Document:

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                                                                   EXHIBIT 10.34

                             FINANCIAL FUSION, INC.
                                 2000 STOCK PLAN

       1.     Purposes of the Plan. The purposes of this Plan are:

              -      to attract and retain the best available personnel for
                     positions of substantial responsibility,

              -      to provide additional incentive to Employees and
                     Consultants, and

              -      to promote the success of the Company's business.

              Options granted under the Plan will be Incentive Stock Options and
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

       2.     Definitions. As used herein, the following definitions shall
              apply:

              (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

              (b) "Applicable Laws" means the requirements relating to the
administration of stock option and restricted stock plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted, and
the applicable laws of any foreign jurisdiction where Options or Stock Purchase
Rights are, or will be, granted under the Plan.

              (c) "Board" means the Board of Directors of the Company.

              (d) "Code" means the Internal Revenue Code of 1986, as amended.

              (e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

              (f) "Common Stock" means the Common Stock of the Company.

              (g) "Company" means Financial Fusion, Inc.

              (h) "Consultant" means any person, including an advisor or
Director, engaged by the Company, its Parent or a Subsidiary of the Company to
render services to such entity.

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              (i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, its Parent or a
Subsidiary of the Company, is not interrupted or terminated. Continuous Status
as an Employee or Consultant shall not be considered interrupted in the case of
(i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company and a Subsidiary of the Company,
or any successor. However, Continuous Status as an Employee or Consultant shall
be considered terminated in the event an Employee or Consultant's employment or
consulting relationship transfers from the Company (or a subsidiary) to the
Company's Parent. A leave of absence approved by the Company shall include sick
leave, military leave, or any other personal leave approved by an authorized
representative of the Company. For purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the one
hundred eighty-first (181st) day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.

              (j) "Director" means a member of the Board.

              (k) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

              (l) "Employee" means any person (including officers and Directors)
who, on the date he or she is granted an Option or Stock Purchase Right under
this Plan is employed by the Company, its Parent or a Subsidiary of the Company.

              (m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

              (n) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                     (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

                     (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the date of determination; or

                     (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.

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              (o) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

              (p) "Misconduct" means the Optionee is terminated for cause, as
defined under applicable law.

              (q) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

              (r) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Right grant.
The Notice of Grant is part of the Option Agreement.

              (s) "Option" means a stock option granted pursuant to the Plan.

              (t) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

              (u) "Optioned Stock" means the Common Stock subject to an Option.

              (v) "Optionee" means an Employee or Consultant who holds an
outstanding Option.

              (w) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

              (x) "Plan" means this 2000 Financial Fusion, Inc. Stock Plan.

              (y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.

              (z) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

              (aa) "Right" means a Stock Purchase Right granted pursuant to the
Plan.

              (bb) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

              (cc) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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              (dd) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

       3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 13,325,000. The Shares may be authorized, but unissued, or
reacquired Common Stock. If an Option expires or becomes unexercisable without
having been exercised in full, the unpurchased Shares that were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). If Shares of Restricted Stock are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the proceeding
sentence, voting rights shall not be considered a benefit of Share ownership.

       4. Administration of the Plan.

              (a) Administration. The Plan shall be administered by (A) the
Board, or (B) a Committee, which Committee shall be constituted to satisfy
Applicable Laws. Once appointed, such Committee shall serve in its designated
capacity until otherwise directed by the Board. The Board may increase the size
of the Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by Applicable Laws.

              (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                     (i) to determine the Fair Market Value of the Common Stock;

                     (ii) to select the Consultants and Employees to whom
Options and Rights may be granted hereunder;

                     (iii) to determine whether and to what extent Options and
Rights are granted hereunder;

                     (iv) to determine the number of shares of Common Stock to
be covered by each Option and Right granted hereunder;

                     (v) to approve forms of agreement for use under the Plan;

                     (vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture

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restrictions, and any restriction or limitation regarding any Option or Right or
the shares of Common Stock relating thereto, based in each case on such factors
as the Administrator, in its sole discretion, shall determine;

                     (vii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                     (viii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                     (ix) to modify or amend each Option or Right (subject to
Section 16(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options;

                     (x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Right
previously granted by the Administrator;

                     (xi) to determine the terms and restrictions applicable to
Options and Rights and any Restricted Stock;

                     (xii) to determine whether and under what circumstances an
Option may be settled in cash under Section 10(e) instead of Common Stock;

                     (xiii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount (if any) of any
deemed earnings on any deferred amount during any deferral period); and

                     (xiv) to make all other determinations deemed necessary or
advisable for administering the Plan.

              (b) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Rights.

       5. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Right may be granted additional Options or Rights.

       6. Limitations.

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              (a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

              (b) Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's employment or consulting
relationship with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.

       7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its approval
by the stockholders of the Company as described in Section 20 of the Plan. It
shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 16 of the Plan.

       8. Term of Option. The term of each Option shall be stated in the Notice
of Grant, and shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant.

       9. Option Exercise Price and Consideration.

              (a) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:

                     (i) In the case of an Incentive Stock Option

                            a) granted to an Employee who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share
on the date of grant.

                            b) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                     (ii) In the case of a Nonstatutory Stock Option

                            a) granted to an Employee or Consultant who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.

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                            b) granted to any other Employee or Consultant, the
per Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant; provided, however, that for any calendar year, the
aggregate number of Shares subject to Nonstatutory Stock Options granted during
such calendar year with a per Share exercise price less than the Fair Market
Value per Share on the date of grant shall not exceed five percent (5%) of the
number of Shares subject to Options granted in the preceding calendar year.

              (b) Waiting Period and Exercise Dates. Subject to the provisions
of Section 10(a), at the time an Option is granted, the Administrator shall fix
the period within which the Option may be exercised and shall determine any
conditions which must be satisfied before the Option may be exercised. In so
doing, the Administrator may specify that an Option may not be exercised until
the completion of a service period or the attainment of certain performance
goals determined by the Administrator, again subject to the provisions of
Section 10(a).

              (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                     (i) cash;

                     (ii) check;

                     (iii) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                     (iv) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

                     (v) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                     (vi) any combination of the foregoing methods of payment;
or

                     (vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.

       10. Exercise of Option.

              (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under

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such conditions as determined by the Administrator and set forth in the Option
Agreement. Except in the case of Options granted to Officers, Directors and
Consultants, Options shall become exercisable at a rate of no less than 20% per
year over five (5) years from the date the Options are granted. Unless the
Administrator provides otherwise, vesting of Options granted hereunder to
officers and Directors shall be tolled during any unpaid leave of absence.

              An Option may not be exercised for a fraction of a Share.

              An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14 of the Plan.

              Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

              (b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than as provided for in Sections 10(c) and 10(d), the Optionee may
exercise his or her Option, but only within such period of time as is specified
in the Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. If, on
the date of termination, the Optionee is not entitled to exercise the Optionee's
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.

                     (i) Notwithstanding the above, in the event an Optionee's
Continuous Status as an Employee or Consultant terminates due to an act of
Misconduct by the Optionee, all unexercised Options held by such Optionee shall
expire five (5) business days following written notice from the Company to the
Optionee.

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                     (ii) Notwithstanding the above, in the event of an
Optionee's change in status from Consultant to Employee or Employee to
Consultant, an Optionee's Continuous Status as an Employee or Consultant shall
not automatically terminate solely as a result of such change in status.
However, in the event of an Optionee's change of status from Employee to
Consultant, an Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option three (3) months and one (1) day following such change
of status.

              (c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

              (d) Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised at any time within twenty-four (24) months following
the date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

              (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

       11. Stock Purchase Rights.

              (a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer, which shall in no
event exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form

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determined by the Administrator. The Administrator may grant a Stock Purchase
Right at a price equal to or in excess of the par value of the Shares; provided,
however, for any calendar year, the aggregate number of shares subject to grants
of Stock Purchase Rights granted during such calendar year with a per Share
exercise price less than the Fair Market Value per Share on the date of grant
shall not exceed ten percent (10%) of the number of Shares subject to Options
granted in the preceding calendar year.

              (b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment or in the event of the purchaser's Misconduct with
the Company for any reason (including death or Disability). The purchase price
for Shares repurchased pursuant to the Restricted Stock purchase agreement shall
be the original price paid by the purchaser and may be paid by cancellation of
any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator.

              (c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

              (d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.

       12. Withholding Taxes. In accordance with any applicable administrative
guidelines it establishes, the Administrator may allow a purchaser to pay the
minimum amount of taxes required by law to be withheld (but no greater amount)
as a result of a purchase of Shares or a lapse of restrictions in connection
with Shares purchased pursuant to an Option or Right, by withholding from any
payment of Common Stock due as a result of such purchase or lapse of
restrictions, or by permitting the purchaser to deliver to the Company, Shares
having a Fair Market Value, as determined by the Administrator, equal to the
amount of such required withholding taxes.

       13. Non-Transferability of Options. Unless otherwise specified by the
Administrator in the Notice of Grant, an Option or Right may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee. If the Administrator
makes an Option or Right transferable, such Option or Right shall contain such
additional terms and conditions as the Administrator deems appropriate.

       14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

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              (a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Right.

              (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Right until ten (10) days prior
to such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option or Right would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase rights
applicable to any Shares purchased upon exercise of an Option or Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Right will terminate immediately prior
to the consummation of such proposed action.

              (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option or Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation (the "Successor Corporation"), unless
the Successor Corporation refuses to assume or substitute for the Option or
Right, in which case the Optionee shall have the right to exercise the Option or
Right as to all of the Optioned Stock, including Shares as to which it would not
otherwise be exercisable. If an Option or Right is exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Right shall be fully exercisable for a period of not less than fifteen
(15) days from the date of such notice, and the Option or Right shall terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option or Right shall be considered assumed if, following the merger or sale of
assets, the Option or Right confers the right to purchase or receive, for each
Share of Optioned Stock subject to the Option or Right immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of

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the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the Successor Corporation, the
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon the exercise of the Option or Right, for
each Share of Optioned Stock subject to the Option or Right, to be solely common
stock of the Successor Corporation equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

       15. Date of Grant. The date of grant of an Option or Right shall be, for
all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.

       16. Amendment and Termination of the Plan.

              (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

              (b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options and rights granted
under the Plan prior to the date of such termination.

       17. Conditions Upon Issuance of Shares.

              (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Right unless the exercise of such Option or Right and
the issuance and delivery of such Shares shall comply with Applicable Laws, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

              (b) Investment Representations. As a condition to the exercise of
an Option or Right, the Company may require the person exercising such Option or
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.

       18. Liability of Company.

              (a) The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

                                                                            -12-
<PAGE>   13

              (b) If the Optioned Stock covered by an Option or Right exceeds,
as of the date of grant, the number of Shares which may be issued under the Plan
without additional shareholder approval, such Option or Right shall be void with
respect to such excess Optioned Stock, unless shareholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Section 20 of the Plan.

       19. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

       20. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.

       21. Information to Optionees and Purchasers. The Company shall provide to
each Optionee and to each individual who acquires Shares pursuant to the Plan,
not less frequently than annually during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and, in the case
of an individual who acquires Shares pursuant to the Plan, during the period
such individual owns such Shares, copies of annual financial statements. The
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.

                                                                            -13-<PAGE>   1
                                                                   EXHIBIT 10.40

                              INDEPENDENCE PLAZA IN
                           TRI-VALLEY TECHNOLOGY PARK
                              INDUSTRIAL-R&D LEASE

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

         This Lease, dated August 7, 2000 for reference purposes only, is made
and entered into by and between Independence Campus I, LLC, a California limited
liability company ("Landlord"), whose address is 2755 Campus Drive, #100 San
Mateo, CA 94403, and NextCard Inc., a Delaware Corporation ("Tenant"), whose
address is 595 Market Street, Suite 1800, San Francisco, CA 94105. Landlord and
Tenant agree to the terms, covenants and conditions of this Lease, as follows:

         1.  Definitions.

                  1.1 Property. The term "Property" shall mean the real property
with all improvements now or hereafter located thereon described by the site
plan attached hereto as Exhibit "A", containing one (1) building, the aggregate
gross area of which is approximately 5.6 acres (the "Property Gross Area").

                  1.2 Building. The term "Building" shall mean the structure
situated on the Property in which the Premises are located, as shown on the site
plan attached hereto as Exhibit "A", containing 80,400 square feet of gross
leasable area (the "Building Gross Leasable Area"), and located at the following
address: 3090 Independence Drive, Livermore, California, 94550.

                  1.3 Premises. The term "Premises" shall mean those certain
Premises located within the Building outlined on the site plan attached hereto
as Exhibit "A" containing approximately 40,200 square feet of gross leasable
area (the "Premises Gross Leasable Area").

                  1.4 Tenant's Share. The term "Tenant's Share" shall mean the
percentage obtained by dividing the Premises Gross Leasable Area by the Building
Gross Leasable Area, which the parties agree is fifty (50%) percent.

                  1.5 Outside Areas. The term "Outside Areas" shall mean all
areas and facilities within the Property, except for the Building and any other
buildings located thereon, provided and designated by Landlord for the general
use and convenience of Tenant and other tenants of all or any part of the
Property, including, without limitation, parking areas, access and perimeter
roads, sidewalks, landscaped areas, service areas, and trash disposal
facilities.

                  1.6 Common Areas. The term "Common Areas" shall mean all areas
in the Building designated by Landlord for the general use and convenience of
Tenant and other tenants of the Building, including, without limitation, service
corridors, stairways, lobbies, and restrooms.

                  1.7 Building Measurement. The area of the Building and
Premises shall be measured using the gross square footage of the outside face of
wall to outside face of wall less vertical penetrations, plus a pro-rata share
of first floor common lobby area, as certified by the Architect of the Building.

         2.       Demise, Term and Possession.

                  2.1 Demise of Premises. Landlord hereby leases the Premises to
Tenant and Tenant hereby leases the Premises from Landlord for the term and any
option period, at the rental, and upon all of the other terms, covenants and
conditions set forth herein, together with (a) parking rights as more
particularly described below and (b) the non-exclusive right to use the Common
Areas and Outside Areas.

                  2.1 (a) Parking. Tenant shall have the right, at no cost to
Tenant, to the use of up to 241 unassigned parking places in the parking area of
the Outside Areas. Tenant shall have the right but not the obligation to
designate some parking spaces as reserved for the exclusive use of Tenant.

                  2.2 Term. The term of this Lease shall be for eighty-four (84)
months, commencing on May 1, 2001 (the "Commencement Date"), and ending on April
30, 2008 (the "Expiration Date"), unless sooner terminated or extended pursuant
to the provisions hereof.

                  2.3 Delay in Delivery of Possession Notwithstanding the
Commencement Date set forth in Paragraph 2.2 above, if for any reason Landlord
fails to deliver possession of the Premises on said date, Tenant shall receive
two (2) days free rent for every day of Landlord Delay in delivering the
Premises for occupancy on May 1, 2001. Landlord shall not be liable to Tenant
therefore, nor shall such failure affect the validity of such Lease or the
obligations of Tenant hereunder, except as set forth below. In the event of any
delay in delivery of possession, the Expiration Day shall be extended one (1)
day for each day of such delay, and Tenant shall not be obligated to pay rent or
to perform any of its other obligations under this Lease, except for the
prepayment of rent and payment of security deposit pursuant to Paragraphs 3.5
and 3.6 below, until possession of the Premises is delivered to Tenant.
Notwithstanding the foregoing (i) should any Landlord Delay cause delay in
delivery of possession beyond June 15, 2001, Tenant may, in

                                       1

<PAGE>   2
its sole discretion, terminate this Lease in its entirety without incurring any
liability or ongoing obligation; and (ii) should any delay other than Tenant
Delay, which delay shall include events of Force Majeure, cause delay in
transfer of possession beyond October 15, 2001, Tenant may, in its sole
discretion, terminate this Lease in its entirety without incurring any liability
or ongoing obligation.

                  2.4 Tenant's Early Termination Right. Landlord shall deliver
to Tenant by January 15, 2001 a Completion Notice executed by the general
contractor(s) and architect(s) and certifying that in the reasonable opinion of
such general contractor(s) and architect(s) there is adequate time to finish the
shell, core and Tenant Improvements by June 15, 2001. Notwithstanding the
provisions of Paragraph 2.3 above, if Landlord does not deliver such Completion
Notice by January 15, 2001, Tenant shall have the right but not the obligation
to terminate this Lease. Tenant's right to terminate under this Paragraph 2.4
must be exercised if at all by January 31, 2001.

                  2.5 Early Entry. Providing Tenant does not interfere with
contractors, Tenant shall be permitted by Landlord to occupy the Premises prior
to the Commencement Date for the purpose of installing fixtures or for any other
purpose permitted by Landlord, all of the terms and provisions hereof shall be
applicable as of the date of such occupancy, except for the obligation to pay
rent which shall commence on the Commencement Date. In the event Landlord
permits any such early entry, Tenant agrees not to interfere with or cause any
delay with any work conducted on or about the Premises by Landlord or its
employees and contractors, and further agrees to indemnify Landlord from and
against any and all claims of damage whatsoever arising or alleged to have
arisen out of any activity by Tenant, or its agents, employees or contractors on
or about the Premises during such early entry.

         3.       Rent.

                  3.1 Base Rent. Subject to adjustment of the rent pursuant to
provisions of the Addendum to this Lease relating thereto, if any, Tenant shall
pay to Landlord for each calendar month of the term of this Lease, monthly base
rent (hereafter called "Base Rent"), in installments as follows:
<TABLE>
<CAPTION>
                    MONTHS           RENT PER SQUARE FOOT, TRIPLE NET
                    ------           --------------------------------
                    <S>                 <C>
                    1-12             $1.60
                    13-84            $1.60 plus 4% Annual Rental Increases
</TABLE>
                  3.2 Manner of Payment. Tenant shall pay to Landlord all rent
payable under this Lease without deduction, offset, or abatement except as
otherwise provided under this Lease, and without prior notice or demand, in
advance on the first day of each calendar month of the term of this Lease. Rent
shall be payable in lawful money of the United States of America to Landlord at
the address stated in the initial paragraph above or to such other persons or at
such other places as Landlord may from time to time designate in writing.
Tenant's obligation to pay rent for any partial month shall be prorated on the
basis of a thirty (30) day month.

                  3.3 Late Payment Charge. If any installment of rent or any
other sum due from Tenant is not received by Landlord within five (5) days after
the due date, Tenant shall pay to Landlord an additional sum equal to ten
percent (10%) of the amount overdue as a late charge to compensate for
processing and accounting charges and any charges that may be incurred by
Landlord with regard to any financing secured by the Property. Acceptance of any
late charge shall not constitute a waiver of Tenant's default with respect to
the overdue amount.

                  3.4 Prepayment of Rent. Upon execution of this Lease, Tenant
shall pay to Landlord in cash the sum of Seventy Eight Thousand and Three
Hundred Ninety DOLLARS ($78,390) as a prepayment of rent to be credited against
the first installment of Base Rent and Direct Operating Expenses, as defined in
Paragraph 6.4 below.

                  3.5. Security Deposit. Upon execution of this Lease, Tenant
shall deposit with Landlord a Letter of Credit naming Landlord as Beneficiary,
in an amount equal to$771,840. The amount of the letter Credit will decline
twenty (20%) percent per year, until the end of year five of the lease term.
Upon the sixth (6) year anniversary of the lease term tenant shall deposit with
Landlord a Security Deposit in cash in the sum of $81,383 (the "Deposit") as
security for the faithful performance by Tenant of all of its obligations
hereunder. If Tenant fails to pay rent or any other sums due hereunder, or
otherwise defaults with respect to any provision of this Lease, after proper
Notice by Landlord and failure by Tenant to cure, Landlord may use, apply, or
retain all or any portion of the Deposit for the payment of any rent or other
sum in default, or to compensate Landlord for the payment of actual documented
reasonable sums which Landlord may become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any expenditures, loss or damage
which Landlord may suffer thereby. If Landlord so uses or applies all or any
portion of the Deposit, Tenant shall within ten (10) days after written demand
therefor deposit with Landlord an amount in cash sufficient to restore the
Deposit to the full amount hereinabove stated. Landlord shall not be required to
keep the Deposit separate from its general funds. The Deposit, less any portion
thereof which Landlord is entitled to retain, shall be returned, without payment
of interest, to Tenant (or at Landlord's option to the last assignee, if any, of
Tenant's interest hereunder) within thirty (30) days after the later of the
expiration of the term hereof or the date on which Tenant vacates the Premises.

                                       2

<PAGE>   3
         4.       Use.

                  4.1 Permitted Uses. The Premises shall be used and occupied
only for the following purposes: office, research and development,
manufacturing, sales, and warehouse uses, and for any lawful purpose incidental
thereto, and for no other use or purpose, unless otherwise agreed to by
Landlord. Tenant shall have access to the Premises twenty-four (24) hours per
day, seven (7) days per week and fifty-two (52) weeks per year.

                  4.2 Compliance with Law. Landlord warrants to Tenant that as
of the Commencement Date that neither the Building nor the Premises is in
violation of any applicable law, ordinance, code, rule, order, direction or
regulation of any lawful governmental authority. Tenant shall accept possession
of the Premises in their physical condition existing as of the date of
Landlord's delivery of possession thereof to Tenant, subject to all laws,
ordinances, codes, rules, orders, directions and regulations of lawful
governmental authority (collectively, "Regulations" for purposes of this
paragraph) regulating the use or occupancy of the Premises, and all matters
disclosed by any exhibits attached hereto. Tenant, at Tenant's sole expense,
shall promptly comply with all regulations as may now or hereafter be in effect
relating to or affecting the condition, use or occupancy of the Premises.

                  4.3 Restrictions on Use. Tenant shall not use or permit the
use of the Premises in any manner that will tend to create waste on the Premises
or constitute a nuisance to any other occupant or user of the Building or any
building on the Property or adjacent thereto or do or keep anything that will
cause cancellation of or an increase in rates of any insurance covering the
Building in which the Premises are located. Tenant shall not use any apparatus,
machinery, or other equipment in or about the Premises that may cause
substantial noise or vibration, or overload existing electrical systems, and
shall not place any loads upon the floors, walls, or ceilings of the Premises
which may jeopardize the structural integrity of the Building or any part
thereof. Tenant shall not make any penetrations of the roof or exterior of the
Building without the prior written approval of Landlord. No materials or
articles of any nature shall be stored in the Common Areas, or upon any portion
of the Outside Areas unless located within an enclosure approved by Landlord and
which complies with any applicable governmental requirements, the covenants,
conditions and restrictions of record on title to the Property and with the
rules and regulations set forth in Exhibit "C" hereto (if any).

                  4.4  Toxic Materials.

                        (a) Tenant shall not cause or permit to be discharged
into the plumbing or sewage system of the Building or onto the land underlying
or adjacent to the Building any hazardous, toxic, or radioactive materials,
including, but not limited to, those materials identified in Section 66680 of
Title 22 of the California Administrative Code, Division 4, Chapter 30, as
amended from time to time (collectively "Toxic Materials"). Tenant shall at its
sole expense comply with any and all rules, regulations, codes, ordinances,
statutes, and other requirements of lawful governmental authority respecting
Toxic Materials, pollution, harmful chemicals and other materials in connection
with Tenant's activities on or about the Premises. Tenant specifically agrees to
comply with any such requirements relating to the handling, use, storage and
disposal of Toxic Materials and other materials which are considered by any such
governmental authorities as harmful, dangerous, toxic, flammable, or otherwise
deserving of special care. Tenant shall pay the full cost of any clean-up work
performed on or about the Premises as required by any such governmental
authority in order to remove, neutralize or otherwise treat materials of any
type whatsoever directly or indirectly placed by Tenant or its agents, employees
or contractors on or about the Premises or the land under or about the Premises.

                        (b)  Tenant shall be solely responsible for and shall
indemnify, defend, and hold Landlord harmless from any and all claims,
judgments, losses, demands, causes of action, proceedings, or hearings relating
to the storage, placement, or use of Toxic Materials (hereinafter collectively
referred to as "Claims") by Tenant, its agents, or invitees on or about the
Premises, including, but not limited to, Claims resulting from the contamination
of subterranean water beneath, adjoining, or in the vicinity of the Premises.
Tenant shall reimburse Landlord for (i) losses in or reductions to rental income
resulting from Tenant's use, storage, and disposal of Toxic Materials; (ii) all
costs of refitting or other alterations to the Premises necessitated by Tenant's
use, storage, or disposal of Toxic Materials including, but not limited to,
alterations required to accommodate an alternate use of the Premises; and (iii)
any diminution in the fair market value of the Premises caused by Tenant's use,
storage, or disposal of Toxic Materials. Tenant agrees to defend all such Claims
on behalf of Landlord with counsel reasonably acceptable to Landlord, and to pay
all fees, costs, damages, or expenses relating to or arising out of any such
Claim including attorneys' fees and costs. Tenant shall further be solely
responsible for and shall indemnify, defend and hold Landlord harmless from and
against all claims, including reasonable attorneys' fees and costs, arising out
of or in connection with any removal, clean-up, or restoration work which is
required by any government agency having jurisdiction and which arises from
Tenant's storage, use, or disposal of Toxic Materials on the Premises during the
term of this Lease.

                        (c) Landlord warrants and represents to Tenant that, to
the best of Landlord's actual knowledge without independent investigation or
inquiry, as of the effective date of the Lease: (i) there has been no release
onto or under the Premises or the Building of any Hazardous Material in
violation of any environmental law; (ii) the Building contains no PCBs,
PCB-contaminated electrical equipment, or asbestos-containing materials and
(iii) Landlord has received no notice that the Premises or the Building is in
violation of any Environmental Law."

                                       3
<PAGE>   4
                        (d) The obligations of Tenant under this Paragraph 4.4
shall survive the expiration of the Lease term.

                  4.5 Covenants,  Conditions,  and Restrictions.  Tenant shall
comply with the covenants,  conditions, and restrictions of record on title to
the Property and any subsequent amendments thereto.

                  4.6 Rules and Regulations. Tenant shall comply with all rules
and regulations set forth in Exhibit "D" hereto (if any) and any subsequent
amendments thereto. Landlord from time to time may promulgate additional rules
and regulations or modifications thereto applicable to all occupants of the
Property for the safety, care, cleanliness and orderly management of the
Property, its Common Areas and Outside Areas, and Tenant shall abide by all such
rules and regulations from and after receipt of a written copy thereof. Such
rules and regulations shall not unreasonably restrict or interfere with Tenant's
permitted use of the Premises.

         5.       Taxes.

                  5.1 Tenant's Personal Property. Tenant shall pay prior to
delinquency all taxes, license fees, and public charges assessed or levied
against Tenant or Tenant's estate in this Lease or Tenant's leasehold
improvements, trade fixtures, furnishings, equipment and all other personal
property and merchandise of Tenant situated in or about the Premises.

                  5.2 Tenant's Obligations to Pay Real Property Taxes. Tenant
shall pay Tenant's Share of all Real Property Taxes (as hereinafter defined)
which become due during the Lease term. Notwithstanding the foregoing, in the
event there is more than one tenant in the Building, Landlord reserves the right
to adjust the share of Tenant of the Real Property Taxes respecting the Building
to reflect the portion thereof which is equitably allocable to Tenant. Tenant
shall pay to Landlord all Real Property Taxes due and payable hereunder on or
before the later of (a) ten (10) days prior to the delinquency thereof, or (b)
ten (10) days after the date on which Tenant receives a copy of the tax bill and
notice of Landlord's determination hereunder and other reasonable evidence of
the amount of Real Property Taxes due and payable by Tenant hereunder. Tenant's
liability to pay Real Property Taxes shall be prorated on the basis of a 365 day
year to account for any fractional portion of a fiscal tax year included in the
Lease term at the commencement or expiration of the Term. If Landlord's lender
requires Landlord to pay any or all Real Property Taxes into an impound account
on a periodic basis during the term of this Lease, Tenant, on prior written
notice from Landlord indicating this requirement, shall pay a sum of money
toward its liability under this paragraph to Landlord on a periodic basis in
accordance with the lender's requirements.

                  5.3 Real Property Taxes Defined. The term "Real Property
Taxes" as used herein shall mean (a) all taxes, assessments, levies, and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen, now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the power to tax or levy assessments, which
are levied or assessed against or with respect to; (1) the value, occupancy or
use of the Property (as now constructed or as may at any time hereinafter be
constructed, altered, or otherwise changed), (2) the fixtures, equipment, and
other real or personal property of Landlord that are an integral part of the
Property, (3) the gross receipts, income, and rentals from the Property, or (4)
the use of the Outside Areas, Common Areas, public utilities, or energy within
the Property; (b) all charges, levies or fees imposed by reason of environmental
regulation or other governmental control of the property; (c) new excise,
transaction, sales, privilege or other taxes now or hereafter imposed upon
Landlord as a result of this Lease; and (d) all costs and fees (including
attorneys' fees) incurred by Landlord in contesting any Real Property Taxes and
in negotiating with public authorities as to any Real Property Taxes. If at any
time during the Lease term the taxation or assessment of the property prevailing
as of the Commencement Date shall be altered so that in lieu of or in addition
to any Real Property Taxes described above there shall be levied, assessed or
imposed (whether by reason of a change in the method of taxation or assessment,
creation of a new tax or charge, or any other cause) an alternate, substitute,
or additional tax or charge (a) on the value, use or occupancy of the property,
(b) on or measured by the gross receipts, income, or rentals from the property,
or on Landlord's business of leasing the Property, or (c) computed in any manner
with respect to the operation of the Property, then any such tax or charge,
however designated, shall be included within the meaning of the term "Real
Property Taxes" for purposes of the Lease. If any Real Property Tax is based
upon property or rents unrelated to the property, then only that part of such
Real Property Tax that is fairly allocable to the property as determined by
Landlord shall be included within the meaning of the term "Real Property Taxes."
Notwithstanding the foregoing, the term "Real property Taxes" shall not include
estate, inheritance, transfer, gift or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all sources,
for any similar or replacement tax or assessment.

         6.       Maintenance and Repairs.

                  6.1 Tenant's Obligations. Except as otherwise specifically
provided herein Tenant shall, at Tenant's expense, keep in good and safe
condition, order and repair the Premises and every part thereof, including
without limitation, (a) all plumbing, fire sprinkler and sewage systems, and all
ducts, pipes, vents or other parts of the heating, ventilation and air
conditioning system (the "HVAC") which service only the Premises (as opposed to
servicing an area larger than the Premises), (b) all electrical and lighting
facilities, systems, appliances, and equipment within the Premises including all
wiring therein, (c) all fixtures, non structural interior walls, interior

                                      4

<PAGE>   5
surfaces of exterior walls, non structural floors, and ceilings, and (d) all
windows, doors, entrances, all glass (including plate glass), and skylights
located within the Premises, and the roof membrane. Tenant's responsibility for
maintenance and repair shall include all such facilities or systems that are
located on or within the walls and floor of the Premises. Tenant shall maintain,
repair and replace when necessary all HVAC equipment which services only the
Premises, and shall maintain in full force at all times
during the term of this Lease an HVAC systems preventive maintenance contract
with a qualified service company satisfactory to Landlord covering all such HVAC
systems. Said contract shall provide for periodic servicing no less than every
ninety (90) days and shall include without limitation replacement of filters,
oiling and lubricating of machinery, adjustment of drive belts, oil changes,
weather proofing of all exposed HVAC equipment and ducts, parts replacement and
other preventive maintenance provided, however, that Tenant shall have the
benefit of all warranties available to Landlord regarding the equipment in said
systems. Notwithstanding the foregoing Landlord may, by written notice to
Tenant, elect at any time to assume responsibility for performing maintenance,
repair and replacement of all HVAC equipment servicing only the Premises. All
costs incurred by Landlord in performing such maintenance, repair and
replacement shall be paid by Tenant on a periodic basis within ten (10) days
after receipt of a written invoice therefor from Landlord. Any costs incurred
while performing maintenance and repair work which benefits more than one tenant
in the building shall be prorated among all tenants so benefited. Tenant shall
furnish Landlord with a copy of the HVAC service contract required by this
paragraph, which shall provide that it may not be cancelled or changed without
at least thirty (30) days prior written notice to Landlord. All repairs required
to be made by Tenant shall be made promptly with new materials of like kind and
quality. If the repair work is a repair to the Premises which affects the
structural parts of the Building, or if the estimated cost of any item of repair
exceeds $5,000, then Tenant shall first obtain Landlord's written approval of
the scope of work, plans therefor, materials to be used and the contractor. If
repair work is required in an emergency situation in which tenant can not
contact Landlord, then Tenant shall be allowed to make emergency repairs and
Landlord agrees to reimburse Tenant for the cost of the repair work within ten
(10) days of receipt of invoices therefor from Tenant.. Tenant hereby waives the
benefit of any statute now or hereinafter in effect which would otherwise afford
Tenant the right to make repairs at Landlord's expense or to terminate this
Lease because of Landlord's failure to keep the Premises in good condition,
order and repair. Tenant specifically waives all rights it may have under
Sections 1932(1), 1941, and 1942 of the California Civil Code, and any similar
or successor statute or law.

                  6.2 Landlord's Obligations. Landlord shall maintain in good
condition, order and repair the Common Areas, the foundation and exterior walls
of the Building (excluding the interior of all walls and, except as provided in
Paragraph 6.3 below, the exterior and interior of all windows, doors and plate
glass), and the exterior roof of the Building, including structural supports and
excluding the roof membrane. If there is a central HVAC system or other
facilities servicing portions of the Premises and other areas of the Building,
Landlord shall maintain in good condition and repair and replace when necessary
such systems and facilities. The manner in which such systems and facilities
shall be maintained and the expenditures therefor shall be at all times
consistent with maintenance and expense practices of other landlords for similar
buildings in the immediate vicinity of the Property.. Landlord shall exercise
its best efforts in performing such repairs as soon as practicable. However,
Landlord's obligation to make repairs under this paragraph shall commence after
Landlord's receipt of written notice from Tenant of the need for such repairs or
upon discovery by Landlord of any repairs required during Landlord's inspection
of the Property. . Except as otherwise specifically provided herein, there shall
be no abatement of rent or other sums payable by Tenant prior to or during any
repairs by Tenant or Landlord. Landlord may enter into a preventive maintenance
contract with a qualified service company satisfactory to Landlord providing for
periodic inspection of the roof of the Building and for repair and maintenance
of the roof membrane. Landlord may also enter into a preventive maintenance
contract with a qualified service company satisfactory to Landlord providing for
periodic repair and maintenance of any central HVAC system servicing the
Premises and other areas of the Building. Tenant's Share of the cost of these
preventive maintenance contracts shall be borne by the Tenant.

                  6.3 Maintenance and Control of Outside Areas. Landlord shall
maintain in good condition, order and repair the Outside Areas, together with
all facilities and improvements now or hereafter located thereon, and together
with all other improvements adjacent to the Property as may be required from
time to time by governmental authority. Such obligation shall include
maintenance and replacement of landscaping and repair of parking areas of the
Property, and washing exterior windows and plate glass of the Building.. Such
obligation shall also specifically include painting the outside surface of the
exterior walls of the Building as and when necessary, as determined by Landlord
in its reasonable discretion. The manner in which such areas shall be maintained
and the expenditures therefor shall be at all times consistent with maintenance
and expense practices of other landlords for similar buildings in the immediate
vicinity of the Property.. Tenant's Share of the cost of this maintenance shall
be borne by the Tenant.

Landlord shall at all times have exclusive control of the Outside Areas and may
at any time temporarily close any part thereof, may exclude and restrain anyone
from any part thereof (except the bona fide employees and invitees of Tenant),
and Landlord may change the configuration of the Outside Areas or the location
of facilities thereon so long as any such change by Landlord does not
unreasonably interfere with Tenant's use of or access to the Premises. Landlord
shall also be entitled to employ third parties to operate and maintain all or
any part of such areas on such terms and conditions as Landlord shall determine.
In exercising any of Landlord's rights hereunder, Landlord shall make a
reasonable effort to minimize any disruption of Tenant's business.

                  6.4 Tenant's Obligation to Reimburse. Tenant shall pay
Tenant's Share of all Direct Operating Expenses (as hereinafter defined) as may
be paid or incurred by Landlord during the term of this Lease; provided,
however, that if the Property contains more than one building, Tenant shall pay
Tenant's Share of all Direct Operating Expenses fairly allocable to the Building
as reasonably determined by Landlord, and a proportionate share, based on the
Building Gross Leasable Area as a percentage of the Property Gross Leasable
Area, of all Direct Operating Expenses which relate to the Property in general
and are not fairly allocable to any one building on the Property. Tenant shall
pay to Landlord on the first day of each calendar month during the period
immediately following the Commencement Date until the first December 1
thereafter a fraction of the amount which Landlord estimates will be Tenant's
Share of all Direct Operating Expenses for such period, the numerator of which
is the number of calendar months during said period,

                                       5

<PAGE>   6

and the denominator of which is twelve (12). Thereafter during the lease term,
on the first day of each calendar month during each twelve (12) month period
commencing January 1, Tenant shall pay to Landlord until the first December 1
thereafter an amount estimated by Landlord to be one-twelfth of Tenant's Share
of the Direct Operating Expenses for such twelve (12) month period. Within
ninety (90) days following the end of each calendar year, Landlord shall furnish
Tenant a statement covering the calendar year and the payments made by Tenant
with respect to such period as set forth in this paragraph. If Tenant's payments
for Tenant's Share of said Direct Operating Expenses did not equal Tenant's
Share of the actual amount of said Direct Operating Expenses, Tenant shall pay
to Landlord the deficiency within ten (10) days after receipt of such statement.
If said payments exceed the actual Direct Operating Expense, Landlord shall
refund the amount of the overpayments to Tenant in cash within ten (10) days
after Landlord sends such statement. Direct Operating Expenses shall be prorated
as of the Commencement Date and the Expiration Date to reflect the portion of
the calendar year occurring within the Lease term. Tenant's Share of Direct
Operating Expenses are initially estimated to be $14,070 per month.

                  6.5 Direct Operating Expenses Defined. The term "Direct
Operating Expenses" shall mean the sum of the following  costs and expenses paid
or incurred by Landlord:

                           (a) All labor,  materials,  supplies and services
used or consumed in managing,  maintaining,  operating and repairing the Outside
Areas and the Common Areas, including without limitation, landscaping
maintenance and replacement, cleaning, repairing concrete walkways and patios,
sweeping and repairing parking areas, operation, maintenance and replacement of
lighting, maintenance and replacement of all directional and security signs,
cleaning, maintenance and replacement of carpets and other fixtures in the
Common Areas, cleaning, repainting and resurfacing the exterior surface of
Common Area walls and the exterior walls of the Building, labor costs of
employees incurred in the management of the Building including salaries and
employer taxes thereon, utilities and water servicing such areas, pest control
service (exterior only), janitorial service, if any, security patrol service, if
any, trash removal, and the operation and the rental or the purchase of
maintenance equipment;

                           (b) All labor, materials, supplies and services used
or consumed in maintaining,  repairing or replacing the membrane of the roof of
the Building and any central HVAC system servicing the Premises and other areas
of the Building, including the cost of all maintenance contracts entered into by
Landlord pursuant to Paragraph 6.2 hereof; and

                           (c) A Property Management fee equal to five (5%)
percent of the monthly base rent.

Notwithstanding the foregoing, the following are expressly excluded from the
definition of Direct Operating Expenses:

      1.   Repair and replacement of roof, (excluding roof membrane),
           foundation, walls and other structural elements of Building, as well
           as repairing any Building defects. Mechanical equipment and elevator
           replacement will be amortized over their useful life.

      2.   Repair and cost of construction defects in the Building, the Building
           systems, the parking area and other areas outside the building.

      3.   Costs incurred for the construction, repair, maintenance or
           replacement of the structural components of the Building, to the
           extent of (i) the proceeds of insurance that Landlord is required to
           maintain under the Lease or actually maintains (whichever is higher),
           including any deductibles or self insured amounts, and (ii) any
           reimbursements Landlord is entitled to receive therefor under any
           warranties or from any specific tenant or third party.

      4.   Costs incurred for the construction, maintenance, repair or
           replacement of the Building or any part thereof resulting from the
           active or passive negligence of Landlord or any other tenant, or
           their respective agents, employees or invitees.

      5.   Rentals and other payments by Landlord under any ground lease and
           interest, principal, points and fees on debt or amortization of any
           debt secured in whole or in part by the Premises.

      6.   Depreciation on the Building or any equipment or machinery.

      7.   Any expense billed to or assumed by another tenant in the Building.

      8.   Costs, expenses and penalties (including, without limitation,
           attorneys' fees) incurred as a result of (I) the violation by
           Landlord of any other lease for all or any portion of the Premises or
           pursuant to an underlying deed of trust, mortgage or ground lease
           affecting the Premises or any portion therefor, or (ii) any hazardous
           use or the remediation of any hazardous substances or in connection
           with a hazardous substances condition not caused by Tenant.

      9.   Any costs incurred by Landlord or any person as a result of the
           violation of any statute, ordinance or other source of applicable
           law, or breach of contract or tort liability to any other party.

                                       6
<PAGE>   7
      10.  All costs and expenses for repair of damage (except for Tenant's
           improvements, trade fixtures or personal property) caused by fire or
           other casualty, including earthquakes, whether or not insured,
           including all amounts paid for deductibles or self-insurance
           provisions.

      For any charge or cost which Tenant is obligated to pay under this Lease,
      no such charge or cost item shall be included more than once or allocated
      under more than one expense category. The aggregate sum of all costs items
      allocable to Tenant or occupants of the Premises for any year upon which
      an allocation is made shall nor exceed the aggregate sum of such expense
      items which are actually incurred by Landlord in the year in question.

      Tenant shall have the right, one (1) time per year, upon ten (10) days
      written notice to Landlord and at Tenant's sole expense to inspect the
      books of Landlord with respect to such Direct Operating expenses. Any
      overcharge revealed by such audit shall be promptly returned to Tenant or
      credited against Tenant's Rent.

                  6.6 Tenant's Negligence. Notwithstanding anything in this
Paragraph 6 to the contrary, and subject to the waiver of subrogation rights
pursuant to Paragraph 12.7, Tenant shall pay for the entire cost of maintaining
and repairing the Premises, the Building, the Common Areas, the Outside Areas
and any other portion of the Property if any such cost is incurred to the extent
it is incurred as a result of the negligence or willful misconduct of Tenant,
its agents, customers, employees, contractors or invitees.

      7. Alterations.

                  7.1 Landlord's Consent Required. Tenant shall not, without
Landlord's prior written consent, make any alterations, improvements, additions,
or utility installations (collectively the "Alterations") in, on or about the
Premises, except for nonstructural alterations which in the aggregate do not
exceed Ten Thousand Dollars ($10,000) in cost during any twelve month period
during the Lease Term. As used in this Paragraph 7.1, the term "utility
installation" means power panels, wiring for lighting, fixtures and receptacles,
florescent fixtures, space heaters, conduits, air conditioning and plumbing.
Prior to construction or installation of any alterations, Landlord may require
Tenant to provide Landlord, at Tenant's expense, a lien and completion bond in
an amount equal to one and one-half times the estimated cost of such
alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Tenant make any
Alterations without the prior written consent of Landlord, Tenant shall
immediately remove the same at Tenant's expense upon written demand by Landlord.
Any Alterations made by Tenant shall not interfere with the use or occupancy of
the Building by any other tenants nor interfere with the operation of any
mechanical apparatus or electrical or plumbing system in the Building.

                  7.2 Plans and Permits. Any Alteration that Tenant desires to
make in or about the Premises and which requires the consent of Landlord shall
be presented to Landlord in written form, with proposed detailed plans and
specifications therefor prepared at Tenant's sole expense. Any consent by
Landlord thereto shall be deemed conditioned upon Tenant's acquisition of all
permits required to make such alteration from all appropriate governmental
agencies, the furnishing of copies thereof to Landlord prior to commencement of
the work, and the compliance by Tenant with all conditions of said permits in a
prompt and expeditious manner, all at Tenant's sole expense. Upon completion of
any such Alteration, Tenant, at Tenant's sole cost, shall immediately deliver to
Landlord "as-built" plans in milar form, and in digital form on computer disk if
available, and specifications therefor.

                  7.3 Construction Work Done by Tenant. All construction work
required or permitted to be done by Tenant shall be performed by a licensed
contractor in a prompt, diligent, and good and workmanlike manner and shall
conform in quality and design with the Premises existing as of the Commencement
Date, and shall not diminish the value of the Building or the Property. In
addition, all such construction work shall be performed in compliance with all
applicable statutes, ordinances, regulations, codes and orders of governmental
authorities and insurers of the Premises. Tenant or its agents shall secure all
licenses and permits necessary therefor.

                  7.4 Title to Alterations. Unless Landlord requires the removal
thereof as set forth in Paragraph 7.5, any Alterations which may be made on the
Premises, shall upon installation or construction thereof on the Premises become
the property of Landlord and shall remain upon and be surrendered with the
Premises at the expiration or sooner termination of the term of this Lease.
Without limiting the generality of the foregoing, all heating, lighting,
electrical (including all wiring, conduits, main and subpanels), air
conditioning, partitioning, drapery, and carpet installations made by Tenant,
regardless of how affixed to the Premises, together with all other alterations
that have become an integral part of the Premises, shall be and become the
property of Landlord upon installation, and shall not be deemed trade fixtures,
and shall remain upon and be surrendered with the Premises at the expiration or
sooner termination of this Lease. Notwithstanding the provisions of this
Paragraph 7.5, Tenant's furnishings, machinery and equipment, other than that
which is affixed to the Premises so that it cannot be removed without material
damage to the Premises, shall remain the property of Tenant and may be removed
by Tenant. Tenant shall immediately after removal repair any damage to the
Premises caused thereby at Tenant's expense. Tenant shall be solely responsible
for the maintenance and repair of any and all alterations, additions or
improvements made by Tenant to the Premises. Prior to the commencement date,
Tenant shall provide Landlord with an itemized list of Tenant's fixtures which
Tenant shall be entitled to remove at the end of the Lease term to the extent
such items have not been acquired utilizing the Tenant Improvement Allowance.

                                       7
<PAGE>   8

                  7.5 Removal of Alterations. Tenant shall ascertain from
Landlord within thirty (30) days before the end of the term of this Lease or
within five (5) days after sooner termination, thereof, whether Landlord desires
to have the Premises, or any part or parts thereof, restored to their condition
as of the commencement of this Lease. Landlord may elect, by notice to Tenant to
require Tenant to remove any alterations that Tenant has made to the Premises
and to restore the Premises as hereafter provided. If Landlord so elects, Tenant
shall, at its sole expense, upon expiration of the Lease term or within twenty
(20) days after any sooner termination thereof, remove such alterations, repair
any damage occasioned thereby, and restore the Premises to the condition
existing as of the Commencement Date, subject to normal wear and tear. The
obligations of Tenant set forth in this paragraph shall survive the termination
of this Lease.

         8. Mechanics' Liens. Tenant shall keep the Premises and the Property
free from any liens. If any claim of lien is recorded, Tenant shall bond against
or discharge the same within ten (10) days after the same has been recorded
against the Premises or the Property. Tenant shall give Landlord notice of the
date of commencement of any work in the Premises not less than ten (10) days
prior thereto, and Landlord shall have the right to post notices of
non-responsibility or similar notices in or on the Premises in connection
therewith.

         9. Utilities and Services. Tenant shall pay all charges for water, gas,
electricity, telephone, central station monitor, refuse pickup, janitorial
services, and all other utilities and services supplied or furnished to the
Premises during the term of this Lease, together with any taxes thereon. Said
utilities may be supplied to Tenant in common with any other tenant(s) in the
Building, or at Landlord's option, be separately metered. If separately metered,
or if the Premises consist of the entire building Tenant shall pay all such
charges directly to the charging authority when due. If not separately metered,
Tenant shall pay its allocable portion based upon the ratio between the Premises
Gross Leasable Area and the total gross leasable square feet of space served by
the common utility. However, if Landlord determines that Tenant is using a
disproportionate amount of any utility service not separately metered, then
Landlord may either install a separate meter to measure the utility service, at
Tenant's cost, or charge Tenant a sum equal to Landlord's reasonable estimate of
the cost of Tenant's excess use of such utility service. Tenant shall reimburse
Landlord on a monthly basis for Landlord's cost in furnishing utilities and
services to the Premises within ten (10) days after Tenant receives an invoice
from Landlord and in no event shall Landlord be liable to Tenant for any such
failure or interruption unless caused by the misconduct of Landlord. No failure
or interruption of any such utilities or services shall entitle Tenant to
terminate this Lease or to withhold rent or other sums due hereunder and unless
otherwise specifically provided herein. Landlord shall not be responsible for
providing security guards or other security protection for all or any portion of
the Premises or the Property, and Tenant shall at its own expense provide or
obtain such security services as Tenant shall desire to ensure the safety of the
Premises and the Property. Tenant shall be responsible for contracting directly
for Janitorial service and utilities for the Premises.

         10. Indemnity. Tenant hereby indemnifies Landlord and holds Landlord
harmless from and against any and all claims for damage, loss, expense or
liability due to, but not limited to, bodily injury, including death resulting
at any time therefrom, and/or property damage, now or hereafter arising from any
act, work or things done, or any omission to act, in or about the Premises, by
Tenant or by any of Tenant's agents, employees, contractors, or invitees, or
from any breach or default by Tenant in the performance of any obligation on the
part of Tenant to be performed under the terms of this Lease, except to the
extent such damage, loss, expense or liability is caused by the sole negligence
or willful misconduct of Landlord or its employees or agents. Tenant shall also
indemnify Landlord from and against all damage, loss, expense (including without
limitation, attorneys' fees), and liability incurred or suffered by Landlord in
the defense of or arising out of or resulting from any such claim or any action
or proceeding brought thereon. In the event any action or proceeding shall be
brought against Landlord by reason of any such claim, Tenant upon notice from
Landlord shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. The obligations of Tenant contained in this paragraph
shall survive the termination of this Lease.

         11. Waiver of Claims. Tenant hereby waives any claims against Landlord
for injury to Tenant's business or any loss of income therefrom or for damage to
the goods, wares, merchandise or other property of Tenant, or for injury or
death of Tenant's agents, employees, invitees, or any other person in or about
the Premises from any cause whatsoever, except to the extent caused by
Landlord's or Landlord's agents or employees sole negligence or misconduct.

         12.  Insurance.

                  12.1 Tenant's Liability Insurance. Tenant shall, at Tenant's
expense, obtain and keep in force during the term of this Lease, a policy of
commercial general liability insurance insuring Landlord and Tenant against any
liability arising out of the condition, use, occupancy or maintenance of the
Premises. Such policy of insurance shall have a combined single limit for both
bodily injury and property damage in an amount not less than Three Million
Dollars ($3,000,000). The policy shall insure performance by Tenant of the
indemnity provisions of Paragraph 10. The limits of said insurance shall not,
however, limit the liability of Tenant hereunder. Not more frequently than once
each calendar year if, in the reasonable opinion of Landlord, the amount of
liability insurance required hereunder is not consistent with reasonably prudent
business practices in Alameda County, California., Tenant shall increase said
insurance coverage as reasonably required by Landlord.

                  12.2 Tenant's Property Insurance. Tenant shall, at Tenant's
sole expense, obtain and keep in force during the term of this Lease, a policy
of fire and extended coverage insurance including a standard "all risk"
endorsement, and a sprinkler leakage endorsement (if the Premises shall be
sprinklered), insuring the inventory, fixtures, equipment, personal property,
and leasehold improvements and alterations of Tenant within the Premises for the
full replacement value thereof, as the same may increase from time to time due
to inflation or otherwise. The proceeds from

                                       8
<PAGE>   9
any of such policies shall be used for the repair or replacement of such items
so insured and Landlord shall have no interest in the proceeds of such
insurance.

                  12.3 Landlord's Liability Insurance. Landlord may maintain a
policy or policies of commercial general liability insurance insuring Landlord
(and such other entities as may be designated by Landlord) against liability for
personal injury, bodily injury or death and damage to property occurring or
resulting from an occurrence in, on, or about the Property with a combined
single limit of not less than Three Million Dollars ($3,000,000), or such
greater coverage as Landlord may from time to time determine is reasonably
necessary for its protection. Landlord shall maintain at all times during the
Term of the Lease such policies of insurance in such amounts as would be
maintained by a reasonable prudent landlord of a same or similar building in the
immediate geographical location.

                  12.4 Property Insurance. Landlord shall obtain and keep in
force during the term of this Lease a policy or policies of insurance for the
benefit of Landlord and Tenant covering loss or damage to the Building, the
Common Areas, and the Outside Areas, but excluding coverage of merchandise,
fixtures, equipment, and leasehold improvements of Tenant, which are not
considered part of the real estate for insurance purposes, in the amount of the
full replacement value thereof, providing protection against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk), including (at Landlord's sole
discretion) flood and earthquake (provided that earthquake insurance is
available at commercially reasonable rates), boiler and machinery coverage (if
applicable) and an inflation endorsement. In addition, Landlord shall obtain and
keep in force, during the term of this Lease, a policy of rental loss insurance
covering a period of one year, commencing on the date of loss, with proceeds
payable to Landlord, which insurance shall also cover all Real Property Taxes,
Direct Operating Expenses, insurance premiums, and other sums payable by Tenant
to Landlord hereunder for said period. The insurance coverage shall include
sprinkler leakage insurance if the Building contains fire sprinklers. All
proceeds under such policies of insurance shall be payable to Landlord, and
Tenant shall have no interest in or right to such proceeds. The cost of any
increase in property insurance coverage specifically caused by Tenant's own use
of the Premises shall be borne by the tenant causing the increase.

                  12.5 Payment. Tenant shall pay to Landlord during the term
hereof Tenant's Share of the premiums for any insurance obtained by Landlord
pursuant to Paragraphs 12.3 and 12.4. Notwithstanding the foregoing, Landlord
may obtain liability insurance and property insurance for the Building
separately, or together with other buildings and improvements under blanket
policies of insurance. In such case Tenant shall be liable for only such portion
of the premiums for such blanket policies as are allocable to the Premises, as
reasonably determined by the insurer or Landlord. Tenant shall pay such premiums
to Landlord within thirty (30) days after receipt by Tenant of a copy of the
premium statement or other reasonable evidence of the amount due. If the term of
this Lease does not expire concurrently with the expiration of the period
covered by such insurance, Tenant's liability for premiums shall be prorated on
an annual basis.

                  12.6 Insurance Policies. The insurance required to be obtained
by Tenant pursuant to Paragraphs 12.1 and 12.2, and Paragraph 12.4 if Tenant is
the insuring party thereunder, shall be primary insurance and (a) shall provide
that the insurer shall be liable for the full amount of the loss up to and
including the total amount of liability set forth in the declarations without
the right of contribution from any other insurance coverage of Landlord, (b)
shall be in a form satisfactory to Landlord, (c) shall be carried with companies
acceptable to Landlord, and (d) shall specifically provide that such policies
shall not be subject to cancellation, reduction of coverage or other change
except after at least thirty (30) days prior written notice to Landlord. The
policy or policies, or duly executed certificates for them, together with
satisfactory evidence of payment of the premium thereon, shall be deposited with
Landlord on or prior to the Commencement Date, and upon each renewal of such
policies, which shall be effected not less than, thirty (30) days prior to the
expiration date of the term of such coverage. Tenant shall not do or permit to
be done anything which shall invalidate any of the insurance policies to be
carried by Tenant or Landlord hereunder.

                  12.7 Waiver of Subrogation. Tenant and Landlord each hereby
waives any and all rights of recovery against the other, or against the
officers, employees, agents and representatives of the other, for loss of or
damage to the property of the waiving party or the property of others under its
control, where such loss or damage is insured against under any insurance policy
carried by Landlord or Tenant and in force at the time of such loss or damage.
Tenant and Landlord shall, upon obtaining the policies of insurance required
hereunder, give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.

                  12.8 No Limitation of Liability. Landlord makes no
representation that the limits of liability specified to be carried by Tenant or
Landlord under the terms of this Lease are adequate to protect any party. If
Tenant believes that the insurance coverage required under this Lease is
insufficient to adequately protect Tenant, Tenant shall provide, at its own
expense, such additional insurance as Tenant deems adequate.

                  12.9 Impounding of Premiums. If Landlord's lender requires
Landlord to pay insurance premiums into an impound account on a periodic basis
during the term of this Lease, Tenant, upon notice from Landlord indicating this
requirement, shall pay a sum of money toward its liabilities under this
Paragraph 12 to Landlord on a periodic basis in accordance with the lender's
requirements.

                                       9
<PAGE>   10
         13.  Damage or Destruction.

                  13.1 Partial Damage-Insured. Subject to the provisions of
Paragraphs 13.3 and 13.4, if the Premises or the Building, as the case may be,
are damaged to the extent of less than seventy-five percent (75%) of the then
replacement value thereof (excluding excavations and foundations with respect to
the Building), and such damage was caused by an act or casualty covered under an
insurance policy required to be maintained pursuant to Paragraph 12.4, and the
proceeds of such insurance received by Landlord are sufficient to repair the
damage, Landlord shall at Landlord's expense repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect.

                  13.2 Partial Damage-Uninsured. Subject to the provisions of
Paragraphs 13.3 and 13.4, if at any time during the term hereof the Premises or
the Building, as the case may be, are damaged and the proceeds received by
Landlord are not sufficient to repair such damage, or such damage was caused by
an act or casualty not covered under an insurance policy required to be
maintained by Landlord pursuant to Paragraph 12.4, Landlord may at Landlord's
option either (a) repair such damage as soon as reasonably possible at
Landlord's expense, in which event this Lease shall continue in full force and
effect, or (b) give written notice of termination of this Lease to Tenant within
thirty (30) days after the date of the occurrence of such damage, with the
effective date of such termination to be the date of the occurrence of such
damage. In the event Landlord gives such notice of termination of this Lease,
Tenant shall have the right, within ten (10) days after receipt of such notice,
to agree in writing on a basis satisfactory to Landlord to pay for the entire
cost of repairing such damage less only the amount of insurance proceeds, if
any, received by Landlord, in which event the notice of termination shall be
ineffective and this Lease shall continue in full force and effect, and Landlord
shall proceed to make such repairs as soon as reasonably possible. If Tenant
does not give such notice within such ten (10) day period this Lease shall be
terminated pursuant to such notice of termination by Landlord.

                  13.3 Total Destruction. If at any time during the term hereof
either the Premises or the Building is destroyed to the extent of seventy-five
percent (75%) or more of the then replacement value thereof (excluding
excavations and foundations with respect to the Building), from any cause
whether or not covered by the insurance maintained pursuant to Paragraph 12.4,
this Lease shall at the option of Landlord terminate as of the date of such
destruction. Landlord shall exercise its right to terminate this Lease by
delivery of notice of termination to Tenant within thirty (30) days after the
date that Tenant notifies Landlord of the occurrence of such damage. In the
event Landlord does not elect to terminate this Lease, Landlord shall at
Landlord's expense repair such damage as soon as reasonably possible, and this
Lease shall continue in full force and effect.

                  13.4 Damage Near End of Term. If the Premises are destroyed or
damaged in whole or in part during the last six (6) months of the term of this
Lease, Landlord may at Landlord's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice to Tenant of
Landlord's selection to do so within thirty (30) days after the date of
occurrence of such damage.

                  13.5 Abatement of Rent. Notwithstanding anything to the
contrary contained in Paragraph 13.3 or elsewhere in this Lease, if the Premises
are partially damaged and Landlord repairs or restores them pursuant to the
provisions of this Paragraph 13, the rent, including Tenant's Share of Direct
Operating Expenses, Real Property Taxes, and insurance premiums, payable
hereunder for the period commencing on the occurrence of such damage and ending
upon completion of such repair or restoration shall be abated in proportion to
the extent to which Tenant's use of the Premises is impaired during the period
of repair; provided that, nothing herein shall be construed to preclude Landlord
from being entitled to collect the full amount of any rental loss insurance
proceeds. Except for abatement of rent, if any, Tenant shall have no claim
against Landlord for any damage suffered by reason of any such damage,
destruction, repair or restoration.

                  13.6 Waiver. Tenant waives the provisions of California Civil
Code Sections 1932(2) and 1933(4), and any similar or successor statutes
relating to termination of leases when the thing leased is substantially or
entirely destroyed, and agrees that any such occurrence shall instead be
governed by the terms of this Lease.

                  13.7 Tenant's Property. Landlord's obligation to rebuild or
restore shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises.

                  13.8 Notice of Damage. Tenant shall notify Landlord within
five (5) days after the occurrence thereof of any damage to all or any portion
of the Premises. Landlord's obligation to repair or restore the Premises
pursuant to this Paragraph 13 shall commence after Landlord's receipt of notice
from Tenant of the nature and scope of any damage to the Premises, and a
reasonable period of time to collect insurance proceeds arising from such damage
(unless such damage is clearly not covered by insurance then in effect covering
the Premises).

                  13.9 Replacement Cost. The determination in good faith by
Landlord of the estimated cost of repair of any damage, or of the replacement
cost, shall be conclusive for purposes of this Paragraph 13.

                                       10
<PAGE>   11
         14.  Condemnation.

                  14.1 Partial Taking. If an area less than or equal to
thirty-three percent (33%) of the floor area of the Premises is taken for any
public or quasi-public use, under any statute or right of eminent domain
(collectively a "taking"), this Lease shall, as to the part so taken, terminate
as of the date the condemnor or purchaser takes possession of the property being
taken, and the rent payable hereunder shall be reduced in the same proportion
that the floor area of the portion of the Premises so taken bears to the
original floor area of the Premises. Landlord shall, at its own cost and
expense, make all necessary alterations to the Premises in order to make the
portion of the Premises not taken a complete architectural unit. Such work shall
not, however, exceed the scope of the work done by Landlord in originally
constructing the Premises. Each party hereto waives the provisions of California
Code of Civil Procedure Section 1265.130 allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial taking of the
Premises.

                  14.2 Total Taking. If more than thirty-three percent (33%) of
the floor area of the Premises is taken, then any such taking shall be treated
as a total taking, and this Lease shall terminate upon the date possession shall
be taken by the condemning authority.

                  14.3 Distribution of Award. If a part or all of the Premises
is taken, all compensation awarded upon such taking shall belong to and be paid
to Landlord, except that Tenant shall receive from the award a sum attributable
to Tenant's movable property or trade fixtures on the Premises which Tenant has
the right to remove from the Premises pursuant to the provisions of this Lease,
but elects not to remove; or, if Tenant elects to remove any such property or
trade fixtures, Tenant shall receive a sum for reasonable removal and relocation
costs not to exceed the market value thereof on the date possession of the
Premises is taken.

                  14.4 Sale Under Threat of Condemnation. A sale by Landlord to
any governmental authority having the power of eminent domain, either under
threat of condemnation or while condemnation proceedings are pending, shall be
deemed a taking under the power of eminent domain for purposes of this Paragraph
14.

         15. Assignment and Subletting. Tenant shall not assign this Lease, or
any interest therein, voluntarily or involuntarily, and shall not sublet the
Premises or any part thereof, or any right or privilege appurtenant thereto, or
allow any other person (the agents and servants of Tenant excepted) to occupy or
use the Premises, or any portion thereof, without the prior written consent of
Landlord in each instance pursuant to the terms and conditions set forth below,
which consent shall not unreasonably be withheld. Notwithstanding the foregoing,
Tenant shall have the right during the initial twenty-four (24) months of the
Lease term to enter into a sublease for fifty percent (50%) or less of the
Premises, for the purposes of managing Tenant's space utilization, without the
prior written consent of the Landlord and without termination rights in
Landlord. In lieu of consenting to a proposed assignment or sublease, Landlord
shall be entitled to terminate this Lease with respect to all or such portion of
the Premises which Tenant proposes to assign or sublease except for space
subleased in the first twenty-four (24) months of the term. Such election to
terminate shall be made by Landlord's giving written notice thereof to Tenant.
Any such termination shall be effective on the later of the scheduled
commencement date of the proposed assignment or sublease or thirty (30) days
after Landlord's notice of termination. Upon such termination, any prior
subleases of portions of the Premises, at the option of Landlord, shall also
concurrently terminate. Upon termination of the Lease with respect to all or any
portion of the Premises pursuant to the foregoing, Landlord shall be entitled to
enter into a lease with the proposed assignee or sublessee or with any other
party, on terms the same as or different from those contained in the proposed
assignment or sublease.

                  15.1 Documentation. Prior to any assignment or sublease which
Tenant desires to make, Tenant shall provide to Landlord the name and address of
the proposed assignee or sublessee, and true and complete copies of all
documents relating to Tenant's prospective agreement to assign or sublease, and
shall specify all consideration to be received by Tenant for such assignment or
sublease in the form of lump sum payments, installments of rent, or otherwise.
For purposes of this Paragraph 15, the term "consideration" shall include,
without limitation, all monies or other consideration of any kind, including but
not limited to, bonus money, and payments (in excess of book value thereof) for
Tenant's assets, fixtures, inventory, accounts, good will, equipment, furniture,
general intangibles, and any capital stock or other equity ownership of Tenant.
Within thirty (30) days after the receipt of such documentation and other
information, Landlord shall notify Tenant in writing that Landlord elects to
terminate this Lease as to the portion of the Premises to be assigned or
subleased, or if Landlord does not elect any such termination, then Landlord
shall either (a) consent in writing to the proposed assignment or sublease
subject to the terms and conditions hereinafter set forth, or (b) notify Tenant
in writing that Landlord refuses such consent, specifying reasonable grounds for
such refusal.

                  15.2 Terms and Conditions. As a condition to Landlord's
granting its consent to any assignment or sublease, (a) Landlord may require
that Tenant pay to Landlord, as and when received by Tenant, the amount of any
excess of such consideration to be received by Tenant in connection with said
assignment or sublease over and above the rental amount fixed by this Lease and
payable by Tenant to Landlord, after deducting therefrom: (i) the Rent payable
by Tenant under this Lease, (ii) reasonable leasing commissions paid by Tenant,
(iii) other reasonable out-of-pocket costs paid by Tenant (including attorneys
fees, advertising costs, and expenses of readying the space for occupancy by the
transferee), and (iv) any consideration paid by the transferee or any third
party to induce the transferee to consummate the transfer and (b) Tenant and the
proposed assignee or sublessee must demonstrate to Landlord's reasonable
satisfaction that the assignee or sublessee is financially responsible and
proposes to use the Premises for substantially the same use or a use which is
otherwise satisfactory to Landlord, and which is not injurious to the Premises.
Each assignment or sublease agreement to which Landlord has consented shall be
an instrument in writing in form satisfactory to Landlord, and shall be executed
by both Tenant and the assignee or sublessee, as the case may be. Each such
assignment or sublease agreement shall recite that it is and shall be subject
and subordinate to the provisions of this Lease, that the assignee or sublessee
accepts such assignment or sublease and agrees to perform all of the obligations
of Tenant hereunder (to the extent such obligations relate to the portion of the
Premises assigned or subleased), and that the termination of this Lease shall,
at Landlord's sole election, constitute a termination of every such assignment
or sublease. In the event Landlord shall consent to an assignment or sublease,
Tenant shall nonetheless

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remain primarily liable for all obligations and liabilities of Tenant under this
Lease, including but not limited to the payment of rent. Tenant agrees to
reimburse Landlord upon demand for reasonable attorneys' fees incurred by
Landlord in connection with the negotiation, review, and documentation of any
such requested assignment or sublease. Tenant hereby stipulates that the
foregoing terms and conditions are reasonable.

                  15.3 Partnership. If Tenant is a partnership, a transfer,
voluntary or involuntary, of all or any part of an interest in the partnership,
or the dissolution of the partnership, shall be deemed an assignment requiring
Landlord's prior written consent.

                  15.4 Corporation. If Tenant is a corporation, any dissolution,
merger, consolidation, or other reorganization of Tenant, or the transfer,
either all at once or in a series of transfers, of a controlling percentage of
the capital stock of Tenant, or the sale, or series of sales within any one (1)
year period, of all or substantially all of Tenant's assets located in, on, or
about the Premises, shall be deemed an assignment. The phrase "controlling
percentage" means the ownership of, and the right to vote, stock possessing at
least fifty-one percent (51%) of the total combined voting power of all classes
of Tenant's capital stock issued, outstanding, and entitled to vote for the
election of directors. The provisions of this paragraph shall not apply to
Tenant if Tenant is a corporation the stock of which is listed on a national
securities exchange (as this term is used in the Securities Exchange Act of
1934, as amended) or is publicly traded on the over-the-counter market and
prices therefor are published daily on business days in a recognized financial
journal. The provisions of this paragraph shall not apply to Tenant if Tenant
provides Landlord with sufficient written confirmation and assurances of (i) the
continuation of Tenant's lease obligations and (ii) no materially adverse change
in Tenant's financial condition, subsequent to any change in ownership of Tenant
as provided in this paragraph.

                  15.5 Landlord's Remedies. Any assignment or sublease without
Landlord's prior written consent shall at Landlord's election be void, and shall
constitute a default. The consent by Landlord to any assignment or sublease
shall not constitute a waiver of the provisions of this Paragraph 15, including
the requirement of Landlord's prior written consent, with respect to any
subsequent assignment or sublease. If Tenant shall purport to assign this Lease
or sublease all or any portion of the Premises, or permit any person or persons
other than Tenant to occupy the Premises, without Landlord's prior written
consent, Landlord may collect rent from the person or persons then or thereafter
occupying the Premises and apply the net amount collected to the rent reserved
herein, but no such collection shall be deemed a waiver of Landlord's rights and
remedies under this Paragraph 15 or the acceptance of any such purported
assignee, sublessee or occupant, or a release of Tenant from the further
performance by Tenant of covenants on the part of Tenant herein contained.

                  15.6 Encumbrances, Licenses and Concession Agreements. Tenant
shall not encumber its interest under this Lease or any rights of Tenant
hereunder, or enter into any license or concession agreement, excluding those
licenses or concession agreements made in the ordinary course of business
respecting all or any portion of the Premises, without Landlord's prior written
consent which consent shall not unreasonably be withheld subject to the terms
and conditions referred to in Paragraph 15.2 above, and Tenant's granting of any
such encumbrance, license, or concession agreement shall constitute an
assignment for purposes of this Paragraph 15.

         16.  Default by Tenant.

                  16.1 Event of Default. The occurrence of any one or more of
the following events (an "Event of Default"), shall constitute a default and
breach of this Lease by Tenant:

                           (a) The failure by Tenant to make any payment of rent
or any other payment required to be made by Tenant hereunder, as and when due,
and such failure shall not have been cured within three (3) days after written
notice thereof from Landlord;

                           (b) Tenant's failure to perform any other term,
covenant or condition contained in this Lease and such failure shall have
continued for fifteen (15) days after written notice of such failure is given to
Tenant; provided that, where such failure cannot reasonably be cured within said
fifteen (15) day period, Tenant shall not be in default if Tenant commences such
cure within said fifteen (15) day period, and thereafter diligently continues to
pursue all reasonable efforts to complete said cure until completion thereof;

                           (c) Tenant's failure to continuously and
uninterruptedly conduct its business in the Premises for a period of more than
thirty (30) consecutive days, or Tenant's removal of all or substantially all of
its equipment and other possessions from the Premises, without providing
security protection for the Premises reasonably satisfactory to Landlord;

                           (d) Tenant's assignment of its assets for the benefit
of its creditors other than in the ordinary course of business;

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<PAGE>   13
                           (e) The sequestration of, attachment of, or execution
on, any substantial part of the property of Tenant or on any property essential
to the conduct of Tenant's business on the Premises, and Tenant shall have
failed to obtain a return or release on such property within sixty (60) days
thereafter, or prior to sale pursuant to such sequestration, attachment or
execution, whichever is earlier;

                           (f) An entry of any of the following orders by a
court having jurisdiction, and such order shall have continued for a period of
sixty (60) days: (1) an order for relief in any proceeding under Title 11 of the
United States Code, or an order adjudicating Tenant to be bankrupt or insolvent;
(2) an order appointing a receiver, trustee or assignee of Tenant's property in
bankruptcy or any other proceeding; or (3) an order directing the winding up or
liquidation of Tenant; or

                           (g) The filing of a petition to commence against
Tenant an involuntary proceeding under Title 11 of the United States Code, and
Tenant shall fail to cause such petition to be dismissed within sixty (60) days
thereafter.

                  16.2 Remedies. Upon any Event of Default, Landlord shall have
the following remedies, in addition to all other rights and remedies provided by
law or equity:

                           (a) Landlord shall be entitled to keep this Lease in
full force and effect for so long as Landlord does not terminate Tenant's right
to possession (whether or not Tenant shall have abandoned the Premises) and
Landlord may enforce all of its rights and remedies under this Lease, including
the right to recover rent and other sums as they become due under this Lease,
plus interest at the lower of five percent (5%) per annum plus the discount rate
of the Federal Reserve Bank of San Francisco, or the highest rate then allowed
by law, from the due date of each installment of rent or other sum until paid;
or

                           (b) Landlord may terminate the Tenant's right to
possession by giving Tenant written notice of termination. On the giving of the
notice, this Lease and all of Tenant's rights in the Premises shall terminate.
Any termination under this paragraph shall not release Tenant from the payment
of any sum then due Landlord or from any claim for damages or rent previously
accrued or then accruing against Tenant.

                           In the event this Lease is terminated pursuant to
this Paragraph 16.2(b), Landlord may recover from Tenant:

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

                                    (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 rental loss for the same
period that Tenant proves could have been reasonably avoided; plus

                                    (3) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss for the same period that Tenant
proves could be reasonably avoided; plus

                                    (4) any other amount necessary to compensate
Landlord for all the detriment actually caused by Tenant's failure to perform
Tenant's obligations under this Lease.

                           The "worth at the time of award" of the amounts
referred to in Subparagraphs (1) and (2) of this Paragraph 16.2(b) shall be
computed by allowing interest at the lower of five percent (5%) per annum plus
the discount rate of the Federal Reserve Bank of San Francisco, or the maximum
rate then permitted by law. The "worth at the time of award" of the amount
referred to in Subparagraph (3) of this paragraph shall be 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%). The term, "rent" as used
in this paragraph shall include all sums required to be paid by Tenant to
Landlord pursuant to the terms of this Lease.

                           (c) This Lease may be terminated by a judgment
specifically providing for termination, or by Landlord's delivery to Tenant of
written notice specifically terminating this Lease. In no event shall any one or
more of the following actions by Landlord, in the absence of a written election
by Landlord to terminate this Lease, constitute a termination of this Lease or a
waiver of Landlord's right to recover damages under this Paragraph 16:

                                    (1) appointment of a receiver in order to
protect Landlord's interest hereunder;

                                    (2) consent to any subletting of the
Premises or assignment of this Lease by Tenant, whether pursuant to provisions
hereof concerning subletting and assignment or otherwise; or

                                    (3) any other action by Landlord or
Landlord's agents intended to mitigate the adverse effects of any breach of this
Lease by Tenant, including without limitation any action taken to maintain and
preserve the Premises, or any action taken to relet the Premises or any portion
thereof for the account of Tenant and in the name of Tenant.

                                       13

<PAGE>   14
                  16.3 No Relief From Forfeiture After Default. Tenant waives
all rights of redemption or relief from forfeiture under California Code of
Civil Procedure Sections 1174 and 1179, and under any other present or future
law, in the event Tenant is evicted or Landlord otherwise lawfully takes
possession of the Premises by reason of any Event of Default.

                  16.4 Landlord's Right to Perform Tenant's Obligations. If
Tenant shall at any time fail to make any payment or perform any other act
required to be made or performed by Tenant under this Lease, then Landlord may,
but shall not be obligated to, make such payment or perform such other act to
the extent Landlord may deem desirable, and may, in connection therewith, pay
any and all expenses incidental thereto and employ counsel. No such action by
Landlord shall be deemed a waiver by Landlord of any rights or remedies Landlord
may have as a result of such failure by Tenant, or a release of Tenant from
performance of such obligation. All sums so paid by Landlord, including without
limitation all penalties, interest and costs in connection therewith, shall be
due and payable by Tenant to Landlord on the day immediately following any such
payment by Landlord. Landlord shall have the same rights and remedies for the
nonpayment of any such sums as Landlord may be entitled to in the case of
default by Tenant in the payment of rent.

                  16.5 Interest on Past Due Obligations. Any amount due to
Landlord hereunder not paid when due shall bear interest at the lower of five
percent (5%) per annum plus the discount rate of the Federal Reserve Bank of San
Francisco, or the highest rate then allowed by law, from the date due until paid
in full. Payment of such interest shall not excuse or cure any default by Tenant
under this Lease.

                  16.6 Additional Rent. All sums payable by Tenant to Landlord
or to third parties under this Lease in addition to such sums payable pursuant
to Paragraph 3 hereof shall be payable as additional sums of rent. For purposes
of any unlawful detainer action by Landlord against Tenant pursuant to
California Code of Civil Procedure Sections 1161-1174, or any similar or
successor statutes, Landlord shall be entitled to recover as rent not only such
sums specified in Paragraph 3 as may then be overdue, but also all such
additional sums of rent as may then be overdue.

                  16.7 Remedies Not Exclusive. No remedy or election hereunder
shall be deemed exclusive but shall, wherever possible, be cumulative with all
other remedies herein provided or permitted at law or in equity.

         17.  Default by Landlord.

                  17.1 Cure Period. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within the
period of time specifically provided herein, or if no period of time has been
provided, then within fifteen (15) days after receipt of written notice by
Tenant to Landlord specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than fifteen (15) days are reasonably required for its
performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such fifteen (15) day period and thereafter
diligently prosecute the same to completion.

                  17.2 Mortgagee Protection. In the event of any default on the
part of Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage encumbering the
Premises whose address shall have been furnished to Tenant, and before Tenant
shall have any right to terminate this Lease, Tenant shall grant such
beneficiary or mortgagee a reasonable period within which to cure the default,
if such action is necessary to effect a cure.

         18. Advertisements and Signs. Tenant shall not place or permit to be
placed any sign, display, advertisement, or decoration (collectively "sign") on
the exterior of the Building or elsewhere on the Property without the prior
written consent of Landlord as to the color, size, style, character, content,
and location of each such sign. Tenant shall at its sole expense comply with all
codes, ordinances, regulations, and other requirements of applicable
governmental authority relating to any sign Tenant places on or about the
Premises. Upon termination of this Lease, Tenant shall remove all signs which it
has placed on or about the Property, and shall repair any damage caused by the
installation or removal of each such sign. . Notwithstanding the foregoing,
Tenant shall be entitled, at Tenant's sole cost and expense, to monument and
parapet signs more particularly described on attached Exhibit "E" subject to (i)
any applicable covenants, codes and restrictions; (ii) any applicable City of
Livermore requirements; (iii) any applicable requirements of any other
governmental authority; and (iv) the reasonable approval of Landlord. Landlord
shall use its best efforts to assist Tenant in obtaining any required sign
approvals

         19. Entry by Landlord. Landlord and its agents shall be entitled to
enter into and upon the Premises at all reasonable times, upon 24-hour prior
notice and at all times in a manner to cause the least amount of interruption of
Tenant's business operations at the Premises (except in the case of an
emergency, in which event no notice shall be required), for purposes of
inspecting or making repairs, alterations or additions to all or any portion
thereof, or any other part of the Building (if the Premises comprise only a
portion of the Building), including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required, or for the purpose
of posting notices of non-responsibility for alterations, additions, or repairs,
and during the one hundred eighty (180) day period prior to the expiration of
this Lease, to place upon the Premises any usual or ordinary "for lease" signs
and exhibit the Premises to prospective tenants at reasonable hours, all without
any abatement of rent and without liability to Tenant for any injury or
inconvenience to or interference with Tenant's business, quiet enjoyment of the
Premises, or any other loss occasioned thereby. Landlord's rights of entry as
set forth in this paragraph shall be subject to the reasonable security
regulations of Tenant. During any entry within Tenant's business hours, Landlord
shall act in a manner designed to minimize interference with Tenant's business
activities on the Premises.

         20.  Subordination and Attornment.

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<PAGE>   15
                 20.1 Subordination. Tenant agrees that this Lease may, at the
option of Landlord, be subject and subordinate to any mortgage, deed of trust,
or other instrument of security now of record or which is recorded after the
date of this Lease affecting all or any portion of the Premises, provided,
however, that no such subordination shall be effective unless and until Tenant
obtains from the holder of any such encumbrance a non-disturbance agreement in
recordable form, providing that, in the event of foreclosure, Tenant's use,
possession any enjoyment of the Premises shall not be disturbed and this Lease
shall continue in full force and effect as long as Tenant is not in Default.
Tenant shall execute and return to Landlord any documents required by the lender
to accomplish the purposes of this paragraph, within seven (7) days after
delivery thereof to Tenant, and the failure of Tenant to execute and return any
such instruments shall constitute a default hereunder.

                  20.2 Attornment. Tenant shall attorn to any third party
purchasing or otherwise acquiring the Premises at any sale or other proceeding,
or pursuant to the exercise of any rights, powers or remedies under any
mortgages or deeds of trust or ground leases now or hereafter encumbering all or
any part of the Premises, as if such third party had been named as Landlord
under this Lease.

         21. Estoppel Certificates and Financial Statements. Tenant shall within
seven (7) days following request by Landlord: (a) execute and deliver to
Landlord any documents, including estoppel certificates, in the form presented
to Tenant by Landlord (1) certifying that this Lease has not been modified or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect; (2) stating the date to
which the rent and other charges are paid in advance, if at all; (3)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or if there are uncured defaults on the part of
Landlord, stating the nature of such uncured defaults; and (4) evidencing the
status of this Lease as may be required either by a lender making a loan to
Landlord to be secured by a deed of trust or mortgage encumbering the Premises
or a purchaser of the Premises from Landlord; and (b) deliver to Landlord the
current financial statements of Tenant with an opinion of a certified public
accountant, if available, including a balance sheet and profit and loss
statement for the then current fiscal year, and the two (2) immediately prior
fiscal years (if available), all prepared in accordance with generally accepted
accounting principles consistently applied. Tenant's failure to deliver any such
documents, including an estoppel certificate, or any such financial statements
within seven (7) days following such request shall be an Event of Default under
this Lease. Landlord shall within seven (7) days following a request by Tenant:
(a) execute and deliver to Tenant any documents, including estoppel
certificates, in the form presented to Landlord by Tenant (1) certifying that
this Lease has not been modified or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect, (2) stating the date to which the rent and other charges paid in
advance, if at all, and (3) acknowledging that there are not to Landlord's
knowledge, any uncured defaults on the part of the Tenant hereunder, or if there
are uncured default on the part of the Tenant, stating the nature of such
uncured defaults.

         22. Notices. Any notice, approval, request, demand, or consent
(collectively "notice") required or desired to be given under this Lease shall
be in writing and shall be personally served, delivered by United States mail,
registered or certified, postage prepaid, delivered by other courier service,
sent by tele-fax or e-mail followed by delivery via mail, and addressed to the
party to be served at the last address given by that party to the other party
under the provisions of this paragraph. At the date of execution of this Lease,
the addresses of Landlord and Tenant are as set forth above in the preamble to
this Lease. Any notice delivered by mail pursuant to this paragraph shall be
deemed to have been delivered three (3) days after the posted date of mailing.
All other notices shall be deemed delivered upon actual receipt by the
addressee.

         23. Waiver. The waiver by either party of any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition for any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. No term, covenant or condition shall be deemed to have been waived by
either party unless such waiver is in writing and signed by the party making
such waiver.

         24. No Accord and Satisfaction. No payment by Tenant, or receipt by
Landlord, of an amount which is less than the full amount of rent and all other
sums payable by Tenant hereunder at such time shall be deemed to be other than
on account of (a) the earliest of such other sums due and payable, and
thereafter (b) to the earliest rent due and payable hereunder. No endorsement or
statement on any check or any letter accompanying any payment of rent or such
other sums shall be deemed an accord and satisfaction, and Landlord may accept
any such check or payment without prejudice to Landlord's right to receive
payment of the balance of such rent and/or other sums, or Landlord's right to
pursue any remedies to which Landlord may be entitled to recover such balance.

                                       15

<PAGE>   16
         25. Attorneys' Fees. If any action or proceeding at law or in equity,
or an arbitration proceeding (collectively an "action"), shall be brought to
recover any rent under this Lease, or for or on account of any breach of or to
enforce or interpret any of the terms, covenants, or conditions of this Lease,
or for the recovery of possession of the Premises, the prevailing party shall be
entitled to recover from the other party as a part of such action, or in a
separate action brought for that purpose, its reasonable attorneys' fees and
costs and expenses incurred in connection with the prosecution or defense of
such action. "Prevailing Party" within the meaning of this paragraph shall
include, without limitation, a party who brings an action against the other
after the other is in breach or default, if such action is dismissed upon the
other's payment of the sums allegedly due for performance of the covenants
allegedly breached, or if the party commencing such action or proceeding obtains
substantially the relief sought by it in such action, whether or not, such
action proceeds to a final judgment or determination.

         26. Surrender. Tenant shall, upon expiration or sooner termination of
this Lease, surrender the Premises to Landlord in the same condition as existed
on the date Tenant originally took possession thereof (reasonable wear and tear
and damage due to causes beyond the reasonable control of Tenant excepted) with
all interior walls cleaned, all interior painted surfaces repainted in the
original color, if necessary, all holes in walls repaired, all carpets shampooed
and cleaned, all HVAC equipment servicing only the Premises in operating order
and in good repair, and all floors cleaned and waxed, all to the reasonable
satisfaction of Landlord. Tenant shall at such time also surrender to Landlord
such alterations (to the Premises) as Landlord does not require Tenant to remove
in accordance with Paragraph 7.6 above. Tenant, on or before the expiration or
sooner termination of this Lease, shall remove all of its personal property and
trade fixtures from the Premises, and all property not so removed shall be
deemed abandoned by Tenant. Tenant shall be liable to Landlord for costs of
removal of any such abandoned trade fixtures or equipment of Tenant, or of any
alterations Tenant fails to remove if so required by Landlord, together with the
cost of returning the Premises to its condition as of the date Tenant originally
took possession thereof, and the transportation and storage costs of such items.
If the Premises are not so surrendered at the expiration or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from delay by Tenant in so surrendering the Premises, including
without limitation, any claims made by any succeeding tenant founded on such
delay, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs. All keys to the Premises or any part
thereof shall be surrendered to Landlord upon expiration or sooner termination
of the Lease term.

         27. Holding Over. This Lease shall terminate without further notice at
the expiration of the Lease term. Any holding over by Tenant after expiration
shall not constitute a renewal or extension of the Lease term or give Tenant any
rights in or to the Premises unless otherwise expressly provided in this Lease.
Any holding over after the expiration with the express written consent of
Landlord shall be construed to be a tenancy from month to month, at One hundred
Fifty percent (150%) of the monthly Base Rent for the last month of the Lease
term, and shall otherwise be on the terms and conditions herein specified
insofar as applicable, unless otherwise mutually agreed in writing by the
parties.

         28. Transfer of Premises by Landlord. The term "Landlord" as used in
this Lease, so far as the covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner at the time in
question of the fee title to the Premises. In the event of any transfer of such
fee title, the Landlord herein named (and in case of any subsequent transfer or
conveyances, the then grantor) shall after the date of such transfer or
conveyance be automatically freed and relieved of all liability with respect to
performance of any obligations on the part of Landlord contained in this Lease
thereafter to be performed; provided, that any funds in the hands of Landlord or
the then grantor at the time of such transfer in which Tenant has an interest,
shall be turned over to the grantee. The covenants and obligations contained in
this Lease on the part of Landlord shall, subject to the foregoing, be binding
upon each Landlord hereunder only during his or its respective period of
ownership.

         29. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, or any controversy arising out of the
same transaction, occurrence or series of transactions or occurrences, related
to the subject of this Agreement, whether in tort or contract and whether in law
or in equity, shall be settled in arbitration in accordance with the Arbitration
Rules of the American Arbitration Association. Judgment upon the award rendered
by the arbitrator(s) may be entered in any court having jurisdiction thereof.
Notice of demand for arbitration shall be filed in writing with the other party
to this Agreement and with the American Arbitration Association within three (3)
years from the expiration of this Agreement. However, in the event that a claim
is within the jurisdiction of the Small Claims Court, then the party claiming
that amount may proceed in the Small Claims Court rather than arbitration.

         30. Telecommunications. Landlord shall not charge any fees to Tenant or
Tenant's third party telecommunications service providers in connection with the
installation, for Tenant's sole and exclusive use, of fiber optic cable,
microwave satellite dishes or other telecommunications devices and/or services
to the Premises. The method of installation of Tenant's
cabling/phone/wiring/satellite dishes, etc. shall for subject to Landlord's
approval which shall not be unreasonably withheld or delayed.

         31.  General Provisions.

                  31.1 Entire Agreement. This instrument, together with the
exhibits attached hereto, contains all of the agreements and conditions made
between the parties hereto and may not be modified orally or in any manner other
than by an agreement in writing signed by all of the parties hereto or their
respective successors in interest. Any executed copy of this Lease shall be
deemed an original for all purposes.

                  31.2 Time. Time is of the essence with respect to the
performance of each and every provision of this Lease in which time of
performance is a factor. All references to days contained in this Lease shall be
deemed to mean calendar days unless otherwise specifically stated.

                  31.3 Captions. The captions and headings of the numbered
paragraphs of this Lease are inserted solely for the convenience of the parties
hereto, and are not a part of this Lease and shall have no effect upon the

                                       16

<PAGE>   17

construction or interpretation of any part hereof.

                  31.4 California Law. This Lease shall be construed and
interpreted in accordance with the laws of the State of California. The language
in all parts of this Lease shall in all cases be construed as a whole according
to its fair meaning and not strictly for or against either Landlord or Tenant,
and without reference to which party prepared this Lease.

                  31.5 Gender, Singular and Plural. When required by the context
of this Lease, the neuter includes the masculine, the feminine, a partnership, a
corporation, or a joint venture, and the singular shall include the plural.

                  31.6 Partial Invalidity. If any provision of this Lease is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remainder of the provisions hereof shall nonetheless continue in full force
and effect and shall in no way be affected, impaired, or invalidated thereby.

                  31.7 No Warranties. Any agreements, warranties or
representations not expressly contained herein shall not bind either Landlord or
Tenant, and Landlord and Tenant expressly waive all claims for damages by reason
of any statement, representation, warranty, promise or agreement, if any, not
expressly contained in this Lease.

                  31.8 Joint and Several Liability. If Tenant is more than one
person or entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder.

                  31.9 Binding on Successors. The covenants and conditions
herein contained, subject to the provisions as to assignment, shall apply to and
be binding upon the parties hereto and their respective heirs, executors,
administrator, assigns, and other successors in interest.

                  31.10 Authority. The parties hereby represent and warrant that
they have all necessary power and authority to execute and deliver this Lease on
behalf of Landlord and Tenant, respectively.

                  31.11 Memorandum of Lease. Neither Landlord nor Tenant shall
record this Lease or a short form memorandum hereof without the prior written
consent of the other.

                  31.12 Merger. The voluntary or other surrender of this Lease,
or a mutual cancellation thereof, shall not work an automatic merger, but shall,
at the sole option of Landlord, either terminate all or any existing subleases
or subtenancies, or operate as an assignment to Landlord of any or all of such
subleases or subtenancies.

                                       17
<PAGE>   18
                  30.13 Force Majeure. Any prevention of or delay in the
performance by a party hereto of its obligations under this Lease caused by
inclement weather, labor disputes (including strikes and lockouts), inability to
obtain materials or reasonable substitutes therefor, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other causes
beyond the reasonable control of the party obligated to perform (except
financial inability), shall excuse the performance by such party of its
obligations hereunder (except the obligation of Tenant to pay rent and other
sums hereunder) for a period of one day for each such day of delay.

                  30.14 Brokers. Tenant warrants that it has had no dealings
with any real estate broker or agent in connection with the negotiation of this
Lease, excepting only Grubb & Ellis and CB Richard Ellis, whose fee Landlord
shall pay. Landlord and Tenant agree to hold the other harmless from and
indemnify the other against any claim or demand for commission, finder's fee, or
other compensation by any broker, other than Rick Steffens and Mark Dowling of
Grubb & Ellis and Chris Adams of CB Richard Ellis based upon their respective
acts.

                  30.15 Additional Paragraphs. Paragraphs 1 through 3, as set
forth in the attached Addendum as well as Exhibits A, B, C, D and E are added
hereto and made a part of this Lease.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
dates specified below immediately adjacent to their respective signatures.
Delivery of this Lease to Landlord, duly executed by Tenant, constitutes an
offer by Tenant to lease the Premises as herein set forth, and under no
circumstances shall such delivery be deemed to create an option or reservation
to lease the Premises for the benefit of Tenant. This Lease shall only become
effective and binding upon execution of this Lease by Landlord and delivery of a
signed copy to Tenant.

LANDLORD

Independence Campus I, LLC, a California
limited liability company

By:      Tri-Valley Technology Park, LLC, a Delaware

         limited liability company

By:      Tri-Valley Managers, LLC,

         a Delaware limited liability company,

         its sole managing member

         By:   The Kontrabecki Group, Inc.

               a California corporation,

               its managing member

                 By:
                    ---------------------------------
                        John Kontrabecki, President

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

TENANT

NEXTCARD INC.

A Delaware Corporation

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

Its:
     ----------------------------

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

                                       18

<PAGE>   19

                                   EXHIBIT "A"

                                    SITE PLAN

                                       19

<PAGE>   20

                                   EXHIBIT "B"

                                    PREMISES

                                       20

<PAGE>   21

                                   EXHIBIT "C"

                     COVENANTS, CONDITIONS, AND RESTRICTIONS

                                       21

<PAGE>   22

                                   EXHIBIT "E"

                                      NONE

                                       22

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