Document:

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                                                                   EXHIBIT 10.15

                                 LEASE AGREEMENT

                               PARSONS WEST ANNEX

                               74 N. PASADENA AVE.

                              PASADENA, CALIFORNIA

                                     LESSOR:

                        PARSONS INFORMATION & TECHNOLOGY

                                   GROUP, INC.

                                     LESSEE:

                              BILL GROSS' IDEALAB!

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                               PARSONS WEST ANNEX
                                 LEASE AGREEMENT

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               Page
<S>               <C>                                                                                          <C>
ARTICLE 1:        BASIC LEASE PROVISIONS .........................................................................1
                  1.1      Provisions ............................................................................1

ARTICLE 2:        EXHIBITS .......................................................................................3
                  2.1      Enumeration ...........................................................................3

ARTICLE 3:        DESCRIPTION OF THE BUILDING AND PREMISES .......................................................4

                  3.1      The Building ..........................................................................4
                  3.2      Premises ..............................................................................4
                  3.3      Common Areas ..........................................................................5
                  3.4      Restricted Common Areas ...............................................................5

ARTICLE 4:        LEASE TERM .....................................................................................5
                  4.1      Lease Term ............................................................................5
                  4.2      Option to Extend ......................................................................5
                  4.3      Confirmation of Actual Commencement Date ..............................................6
                  4.4      Lessor's Delay in Delivery ............................................................6

ARTICLE 5:        RENT ...........................................................................................6
                  5.1      Rent ..................................................................................6
                  5.2      Building Operating Expenses ...........................................................7
                  5.3      Late Fee ..............................................................................8
                  5.4      Rent ..................................................................................8
                  5.5      Address for Payments ..................................................................8

ARTICLE 6:        TAXES ..........................................................................................9
                  6.1      Real Estate Taxes .....................................................................9
                  6.2      Personal Property Taxes ..............................................................10

ARTICLE 7:        POSSESSION AND USE ............................................................................10
                  7.1      Possession ...........................................................................10
                  7.2      Permitted Uses .......................................................................10
                  7.3      Rules and Regulations ................................................................10

ARTICLE 8:        UTILITIES AND SERVICES ........................................................................10
                  8.1      Lessor's Covenants ...................................................................10
                  8.2      Lessee's Covenants ...................................................................11
                  8.3      Standards for Utilities and Services .................................................11
                  8.4      Lessor's Right to Cease Service ......................................................11

ARTICLE 9:        INDEMNITY AND INSURANCE .......................................................................12
                  9.1      Indemnity by Lessee ..................................................................12
                  9.2      Lessor's Insurance ...................................................................12
                  9.3      Lessee's Insurance ...................................................................12
                  9.4      Assumption of Risk ...................................................................13
                  9.5      Insurance Related Use Restrictions ...................................................13
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                                      (i)
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<TABLE>
<S>               <C>                                                                                          <C>
ARTICLE 10:       ALTERATIONS ...................................................................................13
                  10.1 Alterations ..............................................................................13
                  10.2 Rights Upon Termination ..................................................................14

ARTICLE 11:       MECHANIC'S LIENS ..............................................................................14
                  11.1     Lessee's Covenants ...................................................................14
                  11.2     Contest of Lien ......................................................................14
                  11.3     Right to Cure ........................................................................14
                  11.4     Notice of Lien .......................................................................14
                  11.5     Notice of Nonresponsibility ..........................................................14

ARTICLE 12:       SIGNAGE  15
                  12.1     Signage Criteria .....................................................................15
                  12.2     Lessor's Approval ....................................................................15
                  12.3     Lessor's Responsibility ..............................................................15
                  12.4     Lessee's Responsibility ..............................................................15

ARTICLE 13:       FIXTURES AND PERSONAL PROPERTY ................................................................15
                  13.1 Trade Fixtures and Personal Property .....................................................15

ARTICLE 14:       ASSIGNMENT, SUBLETTING, MORTGAGING, AND CHANGE IN

                  OWNERSHIP .....................................................................................15
                  14.1     Definitions ..........................................................................15
                  14.2     Restrictions on Occupancy Transactions ...............................................16
                  14.3     Procedures for Approval of Occupancy Transactions ....................................16
                  14.4     Documentation and Expenses ...........................................................17
                  14.5     Rent Payments by Transferee ..........................................................17
                  14.6     Affiliated Company Exception .........................................................17
                  14.7     Disposition of Profits from Occupancy Transaction ....................................17
                  14.8     Lessee's Liability ...................................................................17

ARTICLE 15:       LESSEE'S CONDUCT OF BUSINESS ..................................................................17
                  15.1     Advertising Prohibition ..............................................................17
                  15.2     Trash and Rubbish ....................................................................18
                  15.3     Conformance with Laws ................................................................18
                  15.4     Safe and Clean Environment ...........................................................18

ARTICLE 16:       REPAIRS AND MAINTENANCE .......................................................................18
                  16.1     Lessor's Obligations .................................................................18
                  16.2     Lessee's Obligations .................................................................18
                  16.3     Lessee's Acceptance and Waiver .......................................................18

ARTICLE 17:       RECONSTRUCTION ................................................................................19
                  17.1     Insured Casualty .....................................................................19
                  17.2     Uninsured Casualty ...................................................................19
                  17.3     Abatement of Rent ....................................................................19
                  17.4     Waiver and Notice ....................................................................19
</TABLE>

                                      (ii)
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<TABLE>
<S>               <C>                                                                                          <C>
ARTICLE 18:       COMMON AREA EXPENSES ..........................................................................19
                  18.1     Responsibility and Payment for Common Area Expenses ..................................19
                  18.2     Definition Common Area Expenses ......................................................19
                  18.3     Liability for Security ...............................................................21
                  18.4     Reserved and Visitor Parking Restrictions ............................................21
                  18.5     Control of Common Areas ..............................................................22

ARTICLE 19:       DEFAULT BY LESSOR .............................................................................22
                  19.1 No Right of Termination ..................................................................22
                  19.2 Limitation of Liability ..................................................................23

ARTICLE 20:       DEFAULT BY LESSEE .............................................................................23
                  20.1     Actions or Omissions Causing Default .................................................23
                  20.2     Legal Notices ........................................................................24
                  20.3     Rent Acceptance, No Waiver ...........................................................24

ARTICLE 21:       REMEDIES UPON DEFAULT .........................................................................24
                  21.1     Lessor Election of Remedies ..........................................................24
                  21.2     Bankruptcy Code Limitations ..........................................................24
                  21.3     Action Without Termination ...........................................................25
                  21.4     Damages Upon Termination .............................................................25
                  21.5     Lessor's Right to Declare Forfeiture .................................................26
                  21.6     Fixtures and Personal Property .......................................................26
                  21.7     No Limitation of Remedies ............................................................26
                  21.8     No Waiver Unless In Writing ..........................................................26

ARTICLE 22:       EMINENT DOMAIN ................................................................................26
                  22.1     Taking Resulting in Termination ......................................................26
                  22.2     Taking Without Termination ...........................................................26
                  22.3     Disposition of Award .................................................................27
                  22.4     Transfer Under Threat of Taking ......................................................27

ARTICLE 23:       ATTORNEYS' FEES AND COSTS .....................................................................27
                  23.1 Recovery to Prevailing Party .............................................................27

ARTICLE 24:       SALE OF PREMISES BY LESSOR ....................................................................27
                  24.1 Release of Lessor ........................................................................27

ARTICLE 25:       SUBORDINATION, ATTORNMENT, AND ESTOPPEL CERTIFICATE ...........................................27
                  25.1     Subordination ........................................................................27
                  25.2     Attornment ...........................................................................27
                  25.3     Estoppel Certificates ................................................................27

ARTICLE 26:       QUIET ENJOYMENT ...............................................................................28
                  26.1 Quiet Enjoyment ..........................................................................28

ARTICLE 27:       CONSENTS AND APPROVALS ........................................................................28
                  27.1 Lessor's Consent .........................................................................28
                  27.2 Reimbursement for Cost of Approvals ......................................................28
</TABLE>

                                     (iii)
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<TABLE>
<S>               <C>                                                                                          <C>
ARTICLE 28:       SECURITY DEPOSIT ..............................................................................28
                  28.1     Security Deposit .....................................................................28
                  28.2     Use and Restoration ..................................................................28
                  28.3     Disposition Upon Bankruptcy ..........................................................28
                  28.4     Disposition Upon Sale ................................................................28
                  28.5     Security Deposit Adjustment ..........................................................29

ARTICLE 29:       MISCELLANEOUS .................................................................................29
                  29.1     Captions .............................................................................29
                  29.2     Parties ..............................................................................29
                  29.3     Gender ...............................................................................29
                  29.4     Legal Address ........................................................................29
                  29.5     Construction .........................................................................29
                  29.6     Relationship of Parties ..............................................................29
                  29.7     Severability .........................................................................29
                  29.8     Warranty of Authority.................................................................29
                  29.9     Entire Agreement .....................................................................29
                  29.10    Lessees Selected by Lessor. ..........................................................30
                  29.11    Governing Law; Forum; Construction ...................................................30
                  29.12    Force Majeure ........................................................................30
                  29.13    Use of Name of Building ..............................................................30
                  29.14    Lender Requirements ..................................................................30
                  29.15    Violations by Other Lessees ..........................................................30
                  29.16    Time is of Essence ...................................................................30
                  29.17    Real Estate Broker ...................................................................31
</TABLE>

                                      (iv)
<PAGE>

                               PARSONS WEST ANNEX
                                 LEASE AGREEMENT

         Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
the following described Premises upon the terms and conditions as set forth in
this Lease Agreement ("Lease").

ARTICLE 1:        BASIC LEASE PROVISIONS

     1.1 PROVISIONS. The Basic Lease Provisions outline certain major terms
which are supplemented by other Articles of the Lease.

DATE:             JUNE 17, 1999

LESSOR:  Parsons Information & Technology Group Inc.

ADDRESS OF
LESSOR:           100 West Walnut Street
                  Pasadena, California 91124
                  Attn: Finance Department

         With Copy to:

                  Dacam Management Corporation
                  111 Elm Street, Suite 460
                  San Diego, California 92101

LESSEE:  Bill Gross' Idealab!, a California corporation

ADDRESS OF

LESSEE:           Idealab
                  130 W. Union Street
                  Pasadena, California 91103
                  Attn: Pam Rushman

         With Copy to:

                  Marcia Goodstein
                  Chief Operating Officer
                  Idealab
                  130 W. Union Street
                  Pasadena, California 91103

<PAGE>

PREMISES:   The Eighth Floor of the office building located at 74 North Pasadena
            Avenue, Pasadena, California, designated by diagonal lines on the
            floor plan attached hereto as EXHIBIT "A", containing rentable area
            of approximately 29,064 square feet (the "Premises". Lessee's
            "Rentable Area" has been computed by adding to Lessee's useable area
            (measured from dominant face of exterior walls of the Premises to
            centerline of demising walls), Common Areas on Lessee's floor, and
            Lessee's proportionate share of the main lobby of the Building, but
            excluding vertical shafts, stairwells, and mechanical rooms in the
            basement which serve the entire building.

                                (SEE SECTION 3.2)

PERMITTED
USE:        General Offices, including the development of internet companies

                                (SEE SECTION 7.2)

LEASE TERM: Twenty Four (24) Months (SEE SECTION 4.1)

ANTICIPATED
COMMENCEMENT
DATE:       June 24, 1999

                                (SEE SECTION 4.1)

FIXTURIZATION
PERIOD:     Two (2) Weeks

                                (SEE SECTION 4.1)

BASE RENT:  Forty Three Thousand Five Hundred Ninety Six and 00/100
            Dollars ($43,596.00) per month, commencing June 24, 1999 through
            December 31, 1999.

            Fifty Four Thousand Three Hundred Forty Nine and 68/100 Dollars
            ($54,349.68) per month, commencing January 1,2000 through June 30,
            2001.

                               (SEE SECTION 5.1.1)

PARKING
RENT:       Fifty Five and 00/100 Dollars ($55.00) per month for non-designated
            spaces and Sixty Five and 00/100 ($65.00) per month for designated
            spaces during each year of the Lease Term, adjusted as set forth in
            Section 5.1.4.2 in the event of exercise by Lessee of the option
            described in Section 4.2. Parking Rent shall be Fourteen Thousand
            Nine Hundred Eighty Five and 00/100 Dollars ($14,985.00) per month
            during the initial term ($4,095 for designated spaces and $10,890
            for non-designated spaces).

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                               (SEE SECTION 5.1.2)

STORAGE
RENT:       Not Applicable

                               (SEE SECTION 5.1.3)

LESSEE'S PROPORTIONATE
SHARE OF BUILDING
OPERATING
EXPENSES:   29,064 divided by 256.005 equals 11.4%.

                                (SEE SECTION 5.2)

RESERVED PARKING
SPACES:     Two Hundred Sixty One (261) spaces, including designated and
            non-designated spaces as follows:

            Designated Spaces:        Sixty Three (63)

            Non-Designated Spaces:    One Hundred Ninety Eight (198)

            Total Reserved Parking:   Two Hundred Sixty One (261)

                               (SEE SECTION 18.4)

SECURITY DEPOSIT:   One Hundred Thirty Eight Thousand Six Hundred Seventy and
                    00/100 Dollars ($138,670.00)

                               (SEE SECTION 28.1)

REAL ESTATE
BROKER
(IF ANY):   Lessee:          Travers Realty
            Lessor:          Dacam Management Corporation

                               (SEE SECTION 29.17)

ARTICLE 2:  EXHIBITS

            2.1 ENUMERATION. The exhibits enumerated in this Article and
                -----------
attached to this Lease are incorporated herein by reference:

                Exhibit A - Floor Plan of the Premises
                Exhibit B - Tenant Improvement Manual
                Exhibit C - Rules and Regulations
                Exhibit D - Acceptance of Premises
                Exhibit E - Standards for Utilities and Services

                                       3
<PAGE>

                  Exhibit F - Designated Parking

ARTICLE 3:  DESCRIPTION OF THE BUILDING AND PREMISES

            3.1 THE BUILDING. As used herein, the term "Building" shall mean
those areas of land and the improvements, landscaping, parking, pedestrian
walkways, and other features commonly referred to as "Parsons West Annex" or
"West Annex", located at common address 74 North Pasadena Avenue, Pasadena,
California. The Building may be altered, or expanded from time to time by
Lessor, provided that no such alteration shall materially affect Lessee's use of
the Premises, parking, or access thereto, or decrease Lessee's rights or
increase Lessee's obligations hereunder.

            3.2 PREMISES. Lessor hereby leases to Lessee and Lessee hereby
leases from Lessor, for the Lease Term, at the Rent (as such terms are
hereinafter defined), and upon the terms and conditions hereinafter set forth,
the commercial office space described in the Basic Lease Provisions designated
by diagonal lines on the Floor Plan attached as EXHIBIT "A" hereto, and
incorporated by reference herein (the "Premises").

                  3.2.1 The Rentable Area of the Premises set forth in the
Basic Lease Provisions and the location delineated on EXHIBIT "A" are
approximations. Lessor makes no representations as to the exact rentable square
footage or location. By occupancy of the Premises, Lessee acknowledges that it
has inspected the Premises and that the area so inspected is the area hired by
Lessee pursuant to the terms of this Lease.

                  3.2.2 The Premises shall include only the appurtenances
specifically granted in this Lease, reserving to Lessor each of the following:

                        3.2.3.1  Areas of the Building not designated for common
 use;

                        3.2.3.2  The space above the ceiling and below the
floor;

                        3.2.3.3  Exterior portions of the Building; and

                        3.2.3.4  The right to install,  maintain,  use,  repair,
and replace pipes, ductwork, conduits, utility lines, mechanical rooms, and
wires in the areas reserved by Lessor, subject to the limitations set forth in
this Section 3.

                  3.2.3 Lessor agrees that where possible all work in the
Premises shall be performed in a manner which shall not unreasonably interfere
with the normal business operations of Lessee.

                  3.2.4 The Premises have been improved with certain
leasehold improvements. Responsibilities and procedures for completion of future
improvements (the "Improvements") as set forth in the Tenant Improvement Manual
attached as EXHIBIT "B" hereto and incorporated by reference herein.
Improvements to be completed by Lessee are hereinafter referred to as "Lessee's
Work". Lessee shall abide by procedures and regulations set forth in the Tenant
Improvement Manual for construction of the Improvements. The failure to comply
with such procedures or regulations on a timely basis shall constitute a breach
of this Lease. In the event Lessee exercises the option referred to in Section
4.2, Lessee may, based upon market conditions, be entitled to reimbursement for
certain tenant improvements. In such case, any amounts due Lessee shall be
credited ratably over the first year of the option period as provided in the
Tenant Improvement Manual.

                  3.2.5 Lessor shall be required to complete any improvements
to the Premises required by State and local municipalities to bring the Premises
in compliance with the Americans with Disabilities Act and/or state and local
fire and life safety laws. Lessor shall also thoroughly clean Premises prior to
Lessee's occupancy. Lessor shall replace broken and/or missing ceiling tiles and
carpet tiles with substitutes reasonably available in the marketplace. It is
understood that due to the age of the existing

                                       4
<PAGE>

improvements that there may be variances in color. Except for such requirements
and punch list items addressed to Lessor in writing within thirty (30) days of
occupancy by Lessee, Lessee accepts the Premises on an "as is" basis.

            3.3 COMMON AREAS. The term "Common Areas" as used in this Lease
shall be deemed to include those portions of the Building and other areas that
are designated by Lessor from time to time for the non-exclusive use,
convenience, and benefit of Lessor, Lessee, other lessees of the Building, and
other authorized users. Common Areas shall include, without limitation, exterior
walls of the Building and appurtenances thereto, the main lobby from the parking
garage to the Building, the parking garage, driveways, roadways, sidewalks,
stairways, service bay, pedestrian walkways, elevators, landscaped and planted
areas, open and enclosed courts, museum pieces, artwork, artistic displays, and
landscape and pedestrian easements on public right-of-ways.

            The use and occupation of the Premises by Lessee shall include a
revocable license to use in common with others entitled thereto Common Areas as
may be designated by Lessor from time to time revocable upon breach by Lessee
and Lessee's failure to cure such breach within the applicable cure period.
Lessor reserves the right at any time to relocate the automobile parking areas
and other amenities in the Common Areas and the identity and type of tenancies,
subject to the limitations otherwise set forth herein. Lessee's use of Common
Areas shall be subject to the provisions of this Lease, rules and regulations
described in Section 7.3 (the "Rules and Regulations"), attached as EXHIBIT "C"
hereto and incorporated by reference herein.

            3.4 RESTRICTED COMMON AREAS. "Restricted Common Areas" shall include
areas of the Building designated by Lessor from time to time as Restricted
Common Areas. Lessor may restrict certain areas of the Building from free entry
by Lessee or its agents, such as mechanical rooms, or similar areas required for
the orderly management and maintenance of the Building, or which are considered
unsafe or inappropriate for unrestricted entry and use. Restricted Common Areas
not freely accessible to Lessee or its agents may nevertheless be serviced as a
part of the cost of maintaining Common Areas, provided that Lessee shall have no
liability for (i) such services, except for its Proportionate Share of Operating
Expenses set forth in Section 5.2 and (ii) liability for the negligence,
omissions, and willful acts of its employees, agents and contractors otherwise
set forth herein.

ARTICLE 4:  LEASE TERM

            4.1 LEASE TERM. The "Lease Term" shall be the number of months
specified in the Basic Lease Provisions and shall include any extension,
renewal, or holdover thereof. The Lease Term shall commence on the earlier of
the date when Lessee takes occupancy of the Premises or the Anticipated
Commencement Date specified in the Basic Lease Provisions ("Actual Commencement
Date"). Notwithstanding the foregoing, Lessee shall be granted the
"Fixturization Period" specified in the Basic Lease Provisions to complete
alterations to be made by Lessee ("Lessee's Work"). In the event that Lessor
does not deliver the Premises to Lessee in time to allow Lessee the full
Fixturization Period, the Anticipated Commencement Date shall be extended by the
number of days of such delay so that Lessee will have the full Fixturization
Period to complete Lessee's Work.

            If the Actual Commencement Date falls on other than the first day of
the month, the Lease Term shall be extended by the number of days between the
Actual Commencement Date and the first day of the following month. A "Lease
Year" shall be each twelve (12) month period, starting with the first day of the
first full month of the Lease Term, and each twelve (12) month period
thereafter.

            4.2 OPTION TO EXTEND. Lessee shall have the option to extend the
term of this Lease for one (1) additional three (3) year period upon all terms
and conditions set forth in the Lease subject to the following provisions:

                4.2.1 The option to extend shall terminate in the event that
any time during the term of this Lease (i) Lessee failed to pay or caused to be
paid within ten (10) days of written notice any Rent or

                                       5
<PAGE>

charges required by the Lease to be paid; (ii) Lessee has abandoned the
Premises; (iii) Lessee has failed to do or cause to be done any act, other than
the payment of Rent or charges, required by this Lease, which breach is not
cured within the applicable cure period, (iv) Lessee has caused, permitted, or
suffered without Lessor's prior written consent, any act which requires the
consent of Lessor under the terms of this Lease, or (v) Lessee has caused,
suffered, or permitted any act of bankruptcy as defined under the terms of this
Lease.

                4.2.2 Lessee shall exercise its option to extend by delivery of
written notice to Lessor not less than six (6) months prior to expiration of the
initial Lease term. If written notice is not delivered within said time period,
such option shall terminate.

            4.3 CONFIRMATION OF ACTUAL COMMENCEMENT DATE. Lessee agrees to
execute a supplemental agreement within thirty (30) days after receipt in the
form set forth in EXHIBIT "D" attached hereto and incorporated by reference
herein, which shall confirm the Actual Commencement Date.

            4.4 LESSOR'S DELAY IN DELIVERY. If Lessor has not delivered
possession of the Premises by the Anticipated Commencement Date, Lessor shall
not be liable for any damage caused for failing to deliver possession, and this
Lease shall not be void or voidable, but Lessee shall not be liable for Rent as
defined in Section 5.4, until the Actual Commencement Date. If Lessor does not
deliver possession of the Premises to Lessee within one (1) month after the
Anticipated Commencement Date, Lessee may elect to terminate this Lease by
giving written notice to Lessor within ten (10) days after the expiration of
said one (1) month period.

ARTICLE 5:  RENT

            5.1 RENT. Lessee agrees to pay as Rent for the use and occupancy of
the Premises, at the times and in the manner provided herein, on the first day
of each month without set-off or deduction, except as expressly otherwise
provided herein, commencing on the first day of the Lease Term, Base Rent
specified in Section 5.1.1, Parking Rent, except as otherwise expressly provided
herein, specified in Section 5.1.2, if applicable, Storage Rent specified in
5.1.3, if applicable, and Excess Expenses specified in Section 5.2.

                5.1.1  BASE RENT. Lessee shall pay in twelve (12) equal
installments during each Lease Year, monthly in advance, the Base Rent specified
in the Basic Lease Provisions. Base Rent for the first month of the Lease Term
has been delivered to Lessor upon execution and delivery of this Lease. If the
Actual Commencement Date occurs on other than the first day of the month, Base
Rent for the second month shall be prorated based upon the number of days
remaining in the month and thirty (30) days.

                5.1.2  PARKING RENT. Lessee shall pay in twelve (12) equal
installments during each Lease year, monthly, in advance, the Parking Rent set
forth in the Basic Lease Provisions. Parking Rent for the first month of the
Lease Term has been delivered to Lessor upon execution and delivery of the
Lease. Parking Rent shall be prorated and adjusted in the same manner as Base
Rent under Section 5.1.1. Notwithstanding the Parking Rent set forth herein,
Lessee by written notice delivered to Lessor at least ten (10) days in advance
may, during the first four (4) months of the Lease Term reduce the number of
parking spaces hired with a proportionate reduction of Parking Rent. Any such
reduction shall be effective only on the Commencement Date or the first day of
the month.

                5.1.3  STORAGE RENT. If the description of Lessee's Premises
includes a Storage Area, Lessee shall pay in twelve (12) equal installments
during each Lease year, monthly, in advance, the Storage Rent set forth in the
Basic Lease Provisions. Storage Rent for the first month of the Lease Term has
been delivered to Lessor upon execution and delivery of the Lease. Storage Rent
shall be prorated and adjusted in the same manner as Base Rent under Section
5.1.1.

                5.1.4  RENT DURING OPTION PERIOD. In the event Lessee
exercises the option providedo herein, Base Rent, Parking Rent, and Storage Rent
shall be adjusted as follows:

                                       6
<PAGE>

                        5.1.4.1  Base Rent,  Parking Rent and Storage Rent
shall be adjusted at the inception of the option period to "Fair Market Rent" as
hereinafter defined, but not less than the Base Rent for the immediately
preceding period. Fair Market Rent shall be deemed to include an allowance for
market tenant improvements for the extended term, which amount shall be credited
against Base Rent during the first year of the option period as set forth in the
Tenant Improvement Manual. Fair Market Rent and tenant improvements shall also
take into consideration any reasonable and documented costs incurred by Lessor
in relocating the data and telecom facilities for FEMA if Lessee elects to
relocate.

                        5.1.4.2  Fair  Market  Rent for the Base Rent and
Parking Rent shall reflect actual market rates prevailing in the Pasadena area
and shall be based upon buildings and parking structures of a similar number of
floors, square footage, floor sizes, quality, and age, taking into consideration
all factors influencing actual market rates such as terms of rental escalation,
base year, tenant improvements, and any other concessions. If the parties are
unable to agree on the Fair Market Rent within three (3) months of written
notice by Lessee of its intention to exercise its option to renew, each party
may appoint a consultant who is a licensed broker in the State of California
with knowledge of the Pasadena market, each of which shall be instructed to
arrive at an indication of Fair Market Rent for the Premises and parking. If
such indications are within ten percent (10%) of each other, the average of the
two shall become the Base Rent for the Premises and Parking Rent for the parking
spaces. If the two consultants' indications of Fair Market Rent differ by more
than ten percent (10%), the two consultants shall be asked to select a third
consultant, and the average of the two indications of Fair Market Rent of the
three consultants which are the closest in amount shall become the Fair Market
Rent for the option period. Each party shall pay the fees associated with its
respective consultant. Costs associated with the third consultant shall be
shared equally between Lessee and Lessor.

            5.2 BUILDING OPERATING EXPENSES. In order that the Rent payable
during the Lease Term reflect any increase in Building Operating Expenses, after
December 31, 2000, Lessee shall pay to Lessor as Rent, Lessee's Proportionate
Share (as set forth in the Basic Lease Provisions) of Building Operating
Expenses in excess of those incurred in the calendar year 2000 (the "Base
Year)", as hereinafter set forth:

                5.2.1 Building Operating Expenses shall include all costs
incurred by Lessor to maintain and operate the Building including, but not
limited to, each of the following:

                      5.2.1.1 "Taxes" as set forth in Section 6.1.

                      5.2.1.2 "Utilities and Services" as set forth in
Section 8.1.

                      5.2.1.3 "Insurance" as set forth in Section 9.2.

                      5.2.1.4 "Common Area Expenses" as set forth in
Section 18.1.

                5.2.2 Lessee's Proportionate Share of Building Operating
Expenses in excess of the amount incurred in the Base Year (" Excess Expenses")
shall be computed and paid by Lessee to Lessor as follows:

                      5.2.2.1  Commencing  with the first full  calendar
month after the first Lease Year, Lessee shall pay as Rent an amount equal to
Lessee's Proportionate Share of Excess Expenses. Such payments shall be made in
monthly installments as reasonably estimated by Lessor from time to time. It is
the intention of the parties to estimate the amount of Excess Expenses for each
calendar year and Lessee's Proportionate Share thereof, and to make an
adjustment in the following calendar year based upon Excess Expenses incurred
during the preceding year.

                       5.2.2.2  After  the  end of each  calendar  year,
Lessor shall deliver to Lessee a statement setting forth Lessee's Proportionate
Share of the Excess Expenses for the preceding calendar

                                       7
<PAGE>

year. If Lessee's Proportionate Share of the Excess Expenses for the previous
calendar year exceeds the total of the estimated monthly amount of Excess
Expenses paid by Lessee for such year, Lessee shall pay Lessor the amount of the
deficiency within thirty (30) days of receipt of a statement indicating the
amount due. If the total amount of Excess Expenses paid by Lessee exceeds
Lessee's Proportionate Share of Excess Expenses for such calendar year, Lessor
shall credit against Lessee's next monthly installment(s) of Rent an amount
equal to the difference until the credit is exhausted. If a credit is due from
Lessor to Lessee on the date of termination of the Lease, Lessor shall pay to
Lessee the amount of the credit, reduced by any amounts payable by Lessee to
Lessor, within thirty (30) days of the date of termination. The obligations of
Lessee and Lessor to make payments required under this Section 5.2. shall
survive the termination of the Lease.

                       5.2.2.3  Lessee's Proportionate Share of Excess
Expenses shall be prorated for any partial year.

                       5.2.2.4 In the event that the Building is less than
ninety five percent (95%) occupied in the Base Year, for purposes hereof Base
Year Building Operating Expenses shall be proportionately adjusted to reasonably
reflect Building Operating Expenses if the Building were ninety five percent
(95%) occupied.

                       5.2.2.5 If any dispute  arises as to the amount of
Excess Expenses, Lessee shall have the right, after reasonable notice and at
reasonable times, to inspect accounting records for the Building for the current
and/or immediately preceding Lease Year at the Building or at Lessor's offices.
If, after such inspection, Lessee still disputes the Excess Expenses owed, a
certification as to the proper amount shall be made by Lessor's Certified Public
Accountant, which certification shall be final and conclusive. Lessee agrees to
pay the cost of such certification unless it is determined that Lessor's
original statement overstated Excess Expenses by more than five percent (5%)

            5.3 LATE FEE. If Lessee fails to pay Rent within ten (10) days after
written notice, Lessee and Lessor agree that (i) Lessor will incur additional
expenses in the form of extra collection efforts, handling costs, and potential
impairment of credit on liens for which this Lease is security; (ii) it is
extremely difficult and impractical to ascertain the extent of detriment; (iii)
the amount described herein is and will be reasonable; and, (iv) Lessor shall be
entitled to recover from Lessee as liquidated damages the greater of One Hundred
Dollars ($100) or three percent (3%) of the amount due ("Late Fee"). Past due
amounts shall also bear interest at the prime rate of Bank of America plus three
percent (3%) per annum or the maximum rate permitted by law, whichever is less
("Lease Interest Rate"). Lessee shall further pay, as Rent, a charge of Fifty
Dollars ($50) for each payment of Rent by check which is returned due to
insufficient funds to reimburse Lessor for Lessor's costs of handling.

            Lessor shall have the right to require that Lessee pay Rent in the
form of a cashier's check or money order if any check of Lessee is not honored
upon presentment to Lessee's bank. Notwithstanding the foregoing, the obligation
to pay such Late Fee, interest, or to pay by cashier's check shall not alter or
preclude Lessor's right, prior to actual receipt of any delinquent installment
of Rent, to exercise any right or remedy which Lessor may have under the terms
of this Lease. Furthermore, acceptance of any monies by Lessor shall not
constitute a waiver by Lessor of Lessee's breach or prevent Lessor from
exercising any other rights or remedies available to Lessor as provided herein
or by law.

            5.4 RENT. Base Rent, Parking Rent, Excess Expenses and any other
charges due hereunder, are collectively referred to in this Lease as "Rent". If
such amounts or charges are not paid at the time provided in this Lease, they
shall nevertheless be collectible with the next monthly installment of Rent due
thereafter. Nothing herein contained shall be deemed to suspend or delay the
payment of any amount or charge at the time the same becomes due and payable
hereunder, or limit any other remedy of Lessor.

            5.5 ADDRESS FOR PAYMENTS. All Rent and other payments due from
Lessee shall be paid to Lessor at the address set forth in the Basic Lease
Provisions, or at such other place as may from time to time be designated by
Lessor in writing at least ten (10) days prior to the next ensuing payment date.

                                       8
<PAGE>

Pending further notice, all payments due hereunder shall be made to Dacam
Management Corporation at 111 Elm Street, Suite 460, San Diego, California
92101. Upon written notice from any first mortgagee that Lessor is in default
pursuant to the terms of any agreement with such lender, Lessee shall pay all
Rent due pursuant to the terms hereof to said lender as directed in the notice.
Any Rent paid pursuant to such written notice shall be credited against Lessee's
obligation for Rent due pursuant to the terms hereof.

ARTICLE 6:  TAXES

            6.1  REAL ESTATE TAXES. Lessor shall pay, subject to partial
reimbursement by Lessee under Section 5.2, all Taxes (hereinafter defined)
assessed or imposed, or which become a lien upon or become chargeable against
the Building and personal property situated in Common Areas. With respect to any
assessment which may be levied against or upon the Building, or which under the
laws then in force may be evidenced by improvement or other bonds, and interest
thereon, and may be paid in annual installments, only the amount of such
installment, with appropriate proration for any partial year, shall be included
within the computation of "Taxes".

            For purposes of this Lease, "Taxes" shall include each of the
following:

                 6.1.1 Any form of assessment, license fee, license tax,
business license tax, commercial rental tax, levy, charge, penalty, possessory
interest tax, public charge, or tax, imposed by any authority having the direct
power to tax, including any city, county, state, or federal government, or any
school, agricultural, lighting, drainage, or other improvement or special
district thereof, as against any legal or equitable interest of Lessor in the
Premises or the Building.

                 6.1.2 Any tax on Lessor's right to Rent or on other income
from the Premises or the Building, or as against Lessor's business of leasing
the Premises.

                 6.1.3 Any assessment, tax, fee, levy or charge in
substitution of, or in addition to, partially or totally, any assessment, tax,
fee, levy or charge previously included within the definition of real property
tax, it being acknowledged by Lessee and Lessor that Proposition 13 was adopted
by the voters of the State of California in the June, 1978 election and that
assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Lessee and Lessor that all such substitute, new, additional and increased
assessments, taxes, fees, levies and charges be included within the definition
of Taxes for purposes of this Lease.

                 6.1.4 Any tax allocable to or measured by the area of the
Premises or Rent payable hereunder, including, without limitation, any gross
income tax or excise tax levied by the state, any political subdivision thereof,
city, or federal government, with respect to the receipt of Rent, or upon or
with respect to the possession, leasing, operating, management, alteration,
repair, use, or occupancy by Lessee of the Premises, the Building, or any
portion thereof.

                 6.1.5 All costs and fees incurred by Lessor to appeal or
contest the amount or existence of any Taxes, or any governmental imposition or
surcharge imposed or assessed against Lessor, the automobile parking areas and
parking garage.

                 6.1.6 Any tax upon this transaction or any document to
which Lessee is a party, creating or transferring an interest or an estate in
the Premises, and any and all assessments Lessor must pay pursuant to any
covenants, conditions, or restrictions, reciprocal easement agreements, tenancy
in common agreements, or similar restrictions affecting the Building.

                 6.1.7 Taxes shall not include state or federal income,
franchise, inheritance, or estate taxes of Lessor, or its partners.

                                       9
<PAGE>

            6.2 PERSONAL PROPERTY TAXES. Lessee shall pay before delinquency all
taxes, assessments, license fees and public charges levied, assessed or imposed
upon its business operation, its trade fixtures, and other personal property in
or upon the Premises. In the event that any items of personal property are
assessed with the Building, such assessment shall be equitably divided between
Lessor and Lessee to the extent that Lessee shall pay only its equitable
proportion of such assessment. Lessor shall determine the equitable division
based upon the assessor's valuation of items being assessed.

ARTICLE 7:  POSSESSION AND USE

            7.1 POSSESSION. Lessor shall deliver the Premises to Lessee and
Lessee shall accept the Premises subject to all applicable municipal, county,
and state laws, ordinances, and regulations governing the use of the Premises,
and any covenants or restrictions of record, and accepts this Lease subject to
these and to all other matters disclosed to Lessee and/or in the exhibits
attached hereto. Lessee acknowledges that neither Lessor nor its employees or
agents have made any representations or warranties as to the present or future
suitability of the Premises for the conduct of Lessee's business.

            7.2 PERMITTED USES. Lessee shall use the Premises solely for the
Permitted Uses specified in the Basic Lease Previsions. Lessee shall not use or
permit the Premises to be used for any other use or purpose, without the prior
written consent of Lessor. Lessor's consent to any change of use shall be based
upon Lessor's reasonable judgment that such change does not (i) change the
character of Lessee's use of the Premises; (ii) adversely affect the image of
the Building; or (iii) otherwise adversely, affect other lessees of the
Building.

            Lessee shall not permit any person to use the Premises for any
purpose in violation of the laws, ordinances, regulations, and requirements of
all duly constituted lawful authorities. The Premises shall be kept by Lessee in
a clean and wholesome condition, free of any objectionable noises, odors, or
nuisances.

            Lessee shall not perform any act or carry on any practice which may
injure the Building, be a nuisance or menace to, or disturb the quiet enjoyment
of other lessees in the Building. Lessee will, at its expense, comply with all
requirements with respect to the Premises of insurance underwriters and
governmental authorities, including compliance with requirements for the
Premises necessary to maintain reasonable fire and extended coverage insurance
for the Building. Notwithstanding the foregoing, Lessee shall not be required to
make structural alterations unless required by Lessee's use of, or Alterations
(as defined in Article 10) to, the Premises.

            7.3 RULES AND REGULATIONS. Lessee's use of the Premises shall be
subject to the Rules and Regulations set forth in Exhibit "C". Lessee, its
employees, agents, licensees, and visitors will, at all times, observe and
comply with the Rules and Regulations. Lessor may from time to time reasonably
delete, add, or amend the Rules and Regulations for the use, safety,
cleanliness, and care of the Premises and the Building and for the comfort,
quiet enjoyment, and convenience of all lessees, and their employees, agents,
and customers. Modifications or additions to the Rules and Regulations will be
effective upon notice to Lessee from Lessor, or Lessor's agent. In the event of
any breach of the Rules and Regulations, or any amendments or additions thereto,
Lessor will have all remedies provided in this Lease, or at law or in equity,
including the right to enjoin a breach of the Rules and Regulations. Lessor will
not be liable to Lessee for a violation of the Rules and Regulations by any
other lessee, its employees, agents, visitors, or licensees, or by any other
person. In the event of any conflict between the provisions of the Lease and the
Rules and Regulations, the provisions of the Lease shall govern.

ARTICLE 8:   UTILITIES AND SERVICES

            8.1 LESSOR'S COVENANTS. Provided that Lessee is not in default
hereunder beyond any applicable cure period, Lessor shall provide to the
Premises electricity for normal desk top office and copying equipment, and
heating, ventilation and air conditioning ("HVAC"), Monday through Friday from

                                       10
<PAGE>

8:00 a.m. to 6:00 p.m. and on Saturdays from 8:00 a.m. to 1:00 p.m., except on
holidays. If Lessee desires HVAC at any other time, Lessor shall use reasonable
efforts to furnish such service upon reasonable notice from Lessee and Lessee
shall pay Lessor's cost to operate such equipment as Rent, within thirty (30)
days of receipt of an invoice from Lessor. Lessor's cost shall include, but is
not limited to, utilities, amortization of the cost of mechanical equipment
required to provide such services, additional maintenance costs, staff time to
activate and deactivate such equipment, plus overhead equal to ten percent (10%)
of the total of such expenses (collectively referred to as "HVAC Use Charges").
Specific charges for such expenses are set forth in Exhibit E. Lessor shall
maintain and keep lighted Common Areas of the Building. Lessor shall furnish
janitorial service to the Premises and Common Areas Monday through Friday,
except on holidays. Lessor shall not be in default hereunder or be liable for
any damages directly or indirectly resulting from, nor shall the Rent be abated
by reason of (i) the installation or interruption of use of any equipment in
connection with the furnishing of any of the foregoing services, (ii) the
failure to furnish or delay in furnishing any such services where such failure
or delay is caused by accident or any condition or event beyond the reasonable
control of Lessor, or by the making of necessary repairs or improvements to the
Premises or the Building, or (iii) the limitation, curtailment or rationing of,
or restrictions on, use of water, electricity, gas or any other form of energy
serving the Premises or the Building. Lessor shall not be liable under any
circumstances for a loss of or injury to property or business, however
occurring, through or in connection with or incidental to failure to furnish any
such services. If Lessee uses heat generating machines or equipment in the
Premises which affect the temperature otherwise maintained by the HVAC system,
Lessor reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation, operation and
maintenance thereof, shall be payable by Lessee to Lessor as Rent upon demand.

            8.2 LESSEE'S COVENANTS. Lessee shall not connect any apparatus using
electric current except through existing electrical outlets in the Premises.
Lessee shall not consume water or electric current in excess of that usually
furnished or supplied for the use of Premises as general office space without
first procuring Lessor's written consent, which consent shall not be
unreasonably withheld. The use of supplemental air conditioning equipment for
computer and telephone switching rooms, and space heaters shall be deemed to
require current in excess of that supplied for use as general office space. In
such case, Lessor may have installed a water meter or electrical current meter
to measure the amount of water or electric current consumed, and the cost of any
such meter and of its installation, maintenance and repair shall be paid for by
Lessee as Rent, within thirty (30) days of receipt of an invoice from Lessor
indicating the amount due. If a separate meter is not installed, the excess cost
for such water and electric current shall be established by an estimate made by
a utility company or electrical engineer hired by Lessor at Lessee's expense.

            8.3 STANDARDS FOR UTILITIES AND SERVICES. Standards for Building
Utilities and Services and Rent due from Lessee to Lessor for exceeding such
standards are more particularly set forth in Exhibit F, attached hereto and
incorporated by reference herein.

            8.4 LESSOR'S RIGHT TO CEASE SERVICES. Lessor shall have the right in
its reasonable discretion to reduce, interrupt or cease service of the HVAC,
elevator, plumbing, electrical systems, telephone systems and/or utilities
serving the Premises or the Building because of (i) any accident, emergency,
governmental regulation or Act of God, or (ii) the making of repairs, additions,
alterations or improvements to the Premises or the Building as provided herein
until said repairs, additions, alterations or improvements shall have been
completed.

No such interruption, reduction or cessation of any services or utilities shall
constitute (i) an eviction or disturbance of Lessee's use or possession of the
Premises, (ii) an ejection of Lessee from the Premises, (iii) a breach by Lessor
of any of its obligations, (iv) render Lessor liable for any damages, including
but not limited to any damages or claims arising from any interruption or
cessation of Lessee's business, (v) entitle Lessee to be relieved from any of
its obligations under the Lease, or (vi) result in any abatement of Rent. In the
event of any such interruption, reduction or cessation, Lessor shall use
reasonable diligence to restore such service where it is within Lessor's control
to do so. If an interruption of services

                                       11
<PAGE>

continues for more than five (5) days due to Lessor's failure to make repairs
which Lessor is obligated to make hereunder, Lessee shall have the right to
discontinue the payment of Rent.

ARTICLE 9:  INDEMNITY AND INSURANCE

            9.1 INDEMNITY BY LESSEE. Neither Lessor nor any mortgagee of the
Building shall be liable for any damage or liability, or for any injury to or
death of persons, or for damage to property of Lessee or any other person,
provided, however, Lessor may be liable for damages or injury occasioned by the
negligence or willful misconduct of Lessor, its employees or agents.

            Lessee indemnifies and holds Lessor and its mortgagees harmless from
any liability, on account of any claimed damages or injury and from all liens,
claims, and demands, including reasonable attorney's fees, investigation costs,
and reasonable costs, with respect to any claim or demand, arising out of (i)
the use, condition, operation, or occupation by Lessee of the Premises; (ii) any
repairs, alterations, additions, or changes made by Lessee to the Premises
("Alterations"); (iii) any act, omission, or negligence by Lessee, its
employees, agents, sublessees, invitees, or licensees; or (iv) any failure by
Lessee to comply with the terms or conditions of this Lease. Lessee shall also
hold Lessor harmless from any liability, cost, or expense arising from Lessee's
use or storage in the Premises of any hazardous or toxic substance. Lessee
shall, at Lessee's expense and by counsel satisfactory to Lessor, defend Lessor
in any actin or proceeding arising from any such claim and shall indemnify
Lessor against all costs, attorneys' fees, expert witness fees and any other
expenses incurred in such action or proceeding.

            Lessor indemnifies and holds Lessee harmless from any liability, on
account of any claimed damages or injury and from all liens, claims, and
demands, including reasonable attorney's fees, investigation costs, and
reasonable costs, with respect to any claim or demand, arising out of the
negligence or willful misconduct of Lessor, its contractors, agents or
employees. Lessor shall, at Lessor's expense and by counsel reasonably
satisfactory to Lessee, defend Lessee in any action or proceeding arising from
any such claim and shall indemnify Lessee against all costs, attorneys' fees,
expert witness fees and any other expenses incurred in such action or
proceeding.

            9.2 LESSOR'S INSURANCE. Lessor shall carry insurance to protect the
Building and Lessor, as Lessor shall from time to time deem necessary, based
upon reasonable for comparable buildings in the Pasadena area. The cost of such
insurance shall be included as a part of Common Area Expenses.

            9.3 LESSEE'S INSURANCE. Lessee's obligations with respect to
insurance shall be as follows:

                9.3.1 Lessee agrees to apply for and obtain from insurance
companies reasonably acceptable to Lessor and authorized to do business in
California with a financial rating of at least A, VI in the most current
available edition of "Best's Insurance Reports", effective from and after the
Actual Commencement Date, at Lessee's sole cost and expense, insurance coverage
as follows:

                      9.3.1.1  Comprehensive  general  liability  coverage
issued in the names of Lessee and Lessor with limits of not less than One
Million Dollars ($1,000,000) for damage to property and not less than One
Million Dollars ($1,000,000) single limit liability for injury to persons with
respect to the Premises, the business operated by Lessee in the Premises, and
the maintenance, use, and condition thereof. Such public liability and property
damage insurance shall specifically insure the performance by Lessee of the
indemnity provided in Section 9.1;

                      9.3.1.2 Insurance covering Improvements included in
Lessee's Work, Alterations, trade fixtures, and personal property in or on the
Premises, in an amount not less than one hundred percent (100%) of their full
replacement cost, providing protection against any peril included within the
classification "Fire and Extended Coverage", together with protection against
flood, sprinkler damage, vandalism, and malicious mischief. If requested by
Lessor, Lessee shall name Lessor's first mortgagee as loss payee under any such
casualty insurance carried by Lessee. Any policy proceeds

                                       12
<PAGE>

shall be used for the repair and replacement of the property damaged or
destroyed, unless this Lease shall terminate pursuant to Section 17.2. Upon
termination of the Lease following a casualty, Lessee shall be entitled to any
proceeds received for its trade fixtures and personal property, and the balance
shall be paid to Lessor.

                      9.3.1.3 Worker's Compensation as required by law.

                9.3.2 Executed copies of such policies of insurance, or
certificates thereof, shall be delivered to Lessor within ten (10) days after
issuance of each such policy. All policies shall contain a provision that
Lessor, although named as an insured, shall nevertheless be entitled to recovery
under said policies for any loss occasioned to it, its employees and agents by
reason of the negligence of Lessee. As often as any such policy shall expire or
terminate, renewal or additional policies shall be procured and maintained by
Lessee in like type and amount. New policies, or renewals, shall be delivered to
Lessor at least ten (10) business days prior to the expiration of the term of
the existing policy. All policies of insurance delivered to Lessor must contain
a provision that the company writing such policy will give Lessor notice in
writing at least thirty (30) days in advance of any cancellation or lapse, or
the effective date of any reduction in type or amount of coverage. All policies
shall be written as primary policies, not contributing with and not in excess of
coverage which Lessor may carry.

                9.3.3 Lessee's obligation to carry insurance may be brought
within the coverage of a so-called blanket policy or policies of insurance
carried and maintained by Lessee, provided, however, (i) Lessor shall be named
as an additional insured thereunder as its interest may appear; (ii) the
coverage required by this Section 9.3 will not be reduced or diminished by
reason of the use of such blanket policy of insurance; and (iii) the
requirements set forth herein are otherwise satisfied. If Lessee does not obtain
the insurance coverage as required in this Section 9.3, Lessor may, but it is
not obligated to, secure such coverage and Lessor shall be entitled to
reimbursement for the cost thereof plus interest at the Lease Interest Rate as
Rent.

                9.3.4 Lessee shall report in writing to Lessor any accident
causing property damage reasonably estimated at more than Five Thousand Dollars
($5,000) or involving any injury to a person on the Premises or caused by
Lessee, its employees and/or agents at the Building.

            9.4 ASSUMPTION OF RISK. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to Lessee's personal
property or injury to persons, in, upon or about the Premises and the Building
from any cause, except for damage or injury caused by the negligence or willful
acts of Lessor, its employees, agents, and contractors, and Lessee hereby waives
any such claims against Lessor. Lessor, its employees, and agents shall not be
liable for any damage to Lessee's personal property entrusted to Lessor, nor for
loss or damage to Lessee's personal property by theft or otherwise.

            9.5 INSURANCE RELATED USE RESTRICTIONS. Lessee agrees that it will
not do anything in or about the Premises that will in any way increase the rates
for insurance covering the Building, or cause a loss of coverage for the
Building. Lessee agrees to pay to Lessor, within thirty (30) days of receipt of
an invoice and supporting documentation from the insurer, the amount of any
increase in premiums charged to Lessor for any insurance carried by Lessor,
which increase results from Lessee's violation of the foregoing restriction,
whether or not Lessor has consented to Lessee's actions. Lessee shall install
any fire extinguishing equipment that Lessor's insurance underwriters or
applicable fire, safety, and building codes and/or regulations may require at
the Premises after Lessee's acceptance thereof.

ARTICLE 10: ALTERATIONS

            10.1 ALTERATIONS. Lessee agrees that it will not make any
Alterations to the Premises without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. Lessee shall be responsible for the
entire cost of all permitted Alterations. All Alterations shall be (i) under the
supervision of a competent architect or competent licensed structural engineer;
(ii) made in accordance

                                       13
<PAGE>

with plans and specifications which are approved in writing by Lessor before the
commencement of work; (iii) done in a workmanlike manner by a licensed
contractor approved in writing by Lessor;, and (iv) diligently prosecuted to
completion to the end that the Premises shall at all times be a complete unit
except during the period of work. Any Alterations shall be performed and done
strictly in accordance with all laws and ordinances relating thereto including,
without limitation, all requirements of the City of Pasadena and County of Los
Angeles. In performing any Alterations, Lessee shall have the work performed in
such a manner as not to obstruct access to the Premises or interfere with the
quiet enjoyment of any other lessees in the Building. Upon completion of such
work, Lessee shall file of record, in the office of the Los Angeles County
Recorder, a Notice of Completion as permitted by law. Lessee shall provide to
Lessor, or cause to be provided, a copy of the building permit, building
inspection approvals, and recorded Notice of Completion.

            10.2 RIGHTS UPON TERMINATION. Upon the expiration or earlier
termination of Lessee's leasehold estate, Alterations approved by Lessor shall
not be removed by Lessee, but shall become a part of the Premises and the
property of Lessor. Notwithstanding the foregoing, Lessor may, at Lessor's
option, require that Lessee remove, at Lessee's expense, Alterations placed in
the Premises by Lessee upon the expiration or earlier termination of this Lease,
if Lessor's approval of such Alterations was conditioned upon such removal.
Lessor may exercise said option as to any or all Alterations, either before or
after the expiration or earlier termination of this Lease. If Lessor exercises
such option and Lessee fails to remove the designated items prior to termination
of the Lease, Lessor shall have the right to have such items removed at the
expense of Lessee and charge Lessee Rent for the time during which such items
remain on the Premises after the date of termination. As to any Alterations that
Lessor does not require Lessee to remove, title thereto shall vest in Lessor
without cost to Lessor.

ARTICLE 11: MECHANIC'S LIENS

            11.1 LESSEE'S COVENANTS. Lessee agrees to pay all costs for work
done by it or caused to be done by it in the Premises. Lessee will keep the
Premises and the Building free and clear of all mechanic's and other liens on
account of work done by Lessee or persons claiming under it. Lessee agrees to
indemnify, defend, and save Lessor free and harmless against liability, loss,
damages, costs, attorneys' fees, and all other expenses on account of claims of
lien laborers or materialmen or others for work performed or materials furnished
for Lessee or persons claiming under Lessee.

            11.2 CONTEST OF LIEN. If a lien or notice of the lien is filed with
respect to any work done by or for Lessee, Lessee shall, within ten (10) days of
the filing of such lien or notice, furnish to Lessor adequate security in the
amount of the claim, plus estimated costs and interest, or a bond from a
corporate surety approved in writing by Lessor, in an amount adequate to insure
the discharge of the lien. If, as final judgment establishing the validity of
existence of a lien for any amount is entered, Lessee shall immediately pay the
same.

            11.3 RIGHT TO CURE. If Lessee shall be in default in paying any
charge for which a mechanic's lien claim has been filed and shall not have given
Lessor security to protect the Building and Lessor against such claim of lien,
Lessor may, but shall not be so required to, pay said claim and any costs, and
the amount so paid, together with reasonable attorneys' fees incurred in
connection therewith, shall be immediately due from Lessee to Lessor as Rent.
Lessee shall pay the same to Lessor with interest at the Lease Interest Rate
from the date(s) of Lessor's payment(s).

            11.4 NOTICE OF LIEN. Should any claim of lien be filed against the
Premises, or any action affecting the title to the Building be commenced, the
party receiving notice of such lien or action shall forthwith give the other
party written notice thereof.

            11.5 NOTICE OF NONRESPONSIBILITY. Lessor, its employees, lender, and
agents shall have the right to go upon and inspect the Premises at all
reasonable times and shall have the right to post and keep posted thereon a
notice of nonresponsibility, or such other notices which Lessor may deem to be
proper for the protection of Lessor's interest in the Premises. At least five
(5) days before the

                                       14
<PAGE>

commencement of any Alterations, Lessee shall give to Lessor written notice of
Lessee's intention to commence work to enable Lessor to post such notice.

ARTICLE 12: SIGNAGE

            12.1 SIGNAGE CRITERIA. Subject to Lessor's reasonable approval as
set forth below, Lessee, at Lessee's expense, shall be permitted to install at
the south pedestrian entrance, a monument or garden wall sign identifying Lessee
in size, color, and content consistent with existing signage.

            12.2 LESSOR'S APPROVAL. Lessee shall not art's, paint, erect or
inscribe any sign, projection, awning, signal or advertisement of any kind to
any part of the Premises or Building, including without limitation, the inside
or outside of windows or doors, without the written consent of Lessor. Lessor
shall have the right to remove any signs or other matter, installed without
Lessor's permission, without being liable to Lessee by reason of such removal,
and to charge the cost of removal to Lessee as Rent, payable within ten (10)
days after receipt of an invoice from Lessor.

            12.3 LESSOR'S RESPONSIBILITY. Lessor, at Lessor's expense, shall
identify Lessee's occupancy of the Premises with a directory or other signage in
the main lobby of the Building.

            12.4 LESSEE'S RESPONSIBILITY. Except as otherwise provided herein,
Lessee, at Lessee's expense, shall furnish all signs, including parking signs,
wall signs, and directory identification strips, if any.

ARTICLE 13: FIXTURES AND PERSONAL PROPERTY

            13.1 TRADE FIXTURES AND PERSONAL PROPERTY. Any trade fixtures and
personal property of Lessee not permanently affixed to the Premises shall remain
the property of Lessee. Lessor agrees that Lessee shall have the right, upon the
expiration or earlier termination of the Lease Term, to remove its trade
fixtures and other personal property which it stored or installed in the
Premises. At Lessor's option, Lessee shall have the obligation to remove all
trade fixtures and personal property upon expiration or earlier termination of
the Lease Term. Lessee, at its expense, shall immediately repair any damage
occasioned to the Premises by reason of the removal of any such trade fixtures
and personal property and shall, upon the last day of the Lease Term or date of
earlier termination, leave the Premises in a neat and clean condition, free of
debris.

ARTICLE 14: ASSIGNMENT, SUBLETTING, MORTGAGING, AND CHANGE IN OWNERSHIP

            14.1 DEFINITIONS. As used in this Article, the following definitions
shall apply:

                 14.1.1 "Transfer" means any (i) voluntary or involuntary
assignment of Lessee's entire interest, rights, and duties in the Lease or the
Premises, including Lessee's right to use, occupy, and possess the Premises; or
(ii) sublease of Lessee's right to use, occupy, and/or possess the Premises, in
whole or in part.

                 14.1.2 "Encumbrance" means any conditional, contingent, or
deferred assignment or sublease, voluntarily or involuntarily made by Lessee, of
some or all of Lessee's right to use, occupy, and possess the Premises,
including, without limitation, any mortgage, deed, deed of trust, pledge,
hypothecation, lien, franchise, license, concession, or other security
arrangement.

                 14.1.3 "Change of Control" means the transfer by sale,
assignment, death or incompetency, mortgage, trust, operation of law, or
otherwise of any shares, voting rights, or ownership interests (including
partnership interests) which will result in a change in the identity of the
person or persons exercising, or who may exercise, effective control of Lessee,
unless such change results from

                                       15
<PAGE>

the trading of such shares listed on a recognized public stock exchange and such
trading is not for the purpose of acquiring effective control of Lessee. If
Lessee is a private corporation whose stock becomes publicly held with its
shares listed on a recognized public stock exchange, the transfer of such stock
from private to public ownership shall not be deemed a Change of Control.

                 14.1.4 "Occupancy Transaction" means any Transfer,
Encumbrance, Change of Control, or other arrangement whereby the identity of the
person or persons using, occupying, or possessing the Premises changes or may
change, whether such change be of an immediate, deferred, conditional,
exclusive, nonexclusive, permanent, or temporary nature.

                 14.1.5 "The Transferee" means any proposed assignee,
sublessee, mortgagee, pledgee, or other recipient of Lessee's interest, rights,
or duties in this Lease or the Premises in an Occupancy Transaction.

            14.2 RESTRICTIONS ON OCCUPANCY TRANSACTIONS. Any Occupancy
Transaction shall be subject to restrictions as hereinafter provided.

                 14.2.1 Lessee shall not enter into any Occupancy Transaction
with respect to any of Lessee's interest in the Premises without first procuring
the written consent of Lessor, which consent shall not be unreasonably withheld.
Any attempted Occupancy Transaction without Lessor's written consent shall be
void and confer no rights upon any third person. Lessor reserves the right to
refuse to give such consent unless Lessee remains fully liable for the unexpired
portion of the Lease Term. The consent by Lessor to any assignment or subletting
shall not be construed to relieve Lessee or any Transferee from complying with
the terms of this Article 14 with respect to any future Occupancy Transaction.

                 14.2.2 By way of example and without limitation, Lessor and
Lessee hereby agree that it shall be reasonable for Lessor to withhold its
consent if any of the following situations exist or may exist:

                 (i) The Transferee's proposed use of the Premises is
different than the Permitted Uses described in the Basic Lease Provisions.

                 (ii) In Lessor's reasonable judgment, the Transferee lacks
sufficient ability, management and/or expertise to operate a successful
business.

                 (iii) With respect to a nonaffiliated entity, the net worth
is insufficient to provide Lessor with reasonable assurances regarding the
Transferee's ability to pay the remaining obligations hereunder based upon
reasonably industry standards.

            14.3 PROCEDURES FOR APPROVAL OF OCCUPANCY TRANSACTIONS:

                 14.3.1 Should Lessee desire to enter into an Occupancy
Transaction, Lessee shall request in writing Lessor's consent to such Occupancy
Transaction at least fifteen (15) working days before the effective date of such
transaction, and shall provide Lessor with the following:

                 (i)   The particulars of the proposed Occupancy
Transaction, including its nature, all consideration to be paid, the effective
date, terms and conditions, and copies of any offers, agreements, subleases,
letters of commitment or intent, and/or other documents pertaining to such
Occupancy Transaction.

                 (ii)  A description of the identity, net worth, and
previous business experience of the Transferee and the persons involved therein
including, without limitation, copies of the Transferee's latest income
statement, balance sheet, and change-of-financial-position statement (with
accompanying notes and disclosures of all material changes thereto) in audited
form, if available, and certified as accurate by the Transferee.

                                       16
<PAGE>

                 (iii)  Business and financial references of the Transferee
and the persons involved therein.

                 (iv)   Any further information relevant to the Occupancy
Transaction which Lessor may reasonably request.

                 (v)    A statement that Lessee intends to consummate the
Occupancy Transaction if Lessor consents thereto.

                 14.3.2 Within fifteen (15) working days after receipt by
Lessor of the information required by Section 14.3.1 above, Lessor may either:

                 (i)  Consent to the Occupancy Transaction; or

                 (ii) Refuse to consent to the Occupancy Transaction if,
pursuant to Section 14.2 above, Lessor is entitled to withhold its consent.

            14.4 DOCUMENTATION AND EXPENSES. Each Occupancy Transaction to which
Lessor has consented shall be evidenced by an instrument made in written form
reasonably satisfactory to Lessor, executed by Lessee and the Transferee. By
such instrument, the Transferee shall assume and promise to perform the terms,
covenants, and conditions of this Lease which are obligations of Lessee,
including the payment of Rent. Lessee shall, upon demand of Lessor, reimburse
Lessor for Lessor's reasonable costs, including attorneys' fees, incurred in
obtaining advice, reviewing, and preparing documentation for each Occupancy
Transaction for which consent has been requested, but not to exceed Five Hundred
Dollars ($500.00).

            14.5 RENT PAYMENTS BY TRANSFEREE. In the event Lessor shall consent
to an Occupancy Transaction, the Transferee shall thereafter pay directly to
Lessor the Rent specified herein.

            14.6 AFFILIATED COMPANY EXCEPTION. Notwithstanding the foregoing,
occupancy of all or part of the Premises by parent, subsidiary, or affiliated
companies of Lessee, or an entity into which Lessor is merged or consolidated,
including an entity which acquires substantially all of the assets of Lessee,
shall not be deemed an Occupancy Transaction provided that such parent,
subsidiary, affiliated company, or entity was not formed as a subterfuge to
avoid Lessee's ob`1 ligations under this Section 14. In such case, Lessee shall
provide Lessor with all information required for an Occupancy Transaction to
enable Lessor to verify compliance with the terms of this exception.

            14.7 DISPOSITION OF PROFITS FROM OCCUPANCY TRANSACTION. In the event
that the Rent due from a transferee in an Occupancy Transaction is greater than
the Rent provided herein, any excess Rent after deducting all expenses incurred
by Lessor and Lessee in consummating such Occupancy Transaction, shall be
payable fifty percent (50%) to Lessor and fifty percent (50%) to Lessee. The
party receiving payment from the Transferee shall pay the other party fifty
percent (50%) of the excess rent within thirty (30) days of receipt.

            14.8 LESSEE'S LIABILITY. Nothing herein contained shall be
constituted to release Lessee from its liability hereunder in the event of an
Occupancy Transaction.

ARTICLE 15: LESSEE'S CONDUCT OF BUSINESS

            15.1 ADVERTISING PROHIBITION. Lessee shall not display or sell
merchandise, or allow tables, aerials, antennae, portable signs, or any other
objects to be stored or placed outside of the walls which demise the Premises.
Lessee shall remove any objects maintained in violation of this Section 15.1
immediately upon notice from Lessor or Lessor shall be entitled to remove said
objects. Within ten (10) days of receipt of an invoice from Lessor, Lessee shall
reimburse Lessor for its costs and expenses in removing any of said objects, and
the amount of such reimbursement shall be deemed Rent payable

                                       17
<PAGE>

hereunder. In addition, Lessee shall not solicit in the Building without the
prior written approval of Lessor.

            15.2 TRASH AND RUBBISH. Lessee agrees that all trash and rubbish of
Lessee shall only be deposited within trash receptacles provided by Lessee in
the Premises. Garbage must be in watertight containers that do not permit any
dripping or any odors to escape. Lessor shall cause trash receptacles filled
with normal office refuse to be emptied and trash removed as a part of the
janitorial service, which service shall be charged as a part of Common Area
Expenses. Any extraordinary trash generated by Lessee must be removed from the
Building by Lessee. Should Lessee fail to use the designated trash receptacles
and/or remove any extraordinary trash from the Building within twenty-four (24)
hours after notice from Lessor to do so, Lessor may correct said problem and
Lessee shall pay to Lessor the cost thereof plus a twenty percent (20%)
administrative fee as Rent. Acceptance of any such charges shall not constitute
a waiver by Lessor of Lessee's breach or prevent Lessor from exercising any of
the other rights and remedies available to Lessor hereunder or as provided by
law.

            15.3 CONFORMANCE WITH LAWS. Lessee shall, at its sole cost and
expense, conform to, abide by, and comply with all laws, statutes, ordinances,
rules, and regulations of all governmental authorities having jurisdiction over
the Premises. Nothing herein contained shall obligate Lessee for structural
alterations unless required by Lessee's use of, or Alterations to, the Premises
except in connection with its liability for its Proportionate Share of Common
Area Expenses set forth in Section 18.2, as Excess Expenses. Where permits are
required from governmental authorities for a particular operation, such permits
shall be secured before such operation is undertaken.

            15.4 SAFE AND CLEAN ENVIRONMENT. Lessee shall keep the Premises in a
safe, clean, wholesome, and sanitary condition to the reasonable satisfaction of
Lessor, who shall have the right, upon reasonable notice, to enter and inspect
the Premises and the business conducted on the Premises. Should Lessor or any
representative of an appropriate governmental authority determine the Premises
are not being maintained in compliance with the terms of this Lease, Lessor
shall be entitled to put the Premises in a safe, clean, wholesome, and sanitary
condition as required hereunder or by law and o charge expenses thereby incurred
to Lessee as Rent.

ARTICLE 16: REPAIRS AND MAINTENANCE

            16.1 LESSOR'S OBLIGATIONS. Lessor shall maintain in good order,
condition and repair the Building consistent with comparable first class
buildings, except for the obligations of Lessee, and other lessees as
hereinafter set forth.

            16.2 LESSEE'S OBLIGATIONS.

                 16.2.1 Lessee, at Lessee's sole expense, shall, except for
services furnished by Lessor pursuant to Article 8 hereof, maintain the Premises
in good order, condition and repair, including the interior surfaces of the
ceilings, walls and floors, all doors, all interior windows, and special items
and equipment installed by or at the expense of Lessee.

                 16.2.2 Lessee shall be responsible for all repairs in and to
the Premises, the Building, and the facilities and systems thereof, the need for
which arises out of (i) errors in design of Lessee's lighting, plumbing and
heating and air conditioning systems, (ii) the installation, removal, use or
operation of Lessee's property in the Premises, (iii) defective workmanship in
the completion of Lessee's Work or Alterations, (iv) the moving of Lessee's
property into or out of the Building, or (v) the willful act, omission, misuse
or negligence of Lessee, its agents, contractors, employees or invitees.

            16.3 LESSEE'S ACCEPTANCE AND WAIVER. By accepting possession of the
Premises, Lessee accepts the Premises as being in the condition called for by
this Lease, except for such items as Lessee shall advise Lessor in writing
within ten (10) days from the date Lessee accepts possession of the Premises and
latent defects. Lessee hereby waives any provisions of law permitting repairs by
Lessee at

                                       18
<PAGE>

the expense of Lessor, including, without limitation, all rights granted to
Lessee under Sections 1941 and 1942 of the Civil Code of the State of
California.

ARTICLE 17: RECONSTRUCTION

            17.1 INSURED CASUALTY. In the event of damage or destruction of the
Premises by fire, the elements, acts of God, or any other cause, which damage or
destruction is covered by insurance then in effect with respect to the Building,
Lessor shall repair such damage or destruction and this Lease shall continue in
full force and effect. Lessee, at its sole cost and expense, shall promptly
repair the interior of the Premises, including Improvements included in Lessee's
Work, Alterations, fixtures, furniture, furnishings, and equipment.

            17.2 UNINSURED CASUALTY. In the event the damage or destruction of
the Premises is not fully covered by insurance, Lessor shall have the option to
repair or not to repair the Premises. If Lessor elects to repair the Premises,
this Lease shall remain in full force and effect and Lessee, at its sole cost
and expense, shall promptly repair the interior of the Premises, including the
Improvements included in Lessee's Work, Alterations, fixtures, furniture,
furnishings, and equipment. If Lessor elects not to repair the Premises, Lessor
shall give written notice of such election to Lessee within ninety (90) days of
the event of damage or destruction and this Lease shall thereupon terminate.
Notwithstanding the foregoing, if the repairs cannot reasonably be completed
within a period of six (6) months from the date of damage or destruction, either
party by written notice delivered to the other may terminate this Lease within
thirty (30) days after Lessor has notified Lessee of the schedule for
reconstruction. Lessor shall provide such schedule within sixty (60) days from
the date of such damage or destruction.

            17.3 ABATEMENT OF RENT. In the event that Lessor undertakes repairs,
Lessee shall continue the operation of its business in the Premises during such
repair period, to the extent reasonably practicable from the standpoint of
prudent business management. The Rent due from Lessee to Lessor during the
period such damage or repair continues shall be abated in proportion to the
degree to which Lessee's use of the Premises is impaired, unless such damage or
repair was caused by the negligence or willful misconduct of Lessee, its
employees or agents. If caused by the negligence or willful misconduct of
Lessee, its employees or agents, Rent shall not be abated. Lessee shall not be
entitled to any compensation or damages from Lessor for any loss of use of the
Premises, Lessee's personal property, or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction, or restoration.

            17.4 WAIVER AND NOTICE. With respect to any partial or total
destruction which Lessor is obligated to restore or elects to restore under any
of the provisions of this Lease, the provisions of Section 1932, Subdivision 2,
and Section 1933, Subdivision 4 of the Civil Code of California, are hereby
waived by Lessee. Lessee shall give written notice to Lessor of any damage or
destruction that occurs on the Premises within ten (10) days of such damage or
destruction.

ARTICLE 18: COMMON AREA EXPENSES

            18.1 RESPONSIBILITY AND PAYMENT FOR COMMON AREA EXPENSES. Lessor
shall keep, or cause to be kept, the Common Areas of the Building in a neat,
clean, and orderly condition, properly lighted and landscaped and provide
services in the Premises as are more particularly described in Exhibit F. Common
Area Expenses are included in determining Excess Expenses, which are charged to
Lessee as set forth in Section 5.2.

            18.2 DEFINITION COMMON AREA EXPENSES. The phrase "Common Area
Expenses" shall include the total cost incurred in operating, maintaining, and
managing the Building, including the Common Areas, specifically including each
of the following services:

                 (i)   Salaries and benefits for onsite staff required to
operate and maintain the Building.

                                       19
<PAGE>

                 (ii)   Sanitary control, pest control, janitorial services,
and removal of trash, rubbish, garbage, and other refuse.

                 (iii)  Lighting and utility systems, including incidental
temporary power, which may be provided for the construction of tenant
improvements in the Building.

                 (iv)   Gardening, planting, and landscaping.

                 (v)    Property management fees, but not exceeding property
management fees charged by major real estate firms in the Pasadena area.

                 (vi)   Roof, building, and project signage repairs.

                 (vii)  Parking lot sealing, line, restriping, sweeping, and
cleaning.

                 (viii) Reasonable reserves for replacements and repairs.

                 (ix)   Bookkeeping and/or accounting fees, including any
reports required to be completed by a certified public accounting firm.

                 (x)    Maintenance and repair of any fire protection
systems.

                 (xi)   Directional signs and other markers and bumpers.

                 (xii)  Contractor, installation, and maintenance costs and
expenses pertaining to security for the Building.

                 (xiii) Capital improvements or additions to the Building and
any machinery or equipment installed therein which are required by any
governmental authority or which have the effect of reducing Common Area
Expenses. Lessor shall amortize the cost of any capital improvements or
additions with a life in excess of two (2) years, which capital improvement or
addition costs is in excess of Ten Thousand Dollars ($10,000). In such event,
only the current portion, together with reasonable interest thereon, shall be
charged as a Common Area Expense. Appropriate prorations shall be made for any
partial year during the Lease Term.

                 (xiv)  Capital repairs required to the roof, structure,
mechanical, electrical, plumbing, or any other mechanical or structural
components of the Building. Lessor shall amortize the cost of any capital repair
with a life in excess of two (2) years, which repair cost is in excess of Ten
Thousand Dollars ($10,000). In such event, only the current portion, together
with reasonable interest thereon, shall be charged as Common Area Expenses.
Appropriate prorations shall be made for any partial year during the Lease Term.

                 (xv)   Seasonal and other decorations consistent with
holidays and special events observed in the Pasadena area.

                 (xvi)  Maintenance of street trees and landscaping,
sidewalks, pedestrian walkways, pavement embellishments, and improvements, if
any, in the public right of way which affect the appearance of, or otherwise
benefit, the Building.

                 (xvii) Any costs or expenses incurred in connection with any
changes permitted under the terms of this Lease, repairs, or maintenance of the
Building, including the cost of operation of any additional or replacement
parking.

                 (xviii) Any other reasonable charges resulting from the
operation, maintenance, and management of the Building.

                                       20
<PAGE>

Notwithstanding any provision to the contrary, Common Area Expenses shall not
include:

                 (i)    Any expenditures incurred by Lessor in the expansion
of the Building, or as a part of tenant improvements for any lessee.

                 (ii)   Costs, repairs or other work reimbursed by fire or
other casualty insurance of Lessor, except for the amount of any deductibles.

                 (iii)  Leasing commissions and other expenses incurred in
leasing or procuring new tenants.

                 (iv)   Legal fees, other than those related to the operation
of the Building, planning fees, architectural fees, and engineering fees
incurred in connection with the leasing of the Building.

                 (v)    Any costs in defending any lawsuits with mortgagees
unless caused by an event of default by Lessee or other lessees.

                 (vi)   Any construction allowance paid by Lessor to any
lessee of the Building.

                 (vii)  Any other costs specified herein to be at Lessor's
cost and expense.

                 (viii) Increases in Common Area Expenses exceeding five
percent (5%) per year except for capital repairs resulting from occurrences
beyond the reasonable control of Lessor.

            Lessor shall use due diligence to obtain goods and services required
for the maintenance of the Building at prices competitive in the Pasadena area.

            18.3 LIABILITY FOR SECURITY. Nothing contained herein shall be
deemed to create any liability upon Lessor for any loss of, or damage to, the
property of Lessee, its employees, agents, or customers, or for loss of
property. Lessee acknowledges that if Lessor elects to engage a security service
and/or device, Lessor does not represent or guarantee that Lessee, its
employees, agents or customers will be secure from losses caused by the illegal
acts of third parties and does not assume responsibility to prevent any such
illegal acts. In order to induce Lessor to engage such service and/or device,
Lessee hereby waives any present or future claims Lessee may have against
Lessor, whether known or unknown, for bodily injury or property damage or loss
arising from the performance of such security service. Lessor hereby grants to
Lessee the right to install its own security system and/or provide for a secured
area in the Premises, provided that reasonable access shall be provided Lessor
and its agents to provide the services and such other purposes as are set forth
herein.

            18.4 RESERVED AND VISITOR PARKING RESTRICTIONS.

                 18.4.1 Parking spaces are available in the parking garage
serving the Building (the "Parking Garage"). Lessee has hired spaces on a
designated and non-designated basis as set forth in the Basic Lease Provisions.
Designated spaces, if any, hired by Lessee are identified by diagonal lines on
Exhibit "F", attached hereto and incorporated by reference herein. For each
space reserved in the Parking Garage, Lessee has been provided with a magnetic
card, which card Lessee shall maintain in good condition and repair. Lessee
shall pay to Lessor the amount of Twenty Dollars ($20.00) as Rent, in the event
that a magnetic card provided by Lessor to Lessee is lost or damaged.

                 18.4.2 Visitor parking is available on a fee basis in the
Parking Garage. Visitor parking is currently available at a daily rate of Four
Dollars ($4.00) per day. Lessee shall be permitted to purchase from Lessor
visitor tokens or passes for access to and egress from the Parking Garage at a
cost equal to seventy-five percent (75%) of the daily rate. Lessor reserves the
right, in its sole discretion, to change the daily rate (and visitor rate
charged to Lessee) based upon market conditions from time to time in the City of
Pasadena.

                                       21
<PAGE>

                 18.4.3 In the event any surcharge or regulatory fee is
imposed by any governmental authority based upon reserved parking at the
Building, Lessee shall (commencing after two weeks' notice to Lessee) pay, per
reserved parking space, such surcharge (or regulatory fee) to Lessor
concurrently with the next monthly installment of rent due for parking.

                 18.4.4 Lessee's automobiles are accepted for parking only.
Lessor assumes no liability for fire, theft, or damage in or to any automobile,
except through the negligence or willful misconduct of Lessor, its employees,
agents, or contractors. Lessor shall not be responsible for articles left in any
automobile, including, but not limited to CB radios, antennas, CD or tape decks,
and compact discs or tape cassettes. No employee of Lessor, or their agents,
have authority to vary or increase Lessor's liability. Notice to Lessor's
employees of personal property left in automobiles poses no liability on Lessor.

                 18.4.5 Lessee shall be liable to Lessor for any loss or
damage to the Property or injury to persons or other property caused by Lessee
or Lessee's agents, employees, or contractors relating to the parking privileges
set forth herein.

                 18.4.6 Lessee may not sell, assign, or sublet any of the
parking rights granted in this Lease, without the prior written consent of
Lessor. Lessor may withhold consent in its sole and absolute discretion.

                 18.4.7 If Lessee has reserved designated spaces, Lessee will
provide Lessor with a list of employees and cars assigned to designated spaces,
updated at least quarterly, and cooperate with Lessor in enforcement of parking
controls set forth in the Rules and Regulations.

                 18.4.8 Lessee, employees, agents, and clients who violate
any of the parking provisions set forth in this Section 18 and the Rules and
Regulations may be ticketed and/or towed, in the sole discretion of Lessor.
Parking tickets shall be payable to the City of Pasadena in accordance with
municipal ordinances. The cost of towing a vehicle owned by Lessee, its
employees, agents and/or clients, shall be paid by Lessee to Lessor as Rent
within thirty (30) days of receipt of an invoice from Lessor.

                 18.4.9 Lessee's rights to designated and non-designated
spaces provided herein shall be available on a twenty four (24) hour basis,
except Holidays and Special Event Days as hereinafter defined. While parking is
available on a twenty four (24) hour basis, designated spaces may be used by
others after 6:00 p.m. and at all times on Special Event Days and Holidays. The
location and type of parking spaces shall be in accordance with general industry
practices as determined from time to time by Lessor. Lessee acknowledges that
certain spaces in the parking garage have been designated for exclusive use by
other lessees. Holidays shall include New Years Day, Memorial Day, Independence
Day, Labor Day, thanksgiving Day, and Christmas Day. Special Event Days shall
include days during which the Rose Bowl is being utilized for UCLA games, Rose
Parade and rose Bowl games, and other weekend days where a major event of the
Rose Bowl results in demand for parking at the West Annex Garage.

            18.5 CONTROL OF COMMON AREAS. Lessor shall have the right to control
the use by Lessee, its employees, agents, and clients, of the Parking areas,
driveways, entrances and exits, sidewalks and pedestrian passageways, and other
designated Common Areas. Lessor may at any time exclude and restrain any person
from use of Common Areas, excepting, however, bona fide clients, patrons, and
suppliers of Lessee and other lessees who use said areas in accordance with the
Rules and Regulations.

ARTICLE 19: DEFAULT BY LESSOR

            19.1 NO RIGHT OF TERMINATION. In the event that Lessee claims that
Lessor is in breach of this Lease or that Lessor has failed to perform any of
the terms, covenants, or conditions contained herein,

                                       22
<PAGE>

Lessee shall give written notice of such claim of breach to Lessor. Lessor shall
have thirty (30) days after receipt of written notice, or such additional time
as may be reasonably required, to cure such breach. Lessor shall not be
considered in breach of this Lease unless this procedure has been followed by
Lessee. In any event, Lessee may not terminate this Lease as a consequence of
any such breach.

            19.2 LIMITATION OF LIABILITY. Lessee agrees, in the event of any
actual or alleged breach by Lessor, as follows:

                 19.2.1 The sole and exclusive remedy shall be against Lessor's
interest in the Building.

                 19.2.2 No service of process shall be made against any
officer or employee of Lessor (except as may be necessary to secure jurisdiction
of the corporation).

                 19.2.3 No officer or employee of Lessor shall be required to
answer or otherwise plead to any service of process.

                 19.2.4 No judgment will be taken against any officer or
employee of Lessor.

                 19.2.5 Any judgment taken against any officer or employee of
Lessor may be vacated and set aside at any time effective as of the date such
judgment was entered.

                 19.2.6 No writ of execution  will ever be levied  against the
assets of any officer or employee Lessor.

                 19.2.7 These covenants and agreements are enforceable by
Lessor and by any officer or of Lessor.

                 19.2.8 No action may be brought by Lessee against Lessor, or
its successor, for any claim occurring during a period for which Lessee has
represented in a writing, such as an estoppel certificate, that Lessor is not in
breach of the terms hereof.

                 19.2.9 In no event shall any action be brought by Lessee
against Lessor more than three (3) years after the action or occurrence which is
the basis for the alleged claim.

ARTICLE 20: DEFAULT BY LESSEE

            20.1 ACTIONS OR OMISSIONS CAUSING DEFAULT. The occurrence of any of
the following actions or omissions shall constitute a material breach of this
Lease by Lessee:

                 20.1.1 The failure of Lessee to pay, or cause to be paid
when due, Rent or other charges required by this Lease to be paid by Lessee when
such failure continues for a period of ten (10) days after written notice.

                 20.1.2 The legal abandonment of the Premises by Lessee.

                 20.1.3 The failure of Lessee to do, or cause to be done, any
act required by this Lease, other than payment of Rent or other charges, which
failure continues for a period of ten (10) days after written notice or, if such
breach cannot reasonably be cured within said ten (10) day period, Lessee fails
to commence curative action within said ten (10) day period and diligently to
pursue the same to completion.

                 20.1.4 Lessee causing, permitting, or suffering, without the
prior written consent of Lessor, any act when this Lease requires Lessor's prior
written consent or prohibits such act.

                                       23
<PAGE>

                 20.1.5 To the extent permitted by law, any act of bankruptcy
caused, suffered, or permitted by Lessee. For purposes of this Lease, "act of
bankruptcy" shall include any of the following:

                 (i)    Any general assignment or general arrangement for the
benefit of creditors;

                 (ii)   The filing of any petition by or against Lessee to
have Lessee adjudged a bankrupt or a petition for reorganization or arrangement
under Title 11 of the United States Code relating to bankruptcy, as amended or
comparable law ("Bankruptcy Code"), unless such petition is filed against Lessee
and dismissed within ninety (90) days;

                 (iii)  The appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located in the Premises or
Lessee's interest in this Lease;

                 (iv)   The attachment, execution, or other judicial seizure
of substantially all of Lessee's assets located in the Premises or Lessee's
interest in this Lease; or

                 (v)    The discovery by Lessor that any financial statement
initially given to Lessor by Lessee, or its successor-in-interest, or by any
guarantor of Lessee's obligations hereunder, was intentionally false.

            20.2 LEGAL NOTICES. Any notice required herein shall be in lieu of,
and not in addition to, any notice required by California Code of Civil
Procedure Section 1161 et. seq. In the event that Lessor issues a three (3) day
notice, notice of abandonment, or comparable document by reason of Lessee's
breach, and Lessee cures such breach, Lessee agrees to pay to Lessor the
reasonable cost of preparation, delivery, and/or service of any such notice.

            20.3 RENT ACCEPTANCE, NO WAIVER. The acceptance by Lessor of Rent
due hereunder after breach by Lessee shall not constitute a waiver of such
breach, unless a writing to that effect has been delivered to Lessee.

ARTICLE 21: REMEDIES UPON DEFAULT

            21.1 LESSOR ELECTION OF REMEDIES. In the event of a breach by
Lessee, in addition to other rights or remedies of Lessor at law or in equity,
Lessor shall have the right, without further notice or demand of any kind, to do
the following:

                 21.1.1 Terminate this Lease and Lessee's right to possession
of the Premises and reenter the Premises and take possession thereof, and Lessee
shall have no further claim to the Premises or under this Lease; or

                 21.1.2 Continue this Lease in effect, re-enter and occupy the
Premises for the account of Lessee, and collect any unpaid Rent or other charges
which have or thereafter become due and payable; or

                 21.1.3 Re-enter the Premises under the provisions of Section
21.1.2 above, and thereafter elect to terminate this Lease and Lessee's right to
possession of the Premises.

            21.2 BANKRUPTCY CODE LIMITATIONS. If Lessor shall not be permitted
to terminate this Lease as hereinabove provided because of the provisions of the
Bankruptcy Code, Lessee, as a debtor-in-possession, or any trustee appointed for
the benefit of Lessee, agrees promptly, within no more than sixty (60) days upon
request by Lessor to the Bankruptcy Court, to assume or reject this Lease.
Lessee on behalf of itself and any trustee agrees not to seek or request any
extension or adjournment of any application by Lessor to assume or reject this
Lease with the Bankruptcy Court. In such event, Lessee, or any trustee for
Lessee, may only assume this Lease if it (i) cures or provides adequate
assurance that the trustee will promptly cure any breach hereunder; (ii)
compensates Lessor or provides adequate

                                       24
<PAGE>

assurance that Lessee will promptly compensate Lessor for any actual pecuniary
loss to Lessor resulting from any breach; and (iii) provides adequate assurance
of performance during the remaining Lease Term of all covenants and conditions
of this Lease to be performed by Lessee. In no event, after the assumption of
this Lease, shall any then-existing breach remain uncured for a period in excess
of ten (10) days. Adequate assurance of performance of this Lease, shall
include, without limitation, reasonable assurance that (i) there is a source of
payment of Rent reserved hereunder; and (ii) the assumption of this Lease will
not breach any provision hereunder. In the event of a filing of a petition under
the Bankruptcy Code by or against Lessee, Lessor shall have no obligation to
provide Lessee with any services required, unless Lessee shall have paid and is
current with all payments of Base Rent, Parking Rent, Excess Expenses, and other
charges provided herein.

            21.3 ACTION WITHOUT TERMINATION. If Lessor re-enters the Premises
under the provisions of either Sections 21.1.2 or 21.1.3 above, Lessor shall not
be deemed to have terminated this Lease or the obligation of Lessee to pay Rent
or other charges thereafter accruing even if Lessee surrenders possession of the
Premises pursuant to a notice under the unlawful detainer statutes, unless
Lessor notifies Lessee in writing of Lessor's election to terminate this Lease.
In the event of any re-entry or retaking of possession by Lessor, Lessor shall
have the right, but not the obligation, to remove all or any part of Lessee's
property in the Premises and to place such property in storage at a public
warehouse at the expense and risk of Lessee. If Lessor elects to re-let the
Premises for the account of Lessee, the Rent received by Lessor from such
re-letting shall be applied as follows:

                 (i)   To the payment of any obligations other than Rent due
hereunder from Lessee to Lessor;

                 (ii)  To the payment of any costs of such re-letting;

                 (iii) To the payment of the cost of any alterations or repairs
to the Premises;

                 (iv)  To the payment of Rent due and unpaid hereunder; and

                 (v)   The balance, if any, shall be held by Lessor and
applied in payment of future Rent, as it becomes due.

            If that portion of Rent received from the re-letting which is
applied against the Rent due hereunder is less than the amount of Rent due,
Lessee shall pay the deficiency to Lessor promptly upon demand by Lessor. Such
deficiency shall be calculated and paid monthly. Lessee shall also pay to
Lessor, as soon as determined, any costs incurred by Lessor in connection with
such re-letting or in making alterations and repairs to the Premises reasonably
required to secure a new lessee, which are not covered by any amounts received
from the re-letting.

            21.4 DAMAGES UPON TERMINATION. In the event that Lessor elects to
terminate this Lease under the provisions of either Sections 21.1.1 or 21.1.3
above, Lessor may recover as damages from Lessee the following:

                 21.4.1 The worth at the time of award of the unpaid Rent
which had been earned at the time of termination. Worth at the time of award"
shall be computed by allowing interest at the Lease Interest Rate from the first
day the breach occurs.

                 21.4.2 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 that Lessee proves could have been
reasonably avoided. "Worth at the time of award" shall be determined by allowing
interest at the Lease Interest Rate from the first day a breach occurs.

                 21.4.3 The worth at the time of award of the amount by which
the unpaid Rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Lessee proves could be reasonably
avoided. "Worth at the time of award" shall be computed by discounting

                                       25
<PAGE>

such amount at the discount rate at the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).

                 21.4.4 Any other amount necessary to compensate Lessor for
all the detriment proximately caused by Lessee's failure to perform its
obligations under the Lease or which in the ordinary course of business would be
likely to result therefrom including, but not limited to, expenses of
re-letting, attorneys' fees, real estate commissions, cost of alterations and
repairs, recording fees, filing fees, and any other expenses customarily
resulting from obtaining possession of leased premises and re-leasing.

            21.5 LESSOR'S RIGHT TO DECLARE FORFEITURE. It is understood that all
covenants made by Lessee herein are conditions of this Lease. Therefore, in the
event of any breach of Lessee in fulfilling any covenant, Lessor may at any time
thereafter declare a forfeiture of this Lease. Any holding over thereafter shall
be construed to be a tenancy from month-to-month only, for the same rental and
under the same conditions, except as to Lease Term, as set forth in this Lease.

            21.6 FIXTURES AND PERSONAL PROPERTY. In the event of abandonment,
subject to the obligations of Lessee under Section 10.2, all of Lessee's
furniture, fixtures, equipment, Alterations, and personal property left on the
Premises shall, at the option of Lessor, be deemed abandoned. In such event,
Lessor shall have the right to take exclusive possession of and use same, free
of charge, and/or dispose of said personal property and is hereby relieved of
any liability in doing so.

            21.7 NO LIMITATION OF REMEDIES. The remedies given to Lessor in this
Article 21 shall be in addition and supplemental to all other rights or remedies
which Lessor may have under laws then in force. Lessee hereby expressly waives
all rights of redemption granted under any present or future laws in the event
that Lessee abandons the Premises or Lessor obtains possession of the Premises
by reason of the violation by Lessee of any covenant of this Lease.

            21.8 NO WAIVER UNLESS IN WRITING. The waiver by Lessor of any breach
of this Lease shall not be deemed to be a waiver of any subsequent or other
breach. The acceptance of Rent, interest, a Late Fee, or other charges hereunder
by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee
of any other term, covenant, or condition of this Lease, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such charge. No
covenant, term, or condition of this Lease shall be deemed to have been waived
by Lessor, unless such waiver is in writing from Lessor.

ARTICLE 22: EMINENT DOMAIN

            22.1 TAKING RESULTING IN TERMINATION. If the Premises, or any part
thereof, are appropriated or taken under the power of eminent domain by any
public or quasi-public authority ("Condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes possession.
In the event that more than ten percent (10%) of the Rentable Area of the
Premises is taken by Condemnation, and if the remaining portion of the Premises
is not reasonably suitable for the conduct of business by Lessee, either Lessor
or Lessee may terminate this Lease as of the date the condemning authority takes
possession by delivery of written notice of such election within sixty (60) days
after receipt by such party of notice that said Premises have been condemned or,
in the absence thereof, within ten (10) days after the date of condemning
authority takes possession. In the event of an election to terminate, Lessor and
Lessee shall be released from any obligations hereunder to the other occurring
after the date the condemning authority takes possession.

            22.2 TAKING WITHOUT TERMINATION. If neither Lessor nor Lessee
terminate this Lease, less than ten percent (10%) of the Rentable Area of the
Premises is condemned, or if the remaining portion is reasonably suitable for
the conduct of business by Lessee, Lessee shall continue to occupy that portion
of the Premises which shall not have been condemned as herein provided and the
parties will proceed as follows:

                                       26
<PAGE>

                 (i)   At Lessor's expense, as soon as reasonably possible,
Lessor will restore the Premises;

                 (ii)  Rent shall be reduced on an equitable basis, taking
into account the relative values of the portion remaining; and

                 (iii) Lessor shall be entitled to receive the total award or
compensation in such proceedings, except as otherwise provided in Section 22.3.

            Lessee hereby waives any statutory rights of termination which may
arise by reason of any partial taking of the Premises under the power of eminent
domain.

         22.3 DISPOSITION OF AWARD. In the event of Condemnation, Lessor shall
be entitled to the entire award or compensation from any proceedings with
respect to the Premises, but the Rent and other charges for the last month of
Lessee's occupancy shall be prorated and Lessor agrees to refund to Lessee any
Rent, and other charges paid in advance. Notwithstanding the foregoing, Lessee
shall have the right to receive compensation or damages for the loss of, or
damage to, fixtures and personal property which Lessee has the right to remove,
goodwill, lost profits, and for relocation costs.

            22.4 TRANSFER UNDER THREAT OF TAKING. A voluntary sale or conveyance
under threat in lieu of condemnation shall be deemed an appropriation or taking
under the power of eminent domain.

ARTICLE 23: ATTORNEYS' FEES AND COSTS

            23.1 RECOVERY TO PREVAILING PARTY. In the event that Lessor or
Lessee shall institute any action or proceeding against the other relating to
the provisions of this Lease, the unsuccessful party in such action agrees to
reimburse the prevailing party for the actual attorneys' fees, legal expenses,
and costs incurred. The parties agree that the actual attorneys' fees and costs
so incurred shall be deemed reasonable.

ARTICLE 24: SALE OF PREMISES BY LESSOR

            24.1 RELEASE OF LESSOR. In the event of a sale or transfer of the
Building by Lessor and the assumption in writing by the transferee of Lessor's
obligations hereunder, Lessor shall be freed of all liability under covenants
contained in or derived from this Lease, or arising out of any act, occurrence,
or omission relating to the Premises and this Lease, which occurs after the
consummation of such sale, transfer, or assignment.

ARTICLE 25: SUBORDINATION, ATTORNMENT, AND ESTOPPEL CERTIFICATE

            25.1 SUBORDINATION. Upon written request of Lessor or its lender,
Lessee will, in writing, subordinate its rights hereunder to the lien of any
mortgage, deed of trust, lease, or easement, now or hereafter placed upon the
Building, and to all advances made or hereafter to be made upon the security
thereof. Notwithstanding the foregoing, so long as Lessee is not in breach
hereunder after the expiration of any applicable cure period, this Lease shall
remain in full force and effect and Lessee shall have quiet enjoyment of
possession of the Premises as provided in Section 26.1. Lessee may require, as a
condition of execution of an agreement to subordinate, that the party to whom
such right is granted provide written assurances that Lessee's right of quiet
enjoyment will not be disturbed so long as Lessee is not in default under the
terms hereof.

            25.2 ATTORNMENT. In the event of any foreclosure or exercise of the
power of sale under any mortgage or deed of trust made by Lessor covering the
Building, Lessee shall attorn to the purchaser upon any such foreclosure or
sale, and recognize such purchaser as Lessor under this Lease.

                                       27
<PAGE>

            25.3 ESTOPPEL CERTIFICATES. Within twenty (20) days after written
request therefor by Lessor, Lessee shall execute and deliver a certificate in
such form as may be reasonably required by Lessor, a prospective purchaser of
the Building, assignee, or mortgagee, addressed to any such prospective
purchaser, assignee, or mortgagee, or to Lessor certifying that this Lease is in
full force and effect and that there are no defenses or offsets claimed by
Lessee.

ARTICLE 26: QUIET ENJOYMENT

            26.1 QUIET ENJOYMENT. Lessor agrees that Lessee, upon timely payment
of Rent and performing the other covenants and conditions of this Lease, shall
quietly have and enjoy possession of the Premises during the Lease Term.

ARTICLE 27: CONSENTS AND APPROVALS

            27.1 LESSOR'S CONSENT. Wherever this Lease provides that Lessee is
required to obtain Lessor's consent or approval, such consent or approval must
be obtained in advance and shall not be valid or effective unless consented to
or approved expressly in writing. Any such consent or approval by Lessor, or its
designated agent, may be given or denied at the sole and absolute discretion of
any person having the right to give or deny such consent or approval, except as
otherwise provided in this Lease. Lessor's consent to or approval of any act by
Lessee shall not be deemed to waive or render unnecessary Lessor's consent to or
approval of any subsequent similar act by Lessee. Notwithstanding the foregoing,
in no event shall such consent be unreasonably delayed or withheld.

            27.2 REIMBURSEMENT FOR COST OF APPROVALS. In addition to other
obligations of Lessee set forth herein, Lessee agrees to reimburse Lessor for
payment made for any municipal or other out of pocket fees or charges assessed
in connection with obtaining and/or processing approvals requested by Lessee
hereunder.

ARTICLE 28: SECURITY DEPOSIT

            28.1 SECURITY DEPOSIT. Lessee has paid to Lessor the sum specified
in the Basic Lease Provisions as a deposit ("Security Deposit"), receipt of
which is hereby acknowledged. The Security Deposit shall be held by Lessor
without liability for interest as security for the faithful performance by
Lessee of all of the terms and conditions of this Lease. The Security Deposit
may be commingled with other funds of Lessor. The Security Deposit shall not be
mortgaged, assigned, transferred, or encumbered by Lessee, and any act by Lessee
purporting to accomplish same shall be without force and effect and shall not be
binding upon Lessor.

            28.2 USE AND RESTORATION. If Rent or any other sum payable by Lessee
to Lessor hereunder shall be overdue and unpaid, or should Lessor make payments
on behalf of Lessee, or Lessee fails to perform any of the covenants or
conditions of this Lease, then Lessor may, at its option and without prejudice
to any other remedy which Lessor may have on account thereof, apply said
Security Deposit, or so much thereof as may be necessary to compensate Lessor,
to the payment of Rent, loss, or damage sustained by Lessor due to such breach
by Lessee. Lessee shall immediately upon demand restore the Security Deposit to
the sum previously deposited. Should Lessee comply with all said covenants and
conditions and promptly pay all rent as it falls due, and any other sums payable
by Lessee to Lessor, the Security Deposit shall be returned in full to Lessee
within thirty (30) days after the expiration of the Lease Term.

            28.3 DISPOSITION UPON BANKRUPTCY. In the event of bankruptcy or
other debtor-creditor proceedings against Lessee, any Security Deposit shall be
applied to the payment of Rent and other charges first due to Lessor for the
period prior to the filing of such proceedings.

                                       28
<PAGE>

            28.4 DISPOSITION UPON SALE. Lessor may deliver the Security Deposit
to the purchaser of Lessor's interest in the Premises in the event of the sale
of such interest. With such delivery, Lessor shall be discharged from any
further liability with respect to the Security Deposit. This provision shall
also apply to any subsequent transfers.

            28.5 SECURITY DEPOSIT ADJUSTMENT. In the event of the exercise by
Lessee of the option set forth in Section 4.2 and/or the expansion of Lessee's
Premises pursuant to Section 29.19, which options include Fair Market tenant
improvements and/or increased Rent, the Security Deposit shall be increased, as
appropriate, to provide (i) additional reasonable security, guarantees, and/or
alternative collateral for tenant improvements, commissions and other costs, to
be paid and/or credited by Lessor and (ii) the increased Rent due from Lessee to
Lessor.

ARTICLE 29: MISCELLANEOUS

            29.1 CAPTIONS. The captions of Articles and Sections of this Lease
are for convenience only, and do not in any way limit or amplify the terms,
covenants, and conditions of this Lease.

            28.2 PARTIES. If more than one person or corporation is named as
Lessee in this Lease and executes the same as such, then the word "Lessee"
wherever used in this Lease is intended to refer to all such persons or
corporations, and the liability of such persons or corporations for compliance
with and performance of all the terms, covenants, and conditions of this Lease
shall be joint and several.

            29.3 GENDER. The masculine pronoun used herein shall include the
feminine or the neuter, as the case may be, and the use of the singular shall
include the plural.

            29.4 LEGAL ADDRESS. Whenever provision is made under this Lease for
any demand, notice, or declaration of any kind, or where it is deemed desirable
or necessary by either party to give or serve any such notice, demand, or
declaration to the other party, it shall be in writing and sent by United States
Certified Mail, postage prepaid, return receipt requested, or by a reputable
courier, addressed to the address(es) set forth in the Basic Lease Provisions.
Either party may change such address by giving written notice by certified or
registered mail to the other.

            29.5 CONSTRUCTION. The parties hereto agree that all the provisions
hereof are to be construed as covenants and agreements, and the words importing
such covenants and agreements shall be construed as though used in each separate
paragraph hereof. All of the provisions hereof shall bind and inure to the
benefit of the parties hereto, their respective heirs, legal representatives,
successors, and assigns.

            29.6 RELATIONSHIP OF PARTIES. It is agreed that nothing contained in
this Lease shall be deemed or construed as creating a partnership or joint
venture between Lessor and Lessee or between Lessor and any other party, or
cause Lessor to be responsible in any way for the debts or obligations of
Lessee, or any other party.

            29.7 SEVERABILITY. It is agreed that if any provision of this Lease
shall be determined to be void by any Court of competent jurisdiction, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect. It is the intention of
the parties that if any prevision of this Lease is capable of two constructions,
only one of which would render the provision valid, the provision shall have the
meaning which renders it valid.

            29.8 WARRANTY OF AUTHORITY. If Lessee is a corporation, the parties
executing this Lease on behalf of Lessee hereby covenant and warrant that (i)
Lessee is a duly qualified corporation and all steps have been taken prior to
the date hereof to qualify Lessee to do business in California; (ii) all
franchise and corporate taxes have been paid to date; and (iii) all future
forms, reports, fees, and other documents necessary to comply with applicable
laws will be filed and/or paid when due.

                                       29
<PAGE>

            29.9 ENTIRE AGREEMENT. No oral agreements exist between the parties
hereto affecting this Lease. This Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements, and understandings,
if any, between Lessor and Lessee, their employees and agents, and none thereof
shall be used to interpret or construe this Lease. This Lease is and shall be
considered to be the only agreement between the parties. All negotiations and
oral agreements acceptable to both parties have been merged into and are
included herein. There are no other representations or warranties between the
parties and all reliance with respect to such representations is based solely
upon the representations and agreements contained in this Lease.

            29.10 LESSEES SELECTED BY LESSOR. Lessor reserves the right to
effect such other tenancies in the Building as Lessor, in the exercise of its
sole business judgment, shall determine to best promote the interest of the
Building. Lessee does not rely on the fact, and Lessor does not represent, that
any specific tenant or number of tenants shall occupy space in the Building
during the Lease Term.

            29.11 GOVERNING LAW; FORUM; CONSTRUCTION. The laws of the State of
California shall govern the validity, performance, and enforcement of this
Lease. Should either party institute legal suit or action for enforcement of any
obligation contained herein, it is agreed that the venue of such suit or action
shall be Los Angeles County, California. Although the printed provisions of this
Lease were drawn by Lessor, this Lease shall not be construed either for or
against Lessor or Lessee, but this Lease shall be interpreted in accordance with
the general tenor of the language in an effort to reach the result intended by
the language.

            29.12 FORCE MAJEURE. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain materials or
reasonable substitutes therefor, governmental action, civil commotion, fire, or
other casualty, and other causes beyond the reasonable control of the party
obligated to perform shall excuse the performance by such party for a period
equal to any such prevention, delay, or stoppage, except obligations imposed
herein upon Lessee with regard to the payment of Rent and other charges.

            29.13 USE OF NAME OF BUILDING. Lessor reserves the right to change
or modify the name of the West Annex or Parsons West Annex as Lessor may desire
from time to time. Lessee acknowledged that the names "Parsons", "Parsons West
Annex", and "West Annex" are proprietary names held by Lessor and not geographic
names. Lessee shall not have or acquire any property right or interest in the
aforementioned names, the logo, or in any other name or logo for the Building,
and shall not use Parsons, Parsons West Annex, or West Annex, the logo, or any
other name or logo of the Building as a part of its tradename, service mark, or
business name, without Lessor's prior written consent.

            29.14 LENDER REQUIREMENTS. The parties agree that whenever Lessor's
approval is requested and/or required and Lessor is first required to secure the
approval of a mortgagee for such request or requirement pursuant to the terms of
any loan agreement or deed of trust, Lessor may disapprove any such request,
subject to applicable law, if the mortgagee fails or refuses to grant such
approval. In such case, Lessor's disapproval shall be deemed reasonable. The
parties agree that this Lease shall be modified at the request of Lessor in any
manner requested by a lender providing financing, provided that no such
modification shall substantially affect the rights of Lessee hereunder and, in
no event, shall such modification change the amount of Rent or other charges
payable by Lessee hereunder.

            29.15 VIOLATIONS BY OTHER LESSEES. Lessor shall not be responsible
to Lessee for the non-enforcement or violation of the provisions of any other
Lease affecting the Building.

            29.16 TIME IS OF ESSENCE. Time is of the essence of each of the
terms and conditions of this Lease.

                                       30
<PAGE>

            29.17 REAL ESTATE BROKER. Lessor and Lessee warrant that each party
has had no dealings with any real estate broker or agent in connection with the
negotiations and/or execution of this Lease, except for the broker(s) listed in
the Basic Lease Provisions, if any. Each party hereby indemnifies and holds the
other harmless from and agrees to defend the other against any costs, expenses,
attorneys' fees, or liability for compensation or charges which may be claimed
by any unnamed broker or agent by, reason of any dealings or actions of such
other party.

            IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Lease
as of the date set forth in the Basic Lease Provisions.

LESSEE:

BILL GROSS' IDEALAB!

By:      /S/ MARCIA GOODSTEIN

            MARCIA GOODSTEIN
---------------------------------------------
(Please Print Name and Title) CHIEF OP. OFCR.

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

---------------------------------------------
(Please Print Name and Title)

LESSOR:

PARSONS INFRASTRUCTURE & TECHNOLOGY GROUP, INC.

By:      /S/ [illegible]
    -----------------------
                                       31

<PAGE>

                           ADDENDUM TO LEASE AGREEMENT

                              BILL GROSS' IDEALAB!

            29.18 YEAR 2000 COMPLIANCE. Lessor shall provide Lessee with
reasonable assurances that the building systems are year 2000 compliant (Y2K),
including heating and air conditioning, elevators, parking, and fire and life
safety systems. In the event any of such systems fail to operate correctly with
the transition to the year 2000, Lessor, at Lessor's expense will undertake all
reasonable measures to ensure that the building systems operate correctly.

            29.19 EXPANSION. Lessee may expand its Premises to include floor 2,
or floors 2 and 3, effective January 1, 2000 upon the following terms and
conditions:

                  29.19.1 Lessee's satisfaction of the conditions precedent to,
and exercise of, its option to extend with respect to the Premises in accordance
with the terms and conditions set forth in Sections 4.2 and 5.1.4.

                  29.19.2 Agreement by the parties of (i) Base Rent and Parking
Rent, tenant improvements, parking, and other terms for the expansion area for
the period January 1, 2000 through June 30, 2004 and (ii) additional Security
Deposit, guarantees and/or collateral as more particularly described in Section
28.5.

                  29.19.3 Execution of an Amendment to Lease prior to August
15, 1999, formalizing the expansion of the Premises and agreement by the parties
of the terms as required in this Section.

                  29.19.4 Lessee's option to expand its Premises to include
floor 3 is also subject to (i) Lessor's ability to relocate FEMA at a reasonable
cost to Lessor( taking into consideration FEMA's one year extension)and/or (ii)
Lessee, prior to August 15, 1999, agrees in writing to pay any excess costs to
be incurred by Lessor in connection with such relocation.

                  29.19.5 If Lessor and Lessee agree on terms for expansion of
Lessee's Premises as provided above, such terms shall include one additional
option for a period of five (5) years to be exercised by Lessee by written
notice delivered to Lessor prior to June 30, 2003. In such case, Lessor and
Lessee shall determine Fair Market Rent for Base Rent and Parking Rent for the
second option period based upon the time periods and procedures set forth in
5.1.4.2.

            29.20 NOTICE OF AVAILABLE SPACE. Upon request of Lessee, Lessor
shall provide Lessee with information on existing and projected areas which will
be available for lease in the West Annex. Nothing herein contained shall require
that Lessor lease such areas to Lessee, it being understood that Lessor will
exercise its judgement in connection with future tenancies in the West Annex in
its sole and absolute discretion.

                                       32
<PAGE>

                                   EXHIBIT "A"

                          WEST ANNEX BUILDING 8TH FLOOR

<PAGE>

                                   EXHIBIT "B"

                            TENANT IMPROVEMENT MANUAL

                               PARSONS WEST ANNEX
                            74 NORTH PASADENA AVENUE

I.       INTRODUCTION

         A.       The Parsons West Annex ("West Annex") has been designed to be
                  a high quality office building. To maintain this quality, it
                  is important that tenant improvements be completed with the
                  least disturbance to other lessees and that the Common Areas
                  be consistently maintained at a high standard.

         B.       This Tenant Improvement Manual is for the mutual benefit of
                  all lessees. In the event of any conflict between the Tenant
                  Improvement Manual and the Lease, the Lease shall govern.

II.      LESSEE'S ARCHITECT

         A.       SELECTION APPROVAL. Lessee shall retain, at Lessee's expense,
                  the services of a licensed architect and/or recognized
                  interior designer ("Lessee's Architect") for the design of
                  the improvements to include interior design, signage,
                  mechanical, plumbing and electrical systems, and utilities.
                  The selection of such firm is at the discretion of Lessee,
                  subject to the reasonable approval of Lessor.

         B.       FIELD MEASUREMENT. If requested, Lessee's Architect will be
                  provided with a copy of Lessor's plans and specifications
                  ("Lessor's Plans"), including a floor plan for the floor on
                  which the Premises is located, and applicable mechanical,
                  electrical, and plumbing drawings which are available to
                  Lessor. Lessee shall reimburse Lessor for any costs incurred
                  in reproducing such plans. Lessee's Architect shall be
                  responsible to field measure the Premises and advise Lessor
                  within seven (7) days of receipt of Lessor's Plans of any
                  discrepancies.

         C.       UTILITY VERIFICATION. Lessee's Architect shall verify that the
                  utilities available to the Premises are adequate to satisfy
                  Lessee's requirements.

II.      PLAN SUBMISSION PROCEDURES

         A.       LESSEE'S PRELIMINARY PLANS AND SPECIFICATIONS

                  1.       Within twenty (20) working days after receipt of
                           Lessor's Plans, Lessee shall submit to Lessor for
                           Lessor's approval three (3) sets of preliminary
                           design drawings for the Improvements prepared by
                           Lessee's Architect, which drawings shall indicate
                           Lessee's specific requirements, including, without
                           limitation, fully dimensioned floor plans (Scale 1/4
                           = 1".0") describing in reasonable detail the layout
                           of access to Common Areas and interior partitions,
                           and indicating the proposed use of each enclosed
                           area.

                  2.       Lessor shall approve or disapprove Lessee's
                           preliminary design drawings within five (5) working
                           days after Lessor's receipt thereof. If

<PAGE>

                           disapproved, Lessor shall indicate the reasons and/or
                           corrections required for approval.

         B.       LESSEE'S CONSTRUCTION PLANS AND SPECIFICATIONS

                  1.       Within fifteen (15) working days after Lessor's
                           approval of Lessee's preliminary design drawings, and
                           subject to Lessee's field measurement of the
                           Premises, Lessee shall, at Lessee's expense, submit
                           to Lessor for approval three (3) sets of plans and
                           one (1) set of reproducible plans of fully detailed
                           architectural working drawings and specifications
                           ("Lessee's Construction Plans") prepared by Lessee's
                           Architect describing the Improvements to be completed
                           in the Premises including, without limitation, floor
                           plans (Scale1/4" = 1'.0"), Common Areas, interior
                           partitions, trade fixtures, lighting, electrical
                           outlets; telephone jacks; telecommunication systems;
                           reflected ceiling plan, including ceiling height(s)
                           (Scale1/4" = 1'.0"); plumbing; location, size and
                           details of signage; areas of unusual floor loading;
                           mechanical and electrical requirements; and all other
                           improvements to be performed by Lessee pursuant to
                           Section V thereof ("Lessee's Work").

                  2.       In the event there are any design changes required in
                           securing required permits for completion of Lessee's
                           Work, Lessee shall forthwith provide Lessor with
                           three (3) sets of plans and one (1) set of
                           reproducible plans which describe the required
                           revisions for Lessor's approval. The revised plans
                           shall thereupon become "Lessee's Construction Plans".
                           Lessor shall have five (5) working days after receipt
                           of same within which to examine and to approve or
                           disapprove Lessee's revised Construction Plans. The
                           failure by Lessor to disapprove Lessee's Construction
                           Plans in writing within said five (5) working days
                           shall be deemed an approval thereof.

                  3.       Lessee shall promptly and diligently modify Lessee's
                           Construction Plans until same have been approved by
                           Lessor.

                  4.       Construction of the Improvements specified on
                           Lessee's Construction Plans shall not commence until
                           Lessee's Construction Plans have been approved by
                           Lessor.

                  5.       Lessee shall furnish as-built plans and
                           specifications to Lessor within thirty (30) days
                           after completion of Lessee's Work.

                  6.       If Lessee's Construction Plans are in conflict with
                           terms and conditions of this Tenant Improvement
                           Manual, the Tenant Improvement Manual shall control.

                  7.       Any additional changes, expenses or costs (including
                           architects' fees and attorneys' fees) arising by
                           reason of any subsequent change, modification or
                           alteration of Lessee's Construction Plans, made at
                           the request of Lessor, shall be at the expense of
                           Lessee. No changes, modifications or alterations
                           shall be made to Lessee's Constructions Plans without
                           the prior written consent of Lessor.

                  8.       Lessor's approval of Lessee's Construction Plans, or
                           any work or installation made by Lessee, shall not
                           constitute a warranty or representation by Lessor
                           that Lessee's drawings, work or installations comply
                           with the requirements of any applicable law,
                           ordinance or

                                       2

<PAGE>
                           regulation, or are safe, sound, merchantable or fit
                           for the purpose intended. Lessor shall have no
                           liability to Lessee in the event Lessee is required
                           to change its drawings, or Lessee's Work, to meet
                           applicable governmental requirements or in the event
                           that such drawings or Lessee's Work are defective or
                           cause injury to persons or property.

IV.      LESSEE'S CONTRACTOR

         A.       LICENSED CONTRACTORS. Each contractor and subcontractor
                  engaged by Lessee to perform Lessee's Work ("Lessee's
                  Contractor") shall be licensed in the State of California. The
                  selection of such firm(s) is at the discretion of Lessee,
                  subject to the reasonable approval of Lessor. By approving
                  Lessee's Contractor, Lessor assumes no liability for the work
                  completed by, or other obligation of, Lessee's Contractor.
                  Lessor hereby approves Lucent Technologies as Lessee's
                  Contractor.

         B.       COORDINATION. Lessee's Contractor shall coordinate Lessee's
                  Work with all other work being performed or to be performed at
                  or in connection with the West Annex so that Lessee's Work
                  does not interfere with or delay the completion of such other
                  work or the orderly operation of business by other lessees in
                  the West Annex.

         C.       MATERIAL STORAGE. Lessee's Contractor shall not use any space
                  outside of the Premises and within the West Annex and/or on
                  sidewalks or adjacent streets for storage, handling, or moving
                  of materials and equipment, and/or for the location of any
                  field office or facilities required for construction personnel
                  without the prior written authorization of Lessor.
                  Construction vehicles shall be prohibited from parking in the
                  West Annex parking garage, except in accordance with parking
                  regulations for day parking in the parking garage, or as
                  otherwise authorized by Lessor in writing. Notwithstanding the
                  foregoing, Lessee's Contractor may, during the period of
                  construction, (i) maintain a construction dumpster in the
                  Service Bay in a location designated by Lessor for a period
                  reasonably required for completion of Lessee's Work and (ii)
                  authorize individuals engaged to complete Lessee's Work to use
                  parking passes previously issued to Lessee for the purpose of
                  parking their vehicles in the Parking Garage.

         D.       DEBRIS REMOVAL. Lessee's Contractor shall remove and dispose
                  of all debris and rubbish caused by or resulting from Lessee's
                  Work on a daily basis. No trash receptacles or carts will be
                  allowed to be stored, even temporarily, in the Common Areas,
                  including the parking garage, on sidewalks or adjacent
                  streets. Upon completion of Lessee's Work, Lessee's Contractor
                  shall remove all temporary structures, surplus materials,
                  debris and rubbish remaining within the West Annex which has
                  been brought in or created as a result of Lessee's Work. If
                  Lessee's Contractor shall neglect, refuse or fail to remove
                  any temporary structures, surplus materials, debris and
                  rubbish within twenty-four (24) hours after notice to Lessee
                  from Lessor, Lessor may remove or cause same to be removed,
                  and Lessee shall pay the expense of removal and hold Lessor
                  harmless therefrom.

         E.       INSURANCE - OSHA COMPLIANCE. In addition to the requirements
                  of the Lease, and without any limitation thereof, Lessee's
                  Contractor shall (i) comply with all governmental rules and
                  regulations including applicable OSHA standards and (ii) carry
                  workers' compensation and public liability insurance
                  (including property damage), with limits and in a form
                  approved in advance, ("Course of Construction Insurance") by
                  Lessor and issued by insurance companies approved in advance

                                       3
<PAGE>

                  by Lessor. Lessor, Lessee, the Building Manager, and the
                  contractor and/or subcontractors procuring the insurance shall
                  be named insureds (or named as additional insureds) in each
                  policy of said liability insurance, which policy shall have a
                  cross-liability endorsement or its equivalent. Certificates
                  evidencing the foregoing insurance shall be delivered to
                  Lessor before any work is commenced by Lessee's Contractor and
                  before his equipment and/or materials are brought to the West
                  Annex.

V.       LESSEE'S CONSTRUCTION RESPONSIBILITIES

         A.       LESSEE'S WORK. All remodeling in the Premises shall be
                  performed diligently by Lessee, at Lessee's expense, and in a
                  first class manner. Lessee's Work shall include, but is not
                  limited to, the purchase, installation, and performance of the
                  following additions and modifications, if reflected in
                  Lessee's approved Construction Plans:

                  1.       Interior partitions and glazed walls within the
                           Premises, including drywall and taping on exterior
                           walls and drywall and taping on, and insulation in,
                           demising walls.

                  2.       Ceilings.

                  3.       Interior painting, wallpaper and other finishes.

                  4.       Floor covering and floor finishes, preparations of
                           surfaces to receive same, and any special
                           reinforcing, raised areas or depressions in the
                           concrete floor.

                  5.       Plumbing fixtures and accessories, toilets, water
                           heaters, water treatment systems and drinking
                           fountains with plumbing thereto connected to services
                           as shown in Lessor's Plans. Grease traps will be
                           required for any food preparation areas having pot
                           sinks or other grease producing appliances that
                           discharge grease into the waste system at such
                           location as shall be specified in Lessee's
                           Construction Plans.

                  6.       Internal communications, security, fire detection,
                           and alarm systems.

                  7.       Fixtures and furnishings.

                  8.       Signs.

                  9.       Heating, cooling or ventilating equipment and ducting
                           including revisions required by local building codes
                           or otherwise.

                  10.      Telephone service and equipment, telephone conduit,
                           cabinets and outlets within the Premises, including
                           wiring from the terminal board existing in the
                           telephone room in the basement, through existing
                           conduits which are provided in the Premises, or the
                           addition of conduits from the telephone room, if
                           required.

                  11.      Electrical work and equipment, including lighting.

                  12.      Fire sprinkler system.

                                       4

<PAGE>

         B.       CONTRACTOR'S WARRANTY. Lessee shall ensure that Lessee's
                  contractor shall guarantee that portion thereof for which he
                  is responsible against any defects in workmanship and
                  materials for a period of not less then one (1) year from the
                  date of final completion of Lessee's Work. The correction of
                  such work shall include, without limitation, all expenses and
                  corrections to, or in connection with, the structure of the
                  West Annex, should the Building be damaged or affected by
                  defective work or by the repair or replacement of such
                  defective work. All such warranties or guarantees as to
                  materials or workmanship with respect to Lessee's Work shall
                  be contained in Lessee's agreement with Lessee's Contractor.
                  Lessee shall require each contractor to include such
                  warranties or guarantees in each subcontract, and all such
                  warranties or guarantees shall be so written so that same
                  shall inure to the benefit of both Lessee and Lessor, as their
                  respective interests may appear, and so that same may be
                  directly enforced by Lessee or Lessor. Lessee hereby covenants
                  to give to Lessor an assignment or other assurance necessary
                  to perfect such right to permit enforcement by Lessor.

         C.       LESSOR'S INSPECTION. Lessor's prior inspection and written
                  approval shall be a condition precedent to Lessor's acceptance
                  of Lessee's Work as being complete and in accordance with
                  Lessee's Construction Plans. Lessee shall give Lessor at least
                  five (5) working days prior written notice of the anticipated
                  completion date of Lessee's Work. Lessee shall be required to
                  settle and/or bond against any mechanic's or materialman's
                  liens, or other similar liens, filed against the West Annex as
                  a result of Lessee's Work in accordance with the provisions
                  relating to such liens in the Lease. Lessee shall reimburse
                  Lessor in full, and indemnify, defend and hold Lessor harmless
                  from and against any liability, cost or expense incurred by
                  Lessor in connection with any such lien.

         D.       NOTICE OF COMPLETION. Lessee shall, within ten (10) working
                  days after completion of Lessee's Work, execute and file of
                  record, or cause to be filed of record, a notice of completion
                  with respect thereto in a form complying with the applicable
                  provisions of the California Civil Code specifying the name of
                  Lessee's Contractor and the work done. Lessee shall furnish a
                  conformed copy thereof to Lessor upon recordation. If Lessee
                  fails to record said notice, Lessee hereby appoints Lessor as
                  Lessee's attorney-in-fact for the purpose of executing and
                  filing same on behalf of Lessee. This power of attorney is
                  coupled with an interest in the Lease and is irrevocable.

VL.      CONSTRUCTION RULES AND REGULATIONS

         To expedite the completion of the Improvements with the least amount of
         inconvenience to all concerned, the following Construction Rules and
         Regulations are applicable to Lessee, its employees, contractors, and
         agents.

         A.       TIMELY COMPLETION. The interior of the Premises shall, as soon
                  as practically possible, be constructed by Lessee at Lessee's
                  expense, in accordance with Lessee's Construction Plans.
                  Lessee agrees to pursue Lessee's Work diligently to
                  completion, complying with all applicable city, county, state
                  and federal laws, ordinances and regulations relating thereto.

         B.       PERMITS. Lessee shall obtain and transmit copies to Lessor of
                  all permits and approvals with respect to Lessee's Work
                  required or given by the City of Pasadena, County of Los
                  Angeles and/or any utility service, unless Lessor shall have
                  already obtained said permit(s) and/or utility service(s).
                  Lessee must

                                       5

<PAGE>

                  furnish evidence of permits to Lessor prior to the
                  commencement of Lessee's Work.

         C.       BOND. Lessor shall have the right, in Lessor's reasonable
                  discretion, to require Lessee or Lessee's Contractor to
                  furnish a bond or other security in form satisfactory to
                  Lessor covering the prompt and faithful performance of
                  Lessee's Work in an amount equal to one hundred twenty-five
                  percent (125%) of the cost thereof. Lessor hereby waives a
                  bond with respect to Lucent Technologies, and will waive bonds
                  for other contractors with comparable net worth.

         D.       SECURITY. Lessee will be responsible for the security of the
                  Premises during construction and shall take all necessary
                  steps to secure the same. Lessor shall have no liability for
                  any loss or damage, including theft of building materials,
                  equipment or supplies.

         E.       WORKING HOURS. Work in the Premises which does not involve
                  core drilling, saw cutting, or other procedures likely to
                  disturb other lessees shall be completed during regular
                  working hours which shall be 6:00 a.m. to 6:00 p.m., Monday
                  through Friday, or such other hours as may be approved by the
                  Building Manager in writing. Work which may affect systems in
                  the Building or disturb other lessees shall be completed at
                  other times arranged in advance with the Building Manager.

         F.       PUBLIC SAFETY. It is the responsibility of Lessee to ensure
                  that Lessee's Contractor exercises caution in matters relating
                  to public safety and to prevent damage to the Building and
                  other leased areas.

         G.       CLEANLINESS OF THE COMMON AREAS. Lessee shall ensure that
                  Lessee's Contractor keeps the Common Areas, including the
                  elevators, stairways, restrooms, garage, sidewalks and
                  adjacent streets in an absolutely clean and neat condition at
                  all times. Drop cloths shall be used whenever reasonable to
                  preclude damage to, or maintain cleanliness in, the Common
                  Areas. If Lessee's Contractor violates this regulation on more
                  than one (1) occasion, or fails to immediately cure such
                  default, Lessor may prohibit Lessee's Contractor from entering
                  the West Annex.

         H.       PROTECTION OF FLOOR AREAS AND ELEVATORS. All supplies,
                  merchandise, materials, equipment or trash being delivered to
                  or removed from the Premises across the Common Areas or within
                  the elevators which requires the use of dollies or handtrucks
                  must be transported on dollies or handtrucks with soft rubber
                  tires.

         I.       FLOOR LOADING. The following limitations shall be observed by
                  the Lessee in the conduct of Lessee's Work:

                  1.       No suspended loads will be attached to the underside
                           of the floor or roof structure, with the exception of
                           normal suspended ceiling and light fixtures, without
                           Lessor's prior written approval.

                  2.       No wall mounted fixtures will be applied to demising
                           walls, other than those approved in writing by
                           Lessor. Lessee acknowledges that the standard steel
                           stud and drywall demising walls are not designed to
                           support wall mounted fixtures. Notwithstanding the
                           foregoing, Lessee shall not be required to remove any
                           existing wall mounted fixtures.

                                       6

<PAGE>

                  3.       No load shall be imposed upon any floor areas of the
                           Premises in excess of the design live load of 100
                           pounds per square foot uniformly distributed.

         J.       RESTROOMS. Restrooms may be used only for personal functions.
                  Cleaning of tools or painting equipment will not be allowed in
                  the restrooms. Utility sinks will contain a water supply, but
                  may not be used for tool or painting equipment cleaning or
                  other construction work.

VII.     LESSOR'S FUNDING OF LESSEE'S WORK

         A.       TENANT IMPROVEMENT ALLOWANCE. Lessor shall not be responsible
                  to fund any tenant improvements during the initial term. In
                  consideration for exercise of the option set forth in Section
                  4.2 by Lessee, Lessor agrees to reimburse Lessee an amount
                  equal to market tenant improvements as determined in
                  accordance with Section 5.1.4.1 ("Tenant Improvement
                  Allowance"). The Tenant Improvement Allowance shall be reduced
                  by 4% of the amount which Landlord is required to fund for
                  Lessee's tenant improvements.

         B.       PAYMENT REQUEST. In order to receive credit for the Tenant
                  Improvement Allowance, Lessee shall request such credit from
                  Lessor in writing ("Payment Request"), which Payment Request
                  shall conform with and/or include unconditional lien releases
                  from Lessee's Contractor and a detailed cost breakdown
                  indicating the cost for each trade and a copy of all contracts
                  with Lessee's Contractor.

                  Upon receipt of documentation confirming that cost of
                  improvements completed by Lessee in the Premises exceed the
                  Tenant Improvement Allowance, and Lessee's compliance with
                  other requirements set forth in this Tenant Improvement
                  Manual, Lessor shall credit the Tenant Improvement Allowance
                  in twelve (12) equal monthly installments against Base Rent
                  next due and owing during the option period.

                                       7

<PAGE>

                                   EXHIBIT "C"

                              RULES AND REGULATIONS

                               PARSONS WEST ANNEX
                            74 NORTH PASADENA AVENUE

I.       GENERAL

         A.       Parsons West Annex is designed as a high quality professional
                  office building. While certain specific requirements for
                  conduct and/or business operations are established by these
                  Rules and Regulations, general rules of courtesy and
                  reasonable business procedures must also be observed in order
                  that the common good of all is served.

         B.       The Rules and Regulations for 74 North Pasadena Avenue,
                  Pasadena, California and the adjacent parking garage,
                  (collectively, the "Building") are intended to ensure the
                  quiet enjoyment of Lessee and other lessees to establish a
                  professional environment for Lessee, its employees, and
                  clients.

         C.       The Rules and Regulations will be revised as necessary from
                  time to time, in Lessor's reasonable judgement, to meet the
                  needs of the majority of the lessees of the Building. If a
                  lessee has suggestions for any revision of the Rules and
                  Regulations, the matter should be brought to the attention of
                  the onsite representative of Lessor ("Building Manager").

         D.       Every lessee is expected to read and be familiar with the
                  Rules and Regulations. Lessee, or its office manager, shall
                  read the Rules and Regulations, execute a statement prepared
                  by Lessor verifying that she/he has read same, and deliver
                  such signature page to the Building Manager.

         E.       The Building Manager may take any reasonable action required
                  to ensure compliance with the Rules and Regulations.
                  Notwithstanding the foregoing, Lessor and/or the Building
                  Manager shall not be responsible or liable to any lessee for
                  the failure to enforce the Rules and Regulations.

         F.       If Lessee, or its employees, observes an infraction of the
                  Rules and Regulations which they believe may have a negative
                  impact on the conduct of their business, Lessee should report
                  this infraction to the Building Manager as soon as possible in
                  order to permit the Building Manager to take effective action.

II.      BUSINESS OPERATIONS

         A.       Lessee, and/or its employees, shall immediately report to the
                  Building Manager any theft, or other illegal activity that is
                  observed in the Building.

         B.       Neither Lessee, nor its employees, agents, visitors, or
                  licensees shall at any time bring to or keep on the Premises
                  any flammable, combustible or explosive fluid, chemical or
                  substance or any toxic, hazardous or radioactive matter,
                  except combustible fluids or toxic substances required to be
                  used in the ordinary course of business and contained in
                  appropriate containers to prevent a leakage and/or fire.

<PAGE>

         C.       No projection shall be attached to the outside walls of the
                  Premises or the exterior of the Building without the prior
                  written consent of Lessor.

         D.       No curtains, blinds, shades, screens, film or other materials
                  shall be attached to or hung in, or used in connection with,
                  any window or door of the Premises, without the prior written
                  consent of Lessor.

         E.       Lessee shall not use the Premises for lodging or sleeping or
                  for any immoral or illegal purposes. No one shall be permitted
                  to remain on the Premises who is under the influence of
                  alcohol or drugs. No illegal drugs shall be allowed on the
                  Premises at any time. The violation of this provision shall be
                  considered a material breach of the Lease.

         F.       No additional locks or bolts of any kind shall be placed upon
                  any of the doors or windows of the Premises by Lessee, nor
                  shall any changes be made to the locks or the mechanism
                  approved and/or installed by Lessor. Lessee must, upon the
                  termination of its tenancy, return to Lessor all keys to the
                  Premises, internal offices, storerooms, and toilet rooms.
                  Lessee shall furnish Lessor with a key to the Premises to
                  permit access during emergencies or provide Lessor with
                  written advise of Lessee's designated representative(s) who
                  will be available at all times to permit access in the case of
                  an emergency. If a key to the Premises is not provided to
                  Lessor, and Lessee's designated representative is not
                  available to permit access for an emergency, Lessee shall be
                  responsible for the cost of damages resulting from a forced
                  entry.

         G.       No cooking shall be done or permitted on the Premises,
                  provided that the preparation of coffee, tea, hot chocolate,
                  soft drinks, and similar drinks for Lessee, its employees,
                  agents and clients shall be permitted in employee break rooms.
                  Lessee shall not cause or permit any unusual or objectionable
                  odors to be produced on or permeate from the Premises. Lessee
                  shall not obtain or purchase food or beverages at the Building
                  from any vendor or supplier except as approved by Lessor.
                  Notwithstanding the foregoing, Lessee may install vending
                  machines in the Premises.

         H.       Lessee shall not use any sound or light producing equipment on
                  the Premises which can be seen or heard outside the Premises,
                  to the end that the quiet enjoyment of other lessees and their
                  clients shall not be disturbed.

         I.       The sidewalks, halls, passages, stairways and elevators shall
                  not be used by Lessee for any purpose other than for ingress
                  to and egress from the Premises. The halls, passages,
                  entrance, elevators, stairways and portions of the roof are
                  not for the use of the general public. Lessor retains the
                  right to control and prevent access thereto from all persons
                  whose presence, in the judgment of Building Manager, shall be
                  prejudicial to the safety, character, reputation and interests
                  of the Building or its lessees. Nothing herein contained shall
                  be construed to prevent access to persons with whom Lessee
                  deals in the ordinary course of its business, unless such
                  persons are engaged in illegal activities. Lessee, its
                  employees, agents and clients, shall not go in or upon
                  unauthorized areas of the Building without the written consent
                  of Lessor or the Building Manager.

         J.       The carrying in or out of any safes, freight, furniture, or
                  bulky matter of any description must be under the supervision
                  of the Building Manager and take place during non- business
                  hours scheduled with the Building Manager. The persons
                  employed by Lessee for such work must be approved by the
                  Building Manager and provide appropriate insurance as
                  reasonably determined by the Building Manager, based upon the
                  scope of their work. All damages done to the Building by
                  moving or maintaining a safe or other property shall be
                  repaired at the sole expense of Lessee.

         K.       Lessor shall have the right to prescribe the weight, size, and
                  position of all safes, other heavy equipment, file cabinets,
                  file storage areas, and library banks, allowed into the

                                       2

<PAGE>

                  Building.Safes, other heavy equipment, file cabinets, file
                  storage areas, and library banks shall, if considered
                  necessary by Lessor, stand on a platform of such thickness as
                  is necessary to property distribute the weight.

         L.       Toilet rooms, toilets, urinals, wash bowls and other apparatus
                  shall not be used for any purpose other than for which they
                  were constructed and no foreign substance of any kind
                  whatsoever shall be thrown therein. The expense of any
                  breakage, stoppage or damage, resulting from the violation of
                  this Rule, by Lessee, its employees, agents, and clients shall
                  be borne by Lessee.

         M.       Deliveries shall be conducted in an expeditious manner. No
                  delivery vehicle shall be left unattended in front of the
                  Building, in parking areas, or at the service bay and loading
                  dock area (the "Service Bay") for more than ten (10) minutes,
                  without the approval of the Building Manager.

         N.       All delivery handtrucks, dollies, and carts shall be equipped
                  with rubber tires and side guards.

         O.       Except with the written consent of Lessor, no person or
                  persons other than those approved by Lessor shall be permitted
                  to enter the Building for the purpose of cleaning same. Lessee
                  shall not cause any unnecessary labor by reason of Lessee's
                  carelessness or indifference in the preservation of good order
                  and cleanliness. Janitorial service shall include ordinary
                  dusting and cleaning by the janitor assigned to such work and
                  include shampooing of carpets as reasonably required from time
                  to time. Window cleaning, including the cleaning of inside
                  windows, shall be done only by Lessor or its agents. Lessor
                  shall not be responsible to Lessee for the loss of property
                  from the Premises, however occurring, or for damage done to
                  the effects of Lessee by a janitorial or other contractor, or
                  person, engaged by Lessor to provide services to the Building.

         P.       Lessor will direct electricians as to where and how telephone,
                  computer, and other wires servicing the Premises are to be
                  introduced. No boring or cutting for wires or stringing of
                  wires will be allowed without the written consent of Lessor.

         Q.       Lessee shall not lay linoleum, tile, carpet or other similar
                  floor covering so that the same shall be affixed to the floor
                  of the Premises in any manner except as approved by Lessor.
                  The expense of removal of any floor covering and repairing any
                  damage resulting from a violation of this Rule by Lessee, its
                  employees, contractors or agents, shall be borne by Lessee.

         R.       Except for usual and customary wall hangings, Lessee shall not
                  mark, drive nails, screw or drill into the partitions,
                  woodwork or plaster or in any way deface the Premises or any
                  part thereof. Lessee shall pay the cost of repairs resulting
                  from violating the foregoing provision.

         S.       Lessor reserves the right to regulate access of all persons to
                  the Building at such times as Lessor may deem advisable for
                  the protection and safety of the Building and its lessees.
                  Lessor may refuse admission to the Building outside of
                  ordinary business hours to any person not known to Lessor, or
                  its agents, and may require persons admitted to or leaving the
                  Building to register. Any person whose presence in the
                  Building at any time shall, in the sole judgement of Lessor,
                  be prejudicial to the safety, character, reputation and
                  interests of the Building or its lessees may be denied access
                  to the Building or may be ejected therefrom. Lessor may
                  require any person leaving the Building with any package or
                  other object to exhibit a key from Lessee from whose Premises
                  the package or object is being removed. The establishment and
                  enforcement of such requirement shall not impose any
                  responsibility on Lessor for the protection of Lessee against
                  the removal of property from the Premises. Lessor shall, in no
                  event, be

                                       3

<PAGE>

                  liable for damages for any error with regard to the admission
                  or exclusion from the Building of any person.

         T.       The Premises shall not be used for manufacturing or for the
                  storage of merchandise except as such storage may be
                  incidental to the use of the Premises for general office
                  purposes. No Lessee shall occupy or permit any portion of the
                  Premises to be occupied as an office for a public stenographer
                  or typist or for the manufacture or sale of liquor, narcotics,
                  or tobacco in any form, or as a medical office, or as a barber
                  or manicure shop, or as an employment bureau, or as a travel
                  agency, without the consent of Lessor. No Lessee shall sell or
                  permit the sale of any other goods or merchandise in or on the
                  Premises. No Lessee shall engage or pay any employees on the
                  Premises except those actually working for such Lessee on the
                  Premises nor shall any Lessee advertise for laborers giving an
                  address at the Premises.

         U.       Lessee shall see that the doors to the Premises are closed and
                  securely locked before leaving the Building. Lessee must
                  observe strict care and caution that all water faucets or
                  water apparatus are entirely shut off before Lessee or its
                  employees leave the Building. Lessee shall also make sure that
                  all electricity, gas and air are shut off, so as to prevent
                  waste or damage.

         V.       Lessee shall cooperate with Lessor in obtaining maximum
                  effectiveness of the cooling system by closing drapes when the
                  sun's rays fall directly on windows of the Premises. Lessee
                  shall not obstruct, alter, or in any way impair the efficient
                  operation of the heating, ventilating and air conditioning
                  system in the Building. Lessee shall not place any
                  obstructions on the air supply or exhaust grilles so as to
                  interfere with air flow.

         W.       All doors opening onto public corridors shall be kept closed,
                  except when in use for ingress and egress. All doors leading
                  to equipment and utility rooms shall be kept closed.

         X.       No bicycles, skateboards, vehicles or animals of any kind
                  shall be brought into or kept in or about the Building.
                  Notwithstanding the foregoing, bicycles may be brought into
                  the parking garage by employees, and stored in locations
                  designated in the garage for such purpose.

         Y.       Lessee, upon the expiration or earlier termination of the
                  Lease Term, shall deliver to the Lessor keys to the Premises
                  which were furnished to Lessee. In the event of loss of any
                  keys so furnished, Lessee shall pay Lessor the greater of (i)
                  Ten Dollars ($10.00) per key or (ii) the cost of replacing the
                  key(s).

         Z.       Any construction in the Premises shall be subject to the
                  restrictions set forth in the Tenant Improvement Manual.

II.      DELIVERIES

         A.       The carrying in or out of any safes, freight, furniture, or
                  bulky matter of any description must be accomplished under the
                  supervision of the Building Manager and take place during
                  non-business hours scheduled with the Building Manager. The
                  persons employed by Lessee for such work must be approved by
                  the Building Manager and provide appropriate insurance as
                  reasonably determined by the Building Manager, based upon the
                  scope of their work.

         B.       The Service Bay is designated for receipt of deliveries or
                  removal of construction materials, trade fixtures, and/or
                  trash and shall be used only for such purposes.

                                       4

<PAGE>

         C.       Whenever possible, deliveries through the lobby which require
                  the use of a cart shall be made before 8:00 a.m. or after 6:00
                  p.m. Deliveries shall be conducted in art expeditious manner.
                  No delivery vehicle shall be left unattended in the Service
                  Bay for more than thirty (30) minutes without the approval of
                  the Building Manager.

         D.       All deliveries to, and removals from, the Premises shall be
                  made on the service elevators.

         E.       No furniture shall be placed in front of the Building, or in
                  any lobby or corridor or balcony, without the prior written
                  consent of the Building Manager. Lessor shall have the right
                  to remove all non-permitted furniture, without notice to
                  Lessee and at the expense of the Lessee.

         F.       All delivery handtrucks, dollies, and carts shall be equipped
                  with rubber tires.

         G.       Lessee shall be responsible for any damage to the Building or
                  required maintenance of Common Areas resulting from deliveries
                  made to the Premises.

IV.      PARKING

         A.       Lessor shall have exclusive control over the parking garage
                  and vehicular entry and exit. Control of entry and exit may be
                  by personnel and/or equipment reasonably determined by Lessor
                  from time to time.

         B.       Spaces designated for visitor parking shall not be used by
                  Lessee or its employees.

         C.       Lessor shall have the right to designate such portions of the
                  parking garage for the exclusive use of designated lessees,
                  and/or their employees and customers, as Lessor may deem
                  appropriate from time to time.

         D.       Lessor reserves the right to preclude any vehicles from
                  entering the parking garage, or thereafter remove such vehicle
                  from the parking garage, if, in the reasonable judgement of
                  the Building Manager, such vehicle creates an unsafe or
                  unclean environment or otherwise creates a nuisance. Vehicles
                  creating excessive exhaust, leaking oil, or with distasteful
                  language, signage, or advertising displayed on the vehicle
                  will be excluded.

         E.       Any vehicle left in the garage over night must first receive
                  the approval of the Building Manager. If such approval is not
                  first obtained, the Building Manager may remove such vehicle
                  as hereinafter provided.

         F.       Vehicles must be parked entirely within the painted stall
                  lines of a single parking stall.

         G.       All directional signs and arrows must be observed.

         H.       The speed limit within all parking areas shall be five (5)
                  miles per hour.

         I.       Parking is prohibited in areas not striped for parking,
                  including, but not limited to, aisles, where "no parking"
                  signs are posted, access ramps to the parking garage, and
                  along driveways providing access to the Building.

         J.       Washing, waxing, cleaning or servicing of any vehicle in any
                  parking area at the Building is prohibited.

                                       5

<PAGE>

         K.       Lessee shall acquaint all persons to whom Lessee provides
                  parking validation of these Rules and Regulations.

         L.       Every parker is required to park and lock his own vehicle. All
                  responsibility for damage to a vehicle is assumed by the
                  vehicle owner.

         M.       An employee of Lessee who has been provided with a designated
                  space shall not park in other than his/her designated space.

         N.       Any vehicle left in the parking garage or visitor parking area
                  which violates any provision of the Rules and Regulations, or
                  the Lease, may be ticketed for illegal parking by the City of
                  Pasadena and/or removed by the Building Manager to a secured
                  lot without notice to Lessee or the owner of the vehicle. If
                  the person violating the Rules and Regulations is Lessee, its
                  employee, or agent, Lessee shall pay to Lessor the cost to
                  remove and store such vehicle as Rent.

IV.      SIGNS

         A.       No sign, placard, picture, advertisement, name or notice shall
                  be inscribed, displayed, printed or affixed on or to the
                  Premises or to the outside or inside of the Building without
                  the prior written consent of Lessor. Lessor shall have the
                  right, unless Lessor has given prior written consent, to
                  remove any such sign, placard, picture, advertisement, name or
                  notice, without notice to and at the expense of Lessee. Lessor
                  shall not be liable in damages for removal of signage not
                  approved in writing by Lessor. All signs or lettering on doors
                  and walls shall be printed, painted, affixed or inscribed at
                  the expense of Lessee, in content and style approved by
                  Lessor, and by a vendor selected by Lessor.

         B.       If directories are provided for the Building, such directories
                  shall be exclusively for the display of the name and location
                  of lessees of the Building. The listing of Lessee on
                  directories shall be in content and style approved by Lessor,
                  at the expense of Lessee.

LESSEE:

BILL GROSS' IDEALAB!

By:      /S/  [illegible]
    ------------------------------------

                                      6

<PAGE>

                                   EXHIBIT "D"

                             ACCEPTANCE OF PREMISES

                               PARSONS WEST ANNEX
                            74 NORTH PASADENA AVENUE

LESSEE:               Bill Gross' Idealab!

LESSOR:               Parsons Information & Technology Group Inc.

LEASE DATE:

TERM OF LEASE:

ADDRESS OF PREMISES:  8th Floor containing approximately 29,064 rentable sq. ft.
                      located at 74 North Pasadena Avenue, Pasadena,
                      California, 91124.

COMMENCEMENT DATE:    June 24, 1999

EXPIRATION DATE:      June 30, 2001

The Premises are accepted by Lessee as required under the terms of its Lease
Agreement with Lessor. The above described Lease term commences and expires on
the dates set forth above.

LESSEE:

BILL GROSS' IDEALAB!

By:      /S/  [illegible]
    ---------------------------------------

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

<PAGE>

                                   EXHIBIT "E"

                      STANDARDS FOR UTILITIES AND SERVICES

                               PARSONS WEST ANNEX
                            74 NORTH PASADENA AVENUE

The furnishing of building services and utilities to Lessee shall be in
accordance with Article 8 of the Lease and subject to the terms and conditions
set forth in this Exhibit "F". Lessor reserves the right to adopt from time to
time such reasonable modifications and additions hereto as Lessor deems
appropriate.

         A. Subject to the full performance by Lessee of all of Lessee's
obligations under the Lease, and excepting legal holidays, Lessor shall, on
Monday through Friday, from 8:00 a.m. to 6:00 p.m., and on Saturday, from 8:00
a.m. to 1:00 p.m., ("Normal Hours") provide the following building services:

            1.  Elevator service with one elevator available at all times.

            2.  Heating, ventilation, and air conditioning ("HVAC")
when, in the reasonable judgment of Lessor, it is required for the comfortable
occupancy of the Premises for general office purposes. Lessor shall not be
responsible for any inadequacy of performance of the HVAC system if: (i) the
occupancy of the Premises exceeds standards as set forth by the Pacific Fire
Rating Bureau, (ii) electrical power requirements for Lessee's office equipment
exceed those hereinafter set forth, (iii) Lessee installs partitions or other
installations which interfere with the proper operation of the interior climate
control systems, or (iv) window coverings on exterior windows are not kept fully
closed.

            Lessee shall reimburse Lessor for use of the HVAC system beyond
Normal Hours at Lessor's costs of providing such service including, but not
limited to, utility charges, amortization of the cost of mechanical equipment
required to provide such services, additional maintenance costs, staff time to
activate and deactivate, plus a ten percent (10%) overhead fee. The initial
charges for after Normal Hours HVAC service shall be as follows:

            (i)   Less than 2 hours in a 24-hour period - $30/hour

            (ii)  2 hours in a 24-hour period but less than 3 hours - $25/hour

            (iii) 3 or more hours in a 24-hour period - $23/hour

Lessor may Increase the foregoing rates based upon actual increases in its
actual cost of utilities, labor, and/or maintenance.

            3. Electric current for routine lighting, HVAC, and the
operation of general office machines such as typewriters, dictating equipment,
desk model adding machines, photocopy machines and "small" computers incidental
to the conduct of normal office business, which use 110/220-volt electric power
not to exceed six (6) watts of electricity per rentable square foot per year.
Notwithstanding the foregoing, Lessee shall reimburse Lessor, Lessor's cost plus
a 20% administrative fee, for (i) all electrical, gas, and/or water usage
resulting from non-standard equipment, such as mainframe computers and self
contained air conditioning units, and (ii) all electrical consumption exceeding
6 wafts of electricity per rentable square foot per year.

<PAGE>

            4. Water for restrooms and restroom facilities and landscaping.

            5. Janitorial services Monday through Friday (except
legal holidays), provided that (i) the Premises are used consistently with the
terms of the Lease and are kept reasonably in order by Lessee and (ii) said
janitorial services can be performed during the evenings without interference by
Lessee or Lessee's employees. Lessor shall not be responsible or liable for any
act or omission or commission on the part of the persons employed to perform
said janitorial services.

         B. Lessor shall replace electric light bulbs, tubes, and ballasts in
the Premises. Lessor may, in Lessor's sole discretion, adopt a system of
re-lamping and re-ballasting on a basis consistent with good practice.

         C. No electrical or HVAC equipment, or plumbing additions shall be
installed, nor shall any changes be made to the Building's HVAC, electrical or
plumbing systems which would increase the cost of operating the Building or
otherwise adversely affect the Building or such systems without prior written
consent from Lessor, which consent may be withheld by Lessor in its sole
discretion. Lessor reserves the right to designate and/or approve any contractor
proposed by Lessee to modify, alter, or expand HVAC, electrical, or plumbing
systems. Any permitted installations shall be completed in conformity with the
terms and conditions set forth in the Tenant Improvement Manual. Lessee shall
pay for any costs resulting from structural changes necessitated by increased
floor loading and additional equipment required as a result of such
installations.

         D. Lessor shall not provide in the Premises, reception outlets or
television or radio antennas for television or radio broadcast or reception.
Lessee shall not install any such equipment without prior written consent from
Lessor, which consent may be withheld by Lessor in its sole discretion.

         E. Lessee shall not, without the prior written consent of Lessor, use
any apparatus, machine or device in the Premises, which will increase the amount
of electricity or water furnished or supplied for use of the Premises as general
office space, nor connect to any electric current, except through existing
outlets in the Premises, any apparatus or device for the purpose of using such
electric current in excess of that furnished or supplied for use of the Premises
as general office space.

         F. Lessee's telecommunication requirements shall be accomplished, at
Lessee's sole expense. Lessee shall arrange with the applicable local public
authorities, utility companies and telephone companies, as the case may be, for
the furnishing of, and payment of the cost of, all telephone services required
by Lessee's use of the Premises. Lessee shall pay directly for such telephone
services, including the establishment and connection thereof, at the rates
charged for such services by said authority, telephone company or utility. The
failure of Lessee to obtain or to continue to receive such services for any
reason shall not relieve Lessee of any of its obligations under the Lease, nor
constitute a breach of the Lease by Lessor.

         G. Lessee shall cooperate with Lessor to assure, and to abide by all
requirements which Lessor may adopt from time to time for the proper functioning
and protection of the Building's HVAC, electrical, security, plumbing, and fire
and life safety systems. Lessee shall comply with all laws, statutes, ordinances
and governmental rules and regulations now in force or which may later be
enacted or promulgated in connection with building services furnished to the
Premises, including, without limitation, any rule or regulation relating to the
HVAC, electrical, security, plumbing, and fire and life safety systems.

         H. Notwithstanding anything to the contrary set forth herein, the
Building, which includes the adjacent parking structure, shall be available to
Lessee and its employees at all

                                       2

<PAGE>

times, except times when prevented from entering due to causes beyond the
reasonable control of Lessor such as natural disasters, fire drills, bomb
threats, and other casualties.

                                       3
<PAGE>

                                   EXHIBIT "F"

                             WEST PARKING STRUCTURE

                                     LEVEL A<PAGE>
                                                                   EXHIBIT 10.16

                    LANDLORD'S CONSENT TO ASSIGNMENT OF LEASE
            OF PREMISES AT 380 PORTAGE AVENUE, PALO ALTO, CALIFORNIA

     EL CAMINO CENTER, A CALIFORNIA LIMITED PARTNERSHIP, as Landlord under the
Lease attached hereto and made a part hereof as Exhibit A, consents to the
Assignment of the Lease by TELLME NETWORKS, INC., Assignor, to BILL GROSS'
IDEALAB!, Assignee, and, contingent upon the execution of the Assignment And
Assumption of Lease Agreement dated of even date herewith by Assignor and
Assignee, a copy of which Agreement is attached hereto as Exhibit B, fully and
completely releases Assignor from any and all liability of Assignor for any and
all acts or omissions, liabilities or obligations arising from and after the
Effective Date of the Assignment. Assignee acknowledges that pursuant to
Paragraph 42 of said Lease, in signing this Consent, Landlord has relied upon
the completeness and accuracy of the financial information provided to Landlord
by Assignee, although Landlord acknowledges that its release of Assignor shall
be fully effective notwithstanding any such reliance. Landlord further waives
the requirement to augment the Security Deposit by the Letter of Credit or
Certificate of Deposit as set forth in Paragraph 4 of said Lease.

                                            "Landlord"

                                            EL CAMINO CENTER,
                                            A CALIFORNIA LIMITED PARTNERSHIP

By: /s/ RICHARD M. JACOBSEN
   -------------------------------
    RICHARD M. JACOBSEN, PARTNER
   -------------------------------
                [Print Name]

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

<PAGE>

                  ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT (this "Assignment") is dated
as of January 7, 2000 by and between TELLME NETWORKS, INC., a Delaware
corporation ("Assignor") and BILL GROSS' IDEALAB!, a California corporation
("Assignee").

WHEREAS, Assignor is Tenant under that certain Office Lease dated October 12,
1999 (the "Lease"), between El Camino Center, a California limited partnership
("Landlord"), and Assignor, as Tenant, for approximately 22,167 rentable square
feet in that certain building (the "Premises") located at 380 Portage Avenue,
California; and

WHEREAS, Assignor desires to assign its interest in the Lease to Assignee and
Assignee desires to assume Assignor's obligations under the Lease.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor and Assignee agree as follows:

1. EFFECTIVE DATE OF ASSIGNMENT. This assignment contained in this Assignment
shall take effect on January 15, 2000 (the "Effective Date"). Assignor shall
give possession of the Premises to Assignee on that date.

2. ASSIGNMENT OF LEASE. Assignor does hereby transfer, assign, convey and
deliver to Assignee its entire right, title and interest in the Lease and the
Premises. Assignor hereby agrees to indemnify Assignee against and hold Assignee
harmless from any and all cost, liability, loss, damage or expense, including,
without limitation, attorneys' fees, arising out of Assignor's breach of the
Lease prior to the Effective Date.

3. ASSUMPTION OF OBLIGATIONS. Assignee does hereby accept this assignment and,
for the benefit of Assignor and Landlord, expressly assumes and agrees to
hereafter perform all of the terms, covenants, conditions and obligations of
Assignor under the Lease. Assignee hereby agrees to indemnify Assignor against
and hold Assignor harmless from any and all cost, liability, loss, damage or
expense, including, without limitation, attorneys' fees, arising out of or
relating to events occurring after the Effective Date and arising out of
Assignee's obligations as tenant under the Lease or Assignee's breach of the
Lease. If Assignee breaches its obligations under the Lease and (i) Assignor
pays rent to Landlord; and/or (2) fulfills any of Assignee's other obligations
in order to prevent Assignee from being in default, Assignee immediately shall
reimburse Assignor for the amount of rent or costs expended by Assignor together
with interest on those sums at the highest rate allowed by law.

4. SECURITY DEPOSIT. The parties acknowledge that Landlord currently holds a
security deposit in the amount of $50,000.00 (the "Security Deposit") pursuant
to the terms of the Lease. Upon execution of this Assignment, Assignee agrees to
pay Assignor in cash the amount of the Security Deposit and upon such payment,
Assignor shall

                                       1.
<PAGE>

release all claims to the Security Deposit, which thereafter will be held by
Landlord for the benefit of Assignee, subject to the provisions of the Lease.

5. ASSIGNMENT REIMBURSEMENT. Upon execution of this Assignment, Assignee agrees
to reimburse Assignor in cash the amount of $34,294.98 for the following costs,
fees, and expenses paid by Assignor:

             A. Ninth Month's Rent (prepaid):      $24,383.70
             B. Design Fees:                       $9,335.00
             C. Tax Reimbursement:                 $576.28
             ---------------------------------------------

             Total:                                $34,294.98

6. BROKERAGE COMMISSIONS. Upon execution of this Assignment, Assignee agrees to
pay a commission to Cornish & Carey Commercial in the amount of Two Hundred Five
Thousand Three Hundred Thirty-three and 76/100 Dollars ($205,333.76). Neither
Assignor nor Landlord shall have any obligation to pay commissions to any real
estate broker in connection with this transaction.

7. CONTINGENCY. Notwithstanding anything to the contrary herein, this Assignment
shall be contingent upon the unconditional written consent of Landlord,
including full and complete release of Assignor from all liability satisfactory
to Assignor, which shall be received by the parties no later than the Effective
Date.

8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.

9. ENFORCEMENT BY LANDLORD. Landlord is a third party beneficiary of this
Assignment. As such, the provisions of this Assignment inure to the benefit of,
and are enforceable by, Landlord.

10. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original.

11. ATTORNEY'S FEES. If there is any legal or arbitration action or proceeding
between the parties to enforce any provision of this Assignment or to protect or
establish any right or remedy of any of the parties, the unsuccessful party to
such action or proceeding will pay to the prevailing party all costs and
expenses, including reasonable attorney's fees incurred by such prevailing party
in such action or proceeding and in any appearance in connection therewith, and
if such prevailing party recovers a judgment in any such action, proceeding or
appeal, such costs, expenses and attorney's fees will be determined by the court
or arbitration panel handling the proceeding and will be included in and as a
part of such judgment.

12. NOTICES. Any notices or other communications required or permitted under
this Agreement will be in writing and either served personally or sent by
prepaid, first-class

                                       2.
<PAGE>

mail and addressed to the other party at the address set forth below. Either
party may change its address by notifying the other party of the change of
address.

13. REPRESENTATION OF ASSIGNOR. Assignor holds all of the right, title and
interest of Tenant under the Lease and has the complete and unrestricted power
and the unqualified right to assign the Lease to Assignee, subject to consent of
Landlord.

                                            ASSIGNOR:

                                            TELLME NETWORKS, INC., a Delaware
                                            corporation

                                            By: /s/ J. W. PITTS, III
                                               --------------------------------
                                               Name: J.W. PITTS, III
                                                    ---------------------------
                                               Its: VICE PRESIDENT
                                                   ----------------------------

                                            ADDRESS:
                                            977 Commercial Street
                                            Palo Alto, California 94303
                                            Fax: 650-815-0291

                                            ASSIGNEE:

                                            BILL GROSS' IDEALAB!, a California
                                            corporation

                                            By: /s/ BRIAN A.C. STEEL
                                               --------------------------------
                                               Name: BRIAN A.C. STEEL
                                                    ---------------------------
                                               Its:  Managing Director &
                                                   ----------------------------
                                                     Chief Operating Officer

                                            ADDRESS:
                                            idealab!
                                            501 Macara Avenue
                                            Sunnyvale, California 94086

                                       3.
<PAGE>

                                 LEASE AGREEMENT

     This Lease, made this 12TH day of October, 1999 between the El Camino
Center, a California Limited Partnership, hereinafter called Landlord, and
TELLME NETWORKS, INC., A DELAWARE CORPORATION, hereinafter called Tenant.

                                   WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") more particularly described as
follows: Approximately 18,550 square feet of enclosed warehouse and 3,617 square
feet of roofed and fenced open area as outlined in red on Exhibit "A", attached
hereto and incorporated herein by this reference thereto. Premises are further
identified as:

               380 Portage Avenue, Palo Alto, Santa Clara County, California

As used herein the Complex shall mean and include all of the land outlined in
red and described in Exhibit "B", attached hereto, and all of the buildings,
improvements, fixtures and equipment now or hereafter situated on said land.
     Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

1. USE Landlord hereby discloses to Tenant and Tenant hereby acknowledges that
the prior use of the Premises was for warehousing and distribution, and that any
change in use is subject to the approval of the City of Palo Alto. Landlord is
in the process of obtaining approval from the City of Palo Alto to allow the
Premises to be used for software development and other similar uses. This Lease
is specifically conditioned upon Landlord's obtaining approval from the City of
Palo Alto, by November 1, 1999, for a use of the Premises that will allow Tenant
to conduct Tenant's intended business. Landlord shall deliver to Tenant a copy
of all documents issued by the City of Palo Alto to Landlord which indicate the
City of Palo Alto's approval. In the event Landlord is unable to obtain the City
of Palo Alto's approval for the proposed change in use by November 1, 1999, this
Lease shall be void and of no force and effect between the parties and neither
Landlord nor Tenant shall be liable to one another for having entered into this
Lease and Landlord shall return to Tenant any security deposit and Letter of
Credit (if so received). Tenant shall use the Premises only in conformance with
applicable governmental laws, regulations, rules and ordinances and shall
conform to any specific guidelines as issued by the City of Palo Alto. Tenant
shall not do or permit to be done in or about the Premises or the Complex nor
bring or keep or permit to be brought or kept in or about the Premises or the
Complex anything which is prohibited by or will in any way increase the existing
rate of (or otherwise affect) fire or any insurance covering the Complex or any
part thereof, or any of its contents, or will cause a cancellation of any
insurance covering the Complex or any part thereof, or any of its contents.
Tenant shall not do or permit to be done anything in, on or about the Premises
or the Complex which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Complex or injure or annoy them, or use or
allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises or the Complex. No physical sale by auction shall
be permitted on the Premises. Tenant shall not place any loads upon the floors,
walls, or ceiling, which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated or allowed by Landlord. No materials,
supplies, equipment, finished products or semi-finished products, raw materials
or articles of any nature shall be stored upon or permitted to remain outside
the Premises or on any portion of common area of the Complex. No loudspeaker or
other device, system or apparatus which can be heard outside the Premises shall
be used in or at the Premises without the prior written consent of Landlord.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises. Tenant shall indemnify, defend and

                                       1
<PAGE>

hold Landlord harmless against any loss, expense, damage, attorney's fees, or
liability arising out of failure of Tenant to comply with any applicable law.
Tenant shall comply with any covenant, condition, or restriction ("CC&R's")
affecting the Premises. The provisions of this paragraph are for the benefit of
Landlord only and shall not be construed to be for the benefit of any tenant or
occupant of the Complex.

2. TERM

     A. Subject to the contingency described in Paragraph 1 above, the term of
this Lease shall be for a period of Seven Years and Two Months (7 and 2/12)
years (unless sooner terminated as hereinafter provided) and, subject to
Paragraphs 2(B) and 3, shall commence on the 15th day of November, 1999 and
end on the 14TH day of January, 2007.

     B. Subject to the contingency described in Paragraph 1 above, possession of
the Premises shall be deemed tendered and the term of this Lease shall commence
November 1, 1999.

3. POSSESSION Subject to paragraph 1 above, if Landlord, for any reason
whatsoever, cannot deliver possession of said Premises to Tenant at the
commencement of said term, as hereinbefore specified, this Lease shall not be
void or voidable; no obligation of Tenant shall be affected thereby; nor shall
Landlord or Landlord's agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of
the Lease, and all other dates affected thereby shall be revised to conform to
the date of Landlord's delivery of possession, as specified in Paragraph 2 (B),
above. The above, is, however, subject to the provision that the period of delay
of delivery of the Premises shall not exceed 45 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond
Landlord's control shall be excluded in calculating such period) in which
instance Tenant, at its option, may, by written notice to Landlord, terminate
this Lease.

4. RENT
     A. BASIC RENT. Tenant agrees to pay to Landlord at such place as Landlord
may designate without deduction, offset, prior notice, or demand, and Landlord
agrees to accept as Basic Rent for the leased Premises the total sum of Three
Million Seven Hundred Eighty-Five Thousand Three Hundred Seventy and 29/100
($3,785,370.29 ) Dollars in lawful money of the United States of America,
payable as follows: $24,383.70 upon execution of this lease, represents the
Basic Rent for the 9th month of the Lease Term

          Month of Lease Term       Total Monthly Basic Rent
                0-8                 $0
                9-20                $24,383.70 (9th month paid)
                21-26               $48,767.40
                27-38               $50,230.42
                39-50               $51,737.33
                51-62               $53,289.45
                63-74               $54,888.14
                75-86               $56,534.78

     B. TIME FOR PAYMENT. In the event that the term of this Lease commences on
a date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).

     C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rent as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)

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days. Said late charge shall equal five (5%) percent of each rental payment so
in default.

     D. ADDITIONAL RENT. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord in addition to the Basic Rent and as
Additional Rent the following:
     (1)  Tenant's proportionate share of all utilities relating to the Complex
          as set forth in Paragraph 11, and
     (2)  Tenant's proportionate share of all Taxes relating to the Complex as
          set forth in Paragraph 12, and
     (3)  Tenant's proportionate share of all insurance premiums relating to the
          Complex, as set forth in Paragraph 15, and
     (4)  Tenant's proportionate share of expenses for the operation,
          management, maintenance and repair of the Building (including common
          areas of the Building) and Common Areas of the Complex in which the
          Premises are located as set forth in Paragraph 7, and
     (5)  All charges, costs and expenses, which Tenant is required to pay
          hereunder, together with all interest and penalties, costs and
          expenses including attorney's fees and legal expenses, that may accrue
          thereto in the event of Tenant's failure to pay such amounts, and all
          damages, reasonable costs and expenses which Landlord may incur by
          reason of default of Tenant or failure on Tenant's part to comply with
          the terms of this Lease. In the event of nonpayment by Tenant of
          Additional Rent, Landlord shall have all the rights and remedies with
          respect thereto as Landlord has for nonpayment of rent.
Tenant shall pay to Landlord monthly, in advance, Tenant's prorata share of an
amount estimated by Landlord to be Landlord's approximate average monthly
expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of this
Lease) any amount of estimated payments made by Tenant in excess of Landlord's
actual expenditures for said Additional Rent items.

Tenant's payment for such Additional rent as of the commencement of the term of
this lease shall be Two Thousand One Hundred ($2,100.00) Dollars per month. Any
payments required to be made by Tenant for Additional Rent shall be made by
check or instrument separate from that check or instrument used by Tenant to
make any payments for Basic Rent pursuant to paragraph 4 A.

The respective obligations of Landlord and Tenant under this paragraph shall
survive the expiration or other termination of the term of this Lease, and if
the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

     E. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent hereunder
and all payments hereunder for Additional Rent shall be paid to Landlord at the
office of Landlord at 3201 Ash Street, Palo Alto, California 94306, or to such
other person or to such other place as Landlord may from time to time designate
in writing.

     F. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of Fifty Thousand ($50,000.00)
Dollars. Said sum shall be held by Landlord as a Security Deposit for the
faithful performance by Tenant of all the terms, covenants, and conditions of
this Lease to be kept and performed by Tenant during the term hereof. If Tenant
defaults with respect to any provisions of this Lease, including, but not
limited to, the provisions relating to the payment of rent and any of the
monetary sums due herewith, Landlord may (but shall not be required to) use,
apply or retain all or any part of this Security Deposit for the payment of any
other amount which Landlord may spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in the amount sufficient to restore the Security
Deposit to its original amount. Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep this Security
Deposit separate from its general funds, and Tenant shall not be entitled to
interest on such Deposit. If Tenant fully and

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<PAGE>

faithfully performs every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord's option, to the last assignee of Tenant's interest hereunder) at the
expiration of the Lease term and after Tenant has vacated the Premises. In the
event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest whereupon Tenant
agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor.

In addition to the cash Security Deposit as defined in this paragraph 4.F.
Tenant agrees to tender to Landlord no later than January 2, 2000, an
irrevocable standby Letter of Credit in the amount of $300,000. The form of the
irrevocable standby Letter of Credit must be acceptable to Landlord. The Letter
of Credit must provide that Landlord has the ability to cash or draw the entire
amount solely upon Landlord's representing to the issuing Bank that Tenant is in
an uncured monetary default of the Lease. The Letter of Credit required
hereunder shall remain in full force and effect until December 31st, 2003. In
the event Tenant has not provided Landlord the Letter of Credit as required,
then on January 15, 2000, Tenant agrees to tender to Landlord a Certificate of
Deposit in Landlord's name in the amount of $300,000. Any interest generated by
the Certificate of Deposit during the term of the Lease shall be given to
Tenant.

5. RULES AND REGULATIONS AND COMMON AREA Subject to the terms and conditions of
this Lease and such Rules and Regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees, invitees and customers shall, in
common with other occupants of the Complex in which the Premises are located,
and their respective employees, invitees and customers, and others entitled to
the use thereof, have the non-exclusive right to use the access roads, parking
areas, and facilities provided and designated by Landlord for the general use
and convenience of the occupants of the Complex in which the Premises are
located, which areas and facilities are referred to herein as "Common Area" This
right shall terminate upon the termination of this Lease. Landlord reserves the
right from time to time to make changes in the shape, size, location, amount and
extent of Common Area. Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the Common Area, and any
part or parts thereof, as Landlord may deem appropriate for the best interests
of the occupants of the Complex. The Rules and Regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by them
and cooperate in their observance. Such Rules and Regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy to Tenant. Landlord shall not be
responsible to Tenant for the non-performance by any other tenant or occupant of
the Complex of any of said Rules and Regulations.
     Landlord shall operate, manage and maintain the Common Area. The manner in
which the Common Area shall be maintained and the expenditures for such
maintenance shall be at the discretion of Landlord.

6. PARKING Tenant shall have the right to use with other tenants or occupants of
the Complex 80 parking spaces in the common parking areas of the Complex
outlined in red on Exhibit C. Tenant agrees that Tenant, Tenant's employees,
agents, representatives and/or invitees shall not use parking spaces in excess
of said 80 spaces allocated to Tenant hereunder. Landlord shall have the right,
at Landlord's sole discretion, to specifically designate the location of
Tenant's parking spaces within the common parking areas of the Complex in the
event of a dispute among the tenants occupying the building and/or Complex
referred to herein, in which event Tenant agrees that Tenant, Tenant's
employees, agents, representatives and/or invitees shall not use any parking
spaces other than those parking spaces specifically designated by Landlord for
Tenant's use. Said parking spaces, if specifically designated by landlord to
Tenant, may be relocated by Landlord at any time, and from time to time.
Landlord reserves the right, at Landlord's sole discretion, to rescind any
specific designation of parking spaces, thereby returning Tenant's parking
spaces to the common parking area. Landlord shall give Tenant written notice of
any change in Tenant's parking spaces. Tenant shall not, at any time, park, or
permit to be parked, any trucks or vehicles adjacent to the loading areas so as
to interfere in any way with the use of such areas, nor shall Tenant at any time
park, or permit the parking of Tenant's trucks or other vehicles or the trucks
and vehicles of Tenant's suppliers or others, in any portion of the common area
not designated by Landlord for such use by Tenant. Tenant shall not park not
permit to be parked, any inoperative vehicles or equipment on any portion of the
common parking area or other common areas of the Complex. Tenant agrees to
assume responsibility for compliance by its employees with the parking provision
contained herein. If Tenant or its employees park in other than such designated
parking areas, then Landlord may charge Tenant, as an

                                       4
<PAGE>

additional charge, and Tenant agrees to pay, ten ($10.00) Dollars per day for
each day or partial day each such vehicle is parked in any area other than that
designated. Tenant hereby authorizes Landlord at Tenant's sole expense to tow
away from the Complex any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions, or to attach violation stickers or
notices to such vehicles. Tenant shall use the parking areas for vehicle parking
only, and shall not use the parking areas for storage.

7. EXPENSES OF OPERATION, MANAGEMENT AND MAINTENANCE OF THE COMMON AREAS OF THE
COMPLEX, PREMISES AND BUILDING  IN WHICH THE PREMISES ARE LOCATED As Additional
Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay to
Landlord Tenant's proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of all expenses of operation,
management, maintenance and repair of the Common Areas of the Complex including,
but not limited to, license, permit and inspection fees; security; utility
charges associated with exterior landscaping and lighting (including water and
sewer charges); all charges incurred in the maintenance of landscaped areas,
lakes, parking lots, sidewalks, driveways; maintenance, repair and replacement
of all fixtures and electrical, mechanical and plumbing systems; structural
elements and exterior surfaces of the buildings; salaries and employee benefits
of personnel and payroll taxes applicable thereto; supplies, materials,
equipment and tools; the cost of capital expenditures which have the effect of
reducing operating expenses, provided, however, that in the event Landlord makes
such capital improvements, Landlord may amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not at a rate
greater than the anticipated savings in the operating expenses.
     "Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.
     Tenant agrees to contract and pay for five-day janitorial service for the
leased Premises and Landlord agrees to maintain the Complex in a first-class
manner.
     Expenses for the operation, management and maintenance of the Premises and
Building shall not include and Tenant shall in no event have any obligation to
perform or to pay directly, or to reimburse Landlord for, all or any portion of
the following repairs, maintenance, improvements, replacements, premiums,
claims, losses, fees, charges, costs and expenses (collectively, "Costs"): Costs
occasioned by the act, omission or violation of any law by Landlord, or its
respective agents, employees or contractors; (b) Costs occasioned by fire,
(except fires caused by Tenant), acts of God, or other casualties or by the
exercise of the power of eminent domain; (c) Interest, charges and fees incurred
on debt; (d) Costs of structural repairs to the Premises (other than repairs or
modifications required because of Tenant's improvements); (e) costs which could
properly be capitalized under generally accepted accounting principles, except
to the extent amortized over the useful life of the capital item in question.

8. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts
the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Tenant
agrees to lease the Premises in an AS-IS condition, and any alteration,
addition, or modification to the Premises shall be made in accordance with this
Paragraph 8 and Paragraph 9 of the Lease and shall be made at Tenant's sole cost
and expense and shall not delay the commencement of Lease nor delay the payment
of any rental due hereunder. Notwithstanding anything herein to the contrary,
Landlord shall have the right to review and approve Tenant's initial build-out
of the Premises, and Tenant shall only be required to restore the Premises to
the condition and configuration in existence upon completion of the initial
build-out. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant. Tenant agrees on the last day of the Lease term, or on
the sooner termination of this Lease, to surrender the Premises promptly and
peaceably to Landlord in good condition and repair (damage by Acts of God, fire
or normal wear and tear excepted), with all interior walls cleaned and repaired
and replaced, if damaged; all floors cleaned and waxed; all carpets cleaned and
shampooed; the air conditioning and heating equipment serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been Tenant's responsibility during the term
of this Lease) together with all alterations, additions and improvements which
may have been made in, to, or on the Premises (except movable trade fixtures
installed at the

                                       5
<PAGE>

expense of Tenant) except that Tenant shall ascertain from Landlord within
thirty (30) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part
or parts thereof before the end of this Lease at Tenant's sole cost and expense.
Tenant, on or before the end of the term or sooner termination of this Lease,
shall remove all of Tenant's personal property and trade fixtures from the
Premises, and all property not so removed on or before the end of the term or
sooner termination of this Lease shall be deemed abandoned by Tenant and title
to same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture and
equipment so abandoned by Tenant, at Tenant's sole cost, and repair any damage
caused by such removal at Tenant's sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from the delay by Tenant
in so surrendering the Premises including, without limitation, any claims made
by any succeeding tenant founded on such delay. Nothing contained herein shall
be construed as an extension of the term hereof or as a consent of Landlord to
any holding over by Tenant. The voluntary or other surrender of this Lease or
the Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies.

9. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant, but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to
Landlord. Tenant shall request in writing Landlord's approval of any alterations
or additions to the Premises, and Landlord shall approve or disapprove Tenant's
request for alterations within 5 working days of receipt of Tenant's written
request. At such time as Landlord approves or disapproves Tenant's request for
alterations, Landlord shall also indicate which alterations, if any, must be
removed and restored to the condition of the initial build-out, such restoration
to be performed pursuant to the terms and conditions of Paragraph 8 above. If
Landlord consents to the making of any alteration, addition, or improvement to
or of the Premises by Tenant, the same shall be made by Landlord at Tenant's
sole cost and expense. In the event Landlord elects not to perform the
construction of Tenant's improvements, Landlord shall have the right to review
and approve in writing Tenant's contractor and to set forth reasonable rules and
guidelines that must be followed in the construction of Tenant's improvements.
In the event Landlord performs the construction, Landlord shall receive a
construction fee equal to 10% of the direct cost of construction of the
improvements. Any modifications to the building or building systems as a result
of Tenant's alterations, additions or improvements required by governmental code
or otherwise shall be made at Tenant's sole cost and expense. Tenant shall
retain title to all moveable furniture and trade fixtures placed in the
Premises. All heating, lighting, electrical, airconditioning, partitioning,
drapery, carpeting and floor installations made by Tenant, together with all
property that has become an integral part of the Premises, shall not be deemed
trade fixtures. Tenant agrees that it will not proceed to make any alterations
or additions, without having obtained consent from Landlord to do so, and until
five (5) days from the receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant
shall, if required by Landlord, secure at Tenant's own cost and expense, a
completion and lien indemnity bond, satisfactory to Landlord, for such work.
Tenant further covenants and agrees that any mechanic's liens file against the
Premises or against the Complex for work claimed to have been done for, or
materials claimed to have been furnished to Tenant, will be discharged by
Tenant, by bond or otherwise, within ten (10) days alter the filing thereof, at
the cost and expense of Tenant. Any exceptions to the foregoing must be made in
writing and executed by both Landlord and Tenant.

10. MAINTENANCE Tenant shall at its sole cost and expense, keep and maintain the
interior of the Premises (including appurtenances) and every part thereof in a
high standard of maintenance and repair, and in good and sanitary condition.
Tenant's maintenance and repair responsibilities herein referred to include, but
are not limited to, all windows, window frames, plate glass, glazing, truck
doors, plumbing systems (such as water and drain lines, sinks, toilets, faucets,
drains, showers and water fountains), electrical systems (such as panels,
conduits, outlets, lighting fixtures, lamps, bulbs, tubes, ballasts), heating
and air-conditioning systems (such as compressors, fans, air handlers, ducts,
mixing boxes, thermostats, time clocks, boilers, heaters, supply and return
grills), store

                                       6
<PAGE>

fronts, roofs, downspouts, all interior improvements within the Premises
including but not limited to wall coverings, window coverings, carpet, floor
coverings, partitioning, ceilings, doors (both interior and exterior, including
closing mechanisms, latches, locks, skylights (if any), automatic fire
extinguishing systems, and all other interior improvements of any nature
whatsoever. Areas of excessive wear shall be replaced at Tenant's sole expense
upon Lease termination. Tenant hereby waives all rights under, and benefits of,
subsection 1 of Section 1932 and Section 1941 and 1942 of the California Civil
Code and under any similar law, statute or ordinance now or hereafter in effect.

Tenant specifically agrees to maintain the interior of the Premises, all
mechanical equipment and plumbing and electrical systems in a first-class
manner. Copies of all maintenance contracts entered into by Tenant shall be
supplied to Landlord on a regular basis. In the event the Premises are damaged
and Landlord has elected to rebuild the Premises, as set forth in paragraph 24
below, then Tenant shall be excused from maintaining the Premises during the
period of rebuilding.

11. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED
Tenant shall pay promptly,  as the same become due, all charges for water,  gas,
electricity, telephone, telex and other electronic communications service, sewer
service, waste pick-up and any other utilities,  materials or services furnished
directly to or used by Tenant on or about the  Premises  during the term of this
Lease,  including,  without  limitation,  any  temporary  or  permanent  utility
surcharge or other exactions whether or not hereinafter imposed.  Landlord shall
not be liable for and Tenant shall not be entitled to any abatement or reduction
of rent by reason of any  interruption  or failure of  utility  services  to the
Premises  when such  interruption  or failure is caused by  accident,  breakage,
repair, strikes,  lockouts, or other labor disturbances or labor disputes of any
nature,  or by any other cause,  similar or  dissimilar,  beyond the  reasonable
control of Landlord.

12 TAXES A. As Additional Rent and in accordance with paragraph 4D of this
Lease, Tenant shall pay to Landlord Tenant's proportionate share of all Real
Property Taxes, which prorata share shall be allocated to the leased Premises by
square footage or other equitable basis, as calculated by Landlord. The term
"Real Property Taxes", as used herein, shall mean (i) all taxes, assessments,
levies and other charges of any kind or nature whatsoever, general and special,
foreseen and unforeseen (including all installments of principal and interest
required to pay any general or special assessments for public improvements and
any increases resulting from reassessments caused by any change in ownership of
the Complex) now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy
assessments, which are levied or assessed against, or with respect to the value,
occupancy or use of, all or any portion of the Complex (as now constructed or as
may at any time hereafter be constructed, altered, or otherwise changed) or
Landlord's interest therein; any improvements located within the Complex
(regardless of ownership); the fixtures, equipment and other property of
Landlord, real or personal, that are an integral part of and located in the
Complex; or parking areas, public utilities, or energy within the Complex; (ii)
all charges, levies or fees imposed by reason of environmental regulation or
other governmental control of the Complex; and (iii) all costs and fees
(including attorney's fees) incurred by Landlord in contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax. If
at any time during the term of this Lease the taxation or assessment of the
Complex prevailing as of the commencement date of this Lease shall be altered so
that in lieu of or in addition to any Real Property Tax 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 or additional tax or charge (i) on the value, use or
occupancy of the Complex or Landlord's interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Complex, on Landlord's
business of leasing the Complex, or computed in any manner with respect to the
operation of the Complex, then any such tax or charge, however designated, shall
be included within the meaning of the term "Real Property Taxes" for purposes of
this Lease. If any Real Property Tax is based upon property or rents unrelated
to the Complex, then only that part of such Real Property Tax that is fairly
allocable to the Complex 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, gift or franchise taxes of Landlord or
the federal or state net income tax imposed on Landlord's income from all
sources.

Real Property Taxes shall not include and Tenant shall not be required to pay
any portion of any tax or

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<PAGE>

assessment expense or any increase therein: (a) Levied on Landlord's rental
income, unless such tax or assessment expense is imposed in lieu of real
property taxes; (b) In excess of the amount which would be payable if such tax
or assessment expense were paid in installments over the longest permitted term;
(c) Attributable to Landlord's net income, transfer, or state taxes.

     B. TAXES ON TENANT'S PROPERTY

(1) Tenant shall be liable for and shall pay ten days before delinquency, taxes
levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant and if Landlord, after
written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand,
as the case may be, repay to Landlord the taxes so levied against Landlord, or
the proportion of such taxes resulting from such increase in the assessment;
provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes so paid under
protest, and any amount so recovered shall belong to Tenant.
(2) If the Tenant improvements in the Premises, whether installed, and/or paid
for by Landlord or Tenant and whether or not affixed to the real property so as
to become a part thereof, are assessed for Real Property Tax purposes at a
valuation higher than the valuation at which standard office improvements in
other space in the Complex are assessed, then the Real Property Taxes and
assessments levied against Landlord or the Complex by reason of such excess
assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of 12A(i), above. If the
records of the County Assessor are available and sufficient detailed to serve as
a basis for determining whether said Tenant improvements are assessed at a
higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

13. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of comprehensive public liability
insurance with limits in the amount of $1,000,000/1,000,000 for injuries to or
death of persons occurring in, on or about the Premises or the Complex, and
property damage insurance with limits of $500,000. The policy or policies
affecting such insurance, certificates of which shall be furnished to Landlord,
shall name Landlord as additional insured, and shall insure any liability of
Landlord, contingent or otherwise, as respects acts or omissions of Tenant, its
agents, employees or invitees or otherwise by any conduct or transactions of any
of said persons in or about or concerning the Premises, including any failure of
Tenant to observe or perform any of its obligations hereunder; shall be issued
by an insurance company admitted to transact business in the State of
California; and shall provide that the insurance effected thereby shall not be
canceled, except upon thirty (30) days' prior written notice to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord's Lender,
insurance advisor or counsel, the amount of insurance described in this
paragraph 13 is not adequate, Tenant agrees to increase said coverage to such
reasonable amount as Landlord's Lender, insurance advisor or counsel shall deem
adequate.

14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKER'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures and leasehold improvements within the leased
Premises for the full replacement value thereof. The proceeds from any of such
policies shall be used for the repair or replacement of such items so insured.
        Tenant shall also maintain a policy or policies of worker's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

15. PROPERTY INSURANCE Landlord shall purchase and keep in force and, as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord Tenant's proportionate share (calculated on a square footage or
other equitable basis as calculated by Landlord) of the cost of policy or
policies of insurance covering loss or damage to the Premises and Complex in the
amount of the full replacement value thereof, providing protection against those
perils included within the classification

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<PAGE>

of "all risks" insurance and flood and/or earthquake insurance, if available,
plus a policy of rental income insurance in the amount of one hundred (100%)
percent of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If
such insurance cost is increased due to Tenant's use of the Premises or the
Complex, Tenant agrees to pay to Landlord the full cost of such increase. Tenant
shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Complex.
     Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.

16. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises or the Complex by
or from any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises or the Complex but excluding, howeve, the negligence of
Landlord, its agents, servants, employees, invitees, or contractors. Except as
to injury to persons or damage to property the principal cause of which is the
negligence of Landlord, Tenant shall hold Landlord harmless from and defend
Landlord against any and all expenses, including reasonable attorney's fees, in
connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or
any part thereof, from any cause whatsoever.

17. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. The judgement of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such law, statute, ordinance
or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This paragraph shall not
be interpreted as requiring Tenant to make structural changes or improvements,
except to the extent such changes or improvements are required as a result of
Tenant's use of the Premises. Tenant shall, at its sole cost and expense, comply
with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and
public liability insurance covering the Premises.

18. LIENS Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation incurred by
Tenant. In the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, Landlord shall
have, in addition to all other remedies provided herein and by law, the right,
but no obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.

19. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. Landlord shall respond
to Tenant's request for consent hereunder with 15 days after receiving the
written notice by Tenant. As a condition for granting its consent to any
subletting, Landlord may require that Tenant agrees to pay to Landlord, as
additional rent, all rents received by Tenant from its subtenants in excess of
the rent payable by Tenant to Landlord hereunder (after first deducting from
such excess rent Tenant's reasonable costs and expenses of assigning the lease
or subletting all or any portion of the Premises, including the cost of any
special improvements made to the Premises by Tenant specific to said sublease or
assignment, reasonable advertising fees, reasonable brokerage fees, reasonable
legal fees, the unamortized cost of any alterations

                                       9
<PAGE>

or additions made to the Premises which were paid for by Tenant). Tenant shall,
by forty five (45) days' written notice, advise Landlord of its intent to sublet
the Premises or any portion thereof for any part of the term hereof. Upon
receipt of said notice, Landlord may, in its sole discretion, elect to terminate
this Lease as to the portion of the Premises described in Tenant's notice on the
date specified in Tenant's notice. If Tenant intends to sublet the entire
Premises and Landlord elects to terminate this Lease, this Lease shall be
terminated on the date specified in Tenant's notice. If, however this Lease
shall terminate pursuant to the foregoing with respect to less than all the
Premises, the rent, as defined and reserved hereinabove shall be adjusted on a
pro-rata basis to the number of square feet retained by Tenant, and this Lease
as so amended shall continue in full force and effect. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the Premises,
with the prior written consent of Landlord, no assignee, transferee or subtenant
shall assign or transfer this Lease, either in whole or in part, or sublet the
whole or any part of the premises, without also having obtained the prior
written consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not
release Tenant from any of Tenant's obligations hereunder to be deemed to be a
consent to any subsequent similar or dissimilar assignment, transfer,
hypothecation, subletting, occupation or use by any other person. Any such
assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of this Lease by Tenant and
shall, at the option of Landlord exercised by written notice to Tenant,
terminate this Lease. The leasehold estate under this Lease shall not, nor
shall any interest therein, be assignable for any purpose by operation of law
without the written consent of Landlord. As a condition to its consent, Landlord
may require Tenant to pay all expenses in connection with the assignment, and
Landlord may require Tenant's assignee or transferee (or other assignees or
transferees) to assume in writing all of the obligations under this Lease and
for Tenant to remain liable to Landlord under the Lease.
Tenant may, without  Landlord's  prior written  consent,  sublet the Premises or
assign the Lease to (a) a  subsidiary,  affiliate  or  corporation  controlling,
controlled by or under common control with Tenant,  (b) a successor  corporation
related to Tenant by merger, consolidation,  nonbankruptcy,  reorganization,  or
government  action,  or (c) a purchases of substantially  all of Tenant's assets
located in the Premises.  A sale or transfer of Tenant's capital stock shall not
be deemed an  assignment,  subletting or any other  transfer of the Lease or the
Premises.  Tenant  shall  in these  instances  remain  fully  liable  for  their
performance of Tenant's obligations under the Lease.

20. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Tenant hereby irrevocably appoints Landlord the attorney in fact of
Tenant to execute, deliver and record any such instrument or instruments for and
in the name and on behalf of Tenant. Notwithstanding any such subordination,
Tenant's possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of
the provisions set forth in this Lease. Tenant agrees to send to any mortgagees
and/or deed of trust holders, by registered mail, a copy of any notice of
default served by Tenant upon the Landlord, provided that prior to such notice,
Tenant has been notified, in writing (by way of notice of assignment of rents or
otherwise) of the addresses of such mortgages and/or deed of trust holders.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, any such mortgagees and/or deed of
trust holders shall have an additional thirty (30) days within which to cure
such default, or if such default is not reasonably susceptible of cure within
that time, then such additional time as may be reasonably necessary if within
such (30) days, any mortgagee and/or deed of trust holder has commenced and is
diligently pursuing the remedies necessary to cure such default, (including but
not limited to commencement of foreclosure proceedings), in which event this
Lease shall not be terminated when such remedies are being diligently pursued.

21. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have,
the right to enter the Premises to inspect them; to perform any services to be
provided by Landlord hereunder; to submit the Premises to prospective
purchasers, mortgagers or tenants; to post notices of nonresponsibility; and to
alter, improve or repair the Premises and any portion of the Complex, all
without abatement of rent; and may erect scaffolding and other necessary
structures in or through the Premises where reasonably required by the character
of the work to be performed; provided, however,

                                       10
<PAGE>

that the business of Tenant shall be interfered with to the least extent that is
reasonably practical. For each of the foregoing purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in an
emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises or any portion thereof. Landlord shall also have the
right at any time to change the arrangement or location of entrances or
passageways, doors and doorways, and corridors, elevators, stairs, toilets or
other public parts of the Complex and to change the name, number or designation
by which the Complex is commonly known, and none of the foregoing shall be
deemed an actual or constructive eviction of Tenant, or shall entitle Tenant to
any reduction of rent hereunder. Landlord agrees to respect the confidentiality
of Tenant's business information that may be observed during any such entry.

22. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.
     Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.
     Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any rights or privileges hereunder be an asset
of Tenant under any bankruptcy, insolvency or reorganization proceedings.
     The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustments
thereto. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any other default under this Lease.
Upon an uncured default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:
          (a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of rental loss for the same period
that Tenant proves could be reasonably avoided, as computed pursuant to
subsection (b) of said Section 1951.2. Any proof by Tenant under subparagraphs
(2) and (3) of Section 1951.2 of the California Civil Code of the amount of
rental loss that could be reasonably avoided shall be made in the following
manner: Landlord and Tenant shall each select a licensed real estate broker in
the business of renting property of the same type and use as the Premises and in
the same geographic vicinity. Such two real estate brokers shall select a third
licensed real estate broker, and the three licensed real estate brokers so
selected shall determine the amount of the rental loss that could be reasonably
avoided from the balance of the term of this Lease after the time of award. The
decision of the majority of said licensed real estate brokers shall be final and
binding upon the parties hereto.

          (b) The rights and remedies provided by California Civil Code which
allows Landlord to continue the Lease in effect and to enforce all of its rights
and remedies under this Lease, including the

                                       11
<PAGE>

right to recover rent as it becomes due, for so long as Landlord does not
terminate Tenant's right to possession; acts of maintenance or preservation,
efforts to relet the Premises, or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's right to possession.

          (c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.

          (d) The right and power, as attorney-in-fact for Tenant, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant
and to sell such property and apply such proceeds therefrom pursuant to
applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its sole discretion may deem advisable, with the right to
make alterations and repairs to the Premises. Upon each subletting, (i) Tenant
shall be immediately liable to pay Landlord, in addition to indebtedness other
than rent due hereunder, the cost of such subletting, including, but not limited
to, reasonable attorney's fees, and any real estate commissions actually paid,
and the cost of such alterations and repairs incurred by Landlord and the
amount, if any, by which the rent hereunder for the period of such subletting
(to the extent such period does not exceed the term hereof) exceeds the amount
to be paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment
of indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the payment of any costs of such subletting and of such alterations and
repairs; third to payment of rent due and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future rent as the same
becomes due hereunder. If Tenant has been credited with any rent to be received
by such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such subletting
under option (ii) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord.
Such deficiency shall be calculated and paid monthly. For all purposes set forth
in this subparagraph (d), Landlord is hereby irrevocably appointed
attorney-in-fact for Tenant, with power of substitution. No taking possession of
the Premises by Landlord, as attorney-in-fact for Tenant, shall be construed as
an election on its part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such subletting without
termination, Landlord may at any time hereafter elect to terminate this Lease
for such previous breach.

          (e) The right to have a receiver appointed for Tenant upon application
by Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subparagraph (d)
above.

23. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate or surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.

24. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, Landlord may, at its option:
          (a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
          (b) Terminate this Lease.
          If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors dues to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior

                                       12
<PAGE>

written notice to Landlord. Notwithstanding anything herein to the contrary,
Landlord's obligation to rebuild or restore shall be limited to the building and
interior improvements constructed by Landlord as they existed as of the
commencement date of the Lease and shall not include restoration of Tenant's
trade fixtures, equipment, merchandise or any improvements, alterations or
additions made by Tenant to the Premises, which Tenant shall forthwith replace
or fully repair at Tenant's sole cost and expense provided this Lease is not
canceled according to the provisions above.
          Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4
of the California Civil Code.
          In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. In the event the destruction of the Premises is caused by
Tenant, Tenant shall pay the deductible portion of Landlord's insurance
proceeds.

25. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.
          If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any portion thereof, or if any of the foregoing events occur
with respect to the taking of any space in the Complex not leased hereby, or any
such spaces is so taken or conveyed in lieu of such taking and Landlord shall
decide to discontinue the use and operation of the Complex, or decide to
demolish, alter or rebuild the Complex, then in any of such events Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice, or
commencement of said action or proceeding, or taking or conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.
          In the event of such a partial taking or conveyance of the Premises,
if the portion of the Premises taken or conveyed is so substantial that the
Tenant can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of such
taking or conveyance, upon written notice to Landlord of its intention so to do,
and upon giving of such notice this Lease shall terminate on the last day of the
calendar month next following the month in which such notice is given, upon
payment by Tenant of the rent from the date of such taking or conveyance to the
date of termination.
          If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.

26. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Complex or any interest therein, by any owner of the reversion then constituting
Landlord, the transferor shall thereby be released from any further liability
upon any of the terms, covenants or conditions (express or implied) herein
contained in favor of Tenant, and in such event, insofar as such transfer is
concerned, Tenant agrees to look solely to the responsibility of the successor
in interest of such transferor in and to the Complex and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor.

27. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in
the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee

                                       13
<PAGE>

title interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by the lender or any third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to attorn to the purchaser at any such foreclosure
sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord
is prior and paramount to the lease, this Lease shall nonetheless continue in
full force and effect for the remainder of the unexpired term hereof, at the
same rental herein reserved and upon all the other terms, conditions and
covenants herein contained.

28. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of the
term of this lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.

29. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modifications
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.

30. CONSTRUCTION CHANGES It is understood that the description of the Premises
and the location of the ductwork, plumbing and other facilities therein are
subject to such minor changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises, and no such changes,
or any changes in plans for any other portions of the Complex shall affect this
Lease or entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.

31. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for five (5) days
after written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obligated
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment of performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of non-payment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.

32. ATTORNEYS FEES

          (A) In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorney's
fees, incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgement.

          (B) Should Landlord be named as a defendant in any suit brought
against Tenant in connection

                                       14
<PAGE>

with or arising out of Tenant's occupancy hereunder, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including a reasonable
attorney's fee.

33. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.

34. NOTICES All notices, demands, requests, advices or designations which may be
or are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at 3201 Ash Street, Palo Alto, CA 94306.
Each notice, request, demand advice or designation referred to in this paragraph
shall be deemed received on the date of the personal service or mailing thereof
in the manner herein provided, as the case may be.

35. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant. Landlord and Tenant mutually intend
that neither shall have any binding contractual obligations to the other with
respect to the matters referred to herein unless and until this instrument has
been fully executed by both parties.

36. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such than
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.

37. CORPORATE AUTHORITY

          If Tenant is a corporation (or a partnership) each individual
executing this Lease on behalf of said corporation (or partnership) represents
and warrants that he is duly authorized to execute and deliver this Lease on
behalf of said corporation (or partnership) in accordance with the by-laws of
said corporation (or partnership in accordance with the partnership agreement)
and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.

38. (deleted)
39. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:

          (i)       the sole and exclusive remedy shall be against Landlord and
                    Landlord's assets;

          (ii)      no partner of Landlord shall be sued or named as a party in
                    any suit or action (except as may be necessary to secure
                    jurisdiction of the partnership)

          (iii)     no service of process shall be made against any partner of
                    Landlord (except as may be necessary to secure jurisdiction
                    of the partnership)

          (iv)      no partner of Landlord shall be required to answer or
                    otherwise plead to any service of process;

          (v)       no judgement shall be taken against any partner of Landlord;

          (vi)      any judgement taken against any partner of Landlord may be
                    vacated and set aside at any

                                       15
<PAGE>

                    time without hearing;

          (vii)     no writ of execution will ever be levied against the assets
                    of any partner of Landlord;

          (viii)    these covenants and agreements are enforceable both by
                    Landlord and also by any partner of Landlord.

          (ix)      The term, "Landlord", as used in this section, shall mean
                    only the owner or owners from time to time of the fee title
                    or the tenant's interest under a ground lease of the land
                    described in Exhibit "B", and in the event of any transfer
                    of such title or interest, Landlord herein named (and in
                    case of any subsequent transfers the then grantor) shall be
                    relieved from and after the date of such transfer of all
                    liability as respects Landlord's obligations 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 delivered to the
                    grantee. Similarly, the obligations contained in this Lease
                    to be performed by Landlord shall be binding on Landlord's
                    successors and assigns only during their respective periods
                    of ownership. Tenant agrees that each of the foregoing
                    covenants and agreements shall be applicable to any covenant
                    or agreement either expressly contained in this Lease or
                    imposed by statute or at common law.

40. BROKERS Tenant warrants that it had dealing with only of the following real
estate brokers or agents in connection with the negotiation of this Lease:
CORNISH AND CAREY and that it knows of no other real estate broker or agent who
is entitled to a commission in connection with this Lease.

41. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside of the
Premises or any exterior windows of the Premises without the written consent of
Landlord first had and obtained and Landlord shall have the right to remove any
unconsented to sign, placard, picture, advertisement, name or notice without
notice to and at the expense of Tenant. If Tenant is allowed to print or affix
or in any way place a sign in, on, or about the Premises, then upon expiration
or other sooner termination of this Lease, Tenant at Tenant's sole cost and
expense shall both remove such sign and repair all damage in such manner as to
restore all aspects of the appearance of the Premises to the condition prior to
the placement of said sign.
          All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

42. FINANCIAL STATEMENTS In the event Tenant tenders to Landlord any information
on the financial stability, credit worthiness or ability of the Tenant to pay
the rent due and owing under the Lease, then Landlord shall be entitled to rely
upon the information provided in determining whether or not to enter into this
Lease Agreement with Tenant and Tenant hereby represents and warrants to
Landlord the following: (i) That all documents provided by Tenant to Landlord
are true and correct copies of the original; and (ii) Tenant has not withheld
any information from Landlord which is material to Tenant's credit worthiness,
financial condition or ability to pay the rent; and (iii) all information
supplied by Tenant to Landlord is true, correct and accurate; and (iv) no part
of the information supplied by Tenant to Landlord contains misleading or
fraudulent statements.
          A default under this paragraph shall be a non-curable default on
behalf of Tenant and Landlord shall be entitled to pursue any right or remedy
available to Landlord under the terms of this Lease or available to Landlord
under the laws of the State of California.

43. HAZARDOUS MATERIALS

          A. As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property including all of those materials and substances designated or
defined as "hazardous" or "toxic" by (i) the Environmental Protection Agency,
the California Water Quality Control Board, the Department of Labor, the
California Department of Industrial Relations, the Department of Transportation,
the Department of Agriculture, the Consumer Product Safety Commission, the
Department of Health and Human Services, the Food and Drug Agency or any other
governmental agency now or hereafter authorized to regulate materials and
substances in the environment, or by (ii) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., as
amended; the Hazardous Materials Transportation Act, 49 U.S.C. 1801, et seq., as
amended; the

                                       16
<PAGE>

Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., as amended; the
Hazardous Waste Control Law, California Health & Safety Code 25100 et seq., as
amended; Sections 66680 through 66685 of Title 22 of the California
Administration Code, Division 4, Chapter 30, as amended; and in the regulations
adopted and publications promulgated pursuant to said laws.

          B. Tenant shall not cause or permit any Hazardous Material to be
improperly or illegally used, stored, discharged, released or disposed of in,
from, under or about the Premises or the Complex, or any other land or
improvements in the vicinity of the Premises or the Complex. Without limiting
the generality of the foregoing, Tenant, at its sole cost, shall comply with all
laws relating to Hazardous Materials. If the presence of Hazardous Materials on
the Premises or the Complex caused or permitted by Tenant results in
contamination of the Premises or the Complex or any soil in or about the
Premises or the Complex, Tenant, as its expense shall promptly take all actions
necessary to return the Premises or the Complex to the condition existing prior
to the appearance of such Hazardous Material. The termination of this Lease
shall not terminate or reduce the liability or obligations of Tenant under this
Section, or as may be required by law, to clean up, monitor or remove any
Hazardous Materials from the Premises or the Complex.
          Tenant shall defend, hold harmless and indemnify Landlord and its
agents and employees with respect to all claims, damages and liabilities arising
out of or in connection with any Hazardous Material used, stored, discharged,
released or disposed of in, from, under or about the Premises or the Complex,
where said Hazardous Material is or was attributable to the activities of
Tenant, its agents or contractors during the Lease term and whether or not
Tenant had knowledge of such Hazardous Material, including, without limitation,
any cost of monitoring or removal, any reduction in the fair market value or
fair rental value of the Premises or the Complex and any loss, claim or demand
by any third person or entity relating to bodily injury or damage to real or
personal property.
          Tenant shall not suffer any lien to be recorded against the Premises
or the Complex as a consequence of a Hazardous Material, including any so called
state, federal or local "super fund" lien related to the "clean up" of a
Hazardous Material in or about the Premises, where said Hazardous Material is or
was attributable to the activities of Tenant.

          C. In the event Hazardous Materials are discovered in or about the
Premises or the Complex, and Landlord has substantial reason to believe that
Tenant was responsible for the presence of the Hazardous Material, then Landlord
shall have the right to appoint a consultant, at Tenant's expense, to conduct an
investigation to determine whether Hazardous Materials are located in or about
the Premises or the Complex and to determine the corrective measures, if any,
required to remove such Hazardous Materials. Tenant, at its expense, shall
comply with all recommendations of the consultant, as required by law. To the
extent it is determined that Tenant was not responsible for the presence of the
Hazardous Materials, then Landlord shall reimburse Tenant for any costs incurred
by Landlord and paid by Tenant under the terms of this paragraph 45.C.
          Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant or the Premises or
the Complex concerning a Hazardous Material. Tenant acknowledges that Landlord,
as the owner of the Property, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to a Hazardous Material by an applicable governmental
authority. Provided Tenant is not in default under the terms of this Lease,
Tenant shall likewise have the right to participate in any negotiations,
approvals or appeals of any actions taken or orders issued with regard to the
Hazardous Material and Landlord shall not have the right to bind Tenant in said
actions or orders.

          D. It shall not be unreasonable for Landlord to withhold its consent
to any proposed assignment or subletting if (i) the proposed assignee's or
subtenant's anticipated use of the Premises involves the storage, use or
disposal of Hazardous Material; (ii) if the proposed assignee or subtenant has
been required by any prior landlord, lender or governmental authority to "clean
up" Hazardous Material; (iii) if the proposed assignee or subtenant is subject
to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material.

          E. Tenant shall surrender the Premises to Landlord, upon the
expiration or earlier termination of the Lease, free of Hazardous Materials
which are or were attributable to Tenant. If Tenant fails to so surrender the
Premises, Tenant shall indemnify and hold Landlord harmless from all damages
resulting from Tenant's failure to surrender the Premises as required by this
paragraph, including, without limitation, any claims or damages in connection
with the condition of the Premises including, without

                                       17
<PAGE>

limitation, damages occasioned by the inability to relet the Premises or a
reduction in the fair market and/or rental value of the Premises or the Complex
by reason of the existence of any Hazardous Materials, which are or were
attributable to the activities of Tenant, in or around the Premises or the
Complex. Notwithstanding any provision to the contrary in this Lease, if any
action is required to be taken by a governmental authority to clean-up, monitor
or remove any Hazardous Materials, which are or were attributable to the
activities of Tenant, from the Premises or the Complex and such action is not
completed prior to the expiration or earlier termination of the Lease, then at
Landlord's election (i) this Lease shall be deemed renewed for a term commencing
on the expiration date of this Lease and ending on the date the clean-up,
monitoring or removal procedure is completed (provided, however, that the total
term of this Lease shall not be longer than 34 years and 11 months); or (ii)
Tenant shall be deemed to have impermissibly held over and Landlord shall be
entitled to all damages directly or indirectly incurred in connection with such
holding over, including without limitation damages occasioned by the inability
to relet the Premises or a reduction in the fair market and/or fair rental value
of the Premises or the Complex by reason of the existence of the Hazardous
Material.

          F. Upon the Lease Commencement Date, Tenant shall provide to Landlord
a complete list of all chemicals, toxic waste or Hazardous Materials employed
by Tenant within the Premises. Throughout the terms of the Lease, Tenant shall
continue to update this list of chemicals, contaminants and Hazardous Materials.

          Landlord hereby represents to Tenant that Landlord is not aware
(without a duty to inspect) of the presence of any Hazardous Materials that
would affect Tenant's use and occupancy of the Premises. Notwithstanding
anything herein to the contrary, Landlord agrees to hold Tenant harmless from
any cost or expense related to Hazardous Materials that were in existence at the
Premises or Complex prior to the commencement of the Lease or which are not
attributable to Tenant's activities or Tenant's use and occupancy of the
Premises.

44. MISCELLANEOUS AND GENERAL PROVISIONS

          a. Tenant shall not, without the written consent of Landlord, use the
          name of the building for any purpose other than as the address of the
          business conducted by Tenant in the Premises.

          b. This Lease shall in all respects be governed by and construed in
          accordance with the laws of the State of California. If any provision
          of this Lease shall be invalid, unenforceable or ineffective for any
          reason whatsoever, all other provisions hereof shall be and remain in
          full force and effect.

          c. The term "Premises" includes the space leased hereby and any
          improvements now or hereafter installed therein or attached thereto.
          The term "Landlord" or any pronoun used in place thereof includes the
          plural as well as the singular and the successors and assigns of
          Landlord. The term "Tenant" or any pronoun used in place thereof
          includes the plural as well as the singular and individuals, firms,
          associations, partnerships and corporations, and each of their
          respective heirs, executors, administrators, successors and permitted
          assigns, according to the context hereof, and the provisions of this
          Lease shall inure to the benefit of and bind such heirs, executors,
          administrators, successors and permitted assigns.

               The term "person" includes the plural as well as the singular and
          individuals, firms, associations, partnerships and corporations. Words
          used in any gender include other genders. If there be more than one
          Tenant the obligations of Tenant hereunder are joint and several. The
          paragraph headings of this Lease are for convenience of reference only
          and shall have no effect upon the construction or interpretation of
          any provision hereof.

          d. Time is of the essence of this Lease and of each and all of its
          provisions.

          e. At the expiration or earlier termination of this Lease, Tenant
          shall execute, acknowledge and deliver to Landlord, within ten (10)
          days after written demand from Landlord to Tenant, any quitclaim deed
          or other document required by any reputable title company, licensed to
          operate in the State of California, to remove the cloud or encumbrance
          created by this Lease from the real property of which Tenant's
          Premises are a part.

          f. This instrument along with any exhibits and attachments hereto
          constitutes the entire agreement

                                       18
<PAGE>

          between Landlord and Tenant relative to the Premises and this
          agreement and the exhibits and attachments may be altered, amended or
          revoked only by an instrument in writing signed by both Landlord and
          Tenant. Landlord and Tenant hereby agree that all prior or
          contemporaneous oral agreements between and among themselves and the
          agents or representatives relative to the leasing of the Premises are
          merged in or revoked by this agreement.

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

          h. Tenant further agrees to execute any amendments required by a
          lender to enable Landlord to obtain financing, so long as Tenant's
          rights hereunder are not substantially affected.

          i. Paragraph(s) _________ through _________ are/is added hereto and
          are/is included as a part of this Lease.

          j. Clauses, plats and riders, if any, signed by Landlord and Tenant
          and endorsed on or affixed to this Lease are a part hereof.

          k. Tenant covenants and agrees that no diminution or shutting off of
          light, air or view by any structure which may be hereafter erected
          (whether or not by Landlord) shall in any way affect this Lease,
          entitle Tenant to any reduction of rent hereunder or result in any
          liability of Landlord to Tenant.

     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year first above written.

LANDLORD:                               TENANT:

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

Date:  13 OCT 99                        Date:  10/12/99
     ------------------------------          -------------------------------

                                       19
<PAGE>

                                   EXHIBIT "A"

                                   380 PORTAGE

                                   PALO ALTO

<PAGE>

                                    EXHIBIT B

                                   [TRACT MAP]

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