Document:

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                                                                   Exhibit 10.15

                               SUBLEASE AGREEMENT

DATED:  January 3, 2002

     1.       FUNDAMENTAL SUBLEASE PROVISIONS.

              a.  Parties: "Sublessor" INTERWOVEN, INC., a Delaware corporation
                           "Sublessee" R2 TECHNOLOGY, INC., a Delaware
                           corporation
                           "Master Lessor" SUNNYVALE PARTNERS LIMITED
                           PARTNERSHIP, an Illinois limited partnership
                           "Master Sublessor" FIRST DATA MERCHANT SERVICES
                           CORPORATION, a Florida corporation

              b.  Master Lease and Master Sublease: (Section 3): Sublessor, as
                  subtenant, is leasing from Master Sublessor, as sublessor,
                  approximately twenty seven thousand five hundred (27,500)
                  rentable square feet located at 1195 West Fremont Avenue, in
                  the City of Sunnyvale, California, on the terms and subject to
                  the conditions of that certain Sublease dated as of April 24,
                  1998, and approximately fifty two thousand one hundred eighty
                  five (52,185) rentable square feet located at 1195 West
                  Fremont Avenue, in the City of Sunnyvale, California (as
                  subsequently amended or modified), collectively "Master
                  Sublease Premises"), on the terms and conditions of that
                  certain undated Assignment of Lease by and between Sublessor,
                  as assignee, and beyond.com, a Delaware corporation, as
                  assignor (collectively, the "Master Sublease"). A copy of the
                  Master Sublease is attached hereto as Exhibit A. Master
                  Sublessor, as tenant, is leasing from Master Lessor, as
                  landlord, approximately seventy five thousand one hundred
                  ninety seven (75,197) rentable square feet located at 1195
                  West Fremont Avenue, in the City of Sunnyvale, California (the
                  "Premises") on the terms and subject to the conditions of that
                  certain Build-to-Suit Lease Agreement dated as of March 18,
                  1997 (the "Master Lease"). A copy of the Master Lease is
                  attached hereto as Exhibit B. The Master Sublease Premises
                  includes all of the Premises plus common areas within the
                  Premises consisting of approximately four thousand four
                  hundred eighty eight (4,488) square feet, and the Premises is
                  located within one building containing a total of
                  approximately seventy nine thousand six hundred eight five
                  (79,685) rentable square feet, together with associated
                  parking areas, driveways and other common areas (the
                  "Complex").

              c.  Sublease Premises: (Section 2): The premises subleased hereby
                  (the "Sublease Premises") constitutes a portion of the Master
                  Sublease Premises and contains approximately thirty nine
                  thousand five hundred seventy five (39,575) rentable square
                  feet, as shown on the floor plan attached hereto as Exhibit C.
                  The Sublease Premises consist of two (2) suites located within
                  the Premises, the upper level suite is referred to herein as
                  "Suite 2000" and the lower level suite is referred to herein
                  as "Suite 1001".

              d.  Sublease Term: (Section 4): The term of this Sublease (the
                  "Sublease Term") is nineteen and one-half (19 1/2) calendar
                  months, beginning on the Commencement Date and ending on the
                  Termination Date described below, unless commenced later or
                  terminated earlier pursuant to the terms of this Sublease.

              e.  Scheduled  Commencement  Date:  (Section  4(a)):  The  latter
                  of  January 15,  2002,  or  Master  Lessor  and  Master
                  Sublessor's consent to this Sublease as evidenced by their
                  execution and delivery of the applicable Consent to Sublease
                  in the form attached hereto.

              f.  Termination Date: (Section 4(a)):  August 31, 2003.

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              g.  Minimum Monthly Rent: (Section 5(b)):

              From the Rental Commencement Date through    $40,648.80 per month
              and including February 28, 2003

              March 1, 2003, through and including August  $104,842.50 per month
              31, 2003

                  Rental Commencement Date: (Section 5(b)):  The latter of March
                  1, 2002, or delivery of the Sublease Premises.

              h. Prepaid Rent: (Section 5(d)): $40,648.80.

              i. Additional Rent: (Section 5(c)) Sublessee's pro rata share as
                 more fully set forth in Section 5(c).

              j. Security: (Section 6):Security Deposit in amount of $98,937.50.

                                   Letter of Credit in amount of $250,000.00.

              k. Permitted Use: (Section 4): Research and development and
                 general office purposes, including, but not limited to,
                 the assembly of computer  system  components for  distribution,
                 each in strict  compliance with the Master Lease and Master
                 Sublease.

              l. Sublessee's Prorata Share: (Section 5(c)):

                  The Sublease Premises constitutes 52.63% of the Master
                  Sublease Premises.

              m. Addresses For Notice: (Section 11):

   To Master Lessor:                         With a copy to:

   James Mantell                             Glen W. Reed
   Sunnyvale Partners Limited Partnership    Gardner, Carton & Douglas
   Ridge Sunnyvale, Inc.                     321 North Clark Street, Suite 3400
   c/o Ridge Capital Corporation             Chicago, Illinois 60610-4795
   257 East Main Street
   Barrington, Illinois 60010

   To Master Sublessor:                      With a copy to:

   First Data Merchant Services Corporation  Blackwell Sanders Peper Martin, LLP
   c/o First Data Properties                 720 Olive Street, Suite 2400
   12500 E. Belford Ave.,                    St. Louis, MO  63101
   Suite M16-S                               Attn:  Susan M. Altnether
   Englewood, CO  80112                      Real Estate Paralegal
   Attn: Contract Administrator

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              To Sublessor:                    With a copy to:

              Tom Smith                        Lucy A. Lofrumento, Esquire
              Interwoven, Inc.                 Silicon Valley Law Group
              803 11th Avenue                  152 North Third Street, Suite 900
              Sunnyvale, California 94089      San Jose, California 95112
              Facsimile:  (408) 220-7558       Facsimile:  (408) 286-1400

              To Sublessee:

              Dick Enck
              R2 Technology, Inc.
              325 Distel Circle
              Los Altos, California 94022
              Facsimile:  (650) 254-7201

              n.  Sublessor's Broker:  (Section 22(d)):  CB Richard Ellis

              o.  Sublessee's Broker:  (Section 22(d)):  Cushman & Wakefield

              p.  Exhibits and Addenda: The following exhibits are annexed to
                  this Sublease:

                  Exhibit A  -  Master Lease
                  Exhibit B  -  Master Sublease
                  Exhibit C  -  Floor Plan of Sublease Premises
                  Exhibit D  -  Furniture Rental Agreement
                  Exhibit E  -  Consent to Sublease
                  Exhibit F  -  Permitted Sublessee Alterations

              Each reference in this Sublease Agreement ("Sublease") to any
              provision in Section 1 shall be construed to incorporate all of
              the terms of each such provision. In the event of any conflict
              between this Section 1 and the balance of the Sublease, the
              balance of the Sublease shall control. Capitalized terms that are
              not defined in this Sublease shall have the meanings given in the
              Master Lease and/or the Master Sublease, as applicable.

     2.       SUBLEASE PREMISES.

              a.  Sublease. Sublessor hereby subleases the Sublease Premises to
                  Sublessee, and Sublessee hereby subleases the Sublease
                  Premises from Sublessor, upon the terms and conditions
                  hereinafter set forth. Sublessee acknowledges that the
                  rentable area of the Sublease Premises as specified in Section
                  1 is an estimate and that Sublessor does not warrant the exact
                  rentable area of the Sublease Premises. Sublessee shall be
                  permitted to verify the rentable square footage within fifteen
                  (15) days after the Commencement Date and should Sublessee's
                  verification determine that the actual rentable square footage
                  of the Sublease Premises deviates from that as set forth
                  herein by more than five percent (5%), as determined in
                  accordance with the Developer's Standard which is customarily
                  used in the Silicon Valley, California, Sublessee and
                  Sublessor shall measure the Sublease Premises again. In the
                  event the second measuring of the Sublease Premises determines
                  that the actual rentable square footage of the Sublease
                  Premises is different than what is set forth herein by more
                  than five percent (5%), Sublessee shall be entitled to a
                  corresponding abatement or reduction in Minimum Monthly Rent
                  and Sublessee's pro-rata share shall be recalculated. In the
                  event Sublessee does not notify Sublessor within said fifteen
                  (15) day period or Sublessee's measurement and/or Sublessee
                  and Sublessor's second measurement of the Sublease Premises
                  does not evidence a difference of greater than five percent
                  (5%) from the square footage set forth herein, Sublessee shall
                  accept the rentable area of the Sublease Premises as that
                  specified in

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                  Section 1 and no abatement or reduction in Minimum Monthly
                  Rent or recalculation of Sublessee's pro-rata share shall
                  occur.

              b.  Condition of the Sublease Premises: As Is.

                         i. Sublessor shall deliver the Sublease Premises to
                            Sublessee with all building structures and systems
                            (including HVAC, electrical, plumbing, roof, window
                            walls, and fire safety) in good operating condition
                            and repair. If, within the first fifteen (15) days
                            after the Rental Commencement Date, Sublessee
                            notifies Sublessor of any defects in the foregoing,
                            Sublessor shall promptly repair and correct the same
                            at Sublessor's sole cost and expense.

                        ii. Subject to the foregoing, Sublessee hereby agrees
                            to accept possession of the Sublease Premises in
                            its "As Is" condition. Sublessee acknowledges that
                            except as expressly stated in this Sublease:

                           1. Sublessor makes no warranties or representations
                              regarding the physical condition or zoning of the
                              Sublease Premises or for the suitability of the
                              Sublease Premises for Sublessee's intended use
                              thereof;

                           2. Sublessee has had an opportunity to inspect the
                              Sublease Premises, including the roof and
                              structural components of the Complex; the
                              electrical, plumbing, HVAC, and other building
                              systems serving the Sublease Premises; and the
                              environmental condition of the Sublease Premises
                              and related common areas; and to hire experts to
                              conduct such inspections on its behalf; and

                           3. Sublessee is leasing the Sublease Premises
                              based on its own inspection of the Sublease
                              Premises and those of its agents, and is not
                              relying on any statements, representations or
                              warranties of Sublessor or Sublessor's agents
                              regarding the physical condition of the Sublease
                              Premises.

              c.  Personal Property. Except as provided in Section 21 below,
                  Sublessee acknowledges that the Sublease Premises shall not
                  include any of the fixtures, equipment, cabling, security
                  systems, furniture, or other personal property belonging to
                  Sublessor, except as specifically agreed to by the parties in
                  the Furniture Rental Agreement dated concurrently herewith, in
                  the form attached hereto as Exhibit D. The parties acknowledge
                  that the Furniture Rental Agreement represents material
                  consideration for each party's entering into this Sublease.

              d.  Alterations to Premises. Sublessee shall not make any
                  alterations, additions, or improvements to the Sublease
                  Premises without the prior consent of Sublessor and Master
                  Sublessor. Sublessee, at its own cost and expense, may erect
                  such shelves, bins, machinery and trade fixtures as it
                  desires, subject to Sublessor's consent, provided that (i)
                  such items do not alter the basic character of the Sublease
                  Premises or the building and/or improvements of which the
                  Sublease Premises are a part; (ii) such items do not overload
                  or damage the same; (iii) such items may be removed without
                  injury to the Sublease Premises; and (iv) the construction,
                  erection or installation thereof complies with all applicable
                  governmental laws, ordinances, regulations and with
                  Sublessor's specifications and requirements. All shelves,
                  bins, machinery and trade fixtures installed by Sublessee
                  shall be removed on or before the earlier to occur of the
                  Termination Date or Sublessee's vacation of the Sublease
                  Premises. Subject to Sublessee obtaining Master Sublessor and
                  Master Lessor's consent, Sublessor hereby consents to the
                  alterations set forth on the attached Exhibit F. All
                  alterations, installations, removals and restoration shall be
                  performed in a good and workmanlike manner so as not to damage
                  or alter the primary structure or structural qualities of the
                  Complex and other improvements situated on the Sublease
                  Premises or of which the Sublease Premises are a part. All
                  alterations, additions or improvements to the Sublease
                  Premises shall, at Sublessee's sole cost and expense, either
                  be removed by Sublessee prior to the Termination Date or, if
                  permitted by Master Lessor and Master Sublessor shall remain
                  on the Sublease Premises after the Termination Date.

                                  Page 4 of 14

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              e.  Common Areas. Sublessee shall have the right to use the Common
                  Areas (as such term is defined in the Master Lease and Master
                  Sublease) and the exterior patio area (collectively, the
                  "Common Areas") in common with any other occupants of the
                  Premises and/or Complex, pursuant to such rules and
                  regulations as Sublessor may determine in its discretion.

     3.       TERMS OF THE MASTER LEASE.

              a.  Sublease Subordinate. This Sublease is subordinate and subject
                  to all of the terms and conditions of the Master Lease and the
                  Master Sublease. If the Master Lease and/or Master Sublease
                  terminates for any reason whatsoever, this Sublease shall
                  terminate concurrently, and the parties hereto shall be
                  relieved of any liability thereafter accruing under this
                  Sublease, except for the liabilities of the parties which by
                  the terms of this Sublease survive the expiration or earlier
                  termination of this Sublease.

              b.  Sublessee's Obligations. Sublessee shall keep and maintain the
                  Sublease Premises as required of the "Tenant" by Section 7A of
                  the Master Lease and as required of the "Subtenant" by Section
                  7(a) of the Master Sublease. For the benefit of Master Lessor,
                  Master Sublessor and Sublessor, Sublessee hereby expressly
                  agrees from and after the Commencement Date to assume, to be
                  bound by, and to perform all the terms, conditions and
                  covenants of the Master Lease and Master Sublease to be
                  fulfilled, performed or observed by Sublessor with respect to
                  the Sublease Premises and/or Sublessee's activities in, on or
                  around the Sublease Premises and the Complex. Sublessee shall
                  not commit or suffer at any time any act or omission that
                  would violate any provision of the Master Lease or Master
                  Sublease.

              c.  Master Lessor's Obligations. Except to the extent otherwise
                  expressly provided in this Sublease, Sublessor shall not be
                  responsible to Sublessee for furnishing any service,
                  maintenance or repairs to the Sublease Premises that are the
                  obligation of the Master Lessor under the Master Lease, it
                  being understood that Sublessee shall look solely to Master
                  Lessor for performance of any such service, maintenance or
                  repairs. However, if Master Lessor shall fail to perform its
                  obligations under the Master Lease, Sublessor, upon receipt of
                  written notice from Sublessee, shall use its best efforts to
                  attempt to enforce the obligations of Master Lessor under the
                  Master Lease; provided, however, that Sublessor shall not be
                  required to incur any material costs or expenses in connection
                  therewith unless Sublessee agrees to reimburse Sublessor for
                  any such costs and expenses as Additional Rent hereunder.

              d.  Master Sublessor's Obligations. Except to the extent otherwise
                  expressly provided in this Sublease, Sublessor shall not be
                  responsible to Sublessee for furnishing any service,
                  maintenance or repairs to the Sublease Premises that are the
                  obligation of the Master Sublessor under the Master Sublease,
                  it being understood that Sublessee shall look solely to Master
                  Sublessor for performance of any such service, maintenance or
                  repairs. However, if Master Sublessor shall fail to perform
                  its obligations under the Master Sublease, Sublessor, upon
                  receipt of written notice from Sublessee, shall use its best
                  efforts to attempt to enforce the obligations of Master
                  Sublessor under the Master Sublease; provided, however, that
                  Sublessor shall not be required to incur any material costs or
                  expenses in connection therewith unless Sublessee agrees to
                  reimburse Sublessor for any such costs and expenses as
                  Additional Rent hereunder.

              e.  Sublessor's Rights and Remedies. In addition to all the rights
                  and remedies provided to Sublessor at law, in equity, or under
                  the terms of this Sublease, (i) in the event of any breach by
                  Sublessee of any of its obligations under this Sublease,
                  Sublessor shall have all of the rights and remedies with
                  respect to such breach which are available to Master Lessor in
                  the event of any breach under the Master Lease and to Master
                  Sublessor in the event of a breach under the Master Sublease;
                  and (ii) as a further remedy, if Sublessee fails to perform
                  any act on its part to be performed pursuant to the
                  requirements of the Master Lease, Master Sublease or as
                  otherwise required by this Sublease, within any applicable
                  grace periods provided herein, then Sublessor may, but shall
                  not be obligated to, fulfill such obligations of Sublessee,
                  including entering the Sublease Premises to perform any such
                  act, and all costs and expenses incurred by Sublessor in doing
                  so, including, but

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                  not limited to, attorneys' fees and costs, shall be deemed
                  Additional Rent payable by Sublessee to Sublessor upon demand.

     4.       SUBLEASE TERM.

               a. Commencement and Termination Dates. The term of this Sublease
                  ("Sublease Term") shall be for the period of time commencing
                  on the date (the "Commencement Date") that is the latter of
                  (i) January 15, 2002; or (ii) the date that Master Lessor and
                  Master Sublessor have executed the Consent to Sublease
                  attached hereto as Exhibit E. The Sublease Term shall end on
                  the termination date described in Section 1 or on such earlier
                  date of termination as provided in this Sublease (the
                  "Termination Date").

              b.  Delay in Commencement. If for any reason possession of the
                  Sublease Premises has not been delivered to Sublessee by the
                  scheduled Commencement Date or any other date, Sublessor shall
                  not be liable to Sublessee or any other person or entity for
                  any loss or damage resulting therefrom. In the event of such
                  delay, the Commencement Date shall be delayed until possession
                  of the Sublease Premises is delivered to Sublessee, but the
                  Termination Date shall not be extended. If Sublessor is unable
                  to deliver possession of the Sublease Premises to Sublessee
                  within sixty (60) days after the scheduled Commencement Date,
                  then Sublessee may terminate this Sublease by giving written
                  notice to Sublessor within ten (10) days after the expiration
                  of the sixty (60) day period, and the parties shall have no
                  further liability thereafter accruing under this Sublease;
                  provided, however, that if Sublessor tenders possession to
                  Sublessee within five (5) days after receipt of Sublessee's
                  notice of termination, such notice shall be void.

              c.  Early Access. Sublessor shall permit Sublessee access to the
                  Sublease Premises on from and after December 15, 2001, for the
                  following limited purposes only: (i) installing a T-1 line in
                  the Sublease Premises; and (ii) space planning by Sublessee
                  and its contractors and architects; provided no alterations or
                  work shall be done within the Sublease Premises except as
                  provided in (i) above. Sublessee shall, prior to such date,
                  deliver to Sublessor certificates of insurance evidencing the
                  policies required of Sublessee under this Sublease.

     5.       RENT AND ADDITIONAL EXPENSES.

              a.  Payment of Rent. All monies payable by Sublessee under this
                  Sublease shall constitute "Rent" for all purposes under this
                  Sublease. All Rent shall be paid in lawful money of the United
                  States, without any deduction or offset, to Sublessor at the
                  address specified in Section 1 or such other place as
                  Sublessor may designate in writing. No payment by Sublessee of
                  a lesser amount than the Rent herein stipulated shall be
                  deemed to be other than on account of the earliest stipulated
                  Rent, nor shall any endorsement or statement on any check or
                  any letter accompanying any check or payment of Rent be deemed
                  an accord and satisfaction, and Sublessor may accept such
                  check or payment without prejudice to its right to recover the
                  balance of such Rent or to pursue any other remedy. Rent for
                  any partial calendar months at the beginning or end of the
                  Sublease Term shall be prorated based on a thirty (30) day
                  month.

              b.  Minimum Monthly Rent. Sublessee shall pay to Sublessor the sum
                  set forth in Section 1 hereof as Minimum Monthly Rent, in
                  advance, on the first day of each calendar month throughout
                  the Sublease Term, commencing on the Rental Commencement Date.
                  Minimum Monthly Rent is calculated by multiplying the monthly
                  per square foot rental charge and the sum of the rentable
                  square footage of the Sublease Premises and the Sublessee's
                  pro-rate share of the approximate rentable square footage of
                  the interior common areas (4,488).

              c.  Additional Rent. In addition to Minimum Monthly Rent,
                  commencing on the Rental Commencement Date, Sublessee shall
                  pay to Sublessor, on the first day of each calendar month, as
                  "Additional Rent," estimated payments for Sublessee's pro-rata
                  share of real property taxes and assessments, maintenance,
                  repair, management, insurance, utilities and other charges
                  attributable to and/or accruing against the Sublease Premises
                  and the related common areas for the

                                  Page 6 of 14

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                  Sublease Term, in such amounts as are payable by Sublessor
                  under the Master Sublease. Prior to delivery of such to
                  Sublessee, Sublessee shall pay to Sublessor the sum of Five
                  Dollars ($5.00) per security badge required for Sublessee's
                  occupancy of the Sublease Premises, such sum shall also be due
                  and owing for any replacement security badges.

              d.  Prepaid Rent. Concurrently with Sublessee's execution of this
                  Sublease, Sublessee shall pay to Sublessor the sum specified
                  in Section 1 as Prepaid Rent, which shall be applied to the
                  installments of Minimum Monthly Rent first coming due under
                  this Sublease.

              e.  Late Charge. If Sublessee fails to pay any Rent when due, then
                  Sublessee shall pay Sublessor a late charge in an amount equal
                  to five percent (5%) of such delinquent amount as liquidated
                  damages for Sublessee's failure to make timely payment. Any
                  notice given by Sublessor pursuant to any statute governing
                  unlawful detainer actions shall be deemed to be concurrent
                  with, and not in addition to, the notice required herein. This
                  provision for a late charge shall not be deemed to grant
                  Sublessee a grace period or extension of time for performance.
                  If any Rent remains delinquent for a period in excess of
                  fifteen (15) days then, in addition to such late charge,
                  Sublessee shall pay to Sublessor interest on the delinquent
                  amount from the date such amount was due until the date such
                  amount is paid in full, at the lesser of ten percent (10%) per
                  annum or the maximum rate permitted by law.

     6.  SECURITY FOR SUBLESSEE'S PERFORMANCE.

              a.  Security Deposit. Upon execution of this Sublease, Sublessee
                  shall deposit with Sublessor in cash the sum specified in
                  Section 1 hereof as a security deposit, and not as prepayment
                  of rent (the "Security Deposit"). The Security Deposit shall
                  be held by Sublessor as security for Sublessee's faithful
                  performance under this Sublease. If Sublessee fails to pay any
                  Rent as and when due under this Sublease or otherwise fails to
                  perform its obligations hereunder, then Sublessor may, at its
                  option and without prejudice to any other remedy which
                  Sublessor may have, apply, use or retain all or any portion of
                  the Security Deposit toward the payment of delinquent Rent or
                  for any loss or damage sustained by Sublessor due to such
                  failure by Sublessee and, in this regard, Sublessee hereby
                  waives any restriction on the uses to which the Security
                  Deposit may be put contained in any applicable law. Sublessee
                  shall upon demand restore the Security Deposit to the original
                  sum deposited. The Security Deposit shall not bear interest
                  nor shall Sublessor be required to keep such sum separate from
                  its general funds. If Sublessor transfers the Sublease
                  Premises during the Sublease Term, Sublessor may pay the
                  Security Deposit to any transferee of Sublessor's interest in
                  conformity with the provisions of applicable law, in which
                  event the transferring Sublessor will be released from all
                  liability for the return of the Security Deposit. If Sublessee
                  performs every provision of this Sublease to be performed by
                  Sublessee, then to the extent not otherwise applied by
                  Sublessor as provided herein, the Security Deposit shall be
                  returned to Sublessee within thirty (30) days after the
                  termination of the Sublease Term. In the event of bankruptcy
                  or other debtor-creditor proceedings filed by or against
                  Sublessee, such Security Deposit shall be deemed to be applied
                  first to the payment of Rent due Sublessor for the period
                  immediately prior to the filing of such proceedings.

              b.  Letter of Credit. As additional security for the performance
                  of every provision of this Sublease to be performed by
                  Sublessee, Sublessee shall deposit with Sublessor on or before
                  the Commencement Date, an unconditional, irrevocable sight
                  draft letter of credit in the principal amount of Two Hundred
                  Fifty Thousand Dollars ($250,000.00) (as may be amended,
                  extended or replaced, "Letter of Credit"), in form and content
                  reasonably acceptable to Sublessor (including, but not limited
                  to, a provision that any termination or cancellation thereof
                  not be effective until at least ten (10) days after delivery
                  of written notice to Sublessor of such termination or
                  cancellation) and drawn on a commercial lender reasonably
                  acceptable to Sublessor, having a term equal to, or being
                  automatically renewable to, January 14, 2003, subject to the
                  second paragraph of this section. Upon any default beyond
                  applicable notice and cure periods ("Event of Default")
                  pursuant to the terms of this Sublease, without waiver of any
                  rights that Sublessor may have under this Sublease or at law
                  or in equity as a result of an Event of Default, Sublessor
                  shall have the right

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                  to draw upon the Letter of Credit, in whole or in part, either
                  prior to, concurrently with or after Sublessor's application
                  of all or any portion of the Security Deposit, for payment of
                  any sums as provided in this section with respect to
                  application of the Security Deposit. If all or any portion of
                  the Letter of Credit is drawn upon by Sublessor hereunder,
                  Sublessee shall, within ten (10) days after written demand
                  therefore, restore the Letter of Credit to its original
                  amount, or if drawn upon in full, deliver to Sublessor a
                  replacement Letter of Credit, and Sublessee's failure to do so
                  shall constitute an Event of Default under this Sublease. In
                  addition, the failure at any time by Sublessee to keep the
                  Letter of Credit in full force and effect as required
                  hereunder shall constitute an Event of Default under this
                  Sublease. In the event that the Letter of Credit has an
                  expiration date that is prior to January 14, 2003, and does
                  not provide for automatic renewals through and including
                  January 14, 2003, then, no later than thirty (30) days prior
                  to each scheduled expiration date of the Letter of Credit,
                  Sublessee shall cause the Letter of Credit to be either
                  extended for a period of at least one (1) year or replaced to
                  the reasonable satisfaction of Sublessor, such that the Letter
                  of Credit shall remain in full force and effect and drawable
                  by Sublessor through and including January 14 2003. If
                  Sublessor has not received any such extension or replacement
                  on or before the date that is thirty (30) days prior to the
                  then scheduled expiration date of the Letter of Credit,
                  Sublessor shall be entitled to draw down on the Letter of
                  Credit in full, and the funds so drawn by Sublessor shall be
                  added to the Security Deposit then held by Sublessor under
                  this Sublease and shall thereafter be held by Sublessor as
                  part of such Security Deposit, subject to and in accordance
                  with the terms of this Section 6. Notwithstanding anything
                  contained in this Sublease to the contrary, if Sublessor draws
                  on the Letter of Credit, then Sublessee shall have the right,
                  upon ten (10) days' prior written notice to Sublessor, to
                  obtain a refund from Sublessor of any unapplied proceeds of
                  the Letter of Credit which Sublessor has drawn upon, any such
                  refund being conditioned upon Sublessee simultaneously
                  delivering to Sublessor a new replacement Letter of Credit in
                  the amount then required, and otherwise meeting the
                  requirements contained in this Section. In the event Sublessee
                  has not provided Sublessor with written notice of its election
                  to obtain a refund of any unapplied proceeds of the Letter of
                  Credit within ten (10) days of the draw of such funds by
                  Sublessor, Sublessee shall have waived its right to obtain a
                  refund of such funds.

     7.  USE.

              a.  Use of the Sublease Premises. Sublessee shall use the Sublease
                  Premises solely for the purposes specified in Section 1 in
                  strict conformance with the applicable requirements of the
                  Master Lease and Master Sublease, and for no other purpose
                  whatsoever.

              b.  Suitability. Sublessee acknowledges that, except as may be
                  explicitly stated in this Sublease, neither Sublessor nor any
                  agent of Sublessor has made any representation or warranty
                  with respect to the Sublease Premises, the permitted uses that
                  can be made of either under existing laws, or the suitability
                  of either for the conduct of Sublessee's business, nor has
                  Sublessor agreed to undertake any modification, alteration or
                  improvement to the Sublease Premises.

              c.  Hazardous Materials.

                 i. Definitions. As used herein, the term "Hazardous Material"
                    shall mean any hazardous or toxic substance, material or
                    waste which is or becomes regulated by any state, federal,
                    or local government authority, including without limitation
                    all of those materials and substances designated as
                    hazardous or toxic by the Environmental Protection Agency,
                    the Department of Labor, the Department of Transportation,
                    the Department of Agriculture, the Department of Health
                    Services or the Food and Drug Agency, as well as any
                    chemicals, materials, substances or wastes which are now or
                    hereafter defined as or included in the definition of
                    "hazardous substances", "hazardous materials", "toxic
                    substances", "extremely hazardous substances", "toxic
                    pollutants", or words of similar import, under any
                    applicable Environmental Laws. Without limiting the
                    generality of the foregoing, the term "Hazardous Material"
                    shall include (1) any substance, product, waste or other
                    material of any nature whatsoever which may give rise to
                    liability under

                                  Page 8 of 14

<PAGE>

                           any statutory or common law theory based on
                           negligence, trespass, intentional tort, nuisance or
                           strict liability or under any reported decisions of a
                           state or federal court; (2) gasoline, diesel fuel, or
                           other petroleum hydrocarbons; (3) polychlorinated
                           biphenyls; (4) asbestos containing materials; (5)
                           urea formaldehyde foam insulation; (6) radon gas; (7)
                           mercury; and (8) lead-based paints. As used herein,
                           the term "Environmental Laws" shall mean all
                           applicable statutes, regulations, rules, ordinances,
                           codes, licenses, permits, orders, approvals,
                           authorizations and similar items, of any state,
                           federal, or local government authority, and all
                           principles of common law pertaining to the regulation
                           and protection of human health, safety, and damages
                           to natural resources, including, without limitation,
                           Releases and threatened Releases or otherwise
                           relating to the operation, manufacture, processing,
                           distribution, use, treatment, storage, disposal,
                           transport, or handling of Hazardous Materials. As
                           used herein, the term "Release" shall mean any
                           emission, spill, seepage, leak, escape, leaching,
                           discharge, injection, pumping, pouring, emptying,
                           dumping, disposing or release of Hazardous Materials.

                      ii.  Use Restriction. To the extent permitted by Master
                           Lessor and Master Sublessor, provided Sublessee
                           complies with Environmental Laws (as such term is
                           defined hereinafter), Sublessee shall be permitted to
                           use KODAK Medical X-Ray Developer, Working Solution
                           and KODAK Medical X-Ray Liquid Fixer and Replenisher
                           in an amount not to exceed twenty (20) gallons in the
                           aggregate per month. To the extent Sublessee desires
                           to use different or additional chemicals or greater
                           amounts of said chemicals, Sublessee shall be
                           required to obtain Master Lessor, Master Sublessor
                           and Sublessor's consent, which consent may be
                           withheld in said party's sole and absolute
                           discretion. Except as expressly set forth above,
                           Sublessee shall not cause or permit any Hazardous
                           Material to be used, stored, generated, discharged,
                           treated, transported to or from, Released or disposed
                           of in, on, over, through, or about the Sublease
                           Premises, or any other land or improvements in the
                           vicinity of the Sublease Premises, without the prior
                           written consent of Master Lessor, Master Sublessor
                           and Sublessor, which consent may be withheld in the
                           sole and absolute discretion of Master Lessor, Master
                           Sublessor and/or Sublessor; provided, however, that
                           Sublessee may use small quantities of household
                           cleaners and office supplies typically used in
                           connection with professional offices. Without
                           limiting the generality of the foregoing, (a) any
                           use, storage, generation, discharge, treatment,
                           transportation, Release, or disposal of Hazardous
                           Material by Sublessee shall strictly comply with all
                           applicable Environmental Laws, and (b) if the
                           presence of Hazardous Material on the Sublease
                           Premises caused or permitted by Sublessee or its
                           agents, employees, invitees, visitors or contractors
                           results in contamination of the Sublease Premises or
                           any soil, air, ground or surface waters under,
                           through, over, on, in or about the Sublease Premises,
                           Sublessee, at its expense, shall promptly take all
                           actions necessary to report, investigate and/or
                           remediate such condition in accordance with all
                           applicable Environmental Laws.

                      iii. Notification. In addition, if the Sublessee knows or
                           has reasonable cause to believe that a Release or
                           other environmental condition required to be reported
                           to local, state, or federal regulatory authorities
                           has occurred on the Sublease Premises, Sublessee must
                           give written notice of the Release and/or condition
                           to Master Lessor, Master Sublessor, and Sublessor
                           within a reasonable period of time following the
                           discovery of the Release or environmental condition.
                           Sublessee must provide notice of any local, state, or
                           federal governmental filings or claims made or
                           notices received by Sublessee from any regulatory
                           authority or third party relating to any threatened
                           claim or alleged violation of Environmental Laws or
                           environmental matters.

     8.  SURRENDER.  Subject  to the  provisions  of this  Sublease,  the
         Master  Lease and the Master  Sublease  regarding  damage or
         destruction due to casualty or condemnation, upon the expiration or
         earlier termination of this Sublease, Sublessee shall surrender the
         Sublease Premises broom clean and in the same condition and repair as
         the Sublease Premises were delivered to Sublessee, excepting only
         ordinary wear and tear and in compliance with the Master Lease and the
         Master Sublease. To the extent permitted by

                                  Page 9 of 14

<PAGE>

         Master Lessor and Master Sublessor, Sublessee shall be permitted to
         remove any and all of its personal property, business or trade
         fixtures, machinery, equipment, cabinetwork, signs, furniture and/or
         movable partitions. Furthermore, Sublessee agrees to repair any damage
         to the Sublease Premises caused by or related to the removal of any
         articles of personal property, business or trade fixtures, machinery,
         equipment, cabinetwork, signs, furniture, movable partitions or
         permanent improvements or additions which Sublessor allows or requires
         Sublessee to remove, including, without limitation, repairing the floor
         and patching and/or painting the walls where required by Sublessor to
         the reasonable satisfaction of Sublessor, Master Lessor and/or Master
         Sublessor, all at Sublessee's sole cost and expense. Sublessee shall
         indemnify Sublessor against any loss or liability resulting from delay
         by Sublessee in so surrendering the Sublease Premises, including,
         without limitation, any claims made by the Master Lessor, Master
         Sublessor and/or any succeeding tenant founded on such delay. Such
         indemnity obligation shall survive the expiration or earlier
         termination of this Sublease.

     9.  CONSENT. Whenever the consent or approval of Master Lessor is required
         pursuant to the terms of the Master Lease or the consent or approval of
         Master Sublessor is required pursuant to the terms of the Master
         Sublease, for the purposes of this Sublease, Sublessee, in each such
         instance, shall be required to obtain the written consent or approval
         of Master Lessor, Master Sublessor and/or Sublessor. If Master Lessor
         and/or Master Sublessor refuses to grant its consent or approval,
         Sublessor may withhold its consent or approval and Sublessee agrees
         that such action by Sublessor shall be deemed reasonable.

     10. INSURANCE. All insurance policies required to be carried by "Tenant"
         under the Master Lease and by "Subtenant" under the Master Sublease
         shall be maintained by Sublessee pursuant to the terms of the Master
         Lease and Master Sublease, and shall name Sublessor, Master Lessor and
         Master Sublessor (and such other lenders, persons, firms, or
         corporations as are designated by Sublessor, Master Lessor or Master
         Sublessor) as additional insureds by endorsement. All policies shall be
         written as primary policies with respect to the interests of Master
         Lessor, Master Sublessor and Sublessor and such other additional
         insureds and shall provide that any insurance carried by Master Lessor,
         Master Sublessor or Sublessor or such other additional insureds is
         excess and not contributing insurance with respect to the insurance
         required hereunder. All policies shall also contain "cross liability"
         or "severability of interest" provisions and shall insure the
         performance of the indemnity set forth in Section 14 of this Sublease.
         Sublessee shall provide Master Lessor, Master Sublessor and Sublessor
         with copies or certificates of all policies, including in each instance
         an endorsement providing that such insurance shall not be cancelled or
         amended except after thirty (30) days prior written notice to Master
         Lessor, Master Sublessor and Sublessor. All deductibles, if any, under
         any such insurance policies shall be subject to the prior reasonable
         approval of Sublessor, and all certificates delivered to Master Lessor,
         Master Sublessor and Sublessor shall specify the limits of the policy
         and all deductibles thereunder.

     11. NOTICES.

              a.  Notice Requirements. All notices, demands, consents, and
                  approvals which may or are required to be given by either
                  party to the other under this Sublease shall be in writing and
                  may be given by (i) personal delivery, (ii) nationally
                  recognized overnight courier such as Federal Express, (iii)
                  facsimile transmission, or (iv) United States registered or
                  certified mail addressed as shown in Section 1. Any notice or
                  demand so given shall be deemed to be delivered or made on (w)
                  the date personal service is effected, (x) the next business
                  day if sent by overnight courier, (y) the same day as given if
                  sent by facsimile transmission which is received by 5:00 p.m.
                  Pacific time with a copy deposited in the United States mail,
                  postage prepaid, or (z) the second business day after the same
                  is deposited in the United States Mail as registered or
                  certified and addressed as above provided with postage thereon
                  fully prepaid. Either party hereto may change its address at
                  any time by giving written notice of such change to the other
                  party in the manner provided herein at least ten (10) calendar
                  days prior to the date such change is desired to be effective.

              b.  Notices from Master Lessor and Master Sublessor. Each party
                  shall provide to the other party a copy of any notice or
                  demand received from or delivered to Master Lessor and Master
                  Sublessor within twenty four (24) hours of receiving or
                  delivering such notice or demand.

                                 Page 10 of 14

<PAGE>

     12. DAMAGE, DESTRUCTION, CONDEMNATION. To the extent that the Master Lease
         and/or Master Sublease gives Sublessor any rights following the
         occurrence of any damage, destruction or condemnation to terminate the
         Master Lease and/or Master Sublease, to repair or restore the Sublease
         Premises, to contribute toward such repair or restoration costs to
         avoid termination, to obtain and utilize insurance or condemnation
         proceeds to repair or restore the Sublease Premises, or any similar
         rights, such rights shall be reserved to and exercisable by Sublessee.
         The exercise of any such right shall under no circumstances constitute
         a default or breach under this Sublease or subject either party to any
         liability therefor.

     13. ENTRY BY SUBLESSOR. Sublessee shall permit Sublessor, Master Sublessor
         and their respective agents to enter the Sublease Premises at any
         reasonable time for the purpose of inspecting the same or posting a
         notice of non-responsibility for alterations, additions or repairs,
         upon at least twenty-four (24) hours prior notice (except that no
         notice shall be required in the case of emergency).

     14. INDEMNITY; EXEMPTION OF SUBLESSOR FROM LIABILITY.

              a.  Sublessee Indemnity. Sublessee shall indemnify, defend (with
                  counsel reasonably satisfactory to Sublessor), protect and
                  hold harmless Sublessor, Master Lessor and their respective
                  agents, employees, contractors, stockholders, officers,
                  directors, successors and assigns from and against any and all
                  claims, demands, actions, suits, proceedings, liabilities,
                  obligations, losses, damages, judgments, costs, penalties,
                  fines, and expenses (including, but not limited to,
                  attorneys', consultants' and expert witness fees) arising out
                  of, resulting from, or related to (i) any injury or death to
                  any person or injury or damage to property caused by, arising
                  out of, or involving any of the following, except (with
                  respect to the indemnity accorded to Sublessor only) to the
                  extent caused by Sublessor's own negligence or willful
                  misconduct: (1) Sublessee's use of the Sublease Premises, the
                  conduct of Sublessee's business therein, or any activity, work
                  or thing done, permitted or suffered by Sublessee in or about
                  the Sublease Premises or the common areas of the Complex, (2)
                  a breach by Sublessee in the performance in a timely manner of
                  any obligation of Sublessee to be performed under this
                  Sublease, or (3) the negligence or willful misconduct of
                  Sublessee or Sublessee's agents, contractors, employees,
                  subtenants, licensees, or invitees, and/or (ii) the storage,
                  use, generation, discharge, treatment, transportation,
                  presence, Release or disposal of any Hazardous Material by
                  Sublessee or its agents, employees, invitees, visitors or
                  contractors in, on, over, through, from, about, or beneath the
                  Sublease Premises or any other property. This indemnity shall
                  survive the expiration or earlier termination of this
                  Sublease.

              b.  Sublessor Indemnity. Except in the case of an indemnification
                  obligation set forth in Section 14(a), Sublessor agrees to
                  indemnify, defend and hold Sublessee and Sublessee's
                  shareholders, members, agents, officers, partners, employees,
                  sublessees, and concessionaires harmless from and against any
                  and all claims, actions, damages, liabilities, and expenses to
                  the extent occasioned by any act or omission of Sublessor or
                  Sublessor's employees, agents or contractors.

              c.  Sublessee Waiver. Sublessee, as a material part of the
                  consideration to Sublessor, hereby assumes all risk of damage
                  to property or injury to persons in, upon or about the
                  Sublease Premises arising from any cause and Sublessee hereby
                  waives all claims in respect thereof against Sublessor, except
                  in connection with damage or injury caused solely by the gross
                  negligence or willful misconduct of Sublessor or its
                  authorized agents; provided, however, that in no event shall
                  Sublessor be liable for any loss of profits or any special,
                  indirect, incidental, consequential or punitive damages,
                  however caused and on any theory of liability. This waiver
                  shall survive the expiration or earlier termination of this
                  Sublease.

              d.  Mutual Waiver of Subrogation. Each party (the "First Party")
                  hereby releases the other party (the "Second Party"), and its
                  partners, officers, agents, employees, and servants, from any
                  and all claims, demands, loss, expense, or injury to the
                  Sublease Premises or to the furnishings, fixtures, equipment,
                  inventory, or other property in, about, or upon the Sublease
                  Premises, which is caused by or results from perils, events,
                  or happenings which are the subject of fire or other casualty
                  insurance carried by the First Party at the time of such loss
                  or which would have been in force had

                                 Page 11 of 14

<PAGE>

                  the First Party carried the insurance required hereunder, by
                  the Master Lease or Master Sublease (collectively, the
                  "Effective Coverage") irrespective of any negligence on the
                  part of the Second Party that may have contributed to or
                  caused such loss; subject to the following limitations: (i)
                  the Second Party shall not be released from any liability to
                  the extent that such damages are not covered by the insurance
                  recovery under the Effective Coverage or are the result of
                  willful acts by the Second Party, and (ii) the Second Party
                  shall be responsible for reimbursing the First Party for any
                  deductible owed as a result of such damages. Each party shall
                  use commercially reasonable efforts to obtain, if needed,
                  appropriate endorsements to its policies of insurance with
                  respect to the foregoing releases; provided, however, that
                  failure to obtain such endorsements shall not affect the
                  releases hereinabove given.

     15. ASSIGNMENT AND SUBLETTING. Sublessee shall not voluntarily or by
         operation of law assign this Sublease or enter into license or
         concession agreement, sublet all or any part of the Sublease Premises,
         or otherwise transfer, mortgage, pledge, hypothecate or encumber all or
         any part of Sublessee's interest in this Sublease or in the Sublease
         Premises or any part thereof, without the prior written consent of
         Master Lessor (pursuant to the terms of the Master Lease), Master
         Sublessor (pursuant to the terms of the Master Sublease) and Sublessor
         (whose consent shall not be unreasonably withheld or conditioned). Any
         attempt to do so without such consent being first had and obtained
         shall be wholly void and shall constitute a default by Sublessee under
         this Sublease. Fifty percent (50%) of any and all compensation realized
         by Sublessee under any such sublease or assignment in excess of the
         Rent payable under this Sublease shall belong to Sublessor.
         Notwithstanding any assignment or subletting, Sublessee shall not be
         relieved of its obligations hereunder, and a consent to one assignment
         or subletting shall not constitute a consent to any other assignment or
         subletting or a waiver of the provisions of this section.

     16. DELIVERY OF DOCUMENTS. Sublessee shall execute and deliver any document
         or other instrument required by Master Lessor, Master Sublessor or
         Sublessor pursuant to the Master Lease or Master Sublease within five
         (5) business days following receipt of a written request from Master
         Lessor, Master Sublessor or Sublessor. Failure to comply with this
         provision shall constitute a default by Sublessee under this Sublease.

     17. HOLDING OVER. Any holding over by Sublessee after the termination of
         the Sublease Term shall constitute a tenancy at sufferance and not a
         renewal or extension of this Sublease or give Sublessee any rights in
         or to the Sublease Premises. In the event of any such holding over,
         Sublessee shall pay Sublessor without demand an amount equal to Two
         Hundred Percent (200%) of any and all amounts which Sublessor is
         required to pay Master Sublessor pursuant to the Master Sublease,
         computed on a daily basis for each day of the holdover period; plus (b)
         all other amounts due and payable under the Sublease; plus (c) all
         other amounts that Sublessor may become liable for under the Master
         Sublease; plus (d) any and all other damages, costs, expenses, and fees
         incurred or suffered by Sublessor as a result of such holdover by
         Sublessee.

     18. PARKING. Subject to the terms of the Master Lease, Master Sublease and
         such reasonable rules and regulations that may be promulgated by Master
         Lessor, Master Sublessor and/or Sublessor from time to time, Sublessee
         shall have the non-exclusive right in common with other tenants and
         occupants of the Complex to use, free of a monthly fee during the
         Sublease Term, its pro rata share of the Complex's non-reserved parking
         area. Sublessor shall retain for its sole use the reserved spaces
         allocated to Sublessor under the Master Sublease.

     19. SIGNAGE. Subject to any and all applicable rules and regulations and
         applicable law, Sublessee shall be permitted to place an identification
         sign on the Sublease Premises of such type and design and at such place
         as Master Lessor, Master Sublessor and Sublessor shall reasonably
         designate after written request by Sublessee. Sublessee shall have be
         permitted the use of the upper fifty percent (50%) of each side of the
         monument sign currently located on the Complex and shall be permitted
         to use the Complex directory in conjunction with other Tenants of the
         Complex.

                                 Page 12 of 14

<PAGE>

     20. FURNITURE AGREEMENT. During the Sublease Term, Sublessee shall be
         entitled to use certain existing cubicles, telephone equipment,
         cabling, and fixtures currently located in the Sublease Premises, as
         more specifically described in that certain Furniture Rental Agreement
         dated of even date herewith, a copy of which is attached hereto as
         Exhibit D ("Sublessor's Property").

     21. ACCESS TO UTILITY CONTROLS AND ROOF. Sublessor and Sublessee
         acknowledge that access to the roof of the building containing the
         Premises and the controls for the HVAC system, public address system
         and certain other utilities serving the Sublease Premises are located
         on a portion of the second floor of the Premises which is not within
         the Sublease Premises. Sublessor agrees that it shall provide Sublessee
         with access to such roof access and utility controls to the extent they
         serve the Sublease Premises upon reasonable prior notice given by
         Sublessor to Sublessee. Sublessor shall have the right to require
         Sublessee's agents or employees to be accompanied by an agent or
         employee of Sublessor during such periods of access. Sublessee's access
         shall not unreasonably interfere with the occupant of the space where
         the roof access and utility controls are located.

     22. GENERAL PROVISIONS.

              a.  Severability. If any term or provision of this Sublease shall,
                  to any extent, be determined by a court of competent
                  jurisdiction to be invalid or unenforceable, the remainder of
                  this Sublease shall not be affected thereby, and each term and
                  provision of this Sublease shall be valid and enforceable to
                  the fullest extent permitted by law.

              b.  Attorneys' Fees; Costs of Suit. If Sublessee or Sublessor
                  shall bring any action or proceeding for any relief against
                  the other, declaratory or otherwise, arising out of this
                  Sublease, including any suit by Sublessor for the recovery of
                  Rent or possession of the Sublease Premises, the prevailing
                  party shall be entitled to recover its reasonable attorneys'
                  fees, expert witness' fees, and costs.

              c.  Waiver. No covenant, term or condition or the breach thereof
                  shall be deemed waived, except by written consent of the party
                  against whom the waiver is claimed, and any waiver of the
                  breach of any covenant, term or condition shall not be deemed
                  to be a waiver of any other covenant, term or condition or any
                  subsequent failure to perform the same or any other such term,
                  covenant or condition. Acceptance by Sublessor of any
                  performance by Sublessee after the time the same shall have
                  become due shall not constitute a waiver by Sublessor of the
                  breach or default of any covenant, term or condition unless
                  otherwise expressly agreed to by Sublessor in writing.

              d.  Brokerage Commissions. The parties represent and warrant to
                  each other that they have dealt with no brokers, finders,
                  agents or other person in connection with the transaction
                  contemplated hereby to whom a brokerage or other commission or
                  fee may be payable, except for the brokers named in Section 1.
                  Each party shall indemnify, defend and hold the other harmless
                  from any claims arising from any breach by the indemnifying
                  party of the representation and warranty in this Section
                  21(d). Pursuant to a separate written agreement Sublessor
                  shall pay a brokerage commission to Sublessor's Broker who
                  shall in turn pay a commission to Sublessee's Broker.
                  Notwithstanding anything contained herein to the contrary,
                  Sublessor shall not be responsible for any brokerage
                  commission due in connection with the entering into by
                  Sublessee with Master Sublessor of that certain Sublease dated
                  January 3, 2002, for the extension of Sublessee's tenancy in
                  the Sublease Premises. Further, Sublessee shall indemnify,
                  defend, protect and hold Sublessor harmless from any claims,
                  damages, costs, expenses (including attorney's fees) arising
                  from any commission due pursuant to the foregoing.

              e.  Binding Effect. Preparation of this Sublease by Sublessor or
                  Sublessor's agent and submission of the same to Sublessee
                  shall not be deemed an offer to lease. This Sublease shall
                  become binding upon Sublessor and Sublessee only when fully
                  executed by Sublessor and Sublessee. Sublessor and Sublessee
                  acknowledge and agree that this Sublease is expressly
                  conditioned upon obtaining the consent of Master Lessor and
                  Master Sublessor hereto following such full execution by
                  Sublessor and Sublessee, which consent may be in the form
                  attached as Exhibit E hereto or such other form as Master
                  Lessor and Master Sublessor may require. In the event such
                  consent is not

                                 Page 13 of 14

<PAGE>

                  so obtained within thirty (30) days following the date of this
                  Sublease, then this Sublease shall automatically terminate and
                  be without further force or effect. In such event, Sublessor
                  shall promptly return to Sublessee any Prepaid Rent and
                  Security Deposit paid by Sublessee to Sublessor pursuant to
                  this Sublease, and neither party shall have any liability to
                  the other party thereafter accruing.

              f.  Entire Agreement. This instrument, along with any exhibits and
                  addenda hereto, constitutes the entire agreement between
                  Sublessor and Sublessee relative to the Sublease Premises.
                  This Sublease may be altered, amended or revoked only by an
                  instrument in writing signed by both Sublessor and Sublessee.
                  There are no oral agreements or representations between the
                  parties affecting this Sublease, and this Sublease supersedes
                  and cancels any and all previous negotiations, arrangements,
                  brochures, agreements, representations and understandings, if
                  any, between the parties hereto.

              g.  Quiet Enjoyment. Sublessor covenants and agrees with Sublessee
                  that upon Sublessee paying the Rent and observing and
                  performing all the covenants, agreements and conditions on
                  Sublessee's part to be observed and performed, Sublessee may
                  peaceably and quietly enjoy the Sublease Premises without
                  hindrance of Sublessor or any person lawfully claiming under
                  Sublessor, subject, nevertheless, to the terms and conditions
                  of this Sublease.

              h.  Execution. This Sublease may be executed in one or more
                  counterparts, each of which shall be considered an original
                  counterpart, and all of which together shall constitute one
                  and the same instrument. Each person executing this Sublease
                  represents that the execution of this Sublease has been duly
                  authorized by the party on whose behalf the person is
                  executing this Sublease.

                    (signatures to follow on succeeding page)

                                 Page 14 of 14

<PAGE>

Sublessor:                                             Sublessee

INTERWOVEN, INC.                                       R2 TECHNOLOGY, INC.
a Delaware corporation                                 a Delaware corporation

By:      /s/ David Allen                               By:      /s/ Richard Enck
     -------------------------------                        --------------------
Name:    David Allen                                   Name:    Richard Enck
       -----------------------------                          --------------
Its:     V.P. and CFO                                  Its:     C.O.O.
      ------------------------------                         ---------

                                 Page 15 of 14

<PAGE>

                                    EXHIBIT A

                                  MASTER LEASE

                                   Exhibit A

                                  Page 1 of 1

<PAGE>

                          BUILD-TO-SUIT LEASE AGREEMENT
                          -----------------------------

                Landlord: SUNNYVALE PARTNERS LIMITED PARTNERSHIP

                Tenant: FIRST DATA MERCHANT SERVICES CORPORATION

                                 March 18, 1997

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page

<S>      <C>                                                                     <C>
1.       Description                                                              1
2.       Term and Occupancy                                                       1
3.       Rent                                                                     2
4.       Construction                                                             3
5.       Use                                                                      6
6.       Condition of Demised Premises                                            7
7.       Maintenance and Repairs                                                  8
8.       Alterations                                                              9
9.       Signs                                                                   10
10.      Services                                                                11
11.      Compliance with Law                                                     11
12.      Landlord's Title, Authority, and Quiet Enjoyment:  Tenant's Authority   12
13.      Subordination                                                           13
14.      Assignment and Sublease                                                 14
15.      Lease Extension                                                         15
16.      Impositions                                                             15
17.      Insurance                                                               17
18.      Destruction and Restoration                                             20
19.      Condemnation                                                            21
20.      Default by Tenant                                                       25
21.      Landlord's Remedies                                                     26
22.      Default by Landlord                                                     28
23.      Tenant's Remedies                                                       28
24.      Delivery of Executed Lease                                              28
25.      Termination                                                             28
</TABLE>
                                       i

<PAGE>

26.      Notices                                                              29
27.      Brokerage                                                            29
28.      Estoppel                                                             29
29.      Hazardous Substances                                                 30
30.      Holdover                                                             31
31.      Surrender                                                            32
32.      Liens                                                                32
33.      Interest; Late Charge                                                33
34.      Inspections                                                          34
35.      Transfer of Landlord's Interest                                      34
36.      Indemnity                                                            34
37.      Modification of Lease                                                35
38.      Memorandum of Lease                                                  35
39.      Paragraph Captions                                                   35
40.      Entire Agreement                                                     35
41.      Choice of Law and Interpretation                                     35
42.      Prevailing Party                                                     36
43.      Exhibits                                                             36
44.      Guarantee                                                            36
45.      Independent Covenants                                                36
46.      Entry by Landlord                                                    37
47.      [Deleted by intent of parties.]                                      37
48.      Survival of Obligations                                              37
49.      Subject to Landlord's Acquisition of Demised Premises                37
50.      Americans With Disabilities Act                                      38
                                       ii

<PAGE>

51.      Reports by Tenant                                                    39
52.      Option to Purchase                                                   39
53.      No Third Party Beneficiaries                                         40
54.      Counterparts                                                         41
55.      Consents and Approvals                                               41
56.      Limitation on Damages                                                41
57.      Tenant's Property                                                    41

Exhibit A         -        Legal Description

Exhibit B         -        Site Plan

Exhibit C         -        Plans

Exhibit C-1       -        Construction Schedule

Exhibit D         -        Schedule of Rents

Exhibit E         -        Lease Term Agreement

Exhibit F         -        Memorandum of Lease

Exhibit G         -        Landlord's Development Costs

Exhibit H         -        Permitted Exceptions

Exhibit I         -        Escrow Agreement

                                      iii

<PAGE>

          THIS BUILD-TO-SUIT LEASE AGREEMENT (this "Lease") is made as of the
_18_th day of March, 1997 (the "date hereof") between SUNNYVALE PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership, having its principal office at c/o
Ridge Sunnyvale, Inc., c/o Ridge Capital Corporation, 257 East Main Street,
Barrington, Illinois 60010 (hereinafter referred to as "Landlord"), and FIRST
DATA MERCHANT SERVICES CORPORATION, having its principal office at 5660 New
Northside Drive, Suite 1400, Atlanta, Georgia 30328 (hereinafter referred to as
"Tenant").

                              W I T N E S S E T H:
                              --------------------

         Landlord, for and in consideration of the rents, covenant and
agreements hereinafter set forth on the part of Tenant to be paid, kept,
observed and performed does hereby lease unto Tenant, and Tenant does hereby
take subject to the conditions herein expressed, all that parcel of land
situated in the City of Sunnyvale, County of Santa Clara, State of California
and legally described on Exhibit A attached hereto and made a part hereof (the
"Land"), together with all improvements located and to be constructed thereon by
Landlord, which are hereinafter called "Landlord's Improvements." Landlord's
Improvements and all improvements, machinery, building equipment, fixtures and
other property of Landlord, real, personal or mixed (except Tenant's trade
fixtures and any other property of Tenant), installed or located thereon,
together with all additions, alterations and replacements thereof are
collectively referred to herein as the "Improvements." The Land and the
Improvements am sometimes hereinafter collectively referred to as the "Demised
Premises". The structure located upon and being a part of the Demised Premises
which is constructed to be used as a two story office building containing
approximately 80,000 "useable square feet" (as defined in Paragraph 4 below) is
hereinafter referred to as the "Building".

          1. Description. Landlord will cause Landlord's Improvements (including
             -----------
the Building and other site improvements depicted on the Site Plan attached
hereto and made a part hereof as Exhibit B) to be constructed in substantial
accordance with the plans and specifications enumerate on Exhibit C (the
"Plans"). Landlord agrees that Landlord shall not make any modifications or
changes to the Plans without Tenant's prior written consent. Landlord further
agrees to make any changes to the Plans requested by Tenant in writing and if
the change requested by Tenant increases or decreases the cost of the Demised
Premises, the Base Rent provided for herein shall be adjusted in accordance with
the provisions of the formula provided on Exhibit D.

          2. Term and Occupancy. A. The term of this Lease shall commence on the
             ------------------
Construction Completion Date, as provided in Paragraph 4 below (hereinafter
referred to as the "Commencement Date"), and shall end on the date which is the
last day of the month that includes the twelfth (12th) anniversary of the
Commencement Date (hereinafter referred to as the "Expiration Date"), unless the
term be extended or earlier terminated as provided herein.

         Landlord shall notify Tenant of the anticipated Construction Completion
Date. Landlord agrees to notify Tenant promptly from time to time of any changes
in the anticipated Construction Completion Date. Tenant shall have the right to
enter the Demised Premises during the approximately ninety (90) day period
preceding the Construction Completion Date for the purpose of installing its
equipment and Tenant does hereby agree to assume all risk of loss or

                                       1

<PAGE>

damage to such equipment, and to indemnify, defend and hold harmless Landlord
from and against any loss or damage to such equipment and all liability, loss or
damage arising from any injury to the property of Landlord, or its contractors,
subcontractors or materialmen, and any death or personal injury to any person or
persons arising out of such installation. Landlord agrees to cooperate with
Tenant so that Tenant's contractors and tradespeople will be permitted to
reasonably perform their work without material interference. Tenant agrees to
cooperate with Landlord so that Landlord's contractors and tradespeople will be
permitted to reasonably perform their work without material interference.

          B. Notwithstanding anything else in this Lease to the contrary, Tenant
shall have the right to terminate this Lease as of the end of the eighth (8th)
Lease Year (the "Early Termination Date") provided that Tenant shall (a) notify
Landlord in writing of its election to terminate at least one (1) year prior to
the Early Termination Date, and (b) pay to the Landlord, concurrently with the
notification to Landlord hereunder, a termination fee by certified or cashier's
check or wire transfer of available funds ("Termination Amount") equal to the
discounted present value (using Landlord's financing interest rate) amount
needed to reduce the remaining unamortized principal balance due on the
indebtedness originally incurred by Landlord to finance the Landlord's
Development Costs (as defined in Paragraph 19F). If Tenant gives such notice as
required hereunder and pays the Termination Amount concurrently therewith, this
Lease shall be deemed terminated as to all rights or obligations hereunder
(except such rights and obligations as Landlord and Tenant would otherwise have
upon normal expiration of the term of this Lease). Any such notice hereunder,
not accompanied by the Termination Amount as provided hereinabove, shall be
deemed invalid and of no force or effect. Upon Landlord's closing on the
permanent loan for the financing of the Landlord's Development Costs, Landlord
shall provide to Tenant a copy of the twenty (20) year permanent loan
amortization (the "Loan Amortization"), which shall include the principal amount
that will be due at the end of the eighth (8th) Lease Year.

          Tenant shall have the right to pay the Termination Amount to any
mortgagee of the Demised Promises or other person with a lien on the Demised
Premises or the rents derived therefrom, but Tenant shall have no such
obligation to do so unless such obligation is specifically set forth in a
non-disturbance or other agreement between Tenant and such mortgagee or other
lienholder. Notwithstanding the foregoing, Tenant acknowledges and agrees that
any payment to any such mortgagee or other lienholder shall only be effectuated
by a two-party or two-payee certified or cashier's check, made payable to both
Landlord and any such mortgagee or other lienholder.

          3. Rent. The annual base rental ("Base Rent") shall be calculated in
             ----
accordance with the provisions set forth on the Schedule of Rents attached
hereto and made a part hereof as Exhibit D. Base Rent shall be paid monthly, in
advance, in equal installments, without offset or deduction by wire transfer in
accordance with separate instruction given by Landlord to Tenant, on the
Commencement Date and on the first day of each month thereafter during the term
hereof; provided however, that if the term of this Lease shall commence on a
date other than the first day of a calendar month or end on a date other than
the last day of a calendar month (i) the first and last month's Base Rent shall
be prorated based upon the ratio that the number of days in the term within such
month bears to the total number of days in such month, and (ii) Base Rent
reserved for the calendar month of any scheduled rent escalation shall be
equitably adjusted upon due

                                       2

<PAGE>

         consideration of the number of days in such month falling within the
preceding Lease Year (as herein defined) and the number of days in such month
falling within the current Lease Year. For purposes of this Lease, the term
"Lease Year" shall mean the 12-month period commencing on the Commencement Date
and each 12-month period thereafter during the term of this Lease (and any
renewal or extension thereof), provided that, if the Commencement Date is not
the first day of a calendar month, the first "Lease Year" shall be the period
commencing on the Commencement Date and ending on the last day of the twelfth
(12th) full calendar month following the Commencement Date and all Base Rent
payable for the month in which the Commencement Date occurs shall be paid on the
first day of the following calendar month. Notwithstanding the foregoing, on or
prior to the date of closing under the Sale Agreement (as defined herein),
Tenant shall also deposit into escrow with First American Title Guaranty Company
the sum of Two Million Dollars ($2,000,000.00) to cover a portion of the
Landlord's Development Costs which shall be disbursed in accordance with the
Escrow Agreement attached hereto as Exhibit I.

          4. Construction.
             ------------

          A. Landlord agrees, at Landlord's sole cost and expense, to cause
construction of Landlord's Improvements in accordance with the following
schedule:

             (a) Landlord shall use reasonable efforts to commence the Site
Preparation Phase (as defined in that certain Real Estate Purchase and Sale
Agreement and Joint Escrow Instructions dated March 18, 1997 (the "Sale
Agreement") between Regis Homes of Northern California, Inc. and Landlord) as
soon as possible following the date Landlord acquires the Land and in any event
on or before the date four (4) business days following the date Landlord
acquires the Land (the "Estimated Construction Commencement Date"), in
accordance with the Plans and in accordance with the construction schedule
attached hereto as Exhibit C-1 (the "Construction Schedule") and shall
                   -----------
diligently pursue construction in an effort to complete Landlord's Improvements
on or before the Estimated Construction Completion Date (as herein defined);
provided, however, if delay is caused or contributed to by act or neglect of
Tenant, or those acting for or under Tenant including, without limitation,
changes ordered by Tenant, or delays caused by labor disputes, casualties, acts
of God or the public enemy, governmental embargo restrictions, shortages of
fuel, labor, or building materials, action or non-action of public utilities, or
of local, State or Federal governments affecting the work, or other similar
causes beyond the Landlord's reasonable control, then the time of commencement
of said construction shall be extended for the additional time caused by such
delay (such delays are each hereinafter referred to as an "excused delay"). The
date on which Landlord actually commences construction of Landlord's
Improvements shall be referred to as the "Construction Commencement Date."

             (b) Landlord shall use all reasonable efforts to substantially
complete construction of Landlord's Improvements as soon as possible following
the Construction Commencement Date in accordance with the Construction Schedule
attached hereto as Exhibit C-1, as may be extended by excused delays (the
"Estimated Construction Completion Date"). The date on which Landlord
substantially completes construction of Landlord's Improvements (except for work
to be performed by Tenant) shall be referred

                                       3

<PAGE>

to as the "Construction Completion Date." Landlord acknowledges that Tenant will
suffer significant damages if Landlord fails to deliver the Demised Premises on
or before the Estimated Construction Completion Date and that time is of the
essence with respect to Landlord's completion of the Landlord's Improvements as
required herein. If Landlord fails to cause the Landlord's Improvements to be
substantially completed on or before the Estimated Construction Completion Date,
as said date may be extended from time to time due to excused delays, Landlord
shall be obligated to pay to Tenant the following sums for each day after the
Estimated Construction Completion Date until the Construction Completion Date up
to the maximum of sixty-five (65) days of delay and thereafter, Landlord shall
be liable for Tenant's actual damages for the delay (which shall include
Tenant's actual costs incurred in connection with holding over at its present
location and/or renting reasonably acceptable substitute space): (a) for the
first thirty (30) days of delay, the sum of One Thousand Dollars ($1,000.00) per
day for each calendar day of delay; (b) for the thirty-first (31st) day through
the sixtieth (60th) day of delay, the sum of Two Thousand Five Hundred Dollars
($2,500.00) per day for each calendar day of delay; and (c) for the sixty-first
(61st) day through the sixty-fifth (65th) day of delay, the sum of Seven
Thousand Five Hundred Dollars ($7,500.00) per day for each calendar day of
delay. Notwithstanding the foregoing, in no event shall Landlord be liable to
Tenant for any punitive, special, incidental, indirect or consequential damages
of any kind whatsoever, each of which is hereby excluded by agreement of the
parties regardless of whether or not any party has been advised of the
possibility of such damages. Landlord shall pay the sums calculated above (other
than actual damages accrued after the 95th day of delay) within thirty (30) days
after the Commencement Date. In connection with the foregoing, Landlord agrees
to deposit into escrow for the benefit of Tenant all damages received from Regis
Contractors of Northern California, L.P. pursuant to Section 1.7 of that certain
Construction Management Agreement dated March 18, 1997. Tenant agrees to deliver
to Landlord an accounting of Tenant's actual damages upon request.

          B. Tenant or its architect will from time to time upon written request
of Landlord or Landlord's construction lender certify that the construction of
Landlord's Improvements has been completed to that point to the reasonable
satisfaction of Tenant. Notwithstanding the foregoing, nothing contained herein
shall be deemed to abrogate, waive or compromise any of Tenant's rights
hereunder with respect to the construction and completion of Landlord's
improvements.

          C. In the event this Lease has not been terminated pursuant to
Paragraph 49 of the Lease, Landlord and Tenant promptly shall execute a document
substantially in the form attached hereto as Exhibit E and made a part hereof,
to establish the Commencement Date and the Expiration Date.

          D. The following phrases shall have the meanings set forth below:

              (a) The phrase "commence[d][s] construction of Landlord's
improvements" as used herein means issuance of all necessary permits needed to
commence construction, a building permit, execution of a construction contract
or contracts for the completion of Landlord's Improvements in accordance with
the Plans, execution of this Lease, and

                                       4

<PAGE>

excavation work has commenced.

              (b) The phrase "substantial[ly] complete[ed] [ion] [of]
construction of Landlord's Improvements as used in this Lease shall mean the
municipality having jurisdiction thereof issues a certificate of occupancy
permitting Tenant to occupy Landlord's Improvements or takes such other action
as may be customary to permit occupancy or use thereof for the purposes provided
herein and Landlord's Improvements am otherwise ready for beneficial use and
occupancy by Tenant subject to completion of any punchlist items (as defined
herein) by Landlord and Landlord's architect certified to Tenant in writing that
Landlord's improvements have been constructed and completed in a good and
workmanlike manner in substantial accordance with the Plans and that to the best
of its knowledge the Plans comply with applicable laws, including without
limitation all building codes, zoning ordinances and regulations and the Act (as
defined herein) and Landlord's Improvements are otherwise ready for beneficial
use and occupancy by Tenant subject to completion of any punchlist items by
Landlord; provided, however, the issuance of a certificate of occupancy or such
other action as may be customary to permit occupancy or use thereof and the
issuance of the architect's certificate shall not be a condition to payment of
rent or commencement of the term if failure to secure such certificate of
occupancy or action or architect's certificate is caused by the act or neglect
of Tenant or if matters required for issuance are the responsibility of Tenant.

              (c) The phrase "usable square feet" means the square feet
contained within the inside of the exterior walls of the Building.

          E. Within fifteen (15) days after the Construction Completion Date,
Tenant, Landlord and Landlord's Architect shall prepare and execute a punchlist
(the "punchlist") of incomplete and incorrect items which shall include details
of construction and mechanical and electrical adjustments which are minor in
character and do not materially interfere with Tenant's use or enjoyment of the
Demised Premises in accordance with the provisions of this Lease, and may also
include landscaping and other items which do not materially affect Tenant's use
of the Demised Premises but which cannot be immediately completed because of
weather, or any items listed on the Plans or the Construction Schedule as items
to be completed after substantial completion of the Landlord's Improvements, if
any (such items are sometimes hereinafter referred to as "punchlist items").
Landlord shall use all reasonable efforts to complete the punchlist items as
soon as possible after its receipt of the punchlist, and to minimize disruption
of Tenant's business and other inconveniences to Tenant, subject to excused
delays. If Landlord fails to complete the punchlist items within ninety (90)
days after the receipt by Landlord of the completed punchlist by Tenant, subject
to excused delays, then Tenant shall have the right, but not the obligation, to
complete the punchlist items and Landlord shall reimburse Tenant for its
reasonable out-of-pocket expenditures in connection there upon presentation of
invoices in sufficient detail and lien waivers covering performance of the work.
Nothing herein contained shall be deemed or construed to permit Tenant to offset
against Base Rent or other charges payable by Tenant hereunder. Landlord shall
deliver to Tenant "as built" working drawings of the Landlord's Improvements
within sixty (60) days after completion of the punchlist items.

          Landlord shall maintain a retainage of a minimum of ten percent (10%)
of the cost the so-called tenant improvement portion of the Landlord
Improvements (the "TI Work") or based on

                                       5

<PAGE>

         an estimated approximate cost for the TI Work. The aforementioned
retainage shall not be released until the punchlist items for TI Work have been
completed to Tenant's reasonable satisfaction.

          F. Landlord shall at its own expense correct or repair any parts of
Landlord's Improvements that fail to conform with the requirements of the Plans
during the period of construction of Landlord's Improvements (unless Tenant is
willing to accept such non-conforming work and so notifies Landlord thereof in
writing). Landlord shall correct any defects in the construction of Landlord's
Improvements not caused by Tenant which appear within a period of one (1) year
from the Construction Completion Date, but not otherwise. Landlord shall obtain
for the joint benefit of Landlord and Tenant, a joint, non-exclusive assignment
of all contractor, subcontractor, equipment, material and manufacturers'
warranties relating to the Landlord's Improvements which shall contain a minimum
of a one (1) year warranty period commencing with the contractors' or
subcontractors' completion of the work included in Landlord's Improvements (the
"Warranties"). Furthermore, on the Construction Completion Date, Landlord shall
assign to Tenant the non-exclusive right to enforce any and all Warranties and
Landlord agrees to reasonably cooperate with Tenant's pursuit of any and all
claims under the Warranties.

          G. Tenant shall have the right to request that changes be made to the
Plans. Within ten (10) days after Tenant's requests, Landlord shall provide an
estimate of the amount that the change will increase or decrease the cost of
completing the Landlord's Improvements and the time adjustment to the
Construction Schedule, if any. If Tenant approves the change following receipt
of the estimates, Landlord shall submit a change order to its contractors to
implement the change requested by Tenant. The estimated increase or decrease in
the time required to complete the Landlord's Improvements resulting from
Tenant's change shall be reflected as an adjustment to the Construction Schedule
and shall be deemed an "excused delay" and any net increase or decrease in
Landlord's construction costs due to Tenant's change order, shall be borne by or
credited to Tenant, as the case may be, by means of an adjustment to the
Schedule of Rents in accordance with the formula established on Exhibit D.

          H. If due to change orders initiated by Tenant, Landlord's Development
Costs exceed the amount of then concurrent with any such change order, Tenant
agrees to deposit into the escrow created by the Escrow Agreement (as defined in
Paragraph 3 hereof) the total amount of any such increase in Landlord's
Development Costs in excess of. Notwithstanding the foregoing, upon the closing
of the permanent financing for the Demised Premises occurring on or after the
Commencement Date, Landlord shall reimburse Tenant for all such increased costs
and the Base Rent shall be adjusted in accordance with the formula established
on Exhibit D; provided, however, Base Rent shall not be adjusted until such time
as Tenant is reimbursed hereunder.

          5. Use.
             ---

          A. The Demised Premises shall be used and occupied for general office
purposes and for any other purpose which does not violate any applicable law,
rule, ordinance or regulation of any applicable government authority having
jurisdiction ("Tenant's Use"). Landlord represents that, to its actual
knowledge, the Demised Premises are currently zoned "O," Administrative

                                       6

<PAGE>

Professional District and R1.7/PD, low medium density residential district
under the zoning ordinance of the City of Sunnyvale, California, which zoning
classification, to Landlord's actual knowledge, will not restrict or limit
Tenant's Use; provided, however, Landlord makes no representation as to whether
a special use permit, zoning, variance or comparable relief from the local
zoning ordinance is required to conduct Tenants Use, and if such special use,
variance or comparable relief is required, Tenant shall obtain the same (at its
sole cost and expense). Landlord further represents, to its actual knowledge
without independent investigation or inquiry and subject to the foregoing
proviso, that there are no other zoning ordinances or any prohibitions
restricting or limiting Tenant's Use in any material respect. In addition,
Tenant may use all or any part of the Demised Premises for any lawful purpose
then permitted by local zoning ordinances and the certificate of occupancy, if
available; provided, however, Tenant may not use or occupy the Demised Premises,
or knowingly permit the Demised Premises to be used or occupied (including
without limitation subleasing the Demised Premises or any part thereof or
assigning this Lease to any other party conducting a business other than
Tenant's Use) or in such a manner as to cause the value or usefulness of the
Demised Premises, or any part thereof, substantially to diminish (reasonable
wear and tear excepted). Tenant shall have the exclusive right to use of and
shall have full access to the Demised Premises twenty-four (24) hours per day,
seven (7) days per week, three hundred sixty-five (365) days per year during the
term.

          B. Tenant may, if Tenant so elects, and for Tenant's sole use, install
and operate within the Building microwave ovens and install and operate within
the Building vending machines to dispense hot and cold beverages, ice cream,
candy, food and cigarettes; such machines shall be maintained in a neat and
sanitary condition and shall comply with all applicable laws and ordinances.
Tenant shall also have the right to use, install and operate within the
Building, all telecommunication lines and other telecommunication and electronic
facilities relating to services to be provided to Tenant and its subtenants and
Landlord agrees to provide all necessary easements upon the Demised Premises
reasonably required by said service provider. Upon termination of the Lease, and
if so requested by Landlord, Tenant shall, at its sole cost and expense, in a
good and workmanlike manner and in as expeditious a manner as possible, remove
any or all of such items from the Demised Premises, to the extent required by
Landlord. Tenant further agrees to repair any damage to the Demised Premises
caused by the removal of such items. In connection with any easements granted
hereunder to service providers, Landlord reserves the right to condition any
such grant upon receipt of acknowledgment from the relevant service provider(s)
that such service provider agrees to vacate the easement, and relinquish all of
its rights in the Demised Premises, effective upon the termination of the Lease.
Notwithstanding anything contained herein to the contrary, if the Lease is in
full force and effect as of the thirteenth (13th) anniversary of the
Commencement Date and Tenant is not then in default hereunder. Landlord waives
its rights hereunder to require Tenant to remove from the Demised Premises any
or at of the items referred to above, upon termination of this Lease.

          6. Condition of Demised Premises. Landlord shall construct and Tenant
             -----------------------------
shall reasonably accept Landlord's Improvements in accordance with the Plans. As
of the Commencement Date, Landlord's Improvements shall be in good working order
and condition and, subject to the items on or to be inserted on the punchlist,
constructed in substantial accordance with the Plans.

                                       7

<PAGE>

          7. Maintenance and Repairs.
             -----------------------
          A. Except as otherwise provided herein, during the term of this Lease,
Tenant shall, at Tenant's sole expense, keep the Demised Premises in good
working order, condition and repair and in compliance with all applicable laws
and shall perform all routine maintenance thereof and all necessary repairs
thereto, interior and exterior, structural and nonstructural ordinary and
extraordinary, foreseen or unforeseen, of every nature, kind and description.
When used in this Paragraph 7, "repairs" shall include all necessary
replacements, renewals, alterations, additions and betterments. If Tenant cannot
keep the Demised Premises or any portion thereof in good working order,
condition and repair, then Tenant shall replace the same in a first-class
manner. Tenant shall comply with manufacturers' recommended schedules for
warranty work. Tenant shall furnish its own cleaning services. All repairs and
replacements made by Tenant shall be at least equal in quality to the original
work and shall be made by Tenant in accordance with all applicable laws. The
necessity for or adequacy of maintenance, repairs and replacements shall be
measured by the standards which are appropriate for improvements of similar
construction and class, provided that Tenant shall in any event make all repairs
and replacements necessary to avoid any structural damage or other damage or
injury to the Demised Premises.

          B. Notwithstanding the provisions of Paragraph 7A, and Tenant's
obligations to pay for all repairs, in the event that at any time during the
term of this Lease after the expiration of the twentieth (20th) Lease Year
(commencing with the Third Extension Term), Tenant reasonably determines that
capital expenditures are required to be expended by Tenant in connection with
maintaining, repairing or replacing the roof or structural components of the
Building, or replacing the parking areas, Building plumbing, electrical heating,
ventilation, or cooling equipment, sprinkler systems, or making any other
capital expenditure required by subsequent law (any such capital expenditure
being herein referred to as a "Specified Capital Item"), then the Tenant shall
submit to Landlord a proposed budget for such capital expenses for the Specified
Capital Items and obtain Landlord's prior written approval thereof, which
approval shall not be unreasonably withheld or delayed. Upon Tenant's obtaining
Landlord's prior written approval of such Specified Capital Items and Tenant
completing such work in accordance with the requirements set forth in this
Lease, then and in that event, the Landlord agrees that it shall reimburse
Tenant for an amount ("Reimbursement Amount") equal to the actual costs incurred
in connection with the Specified Capital Item previously approved by Landlord
multiplied by a fraction, the numerator of which is the portion of the useful
life of such Specified Capital Items remaining after the then existing term and
the denominator of which is the useful life of such Specified Capital Item
(i.e., by way of example, in the event that the approved cost for an approved
Specified Capital Item was Out Thousand Dollars ($1,000) and the useful life of
such Specified Capital Item was eight (8) years and such work was commenced at
the end of the twentieth (20th) Lease Year, then in such event, Landlord would
reimburse Tenant for Five Hundred Dollars ($500) as the Reimbursement Amount).
The "useful life" of a Specified Capital Item shall be determined using the
United States Internal Revenue Service standard depreciation schedule in effect
on the date that the applicable capital expenditure is made. Notwithstanding
anything contained herein to the contrary, in the event that the Tenant
exercises its option to extend the term of the Lease, then simultaneous with the
exercise of such renewal option, the Tenant shall pay to Landlord an amount
equal to the difference between the Reimbursement Amount and the amount Landlord
would have paid as a Reimbursement Amount

                                       8

<PAGE>

had the term been extended by the Extension Term at the time such Specified
Capital Item was commenced (i.e., by way of example, in the event that the
Specified Capital Item was One Thousand Dollars ($1,000) and that the useful
life of the Specified Capital Item was eight (8) years, with such work having
been commenced at the end of the twentieth (20th) Lease Year, whereby Landlord
reimbursed Tenant a Reimbursement Amount of Five Hundred Dollars ($500), then
simultaneous with the exercise of its option to extend the Term for the Fourth
Extension Term, the Tenant would pay to Landlord an amount equal to Five Hundred
Dollars ($500)). The allocation of the costs of Specified Capital Items as set
forth in this Paragraph 7.B. shall not relieve Tenant of Tenant's maintenance
and repair obligations under this Lease

          8. Alterations. Tenant may install tenant finishes in the Demised
             -----------
Premises and make interior alterations, additional installations, modifications,
substitutions, improvements and decorations (collectively, "Alterations") in and
to the Demised Premises, subject only to the following conditions:

                  (i) any Alterations shall be made at Tenant's sole cost and
expense so that the Demised Premises shall at all times be free of liens for
labor and materials supplied to the Demised Premises;

                  (ii) without the prior written approval of Landlord, Tenant
shall make no Alterations (x) which are structural in nature or adversely affect
in any way the structure of the Demised Premises; or (y) which adversely affect
or could render void or invalidate any Warranties under this Lease. In addition,
without the prior written approval of Landlord, Tenant shall make no Alterations
to any portion of the exterior or elevation of the Building.

                  (iii) any Alterations shall be performed in a good and
workmanlike manner and in compliance with all applicable laws and requirements
of governmental authorities having jurisdiction and applicable insurance
requirements and shall not violate any term of any agreement or restriction to
which the Demised Premises are subject;

                  (iv) Tenant, at its sole cost and expense, shall cause its
contractors to maintain builder's risk insurance and such other insurance
(including, without limitation, workers compensation insurance) as is then
customarily maintained for such work, all with insurers licensed by the State of
California;

                  (v) At least fifteen (15) days prior to Tenant's commencement
of any Alterations costing in excess of One Million Dollars ($1,000,000.00), the
plans and specifications therefor shall be submitted to Landlord for Landlord's
review and approval, which approval shall not be unreasonably "withheld or
delayed provided that the provisions of this subparagraph (v) shall not apply to
initial tenant improvements needed to locate a subtenant in the Demised
Premises; and

                  (vi) To the extent not inconsistent with the requirement set
forth above, Tenant shall not be required to obtain Landlord's consent to
Alterations which are a subtenant's initial tenant improvements.

Any Alteration shall, when completed, be of such character as not to reduce the
value or

                                       9

<PAGE>

utility of the Demised Premises or the Building to which such Alteration is made
below its value or utility to Landlord immediately before such Alteration, nor
shall such Alteration alter the exterior of the Improvements or reduce the area
or cubic content of the Building, nor change the character of the Demised
Premises or the Building as to use without Landlord's express written consent.

         No change, alteration, restoration or new construction shall be in or
connect the improvements with any property, building or other improvement
located outside the boundaries of the Land, nor shall the same obstruct or
interfere with any existing casement.

         Tenant shall notify Landlord in writing 30 days prior to commencing any
alterations, additions or improvements to the Demised Premises so that Landlord
shall have the right to record and post notices of nonresponsibility on the
Demised Premises. Within a reasonable time period prior to commencing the
alterations, additions or improvements, Tenant shall provide Landlord with
copies of all plans and specifications prepared in connection with any such
alteration, addition or improvement, as well as copies of each material
amendment and change thereto, if and when applicable.

         All of Tenant's generators and uninterruptible power supply equipment
(but in no event including the primary HVAC system serving the Building), trade
fixtures, movable partitions, furniture, machinery and furnishings installed by
Tenant or assignees, subtenants or licensees of Tenant shall remain the property
of the owner thereof with the right of removal, whether or not affixed and or
attached to the real estate and the owner thereof shall be entitled to remove
the same or any part thereof during the term or at the end of the term provided
herein, provided that such owner shall repair any damage caused by such removal.
Except as otherwise provided herein, all Alterations made or installed by Tenant
shall remain the Property of Tenant and Tenant shall have the right to remove
the Alterations at any time during the term hereof provided Tenant shall repair
any damage resulting therefrom and leave the Demised Premises in a commercially
reasonable condition. Notwithstanding the foregoing, any Alterations on the
Demised Premises at the end of the term shall become the property of Landlord
without payment therefor by Landlord, and shall be surrendered to Landlord at
the expiration of the term of this Lease; provided however, if the Lease term
ends prior to the thirteenth (13th) anniversary of the Lease Commencement Date,
if so requested by Landlord, Tenant shall, at its sole cost and expense and in
as expeditious a manner as possible remove any or all of such Alterations from
the Demised Premises, to the extent required by Landlord. Tenant further agrees
to repair any damage resulting therefrom and leave the Demised Premises in a
commercially reasonable condition.

9.       Signs.
         -----

Tenant may install, at its expense and pursuant to the Plans, a monument
identification sign containing Tenant's name at a location depicted on Exhibit B
unless such location would cause a violation of applicable laws in which event
said monument identification sign shall be moved to a location mutually
acceptable to the parties. Tenant shall also have the right to place any
additional signs at the Demised Premises without the prior consent of Landlord,
provided that such sign or signs (a) do not cause any structural damage or other
damage to the Building; (b) do not violate applicable governmental laws,
ordinances, rules or

                                       10

<PAGE>

regulations; (c) do not violate any existing restrictions affecting the Demised
Premises; and (d) are compatible with the architecture of the Building and the
landscaped area adjacent thereto. Tenant shall remove all signage from the
Demised Premises at the end of the term.

          B. Landlord may place signs on the Demised Premises identifying Tenant
prior to the Construction Completion Date, provided Tenant has approved each
sign, such approval not to be unreasonably withheld.

          10. Services.
              --------

          A. Landlord shall provide all utility equipment, distribution systems,
fixtures and parts to the Demised Premises in accordance with the Plans, and
shall in all other respects prepare the Demised Premises to accept all utilities
to be used by Tenant during the terra of the Lease as contemplated by the Plans
including all connection, tap-in and impact fees, any charges for the
underground installation of electric, gas or other utilities or services, and
other charges relating to the extension of or change in the facilities necessary
to provide the Demised Premises with adequate utilities services. Tenant shall
contract for and pay directly for the cost of usage of all utilities including
all charges for water, heat, gas, light, garbage, electricity, telephone,
sewage, steam, power or other public or private utility services. If after
Landlord's installation of the utility systems required to be provided herein,
any bond, charge or fee is required by the state in which the Demised Premises
are located, or any city or other agency, subdivision, or instrumentality
thereof, or by any utility company furnishing services or utilities to the
Demised Premises, as a condition precedent to continuing to furnish utilities or
services to the Demised Premises, such bond, charge or fee shall be deemed to be
a utility charge payable by Tenant. To the extent existing utility easements on
the Demised Premises are not sufficient to provide utility and communication
services to the Demised Premises for Tenant's Use, Landlord agrees to grant
additional easements to utility providers, including telecommunication and
electronic service providers, if reasonably required by Tenant.

          B. The Demised Premises shall include all of the improvements shown on
the Site Plan, including, without limitation, exclusive use of the paved parking
as set forth on the Site Plan.

          C. Tenant acknowledges that any one or more of the services provided
for in paragraph 10 hereof may be interrupted or suspended by reason of
accident, repair, alterations or improvements necessary to be made, strike,
lockout, misuse or neglect by Tenant or Tenant's agents, employees or invitees,
or by shortages of fuel or other energy supplies to be provided by public or
private utilities or supplies or by other matters, and Landlord shall not be
liable to Tenant therefor, nor shall Tenant have any right to terminate the
Lease or other rights against Landlord in the event of a failure, interruption
or suspension of any of the aforesaid services.

          11. Compliance with Law.
              -------------------

          A. Landlord covenants that the Demised Premises (except trade
fixtures, equipment, machinery or any other item constructed or installed by
Tenant) will materially conform as of the Commencement Date to any applicable
laws, orders, statutes, ordinances, rules, regulations and requirements of
federal, state and municipal governments, including, without limitation, all

                                       11

<PAGE>

applicable rules and regulations of the Board of Fire Underwriters and any
requirements of the certificate of occupancy or any permit with respect to the
Demised Premises and the sidewalks, curbs, roadways, alleys, entrances or other
facilities adjacent or appurtenant thereto. Landlord shall be responsible for
procuring building and other permits and licenses necessary for construction of
Landlord's Improvements.

          B. Tenant shall throughout the term of this Lease, at Tenant's sole
cost, materially comply with or remove or cure any violation of any applicable
laws, orders, statutes, ordinances, rules, regulations and requirements of
federal, state and municipal governments, including, without limitation, any
applicable laws, orders, statutes, ordinances, rules, regulations and
requirements of any federal, state or local government relating to occupational
safety and health (collectively, the "OSHA Regulations"), all applicable rules
and regulations of the Board of Fire Underwriters and any requirements of the
certificate of occupancy or any permit with respect to the Demised Premises and
the sidewalks, curbs, roadways, alleys, entrances or railroad track facilities
adjacent or appurtenant thereto, and whether the compliance, curing or removal
of any such violation and the costs and expenses necessitated thereby shall have
been foreseen or unforeseen, ordinary or extraordinary, and whether or not the
same shall be presently within the contemplation of Landlord or Tenant or shall
involve any change of governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and irrespective of
the costs thereof; provided, however, that Landlord shall be responsible, at
Landlord's sole cost, to make all repairs needed for the Demised Premises to
comply with all laws if said repair is required within one (1) years after the
Commencement Date and is necessary due to a defect in the construction of the
Landlord's Improvements including without limitation, a failure to construct the
Landlord's improvements so that the Demised Premises are in compliance with all
laws as of the Commencement Date. Tenant, at its sole cost and expense, shall
comply with all agreements, contracts, easements, restrictions, reservations or
covenants, if any, affecting the Demised Premises or hereafter created by Tenant
and consented to, in writing, by Tenant or requested, in writing, by Tenant.
Tenant shall also comply with, observe and perform all provisions and
requirements of all policies of insurance at any time in force with respect to
the Demised Premises and shall comply with all development permits issued by
governmental authorities issued in connection with development of the Demised
Premises. Tenant shall procure and maintain all permits and licenses required
for the transaction of Tenant's business at the Demised Premises, including with
limitation, any special use permit, zoning variance or comparable zoning relief
necessary for Tenant's Use.

          12. Landlord's Title, Authority, and Quiet Enjoyment: Tenant's
              ----------------------------------------------------------
Authority.
---------

          A. Landlord represents that it will have, as of the Commencement Date,
marketable fee simple title to the Demised Premises, subject to the exceptions
to title currently encumbering the Premises as described in Exhibit H, and any
additional exceptions to title created in connection with Landlord's acquisition
or development of the Demised Premises, or financing of such acquisition of
development (collectively referred to herein as the "Permitted Exceptions").
Landlord represents that any such additional exceptions to title created in
connection with Landlord's acquisition or development of the Demised Premises or
financing of such acquisition or development shall not materially interfere with
Tenant's intended use of the Demised Premises. Any lien claims properly bonded
over or insured over by title insurance shall be deemed to be Permitted
Exceptions hereunder.

                                       12

<PAGE>

          B. Landlord represents and warrants that it has full and complete
authority to enter into this Lease under all of the terms, conditions and
provisions set forth herein, and so long as Tenant keeps and substantially
performs each and every term, provision and condition herein contained on the
part of Tenant to be kept and performed, Tenant shall peacefully and quietly
enjoy the Demised Premises without hindrance or molestation by Landlord or by
any other person claiming by, through or under Landlord, subject to the terms of
the Lease. Without limiting the foregoing, Landlord covenants to perform all
obligations to be performed by Landlord and to pay as and when due all amounts
to be paid by Landlord under any mortgage, deed of trust, ground lease or other
instrument encumbering the Demised Premises. Each individual executing this
Lease on behalf of Landlord represents and warrants to Tenant that he or she is
duly authorized to do so.

          C. Tenant represents and warrants that it has full and complete
authority to enter into this Lease under all of the terms, conditions and
provisions set forth herein.

          D. Tenant hereby approves the condition of Landlord's title to the
Demised Premises. This Lease shall be subject to the Permitted Exceptions and
Landlord shall not permit or cause any easements, covenants, restrictions,
conditions or other changes in Landlord's title which would materially and
adversely impact Tenant's Use. Landlord shall notify Tenant in writing prior to
permitting or causing any easements, covenants, restrictions, or conditions to
be placed of record.

          13. Subordination. The priority of this Lease and the leasehold estate
              -------------
of Tenant created hereunder are and shall be subject and subordinate to the lien
of any mortgage, deed of trust, sale-leaseback, ground lease or similar
encumbrance, whether such encumbrance is placed against the fee or leasehold
estate, affecting the Demised Premises and to all renewals, modifications,
consolidations, replacements and extensions thereof, and advances thereunder;
provided, however, with respect to any mortgage, deed of trust, sale-leaseback,
ground lease or similar encumbrance such subordination shall be subject to
receipt by Tenant of a nondisturbance agreement in form reasonably required by
any such lienholder or ground Lessor (collectively, a "Mortgagee")and reasonably
acceptable to Tenant. Tenant agrees at any time hereafter, upon twenty (20) days
prior written notice, to execute and deliver any instruments, releases or other
documents that may reasonably be required for the purpose of subjecting and
subordinating this Lease, as above provided, to the lien of any such mortgage,
deed of trust, ground lease, sale-leaseback or similar encumbrance in a form
reasonably acceptable to Tenant and the holder of such mortgage, provided said
subordination provides that all insurance proceeds and condemnation awards will
be made available for the restoration of the Demised Premises, as provided
herein, and that Tenant's rights hereunder will not be disturbed unless Tenant
is in default beyond all applicable cure periods. Any fee which Landlord's
lender or ground lessor may charge for such agreement shall be paid by Landlord.

          In the event of any act or omission of Landlord constituting a default
by Landlord, Tenant shall not exercise any remedy until Tenant his given
Landlord and any mortgagee, ground lessor or sale-leaseback lessor of the
Demised Premises that has provided Tenant with written notice of its interest in
the Demised Premises and a notice address for each such party a prior thirty
(30) day written notice of such act or omission and until a reasonable period of
time to allow Landlord or the mortgagee, ground lessor or sale-leaseback lessor
to remedy such act or

                                       13

<PAGE>

omission shall have elapsed following the giving of such notice; provided,
however, if such act or omission cannot, with due diligence and in good faith,
be remedied within such thirty (30) day period, then Landlord or any such
mortgagee, ground lessor or sale-leaseback lessor shall be allowed such further
period of time as may be reasonably necessary provided that it commence
remedying the same with due diligence and in good faith within said thirty (30)
day period.

          If any Mortgagee shall succeed to the rights of Landlord under this
Lease or to ownership of the Demised Premises, whether through possession or
foreclosure or the delivery of a deed to the Demised Premises, then, upon
written request of such mortgagee so succeeding to Landlord's rights hereunder,
Tenant shall attorn to and recognize such mortgagee, ground lessor or
sale-leaseback lessor as Tenant's landlord under this Lease, and shall promptly
execute and deliver any instrument that such mortgagee may reasonably request to
evidence such attornment (whether before or after making of the mortgage, ground
lease or sale-leaseback lease). In the event of any other transfer of Landlord's
interest hereunder, upon the written request of the transferee and Landlord,
Tenant shall attorn to and recognize such transferee as Tenant's landlord under
this Lease and shall promptly execute and deliver any instrument that such
transferee and Landlord may reasonably request to evidence such attornment.

          14. Assignment and Sublease. Tenant, if there is no Material Breach
              -----------------------
(as herein defined) by Tenant hereunder, shall have the right to assign this
Lease or to sublease all or any portion of the Demised Premises, without
Landlord's written consent in accordance with the terms of this Paragraph 14.

          Tenant may assign this Lease or sublet the Demised Premises to an
affiliate or subsidiary more than fifty percent (50%) of the voting stock of
which is owned directly or indirectly by the direct or remote parent of Tenant
(without Landlord's consent, upon prior written notice to Landlord) and further
Tenant's interest in this Lease may be assigned to and assumed by a successor to
Tenant pursuant to a purchase of all or substantially all of the assets of
Tenant in connection with the sale of such assets or to any entity which
acquires all of Tenant's capital stock (without Landlord's consent upon prior
written notice to Landlord).

          Any assignment or sublease shall require the assignee or subtenant to
comply with all terms of this Lease except for any sublease term, which shall be
at Tenant's discretion (but in no event extend beyond the term of this Lease),
and a copy of such sublease or assignment shall be delivered to Landlord at
least ten (10) days prior to the commencement of such sublease or assignment.

          Any assignee shall assume, by instrument in form and content
satisfactory to Landlord, the due performance of all of Tenant's obligations
under this Lease, including any accrued obligations at the time of the effective
date of the assignment, and such assumption agreement shall state that the same
is made by the assignee for the express benefit of Landlord as a third party
beneficiary thereof.

          Each sublease permitted by this Paragraph 14 shall be subject and
subordinate to all of the terms, covenants and conditions of this Lease and to
all of the rights of Landlord hereunder; and in the event this Lease shall
terminate before the expiration of such sublease, the sublessee thereunder will,
at Landlord's option, attorn to Landlord and waive any rights the sublessee may

                                       14

<PAGE>

have to terminate the sublease or to surrender possession thereunder, as a
result of the termination of this Lease.

          Tenant agrees to pay on behalf of Landlord any and all costs of
Landlord or otherwise occasioned by such assignment or subletting, including
without limitation, the cost of any alteration, addition, improvement or other
renovation or refurbishment to the Demised Premises made in connection with such
assignment or subletting and any cost imposed by any governmental authority in
connection with any of the foregoing.

          Any assignment or subletting under this Paragraph 14 shall not relieve
Tenant (or any guarantor of Tenant's obligations under the Lease or any
assignee) of its obligations hereunder. Any assignment or subletting of this
Lease which is not in compliance with the provisions of this Paragraph 14 shall
be of no effect and void. Except as permitted in this Paragraph 14, Tenant shall
not transfer, sublet, assign, or otherwise encumber its interest in the Lease or
the Demised Premises, unless consented to by Landlord.

          No assignment or subleasing hereunder shall relieve Tenant from any of
Tenant's obligations in this Lease contained.

          All profits from any such assignment or subletting shall be the
property of Tenant and not Landlord.

          15. Lease Extension. If this Lease shall not have been terminated
              ---------------
pursuant to any provisions hereof and there is no Material Breach (as defined
herein) by Tenant hereunder at the time set for exercise of the Extension Terms
(as herein defined) and at the time set for commencement thereof, then Tenant
may, at Tenant's option, extend the term of this Lease for five (5) successive
additional terms of four (4) years each (each an "Extension Term," collectively
the "Extension Terms") commencing on the expiration of the original term, or the
immediately preceding Extension Term, as the case may be. Tenant may exercise
such option by giving Landlord written notice at least ten (10) months prior to
the expiration of the original or the immediately preceding Extension Term, as
the case may be. Upon the giving by Tenant to Landlord of such written notice
and the compliance by Tenant with the foregoing provisions of this Paragraph 15,
this Lease shall be deemed to be automatically extended upon all the Covenants,
agreements, terms, provisions and conditions set forth in this Lease, except
that Base Rent for each such Extension Term shall be as provided on Exhibit D.

          If Tenant fails or omits to so give to Landlord the written notice
referred to above, Landlord shall provide Tenant with written notice of Tenant's
failure to exercise the Extension Term, and upon receipt of such notice, Tenant
shall be allowed fifteen (15) days to exercise the extension option allowed for
herein. If Landlord fails to provide such notice, Tenant's renewal option shall
expire upon the expiration of the then current term. Failure to respond to
Landlord's notice within such fifteen (15) days shall be deemed to be a waiver
by Tenant of its extension option hereunder.

          16. Impositions.
              -----------

          A. Tenant covenants and agrees to pay during the term of this Lease,
as Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof,

                                       15

<PAGE>

all impositions described herein that accrue on or after the Commencement
Date, which include without limitation, all real estate taxes, special
assessments, water rates and charges, sewer rates and charges, including any sum
or sums payable for future sewer or water capacity increases, charges for public
utilities, street lighting, excise levies, licenses, permits, inspection fees,
other governmental charges, and all other charges or burdens of whatsoever kind
and nature (including costs, fees, and expenses of complying with any
restrictive covenants or similar agreements to which the Demised Premises are
subject), incurred in the use, occupancy, ownership, operation, leasing or
possession of the Demised Premises, without particularizing by any known name or
by whatever name hereafter called, and whether any of the foregoing be general
or special, ordinary or extraordinary, foreseen or unforeseen (all of which are
sometimes herein referred to as Impositions"), which at any time during the term
may have been or may be assessed, levied, confirmed, imposed upon, or become a
lien on the Demised Premises, or any portion thereof, or any appurtenance
thereto, rents or income therefrom, and such easements or rights as may now or
hereafter be appurtenant or appertain to the use of the Demised Premises.

          B. If, at any time during the term of this Lease, any method of
taxation shall be such that there shall be levied, assessed or imposed on
Landlord, or on the Basic Rent or Additional Rent, or on the Demised Premises or
on the value of the Demised Premises, or any portion thereof, a capital levy,
sales or use tax, gross receipts tax or other tax on the rents received
therefrom, or a franchise tax, or an assessment, levy or charge measured by or
based in whole or in part upon such rents or value, Tenant covenants to pay and
discharge the same, it being the intention of the parties hereto that the rent
to be paid hereunder shall be paid to Landlord absolutely net without deduction
or charge of any nature whatsoever foreseeable or unforeseeable, ordinary or
extraordinary, or of any nature, kind or description, except as in this Lease
otherwise expressly provided. Nothing in this Lease contained shall require
Tenant to pay any municipal, state or federal net income or excess profits taxes
assessed against Landlord, or any municipal, state or federal capital levy,
estate succession, inheritance or transfer taxes of Landlord, or corporation
franchise taxes imposed upon any corporate owner of the fee of the Demised
Premises.

          C. Tenant covenants to furnish Landlord, within 30 days after the date
upon which any Imposition or other tax assessment, levy or charge is payable by
Tenant, official receipts of the appropriate taxing authority, or other
appropriate proof satisfactory to Landlord, evidencing the payment of the same.
The certificate, advice or bill of the appropriate official designated by law to
make or issue the same or to receive payment of any Imposition or other tax,
assessment, levy or charge may be relied upon by Landlord as sufficient evidence
that such Imposition or other tax, assessment, levy or charge is due and unpaid
at the time of the making or issuance of such certificate, advice or bill,
unless Tenant provides Landlord with evidence to the contrary.

          D. At Landlord's written demand after any Event of Default (as defined
in Section 20 hereinafter) and for as long as such Event of Default is uncured,
or upon the request of any Mortgagee of the Demised Premises, (but only after an
Event of Default and for as long as such Event of Default is uncured) Tenant
shall pay to Landlord the known or estimated yearly real estate taxes and
assessments payable with respect to the Demised Premises in monthly payments
equal to one-twelfth of the known or estimated yearly real estate taxes and
assessments next payable with respect to the Demised Premises. From time to time
Landlord may re-estimate the amount of real estate taxes and assessments, and in
such event Landlord shall notify Tenant,

                                       16

<PAGE>

in writing, of such re-estimate and fix future monthly installments for the
remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-estimated amount over the balance of such period after
giving credit for payments made by Tenant on the previous estimate. If the total
monthly payments made by Tenant pursuant to this Paragraph 16D shall exceed the
amount of payments necessary for said taxes and assessments, such excess shall
be credited on subsequent monthly payments of the same nature; but if the total
of such monthly payments so made under this paragraph shall be insufficient to
pay such taxes and assessments when due, then Tenant shall pay to Landlord such
amount as may be necessary to make up the deficiency.

          E. Tenant shall have the right at its own expense to contest the
amount or validity, in whole or in part, of any Imposition by appropriate
proceedings diligently conducted in good faith, but only after Tenant provides
Landlord or the Mortgagee reasonable security, or Tenant makes payment of such
Imposition, unless such payment, or a payment thereof under protest, would
operate as a bar to such contest or interfere materially with the prosecution
thereof, in which event, notwithstanding the provisions of Paragraph 16A hereof
Tenant may postpone or defer payment of such Imposition if neither the Demised
Premises nor any portion thereof would, by reason of such postponement or
deferment, be in danger of being forfeited or lost, and (b) Tenant is not then
in Material Breach of this Lease. Upon the termination of any such proceedings,
Tenant shall pay the amount of such Imposition or part thereof, if any, as
finally determined in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings, together with any costs,
fees, including attorney's fees, interest, penalties, fines and other liability
in connection therewith, and upon such payment Landlord shall return all amounts
or certificates deposited with it with respect to the contest of such
Imposition, as aforesaid, or, at the written direction of Tenant, Landlord shall
make such payment out of the funds on deposit with Landlord and the balance, if
any, shall be returned to Tenant. Tenant shall be entitled to the refund of any
Imposition, penalty, fine and interest thereon received by Landlord which have
been paid by Tenant or which have been paid by Landlord but for which Landlord
has been previously reimbursed in full by Tenant. Landlord shall not be required
to join in any proceedings referred to in this Paragraph 16E unless the
provisions of any law, rule or regulation at the time in effect shall require
that such proceedings be brought by or in the name of Landlord, in which event
Landlord shall join in such proceedings or permit the same ________ brought in
Landlord's name upon compliance with such conditions as Landlord may reasonably
require. Landlord shall not ultimately be subject to any liability for the
payment of any fees, including attorney's fees, costs and expenses in connection
with such proceedings. Tenant agrees to pay all such fees (including reasonable
attorney's fees), costs and expenses or, on demand, to make reimbursement to
Landlord for such payment. If Landlord is provided a certificate of deposit or
other interest bearing instrument as security for the payment of the contested
Imposition, during the time when any such certificate of deposit or other
interest bearing instrument is on deposit with Landlord, and prior to the time
when the same is returned to Tenant or applied against the payment, removal or
discharge of Impositions, as above provided, Tenant shall be entitled to receive
all interest paid thereon, if any. Cash deposits shall not bear interest.

17.      Insurance.
         ---------

          A. During the term of this Lease, during any extension thereof, and
during any

                                       17

<PAGE>

holdover period, Tenant shall at its cost and expense procure and keep in force
a policy of comprehensive public liability insurance, with limits of not less
than $1,000,000 for injury to any one person, $2,000,000 as to any one accident,
and $100,000 as to property damage, all on a per occurrence basis which policy
shall name Landlord and its managing agent as additional insureds. A certificate
of such insurance shall be delivered to Landlord prior to the Commencement Date
and shall provide that same may not be cancelled or lowered in amounts without
prior written notice of not less than thirty (30) days to Landlord and Landlords
mortgagee. Notwithstanding the foregoing, Tenant may insure the foregoing risks
under its blanket policy or elect to self-insure such risks as provided in
Paragraph 17E below. Any such liability insurance shall contain a contractual
liability endorsement covering Tenants indemnification obligations under this
Lease.

          B. During the term of this Lease and any extension thereof, Tenant, at
its sole cost and expense, shall obtain and continuously maintain in full force
and effect, policies of insurance covering the Improvements constructed,
installed or located on the Demised Premises naming the Landlord, as loss payee
as its interest may appear, against (a) loss or damage by fire; (b) loss or
damage from such other risks or hazards now or hereafter embraced by an
"Extended Coverage Endorsement," including, but not limited to, windstorm, hail,
explosion, vandalism, riot and civil commotion, damage from vehicles, smoke
damage, water damage and debris removal; (c) loss for flood if the Demised
Premises are in a designated flood or flood insurance area; (d) loss for damage
by earthquake if the Demised Premises are located in an earthquake-prone area;
(e) loss from so-called explosion, collapse and underground hazards; and (f)
loss or damage from such other risks or hazards of a similar or dissimilar
nature which are now or may hereafter be customarily insured against with
respect to improvements similar in construction, design, general location, use
and occupancy to the Improvements. At all times, such insurance coverage shall
be in an amount equal to 100% of the then "full replacement cost" of the
Improvements. "Full Replacement Cost" shall be interpreted to mean the cost of
replacing the improvements without deduction for depreciation or wear and tear,
and it shall include a reasonable sum for architectural, engineering, legal,
administrative and supervisory fees connected with the restoration or
replacement of the Improvements in the event of damage thereto or destruction
thereof. If a sprinkler system shall be located in the Improvements, sprinkler
leakage insurance shall be procured and continuously maintained by Tenant at
Tenant's sole cost and expense. Tenant shall cause to be inserted in the policy
of insurance required by this Paragraph 17B a so-called "waiver of subrogation"
clause as to Landlord and Landlord's insurer.

          C. During the term of this Lease and any extension thereof, Tenant
shall maintain Workman's Compensation Insurance in accordance with the laws of
the State of California.

          D. Tenant shall maintain insurance coverage (including loss of use and
business interruption coverage) upon Tenant's business and upon all personal
property of Tenant or the personal property of others kept, stored or maintained
on the Demised Premises against loss or damage by fire, windstorm or other
casualties or causes for such amount as Tenant may desire, and Tenant agrees
that such policies shall contain a waiver of subrogation clause as to Landlord
and Landlord's insurer.

          E. Tenant's right to self-insure with respect to liability insurance
is conditioned upon

                                       18

<PAGE>

Tenant or Tenant's guarantor maintaining a net worth of at least
$100,000,000.00. Tenant shall furnish Landlord written confirmation that Tenant
has elected to self-insure with respect to liability insurance (if that is the
case), and if so, that Tenants or Tenants guarantor's net worth is at least
$100,000,000.00 as evidenced by audited financial statements of Tenant or
Tenant's guarantor or an affidavit from Tenant's or Tenant's guarantor's chief
financial officer. If Tenant self-insures with respect to liability insurance,
then Tenant agrees to indemnify, defend, and hold Landlord harmless from and
against any loss, damage, costs, fees (including attorney's, fees), claims,
demands, actions, causes of action, judgments, suits and liability that was or
would have been covered by the insurance policy or policies replaced by
self-insurance and such self-insurance shall not affect the nonliability of
Landlord under Paragraph 17F as to any loss or damage caused by the perils
described therein. The indemnification contained in this Paragraph 17E is in
addition to, and not in lieu of, any covenants or obligations of Tenant
contained in the other Paragraphs of this Lease. If Tenant so elects to become a
self-insurer with respect to liability insurance, Tenant shall deliver to
Landlord notice in writing of the required coverages which it is self-insuring
setting forth the amount, limits, and scope of the self-insurance in respect to
each type of coverage self-insured. Tenant, at Landlord's request, shall provide
to Landlord's mortgagee or assignee a certificate satisfactory to such mortgagee
or assignee setting forth the self-insured coverages, if any, and stating that
all losses shall be payable to such mortgagee and/or assignee as its interests
may appear.

          Nothing in this Paragraph shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
Paragraphs of this Paragraph under a blanket insurance policy or policies
(certificates thereof reasonably satisfactory to Landlord shall be delivered to
Landlord) which may cover other properties owned or operated by Tenant as well
as the Demised Premises; provided, however, that any such policy of blanket
insurance of the kind provided for shall specify therein the amounts thereof
exclusively allocated to the Demised Premises or Tenant shall furnish Landlord
and the holder of any fee mortgage with a written statement from the insurers
under such policies specifying the amounts of the total insurance exclusively
allocated to the Demised Premises; and provided, further, however, that such
politics of blanket insurance shall, as respects the Demised Premises, contain
the various provisions required of such an insurance policy by the foregoing
provisions of this Paragraph 17.

          F. Tenant hereby releases Landlord (and Landlord's assignees,
employees, agents and servants) and waives any claims it may have against
Landlord from any liability for damage to or destruction of Tenant's trade
fixtures, personal property (including also property under the cam, custody, or
control of Tenant), machinery, equipment, furniture, fixtures and business
interests on the Demised Premises, except arising from Landlord's or Landlord's
assignees', employees', agents' or servants' negligence. This Paragraph shall
apply especially, but not exclusively, to damage or destruction caused by the
flooding of basements or other subsurface areas, or by refrigerators, sprinkling
devices, air conditioning apparatus, water, snow, frost steam, excessive heat or
cold, falling plaster, broken glass, sewage, gas, odors or noise, or the
bursting or leaking of pipes or plumbing fixtures, and shall apply equally,
whether any such damage results from the act or omission of other tenants or
occupants in the Demised Premises or any other persons, and whether such damage
be caused by or result from any of the aforesaid, or shall be caused by or
result from other, circumstances of a similar or dissimilar nature.

          G. Tenant shall require each of its contractors and tradespeople to
carry contractors

                                       19

<PAGE>

liability/completed operations insurance, in the amounts specified in Paragraph
17A above, from companies licensed to do business in the State of California.

          H. Upon expiration of the term of this Lease, the unearned premium
upon any insurance policies or certificates thereof lodged with Landlord by
Tenant shall be payable to Tenant, provided that Tenant shall not then be in
default in keeping, observing or performing the terms and conditions of this
Lease.

          18. Destruction and Restoration.
              ---------------------------

          A. Tenant covenants and agrees that in case of damage to or
destruction of the Improvements after the Commencement Date of the term of this
Lease, by fire or otherwise, Tenant, at its sole cost and expense, shall
promptly restore, repair, replace and rebuild the same as nearly as possible to
the condition that the same were in immediately prior to such damage or
destruction with such changes or alterations (made in conformity with Paragraph
8 hereof) as may be reasonably acceptable to Landlord or required by law. Tenant
shall forthwith give Landlord written notice of such damage or destruction upon
the occurrence thereof and specify in such notice, in reasonable detail, the
extent thereof. Such restoration, repairs, replacements, rebuilding, changes and
alterations, including the cost of temporary repairs for the protection of the
Demised Premises, or any portion thereof, pending completion thereof are
sometimes hereinafter referred to as the "Restoration." The Restoration shall be
carried on and completed in accordance with the provisions and conditions of
Paragraphs 8 and 18B hereof. If the net amount of the insurance proceeds (after
deduction of all costs, expenses and fees related to recovery of the insurance
proceeds) recovered by Landlord and held by Landlord and Tenant as co-trustees
is reasonably deemed insufficient by Landlord to complete the Restoration of
such improvements (exclusive of Tenant's personal property and trade fixtures;
which shall be restored, repaired or rebuilt out of Tenant's separate funds),
Tenant shall, upon request of Landlord, deposit with Landlord and Tenant, as
co-trustees, a cash deposit equal to the reasonable estimate of the amount
necessary to complete the Restoration of such improvements less the amount of
such insurance proceeds available.

          B. All insurance moneys recovered by Landlord held by Landlord and
Tenant as co-trustees on account of such damage or destruction, less Landlord's
reasonable out-of-pocket costs, if any, to Landlord of such recovery, shall be
applied to the payment of the costs of the Restoration and shall be paid out
from time to time as the Restoration progresses upon the written request of
Tenant, accompanied by a certificate of the architect or a qualified
professional engineer in charge of the Restoration stating that as of the date
of such certificate (a) the sum requested is justly due to the contractors,
subcontractors, materialmen, laborers, engineers, architects, or persons, firms
or corporations furnishing or supplying work, labor, services or materials for
such Restoration, or is justly required to reimburse Tenant for any expenditures
made by Tenant in connection with such Restoration, and when added to all sums
previously paid out by Landlord does not exceed the value of the Restoration
performed to the date of such certificate by all of said parties; (b) except for
the amount, if any, stated in such certificates to be due for work, labor,
services or materials, there is no outstanding indebtedness known to the person
signing such certificate, after due inquiry, which is then due for work, labor,
services or materials in connection with such Restoration, which, if unpaid,
might become the basis of a mechanic's lien or similar lien with respect to the
Restoration or a lien upon the

                                       20

<PAGE>

Demised Premises, or any portion thereof; and (c) the costs, as estimated by the
person signing such certificate, of the completion of the Restoration required
to be done subsequent to the date of such certificate in order to complete the
Restoration do not exceed the sum of the remaining insurance moneys, plus the
amount deposited by Tenant, if any, remaining in the hands of Landlord after
payment of the sum requested in such certificate.

          Tenant shall furnish Landlord within thirty (30) days after Tenant's
receipt of each progress payment with evidence reasonably satisfactory to
Landlord that Tenant has paid all bills in respect to any work, labor, services
or materials performed, furnished or supplied in connection with such
Restoration which was covered by the previous progress payment. Landlord shall
not be required to pay out or consent to any additional insurance moneys where
Tenant fails to supply satisfactory evidence of the payment of work, labor,
services or materials performed, furnished or supplied, as aforesaid. If the
insurance moneys in the hands of Landlord and Tenant as co-trustees, and such
other sums, if any, deposited with Landlord and Tenant as co-trustees pursuant
to this Paragraph 18, shall be insufficient to pay the entire costs of the
Restoration, Tenant agrees to pay any deficiency promptly upon demand so long as
Tenant has participated in the adjustment of the insurance proceeds; provided,
however, Landlord shall retain ultimate control over any final adjustment with
the property insurer, and provided further that notwithstanding that the
insurance moneys are insufficient to pay the cost of the Restoration, Tenant
shall continue to be liable for full payment of Base Rent, Additional Rent and
any other amounts due and payable hereunder. Upon completion of the Restoration
and payment in full thereof by Tenant, Landlord shall within a reasonable period
of time thereafter, turn over to Tenant all insurance moneys or other moneys
then remaining upon submission of proof reasonably satisfactory to Landlord that
the Restoration has been paid for in full and the damaged or destroyed Building
and other improvements repaired, restored or rebuilt as nearly as possible to
the condition they were in immediately prior to such damage or destruction, or
with such changes or alterations as may be made in conformity with Paragraphs 8
and 18A hereof.

          C. No destruction of or damage to the Demised Premises, or any portion
thereof, by fire, casualty or otherwise shall permit Tenant to surrender this
Lease or shall relieve Tenant from its liability to pay to Landlord the Base
Rent and Additional Rent payable under this Lease or from any of its other
obligations under this Lease, an ___tenant waives any rights now or hereafter
conferred upon Tenant by present or future law or otherwise to quit or surrender
this Lease or the Demised Premises, or any portion thereof, to Landlord or to
any suspension, diminution, abatement or reduction of rent on account of any
such damage or destruction.

          D. Landlord agrees, subject to the provisions of Paragraphs 8 and 18
hereof, to in all instances turn over and make available to Tenant all insurance
moneys contemplated by Paragraph 18B hereof.

          19. Condemnation.
              ------------

          A. If, during the term of this Lease, the entire Demised Premises
shall be taken as the result of the exercise of the power of eminent domain
(hereinafter referred to as the "Proceedings"), this Lease and all right, title
and interest of Tenant hereunder shall cease and come to an end on the date of
vesting of title pursuant to such Proceedings and Landlord shall be entitled to
and shall receive the total award made in such Proceedings; provided that Tenant
shall

                                       21

<PAGE>

have the right to state a claim separate from Landlord's claim against the
condemning authority for Tenant's moving costs and the loss of the bargain of
this Lease, to the extent that such a claim by Tenant does not otherwise reduce
Landlord's award.

          In any taking of the Demised Premises, or any portion thereof, whether
or not this Lease is terminated as in this Paragraph provided, Tenant shall not
be entitled to any portion of the award for the taking of the Demised Premises
or damage to the Improvements, except as otherwise provided for in Paragraph 19C
with respect to the restoration of the Improvements, or for the estate or
interest of Tenant therein, all such award, damages, consequential damages and
compensation being hereby assigned to Landlord, and Tenant hereby waives any
right it now has or may have under present or future law to receive any separate
award of damages for its interest in the Demised Premises, or any portion
thereof, or its interest in this Lease, except that Tenant shall have,
nevertheless, the limited right to prove in the Proceedings and to receive any
award which may be made for damages to or condemnation of Tenant's movable trade
fixtures and equipment, and for Tenant's relocation costs in connection
therewith.

          B. If, during the initial term of this Lease, or any extension or
renewal thereof, less than the entire Demised Premises, bid more than 15% of the
floor area of the Building, or more than 25% of the land area of the Demised
Premises, or more than 20% of the parking spaces, shall be taken in any such
Proceedings, this Lease shall, upon vesting of title in the Proceedings,
terminate as to the portion of the Demised Premises so taken, and Tenant may, at
its option, terminate this Lease as to the remainder of the Demised Premises.
Tenant shall not have the right to terminate this Lease pursuant to the
preceding sentence unless (a) the business of Tenant conducted in the portion of
the Demised Premises taken cannot reasonably be carried on with substantially
the same utility and efficiency in the remainder of the Demised Premises (or any
substitute space securable by Tenant pursuant to clause (b) hereof) and (b)
Tenant cannot construct or secure or Landlord cannot provide substantially
similar space to the space so taken, on the remainder of the Demised Premises,
or Landlord cannot provide replacement parking spaces on additional property
located in close proximity to the Demised Premises that are reasonably
acceptable to Tenant. Such termination as to the remainder of the Demised
Premises shall be effected by notice in writing given not more than 60 days
after the date of vesting of title in such Proceeding and shall specify a date
not more than 160 days after the giving of such notice as the date for such
termination. Upon the date specified in such notice, the term of this Lease, and
all right, title and interest of Tenant hereunder, shall cease and come to an
end. If this Lease is terminated as in this Paragraph 19B provided, Landlord
shall be entitled to and shall receive the total award made in such Proceedings,
Tenant hereby assigning any interest in such award, damages, consequential
damages and compensation to Landlord, and Tenant hereby waiving any right Tenant
has now or may have under present or future law to receive any separate award of
damages for its interest in the Demised Premises, or any portion thereof, or its
interest in this Lease except as otherwise provided in Paragraph 19A. The right
of Tenant to terminate this Lease, as in this Paragraph 19B provided, shall be
exercisable only upon condition that Tenant is not then in default in the
performance of any of the terms, covenants or conditions of this Lease on its
part to be performed, and such termination upon Tenant's part shall become
effective only upon compliance by Tenant with all such terms, covenants and
conditions to the date of such termination. In the event that Tenant elects not
to terminate this Lease as to the remainder of the Demised Premises, the rights
and obligations of Landlord and Tenant shall be governed by the provisions of
Paragraph 19C hereof.

                                       22

<PAGE>

          C. If 15%, or less, of the floor area of the Building, or 25%, or
less, of the land area of the Demised Premises or 20% or less, of the parking
spaces shall be taken in such proceedings, or if more than 15% of the floor area
of the Building or more than 25% of the land area of the Demised Premises or
more than 20% of the parking spaces is taken (but less than the entire Demised
Premises), and this Lease is not terminated as in Paragraph 19B hereof provided,
this Lease shall, upon vesting of title in the Proceedings, terminate as to the
parts so taken, and Tenant shall have no claim or interest in the award,
damages, consequential damages and compensation, or any part thereof except as
otherwise provided in Paragraph 19A. Landlord shall be entitled to and shall
receive the total award made in such Proceedings, Tenant hereby assigning any
interest in such award, damages, consequential damages and compensation to
Landlord, and Tenant hereby waiving any right Tenant, has now or may have under
present or future law to receive any separate award of damages for its interest
in the Demised Premises, or any portion thereof, or its interest in this Lease
except as otherwise provided in Paragraph 19A. The net amount of the award
(after deduction of all costs and expenses, including attorney's fees), shall be
held by Landlord as trustee and applied as hereinafter provided. Tenant, in such
case, covenants and agrees, at Tenant's sole cost and expense (subject, to
reimbursement to the extent hereinafter provided), promptly to restore that
portion of the Improvements on the Demised Premises not so taken to a complete
architectural and mechanical unit for the use and occupancy of Tenant as in this
Lease provided. In the event that the net amount of the award (after deduction
of all costs and expenses, including attorney's fees) that may be received by
Landlord and held by Landlord as trustee in any such Proceedings as a result of
such taking is insufficient to pay all costs of such restoration work, Tenant
shall deposit with Landlord as trustee such additional sum as may be required
upon the written request of Landlord so long as Tenant has participated in the
Proceedings or otherwise provide reasonably adequate assurances to Landlord that
Tenant has the financial resources to fund such additional sum; provided,
however, Landlord shall retain, ultimate control over any final settlement or
litigation with the condemning authority, and provided further that
notwithstanding that the net amount of the award may be insufficient to pay all
costs of the restoration work, Tenant shall continue to be liable for payment of
Base Rent, Additional Rent and any other amount due and payable hereunder, which
amounts shall not be abated except as provided in Paragraph 19E below. The
provisions and conditions in Paragraph 8 applicable to changes and alterations
shall apply to Tenant's obligations to restore that portion of the Improvements
to a complete architectural and mechanical unit. Landlord agrees in connection
with such restoration work to apply so much of the net amount of any award
(after deduction of all costs and expenses, including attorneys fees) that may
be received by Landlord and held by Landlord as trustee in any such Proceedings
as a result of such taking to the costs of such restoration work thereof and the
said net award as a result of such taking shall be paid out from time to time to
Tenant, or on behalf of Tenant, as such restoration work progresses upon the
written request of Tenant, which shall be accompanied by a certificate of the
architect or the registered professional engineer in charge of the restoration
work stating that (a) the sum requested is justly due to the contractors,
subcontractors, materialmen, laborers, engineers, architects or other persons,
firms or corporations furnishing or supplying work, labor, services or materials
for such restoration work or as is justly required to reimburse Tenant for
expenditures made by Tenant in connection with such restoration work, and when
added to all sums previously paid out by Landlord as trustee does not exceed the
value of the restoration work performed to the date of such certificate; and (b)
the net amount of any such award as a result of such taking remaining in the
hands of Landlord, together with the sums,

                                       23

<PAGE>

if any, deposited by Tenant with Landlord as trustee pursuant to the provisions
hereof, will be sufficient upon the completion of such restoration work to pay
for the same in full. If payment of the award as a result of such taking, as
aforesaid, shall not be received by Landlord in time to permit payments as the
restoration work progresses (except in the event of an appeal of the award by
Landlord), Tenant shall not be required to proceed with any restoration work
until payment of such award is received by Landlord; provided, however, delay in
payment of such amount shall not release Tenant of its obligation to pay Base
Rent, Additional Rent and other amounts due and payable hereunder during any
such delay and there shall be no abatement of Base Rent, Additional Rent or any
other amounts except as provided in Paragraph 19E below. If Landlord appeals an
award and payment of the award is delayed pending appeal Tenant shall,
nevertheless, perform and fully pay for such work without delay, and payment of
the amount to which Tenant would have been entitled had Landlord not appealed
the award (in an amount not to exceed the net award prior to such appeal) shall
be made by Landlord to Tenant as restoration progresses pursuant to this
Paragraph 19C, in which event Landlord shall be entitled to retain an amount
equal to the sum disbursed to Tenant pursuant to the preceding sentence out of
the net award as and when payment of such award is received by Landlord. Tenant
shall also furnish Landlord as trustee with each certificate hereinabove
referred to, together with evidence reasonably satisfactory to Landlord that
them are no unpaid bills in respect to any work, labor, services or materials
performed, furnished or supplied, or claimed to have been performed, furnished
or supplied, in connection with such restoration work (relating to prior
payments made by Landlord to Tenant), and that no liens have been filed against
the Demised Premises, or any portion thereof. Landlord as trustee shall not be
required to pay out any funds when there are unpaid bills for work, labor,
services or materials performed, furnished or supplied in connection with such
restoration work relating to prior payments made by Landlord to Tenant, or where
a lien for work, labor, services or materials performed, furnished or supplied
has been placed against the Demised Premises, or any portion thereof. Upon
completion of the restoration work and payment in full therefor by Tenant, and
upon submission of proof reasonably satisfactory to Landlord that the
restoration work has been paid for in full and that the Improvements have been
restored or rebuilt to a complete architectural and mechanical unit for the use
and occupancy of Tenant as provided in this Lease, Landlord as trustee shall pay
over to Tenant any portion of the cash deposit furnished by Tenant then
remaining; provided, however, any other amounts awarded in such Proceedings and
made available for restoration) which remain following restoration of the
Demised Premises shall be the property of Tenant and Landlord shall have no
claim thereto.

          D. In the event of any partial termination of this Lease as a result
of any such Proceedings, Tenant shall pay to Landlord all Base Rent and all
Additional Rent and other charges payable hereunder with respect to that portion
of the Demised Premises so taken in such Proceedings with respect to which this
Lease shall have terminated justly apportioned to the date of such termination.
From and after the date of vesting of title in such Proceedings, Tenant shall
continue to pay the Base Rent and Additional Rent and other charges payable
hereunder, as in this Lease provided, to be paid by Tenant, subject to
abatement, if any, as provided for in Paragraph 19E hereof.

          E. In the event of a partial taking of the Demised Premises under
Paragraph 19C hereof, or a partial taking of the Demised Premises under
Paragraph 19B hereof, followed by Tenant's election not to terminate this Lease,
the fixed Base Rent payable hereunder during the

                                       24

<PAGE>

period from and after the date of vesting of title in such Proceedings to the
termination of this Lease shall not be reduced unless Tenant shall have
completed the restoration work with its own funds in accordance with the
provisions of the Lease and Landlord shall have applied the net amount of any
award to reduce the indebtedness secured by any financing encumbering the
Demised Premises or otherwise to reduce the amount of Landlord's Development
Costs (as herein defined), in which event fixed Base Rent payable hereunder
shall be reduced to a sum equal to the product of the Base Rent provided for
herein multiplied by a fraction, the numerator of which shall be Landlord's
Development Costs less any amounts so paid to and applied by Landlord less
Tenant's $2,000,000 contribution, and the denominator of which shall be
Landlord's Development Costs less Tenant's $2,000,000 contribution without
regard to any amounts so paid to and applied by Landlord.

          F. Anything herein to the contrary notwithstanding, upon the
occurrence of any Proceedings which would otherwise result in a termination of
this Lease, Tenant shall, as a condition precedent to such termination so long
as Tenant has participated in such Proceedings, (provided, however, Landlord
shall retain ultimate control over any final settlement or litigation with the
condemning authority), pay to Landlord an amount, reasonably estimated by
Landlord, equal to the excess, if any, of the unamortized portion of Landlord's
Development Costs, less the $2,000,000 referred to below, over the net award to
be received by Landlord after deduction of all costs of the Proceedings. In
making the foregoing calculation, Landlord shall use an interest rate equal to
the interest rate associated with the project financing from time to time during
the term of this Lease. "Landlord's Development Costs" shall mean and include
any and all amounts incurred by Landlord in connection with the acquisition and
development of the Demised Premises, including, without limitation,
consideration paid for acquisition of the Demised Premises, costs for required
offsite improvements, including relocating electric lines underground, all
architectural, engineering, environmental, land planning and other consulting
fees, all title and survey expenses, any and all fees and expenses associated
with procuring construction and/or other financing for the project, any other
costs or expenses that would not have been incurred by Landlord had Landlord not
been involved in the acquisition of the Demised Premises, and all attorneys'
fees associated with any of the foregoing. A preliminary estimate of Landlord's
Development Costs (which includes Tenant's initial contribution of $2,000,000 as
deposited into escrow under Paragraph 3) is attached hereto and made a part
hereof as Exhibit G, provided, however, the parties agree and acknowledge that
the amounts and categories of costs and expenses set forth on Exhibit G
represent an estimate of such items only, and that Landlord anticipates changes
in, additions to and modifications of such items, including, without limitation,
changes, additions and modifications of such items as development of the project
and construction of the Demised Premises progresses including, without
limitation, changes, additions and modifications relating to actual design and
construction costs, and in securing construction and permanent financing for the
project from time to time. The parties agree to update the estimate provided for
in Exhibit G within sixty (60) days after the Commencement Date and attach the
updated Exhibit G initialed and dated by the parties in place of the Exhibit G
attached as of the date hereof.

          20. Default by Tenant. The occurrence of any one or more of the
              -----------------
following events shall constitute an "Event of Default" by Tenant:

          A. The failure by Tenant to make any payment of rental or any other
payment

                                       25

<PAGE>

required to be made by Tenant hereunder, and any interest for late payment
thereof, as and when due, where such failure shall continue for a period of five
(5) days after receipt by Tenant of a written notice thereof from Landlord.

          B. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease (other than the failure by Tenant
described in subparagraph E below) where such failure shall continue for a
period of thirty (30) days after receipt by Tenant of written notice thereof
from Landlord; provided, however, that if the nature of Tenant's default is such
that it cannot be cured solely by payment of money (and in the reasonable
judgment of Landlord said default is susceptible to cure) and that more than
thirty (30) days may be reasonably required for such cure, then Tenant shall not
be deemed to be in default if Tenant shall commence such cure within such thirty
(30) day period and shall thereafter diligently prosecute such cure to
completion.

          C.  (a) the making of any general arrangement or any assignment by
Tenant for the benefit of creditors;

              (b) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition of reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the petition is dismissed within ninety (90) days of the date filed);

              (c) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets; and

              (d) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets.

          D. An assignment or subletting by Tenant in violation of Paragraph 14
hereof.

          E. The failure by Tenant in keeping, observing or performing any of
the terms contained in this Lease, other than those referred to in Subparagraphs
14 A, B, C and D above, and which exposes Landlord to criminal liability, and
such default shall continue after written notice thereof given ______ Landlord
to Tenant, and Tenant fails to proceed timely and promptly with all due
diligence and in good faith to cure the same and thereafter to prosecute the
curing of such default with all due diligence, it being intended that in
connection with a default which exposes Landlord to criminal liability that
Tenant shall proceed immediately to cure or correct such condition with
continuity and with all due diligence and in good faith.

          21. Landlord's Remedies. In the event of any Material Breach of this
              -------------------
Lease by Tenant, then Landlord, in addition to other rights or remedies it may
have, shall have the right to terminate this Lease, or without terminating this
Lease, terminate Tenant's right to possession of the Demised Premises, and in
either event Tenant shall immediately surrender possession of the Demised
Premises to Landlord and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy it may have for possession or arrearage of
rentals, enter upon and take possession of the Demised Premises and expel or
remove Tenant and any other person who may be occupying the Demised Premises or
any part thereof, with or without legal proceedings, by force if necessary,
without being liable for prosecution or any claim or damage therefor. In such

                                       26

<PAGE>

event, Landlord shall be entitled to recover from Tenant all reasonable damages
incurred by Landlord by reason of Tenant's default, including without
limitation, the cost of recovering possession of the Demised Premises, expenses
of reletting including reasonable renovation and alteration of the Demised
Premises, reasonable attorneys', fees, real estate commissions, and any other
sum of money, late charges and damages caused by Tenant to Landlord. As used
herein, "Material Breach" shall mean any breach by Tenant in any of the terms
and conditions of this Lease which upon an Event of Default would have a
material and adverse impact of any kind upon Landlord and/or the Demised
Premises, as opposed to a technical breach by Tenant which is de minimis in
nature.

          If Tenant's right to possession of the Demised Premises is terminated
without termination of the Lease, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under the Lease, including the right to recover
the rent as it becomes due hereunder. Should Landlord elect to relet the Demised
Premises or any part thereof, Landlord may do so for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord may
deem appropriate. Rental and other amounts received by Landlord in connection
with such reletting shall be applied against the amounts due from Tenant
hereunder after deducting any expenses incurred by Landlord with respect to such
reletting as provided above. Tenant shall pay any deficiency to Landlord. Such
deficiency shall be calculated on a cumulative basis with all excess payments
received by Landlord from such reletting to be applied against future amounts
due from Tenant and any deficiencies to be paid monthly. No such reentry or
taking possession of the Demised Premises by Landlord shall be construed as an
election on its part to terminate this Lease, unless a written notice of such
intention be given to Tenant, in which event Tenant's obligations to Landlord
shall forthwith cease, or unless the termination thereof be decreed by a court
of competent jurisdiction.

          In the event Landlord terminates this Lease in accordance with this
Paragraph, then, Tenant shall be liable and shall pay to Landlord, the sum of
all rent and other payments owed to date to Landlord, all sums owed to date to
third parties (including without limitation, all Impositions) hereunder accrued
to the date of such termination, all reasonable amounts required to be spent by
Landlord to fulfill any of Tenant's obligations which Tenant did not fulfill
prior to termination by Landlord, plus, as damages, an amount equal to the
present value discounted at ten percent (10%) _________ (i) the total rental
payments hereunder _______ the remaining portion of the term of the Lease,
calculated as if such term expires on the date set forth in Paragraph 2, unless
Tenant has extended this Lease, in which case such calculation shall be as if
the term expires on the final day of the extension term then in effect, less
(ii) the fair market rental value of the Demised Premises for such remaining
period. Nothing herein contained shall limit or prejudice the right of Landlord
to prove for and obtain, as damages by reason of such expiration or termination,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount be greater, equal to or less than the amount
of the difference referred to above.

          Landlord shall have the obligation to mitigate its damages to the
extent required by state law.

          In addition to the aforesaid remedies, Landlord shall be entitled to
pursue any other

                                       27

<PAGE>

remedy now or hereafter available to Landlord at equity or under the laws or
judicial decisions of the state where the Demised Premises is located or by
statute or otherwise. All rights and remedies of Landlord herein enumerated
shall be cumulative, and the exercise or the commencement of the exercise by
Landlord of any one or more of such rights or remedies should not preclude the
simultaneous or later exercise by Landlord of any or all other rights or
remedies. Tenant shall pay, upon demand, all of Landlord's costs, including
reasonable attorneys' fees and court costs, incident to the enforcement of
Tenant's obligations hereunder. A receipt by Landlord of rent with knowledge of
the breach of any covenant hereof (other than breach of the obligation to pay
the portion of such rent paid) shall not be deemed a waiver of such breach, and
no waiver by Landlord of any provisions of this Lease shall be deemed to have
been made unless expressed in writing and signed by Landlord. Without limiting
the generality of the foregoing, no failure by Landlord to insist upon the
performance of any of the terms of this Lease or to exercise any right or remedy
consequent upon a breach thereof shall constitute a waiver of such breach or any
of the terms of this Lease, and no express waiver shall affect any default other
than the default specified in the express waiver and that only for the time and
to the extent therein stated. One or more waivers by Landlord shall not be
construed as a waiver of a subsequent breach of the same covenant, term or
condition. In addition to other remedies in this Lease provided, Landlord shall
be entitled to seek a restraint by injunction of the violation or attempted or
threatened violation of the covenants, conditions and provisions of this Lease.

          22. Default by Landlord. The following shall constitute a "Material
              -------------------
Breach" by Landlord:

          The failure by Landlord to observe or perform any of the covenants,
conditions or provisions of this Lease where such failure shall continue for a
period of thirty (30) days after receipt by Landlord of written notice thereof
from Tenant; provided, however, that if the nature of Landlord's default is such
that it cannot be cured solely by payment of money and that more than thirty
(30) days may be reasonably required for such cure, then Landlord shall not be
deemed to be in default if Landlord shall commence such cure within such thirty
(30) day period and shall thereafter diligently prosecute such cure to
completion.

          23. Tenant's Remedies. In the event of any Material Breach of this
              -----------------
Lease by Landlord, then Tenant in addition to other rights or remedies it may
have at law or in equity (subject to the terms of this Lease), at Tenant's sole
option may perform such obligations of Landlord provided that Tenant has
furnished to any party having a recorded mortgage, deed of trust, ground lease
or similar lien against the Demised Premises (for which Tenant has received
written notice) with written notice of such default and such party has failed to
cure the same within the limits prescribed herein for Landlord to cure such
default, and Tenant may invoice Landlord for the costs and expenses thereof,
which invoice Landlord shall promptly pay. Notwithstanding the foregoing,
despite such notice and expiration of such cure period, no rent or other
payments due from Tenant may be offset by Tenant, and Tenant shall have no right
to perform any obligation of Landlord unless such performance by Tenant is
necessary to prevent imminent injury or damage to persons or Tenant's property.

          24. Delivery of Executed Lease. Deleted by intent of parties.
              --------------------------

          25. Termination. Deleted by intent of parties.
              -----------

                                       28

<PAGE>

          26. Notices. All notices shall be sent by registered mail, return
              -------
receipt requested, or by recognized overnight courier providing proof of
delivery, to the following addresses:

To Landlord:                                To Tenant:

Sunnyvale Limited Partnership               First Data Merchant Services
Ridge Sunnyvale, Inc.,                      Corporation
c/o Ridge Capital Corporation               Attention:  David L. Schlapbach,
Attention: James G. Martell                             Director of Red Estate
257 East Main Street                                    and Counsel
Barrington, Illinois 60010                  5660 New Northside Drive
                                            Suite 1400
                                            Atlanta, Georgia 30328

With a copy to:                             With a copy to:
Gardner, Carton & Douglas                   First Data Merchant Services
Attention. Glenn W. Reed                    Corporation
321 North Clark Street                      Attention: Roger L Pierce, President
Suite 3400                                  700 Hansen Way
Chicago, Illinois 60610-4795                Palo Alto, CA 94303

          Any notice shall be deemed to have been given three (3) days after the
date deposited in the United States mail, or on the first business day after
sending when delivery by recognized overnight courier providing proof of
delivery, in the manner aforesaid.

          Either party, by written notice to the other, shall have the right to
change the addresses for notice(s) to be sent to such party, and to add or
substitute entities to which a copy of any notice shall be sent by the other
party

          27. Brokerage. Landlord and Tenant acknowledged that no real estate
              ---------
broker brought about this lease transaction. Landlord hereby indemnifies Tenant
against the claims of any party claiming by, through or under Landlord in
connection with this Lease transaction, and Tenant hereby indemnifies Landlord
against the claims of any party claiming by, through or under Tenant in
connection with this Lease transaction.

          28. Estoppel. Landlord and Tenant shall, at any time upon not less
              --------
than twenty (20) days prior written notice, execute and deliver to a prospective
new landlord, lender, or assignee or subtenant of Tenant, as the case may be, 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 the party's knowledge, any uncured defaults
on the part of the other party hereunder, or so specifying such defaults if any
are claimed, and (iii) other reasonable requests that relate to the Lease.

                                       29

<PAGE>

          29. Hazardous Substances.
              --------------------

          A. For purposes of this Paragraph 29, "Hazardous Substance" means:

                  (i) "Hazardous Substances" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42
U.S.C.ss.9601 et. seq., as amended, and all regulations promulgated thereunder,
              --------
the Federal Clean Air Act, as amended (42 U.S.C.ss.7401 et. seq.) and the
                                                        --------
Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C.ss.1317 et. seq. as
                                                                --------
amended and all regulations promulgated thereunder;

                  (ii) "Hazardous Waste" as defined by the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C.ss.6602 et. seq. as amended and all
                                            --------
regulations promulgated thereunder;

                  (iii) Any pollutant or contaminant or hazardous, dangerous or
toxic chemicals, materials or substances within the meaning of any other
applicable federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended;

                  (iv) More than 100 gallons of crude oil which is liquid at
standard conditions of temperature and pressure (80 degrees Fahrenheit and 14.7
pounds per square inch absolute);

                  (v) Any radioactive material, including any source, special
nuclear or by-product material as defined in 42 U.S.C.ss.2011 et. seq. as
                                                              --------
amended or hereafter amended, and all regulations promulgated thereunder;

                  (vi) Friable asbestos or any asbestos which becomes friable
during the term of this Lease; and

                  (vii) Anything defined as a hazardous, toxic or radioactive
material, waste substance or the use, transportation or disposal of which is
regulated under applicable California laws or rules and regulations issued
pursuant thereof;

(all of the foregoing statutes, laws, ordinance, rules, regulations, and common
law theories being sometimes hereinafter collectively referred to as "Envlaws").

          B. Landlord and Tenant acknowledge the environmental condition of the
Land described in that certain Site Management Plan prepared by Geomatrix
Consultants dated September 5, 1996, a copy of which Landlord has provided to
Tenant. Prior to the Construction Completion Date, Landlord shall cause to be
performed all asbestos and soil removal and disposal or other remediation
provided for under and in compliance with Section 4.4.7 of the Sale Agreement,
as well as all additional environmental clean-up of Hazardous Substances
required by Section 4.4.7 of the Sale Agreement. Landlord shall indemnify,
defend and hold Tenant harmless from all damages, costs, losses, expenses
(including but not limited to

                                       30

<PAGE>

reasonable attorneys' fees and engineering fees) arising from any breach by
Landlord of the preceding covenant; provided however, the foregoing
indemnification shall terminate upon the expiration of one (1) year from the
Construction Completion Date. Notwithstanding the foregoing, in no event shall
Tenant have the right to terminate this Lease or have any right of sell off
arising out of any breach or claimed breach by Landlord in its obligations
hereunder; it being expressly acknowledged and agreed that the Base Rent and
Additional Rent, and all other charges and sums payable by Tenant hereunder,
shall commence at the times provided herein and shall continue to be payable as
provided under this Lease.

          C. Tenant shall not allow any Hazardous Substance to be brought on to
the Demised Premises and shall not conduct or authorize the generation,
transportation, storage, treatment and disposal at the Demised Premises, of any
Hazardous Substance other than in quantities incident to the conduct of Tenant's
Use and in compliance with Envlaws; provided, however, nothing herein contained
shall permit Tenant to allow any so-called "acutely hazardous,"
"ultra-hazardous," "imminently hazardous chemical substance or mixture" or
comparable Hazardous Substance to be located on or about the Demised Premises.

          D. If the presence, release, threat of release, placement on or in the
Demised Premises, or the generation, transportation, storage, treatment, or
disposal at the Demised Premises of any hazardous substances as a result of
Tenant's operations at the Demised Premises (i) gives rise to liability
(including, but not limited to, a responses action, remedial action, removal
action) under Envlaws, (ii) causes a significant public health effect, or (iii)
pollutes, threatens to pollute the environment, Tenant shall promptly take any
and all remedial and removal action necessary to clean up the Demised Premises
and mitigate exposure to liability arising from the hazardous substance, whether
or not required by law.

          E. Tenant shall indemnify, defend and hold Landlord harmless from all
damages, costs, losses, expenses (including, but not limited to, actual
attorneys' fees and engineering fees) (i) arising from or attributable to the
existence of any hazardous substances at the Demised Premises as a result of
Tenant's operations at the Demised Premises, and (ii) any breach by Tenant of
any of its covenants covered in this Paragraph 29.

          F. Upon request by Landlord during the term of this Lease, prior to
the exercise of any Extension Term, Tenant shall undertake and submit to
Landlord an environmental audit from an environmental consulting firm reasonably
acceptable to Landlord which audit shall evidence Tenant's compliance with this
Paragraph 29. Tenant shall bear the cost of such environmental audit unless such
audit discloses that Tenant has complied with the provisions of this Paragraph
29 in which event Landlord shall pay for such audit.

          G. Landlord or Tenant shall give the other prompt written notice upon
discovery of any Hazardous Substance at or adjacent to the Demised Premises.
Landlord and Tenant's obligations under this Paragraph 29 shall survive
termination of the Lease.

          30. Holdover. Should Tenant continue to occupy the Demised Premises
              --------
after expiration of the term or any renewal thereof and provided Landlord has
notified Tenant thirty (30) days prior to the expiration of the term or any
renewal term that Landlord is negotiating or has executed a lease with a third
party for the Demised Premises or any portion thereof, Tenant

                                       31

<PAGE>

shall be deemed to be occupying the Demised Premises without claim or right and
Tenant shall pay Landlord all costs arising out of loss or liability resulting
from delay by Tenant in so surrendering the Demised Premises as above provided
and shall pay a charge for each day of occupancy an amount equal to 150% the
Base Rent (on a per diem basis) then reserved hereunder. In the event Landlord
has failed to notify Tenant in writing within thirty (30) days prior to the
expiration of the term or any renewal term that Landlord is negotiating or has
executed a lease with a third party for the Demised Premises or any portion
thereof, Tenant shall be entitled to occupy the Demised Premises for a period of
sixty (60) days following expiration of the term or any renewal term on the same
terms and conditions as such term or renewal term (including Base Rental and
additional rental). Should Tenant continue to occupy the Demised Premises
following such sixty (60) day period, Tenant shall be deemed to be occupying the
Demised Premises without claim or right and Tenant shall pay Landlord as a full
measure of all loss or liability resulting from delay by Tenant in so
surrendering the Demised Premises as above provided a charge for each day of
occupancy an amount equal to 200% of the Base Rent and Additional Rent (on a per
diem basis) then reserved hereunder.

          31. Surrender.
              ---------

          A. Upon any termination or expiration of this Lease, Tenant shall
surrender the Demised Premises in the same condition as existed at the
Commencement Date, except for normal wear and tear and damage caused by the fire
or other casualty; provided, however, that nothing in this Paragraph 31 is
intended to change or diminish Tenant's obligations under any other part of this
Lease. Tenant shall remove the Alterations it is required to remove pursuant to
the terms of Paragraph 8 hereof. Any damage to the Demised Premises resulting
from the removal of such Alterations shall be repaired by Tenant at Tenant's
expense. If the Demised Premises be not surrendered as above set forth, Tenant
shall indemnify, defend and hold Landlord harmless against loss or liability
resulting from the delay by Tenant in so surrendering the Demised Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay.

          All property of Tenant not removed on or before the last day of the
term of this Lease (subject to Tenant's right to occupy the Demised Premises
following expiration of the term of this Lease as set forth in Paragraph 30
hereof) or within fifteen (15) days thereafter shall be deemed abandoned. Tenant
hereby appoints Landlord its agent to remove all property of Tenant from the
Demised Premises upon termination of this Lease and to cause its transportation
and storage for Tenant's benefit, all at the sole cost and risk of Tenant and
Landlord shall not be liable for damage, theft, and misappropriation or loss
thereof and Landlord shall not be liable in any manner in respect thereto.
Tenant shall pay all costs and expenses of such removal, transportation and
storage. Tenant shall reimburse Landlord upon demand for any expenses incurred
by Landlord with respect to removal or storage of abandoned property and with
respect to restoring said Demised Premises to good order, condition and repair.

          32. Liens. Landlord shall deliver the Demised Premises to Tenant free
              -----
of all mechanic's and materialmen's liens or bond over all such mechanic's and
materialmen's liens. Tenant has no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind the interest of Landlord or Tenant in the Demised Premises, or to
charge the rentals payable hereunder for any claim in favor of any

                                       32

<PAGE>

person dealing with Tenant, including those who furnish materials or perform
labor for any construction or repairs, and Tenant covenants and agrees that it
shall not mortgage, encumber or pledge this Lease or any interest therein. The
preceding sentence shall not be construed as prohibiting Tenant from making
Alterations as provided in Paragraph 8 above or from permitting any other
mechanics or materialmen's lienable work to be performed as long as such work is
not prohibited by this Lease. Tenant agrees to indemnify and hold Landlord
harmless from any lien filed against the Demised Premises on account of work
performed by or on behalf of Tenant and from any and all losses, costs, damages,
expenses, liabilities, suits, penalties, claims and damages (including
reasonable attorney fees) arising from or relating to such lien. After Tenant's
receipt of notice or actual knowledge of the placing of any lien or encumbrance
against the Demised Premises, Tenant shall immediately give Landlord written
notice thereof. Tenant shall within ten (10) days therefrom remove such lien by
payment or bond.

          If Tenant shall fail to discharge such mechanic's lien within such
period, then, in addition to any other right or remedy of Landlord, Landlord
may, but shall not be obligated to, discharge the same by paying to the claimant
the amount claimed to be due by procuring the discharge of such lien as to the
Demised Premises by deposit in the court having jurisdiction of such lien, a
cash sum sufficient to secure the discharge of the same, or by the deposit of a
bond or other security with such court sufficient in form, content and amount to
procure the discharge of such lien, or in such other manner as is now or may in
the future be provided by present or future law for the discharge of such lien
as a lien against the Demised Premises. Any amount paid by Landlord, or the
value of any deposit so made by Landlord, together with all costs, fees and
expenses in connection therewith (including reasonable attorneys' fees of
Landlord), together with interest thereon at the rate set forth in Paragraph 33
hereof, shall be repaid by Tenant to Landlord on demand by Landlord and if
unpaid may be treated as Additional Rent.

          All materialmen, contractors, artisans, mechanics, laborers and any
other person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Demised Premises, or any
portion thereof, are hereby charged with notice that they must look exclusively
to Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Demised Premises, or any
portion thereof.

          33. Interest; Late Charge. Base Rent payable pursuant to Paragraph 3
              ---------------------
hereof by Tenant to Landlord under this Lease, if not paid when due, and any
other charges payable by Tenant hereunder not paid when due, including any
charges, expenses, liabilities or fees in connection with a default by Tenant,
shall accrue interest at the rate of prime (as announced from time to time by
the First National Bank of Chicago) plus one percent (1%) per annum from the due
date until paid, said interest to be in addition to Base Rent and other charges
under this Lease and to be paid to Landlord by Tenant upon demand. In addition,
if any installment of Base Rent and other charges payable pursuant to this Lease
by Tenant to Landlord is not paid within five (5) days after receipt by Tenant
of a written notice thereof from Landlord, Tenant shall pay Landlord a late
charge in an amount equal to two percent (2%) of the amount then due to defray
the increased cost of collecting late payments.

                                       33

<PAGE>

          34. Inspections. Landlord, its agents or employees may, after
              -----------
providing Tenant with at least twenty-four (24) hours prior notice except in an
emergency situation, enter the Demised Premises during reasonable business hours
when accompanied by an authorized employee or agent of Tenant except in an
emergency situation, to (a) exhibit the Demised Premises to prospective
purchasers or lenders; (b) inspect the Demised Premises to see that Tenant is
complying with its obligations hereunder; and (c) exhibit the Demised Premises
during the last six (6) months of the term to prospective tenants; provided that
Landlord shall comply at all times with Tenant's reasonable security
requirements.

          35. Transfer of Landlord's Interest. Tenant acknowledges that Landlord
              -------------------------------
has the right to transfer its interest in the Demised Premises and in this Lease
at any time after the date which is eighteen (18) months after the Commencement
Date and subject to the provisions of Paragraph 52 hereof, and Tenant agrees
that in the event of any such transfer Landlord shall automatically be released
from all liability under this Lease except for any liabilities accruing prior to
the date of transfer for which Tenant has identified in an estoppel certificate
or by written notice to Landlord, and Tenant agrees to look solely to such
transferee for the performance of Landlord's obligations hereunder; provided,
however, any such transferee shall be deemed to have assumed the obligations of
Landlord hereunder subject to the conditions and limitations herein contained.
Tenant agrees to look solely to Landlord's interest in the Demised Premises for
the recovery of any judgment from Landlord, it being agreed that Landlord, or if
Landlord is a partnership, its partners whether general or limited, or if
Landlord is a corporation, its directors, officers or shareholders, or if
Landlord is a limited liability company, its members or managers, shall never be
personally liable for such judgment. Without limiting the generality of the
foregoing, Tenant agrees that Landlord may transfer its interest in this Lease
to any entity controlled by, controlling or under common control with Landlord,
that acquires the Demised Premises and from and after such transfer Landlord
shall be released from liability, as aforesaid.

          36. Indemnity.
              ---------

              (a) To the fullest extent allowed by law, Tenant shall at all
times indemnify, defend and hold Landlord harmless against and from any and all
claims by or on behalf of any person or persons, firm or firms, corporation or
corporations, arising from the conduct or management, or from any work or things
whatsoever done in or about the Demised Premises, and will further indemnify,
defend and hold Landlord harmless against and from any and all claims arising
during the term of this Lease, or arising from any breach or default on the part
of Tenant in the performance of any covenant or agreement on the part of Tenant
to be performed, pursuant to the terms of this Lease, or arising from, any act
or negligence of Tenant, its agents, servants, employees or licensees, or
arising from any accident, injury or damage whatsoever caused to any person,
firm or corporation occurring during the term of this Lease, in or about the
Demised Premises or upon the sidewalk and the land adjacent thereto, and from
and against all costs, attorneys' fees, expenses and liabilities incurred in or
about any such claim or action or proceeding brought thereon; and in case any
action or proceeding be brought against Landlord by reason of any such claim,
Tenant, upon notice from Landlord, covenants to defend such action or proceeding
by counsel reasonably satisfactory to Landlord. Tenant's obligations under this
Paragraph 36 shall be insured by contractual liability endorsement on Tenant's
policies of insurance required under the

                                       34

<PAGE>

provisions of Paragraph 17 hereof.

              (b) Landlord shall protect, indemnify and hold Tenant harmless
from and against any and all loss, claims, liability or costs (including court
costs and attorneys' fees) incurred by reason of: (a) any damage to any property
or any injury (including but not limited to death) to any person occurring in,
or on or about the Demised Premises or the Building to the extent that such
injury or damage shall be proximately caused by the Landlord's affirmative acts
of negligence or willful misconduct of Landlord or its agents, servants or
employees; provided, however, that such indemnification shall be limited to the
extent of the sum of: (i) amounts of insurance proceeds recovered by Landlord
under insurance policies carried by Landlord for such injury or damage, after
deductibles, or insurance proceeds that would have been received in the event
Landlord had not elected to self-insure, and (ii) the deductible amounts for
such claims under such insurance policies. The provisions of this Article shall
survive the termination of this Lease with respect to any claims or liability
occurring prior to such termination.

              (c) Notwithstanding the foregoing indemnification obligations,
Landlord and Tenant both hereby release the other and the other's officers,
directors, partners, employees and agents from any claim which the indemnified
party might have to the extent that the cost of any such claim is reimbursed by
insurance proceeds recovered by the releasing party, and both Landlord and
Tenant shall confirm that their insurance providers shall similarly waive all
such claims.

          37. Modification of Lease. The terms, covenants and conditions of this
              ---------------------
Lease may not be changed orally but only by an instrument in writing signed by
the party against whom enforcement of the change is sought. The failure of
either party hereto to insist in any one or more cases upon the strict
performance of any term, covenant or condition of this Lease to be performed or
observed by the other party hereto shall not constitute a waiver of
relinquishment for the future of any such term, covenant or condition.

          38. Memorandum of Lease. Neither party shall record this Lease or any
              -------------------
of the exhibits and/or riders attached hereto, but shall enter into a "short
form" or Memorandum of Lease in recordable form attached hereto as Exhibit F and
made a part hereof, which shall set forth the parties, the legal description of
the land, a description of the Demised Premises, the Commencement Date and
Expiration Date of the term of the Lease, and any options to renew, options to
purchase or rights of first refusal granted hereunder.

          39. Paragraph Captions. Paragraph captions herein are for Landlord's
              ------------------
and Tenant's convenience only, and neither limit nor amplify the provisions of
this Lease.

          40. Entire Agreement. This Lease represents the entire agreement
              ----------------
between Landlord and Tenant and supersedes all prior agreements, both written
and oral. The terms, covenants and conditions of this Lease shall be binding
upon and shall inure to the benefit of Landlord and Tenant and their respective
executors, administrators, heirs, distributees, legal representatives,
successors and assigns.

          41. Choice of Law and Interpretation. This Lease shall be governed by
              --------------------------------
the internal

                                       35

<PAGE>

law of the State in which the Demised Premises is situated, without considering
such state's choice of law rules. Should any provision of this Lease require
judicial interpretation, it is agreed that the court interpreting or construing
the same shall not apply a presumption that the terms of any such provision
shall be more strictly construed against one party or the other by reason of the
rule of construction that a document is to be construed most strictly against
the party who itself or through its agent prepared the same, it being agreed
that the agents of all parties hereto have participated in the preparation of
this Lease.

          42. Prevailing Party. If either party hereto files a lawsuit against
              ----------------
the other party relating to performance or non-performance under this Lease, and
the court has entered a judgment in favor of one party on one or more counts and
no judgment in favor of the other party on any counts, then the non-prevailing
party shall pay the prevailing party's reasonable attorneys' fees and costs in
connection with the lawsuit.

          43. Exhibits. Attached hereto and made a part hereof are the
              --------
following:

          Exhibit A         -        Legal Description
          Exhibit B         -        Site Plan
          Exhibit C         -        Plans
          Exhibit C-1       -        Construction Schedule
          Exhibit D         -        Schedule of Rents
          Exhibit E         -        Lease Term Agreement
          Exhibit F         -        Memorandum of Lease
          Exhibit G         -        Landlord's Development Costs
          Exhibit H         -        Permitted Exceptions
          Exhibit I         -        Escrow Agreement

          44. Guarantee. All obligations on the part of Tenant to be paid,
              ---------
performed and complied with are unconditionally guaranteed by First Data
Corporation (the "Guarantor") according to the provisions of the Guarantee
executed by Guarantor in a form prepared by Landlord.

          45. Independent Covenants. It is the express intent of Landlord and
              ---------------------
Tenant that (a) the obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and that the Base Rent and
Additional Rent, and all other charges and sums payable by Tenant hereunder,
shall commence at the times provided herein and shall continue to be payable in
all events; (b) all costs or expenses of whatsoever character or kind, general
or special, ordinary or extraordinary, foreseen or unforeseen, and of every kind
and nature whatsoever that may be necessary or required in and about the Demised
Premises, or any portion thereof, and Tenant's possession or authorized use
thereof during the term of this Lease, shall be paid by Tenant and all
provisions of this Lease are to be interpreted and construed in light of the
intention expressed in this Paragraph 45; (c) the Base Rent specified in
Paragraph 3 shall be absolutely net to Landlord so that this Lease shall yield
net to Landlord the Base Rent specified in Paragraph 3 in each year during the
term of this Lease (unless extended or renewed at a different Base Rent); (d)
all Impositions, insurance premiums, utility expenses, repair and maintenance
expenses, and all other costs, fees, interest, charges, expenses, reimbursements
and obligations of every kind and nature whatsoever relating to the Demised
Premises, or any portion

                                       36

<PAGE>

thereof, which may arise or become due during the term of this Lease, or any
extension or renewal thereof, shall be paid or discharged by Tenant as
Additional Rent.

          46. Entry by Landlord. Subject to the provisions of Section 34 hereof,
              -----------------
Tenant agrees to permit Landlord or Landlord's mortgagee and authorized
representatives of Landlord or Landlord's mortgagee to enter upon the Demised
Premises at all reasonable times during ordinary business hours for the purpose
of inspecting the same and making any necessary repairs to comply with any laws,
ordinances, rules, regulations or requirements of any public body, or the Board
of Fire Underwriters, or any similar body; provided that Landlord shall comply
at all times with Tenant's reasonable security requirements. Nothing herein
contained shall imply any duty upon the part of Landlord to do any such work
which, under any provision of this Lease, Tenant may be required to perform and
the performance thereof by Landlord shall not constitute a waiver of Tenant's
default in failing to perform the same. Landlord may, during the progress of any
work, keep and store upon the Demised Premises all necessary materials, tools
and equipment. Landlord shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business or other damage to Tenant by reason of
making repairs or the performance of any work in or about the Demised Premises,
or on account of bringing material, supplies and equipment into, upon or through
the Demised Premises during the course thereof, and the obligations of Tenant
under this Lease shall not be thereby affected in any manner whatsoever;
provided, however, Landlord shall use all reasonable efforts to conduct any
entry into the Demised Premises so as to interfere with the business of Tenant
as little as reasonably practical under the circumstances.

          47. [Deleted by intent of parties.]
               ----------------------------

          48. Survival of Obligations. Except as otherwise provided herein to
              -----------------------
the contrary, all obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof for a period of one (1)
year.

          49. Lease Subject to Landlord's Acquisition of Demised Premises.
              -----------------------------------------------------------
Anything herein to the contrary notwithstanding, it is agreed and acknowledged
by the parties hereto that as of the date hereof, Landlord does not own the
Demised Premises. Therefore, anything herein to the contrary notwithstanding,
the rights, duties and obligations of Landlord and Tenant hereunder are
expressly subject to and contingent upon acquisition by Landlord of the Demised
Premises by December 31, 1997 ("Contingency Date"), upon terms and conditions
acceptable to Landlord, in its sole and absolute discretion, including, without
limitation, procuring project financing on terms and conditions acceptable to
Landlord. In the event Landlord has not acquired the Demised Premises by the
Contingency Date on terms and conditions acceptable to Landlord, as aforesaid,
Landlord shall notify Tenant, and either party may terminate this Lease at
anytime thereafter (but prior to the date Landlord acquires the Demised
Premises) by delivering written notice of such termination to the other party,
whereupon the parties shall be released and discharged from any and all
obligations and liabilities not theretofore accrued under this Lease; provided,
however, in the event the Lease is so terminated, Tenant shall pay to Landlord,
within ten (10) days from the date Landlord has submitted a written statement to
Tenant requesting such payment, all amounts incurred by Landlord in connection
with the proposed acquisition and development of the Land, including, without
limitation, any earnest money deposit, any costs for

                                       37

<PAGE>

required off-site improvements, including sewer and road improvements, all
architectural, engineering, environmental, land planning and other consulting
fees, all title and survey expenses, all costs associated with the proposed
subdivision of the Land, any and all fees and expenses associated with procuring
construction and/or other financing for the project, any other costs or expenses
that would not have been incurred by Landlord had Landlord not been involved in
the acquisition and proposed development of the Land and all attorneys, few
associated with any of the foregoing. Landlord agrees to use all reasonable
efforts to acquire the Demised Premises on terms and conditions acceptable to
Landlord, as aforesaid.

          50. Americans With Disabilities Act.
              -------------------------------

          A. In the event that any alteration or repair to the Demised Premises
is undertaken by Tenant with or without Landlord's consent, or is undertaken by
Landlord at Tenants request during the term of this Lease (including any renewal
or extension thereof), such alteration or repair (i) shall be designed and
constructed in full compliance with the Americans With Disabilities Act, as
amended from time to time, (the "Act") if such alteration or repair is
undertaken by Tenant, and (ii) shall be designed by Tenant in full compliance
with the Act if such alteration or repair is undertaken by Landlord at Tenant's
request, and the cost of any such design, alteration or repair to the Demised
Premises shall be borne by Tenant, including without limitation (a) the cost of
any such design, alteration, or repair required as a result of (i) Tenant or an
assignee or subtenant being deemed a "Public Accommodation" or the Demised
Premises being deemed a "Place of Public Accommodation" or (ii) such alteration
or repair being deemed to affect an "Area of Primary Function" (as such terms
are defined in the Act); and (b) the cost of the installation or implementation
of any "Auxiliary Aid" required under the Act as a result of the operation of
any business within the Demised Premises. In addition, Tenant shall be
responsible for all costs and expenses incurred or to be incurred in order to
cause the Demised Premises and the operation of any business within the Demised
Premises to comply with the Act, and, if Tenant fails to keep and maintain the
Demised Premises in compliance with the Act, Landlord shall have the right but
not the obligation, at Tenant's sole cost and expense, to enter the Demised
Premises and cause the Demised Premises to be put into compliance with the Act;
and Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all costs, claim and liabilities, including without limitation,
attorneys' fees arising from or related to Tenant's failure to maintain and keep
the Demised Premises in compliance with the Act.

          B. In connection with its construction of the Landlord's Improvements
pursuant to Paragraph 4 hereof, Landlord represents and warrants that the
Landlord's Improvements to be constructed in accordance with the Plans will
comply in all material respects with all applicable laws, including without
limitation, the Act, and Landlord covenants that the Demised Premises delivered
to Tenant as of the Construction Completion Date shall comply in all material
respects with all applicable laws, including without limitation, the Act.
Landlord shall indemnify, defend and hold Tenant harmless from all damages,
costs, losses, expenses (including but not limited to reasonable attorneys'
fees) arising from any breach by Landlord of the preceding covenant; provided
however the foregoing indemnification shall terminate upon the expiration of one
(1) year from the Construction Completion Date. Notwithstanding the foregoing,
in no event shall Tenant have the right to terminate this Lease or have any
right of set-off arising out of any breach or claimed breach by Landlord in its
obligations hereunder, it being expressly acknowledged and agreed that the Base
Rent and Additional Rent, and all other charges and

                                       38

<PAGE>

sums payable by Tenant hereunder, shall commence at the times provided herein
and shall continue to be payable as provided herein.

          51. Reports by Tenant. Upon request by Landlord at any time after 135
              -----------------
days after the end of the applicable fiscal year of Tenant, Tenant shall deliver
to Landlord (within 15 days after receipt of written request) a copy of the
audited financial statement of any guarantor of Tenant's obligations under this
Lease. If such audited statements are not available, Tenant may provide such
statements certified by such guarantor's chief financial officer as being true
and correct, in accordance with generally accepted principals of accounting
consistently applied over the applicable periods. Said financial statements
shall only be required in connection with a proposed sale or mortgaging of the
Demised Premises and shall be held in confidence by Landlord and any such
proposed purchaser or lender or their respective successors or assigns.
Notwithstanding the foregoing, Tenant shall cause First Data Corporation to
submit annual audited financial statements to Landlord and Landlord's mortgagee
in the manner set forth herein if First Data Corporation ceases to be a publicly
traded company.

          52. Option to Purchase. Subject to the provisions hereinafter set
              ------------------
forth, and provided that Tenant is not then in default hereunder, Landlord
hereby grants to Tenant the option to purchase the Demised Premises upon the
following terms and conditions:

          A. Landlord shall notify Tenant thirty (30) days prior to the date
that it intends to make the Demised Premises available for sale to third
parties. Included with such notice shall be the proposed purchase price for the
Demised Premises, as well as any other relevant economic terms being offered by
Landlord. In no event shall Landlord have the right to convey the Demised
Premises or otherwise make the Demised Premises available for sale to third
parties until eighteen (18) months after the Commencement Date.

          B. If, at anytime after notice is delivered to Tenant as set forth
above, Landlord enters into a serious negotiation with a prospective purchaser
to purchase the Demised Premises, then Landlord shall notify Tenant in writing
of (i) the fact of such negotiation, (ii) the purchase price agreed to between
Landlord and such prospective purchaser, and (iii) the other relevant
agreed-upon economic terms upon which such purchaser would acquire the Demised
Premises, and Tenant must within ten (10) business days thereafter, by written
notice to Landlord, elect to exercise the option to purchase the Demised
Premises upon all of the same terms and conditions as are contained in
Landlord's notice to Tenant in which event the parties shall enter into a
definitive agreement incorporating said terms and conditions. If Tenant does not
elect to purchase, Landlord shall have the right to sell to a third party on the
same terms and conditions provided to Tenant or shall submit any modified terms
to Tenant in accordance with the above. In no event shall Tenant be afforded
more than three (3) opportunities to exercise its option hereunder, in
connection with more than three (3) different offers from three (3) different
third parties.

          C. If Tenant exercises its option to purchase hereunder, the closing
of such purchase shall occur on the date set forth in the definitive agreement
entered into between Landlord and Tenant. At the closing, Tenant shall pay the
purchase price via cash or wire transfer of immediately available funds to
Landlord, and Landlord shall deliver to Tenant a general warranty deed (or
equivalent) to the Demised Premises conveying good and marketable fee

                                       39

<PAGE>

simple title in Tenant to the Demised Premises, subject to no liens,
encumbrances or other exceptions to title other than the Permitted Exceptions
and taxes for the current year, and any exceptions to title that have been
caused by Tenant or that Tenant has accepted in writing (other than any
mortgages or other liens, which must be discharged by Landlord at or prior to
such closing). On the closing date, Landlord and Tenant shall also execute and
deliver such other documents and instruments as are customary in similar
transactions and/or reasonably necessary to implement the terms and conditions
of this Lease, and to allow Tenant to obtain an extended coverage ALTA owner's
title policy insuring Tenant's fee simple ownership of the Demised Premises in
accordance with the above.

          D. Landlord covenants and agrees that if any exceptions to title other
than the Permitted Exceptions shall be revealed by the deed or title policy,
Landlord will at its sole cost and expense clear the title of such exceptions as
soon as reasonably practical but, in any event, within six (6) months after the
intended closing date (unless Tenant shall in writing extend such period), and
the actual closing (including the payment of the purchase price) of such
purchase of the Demised Premises shall be delayed until the title thereto has
been cleared. Until such time as Tenant's purchase of the Demised Premises is
closed as hereinabove provided, Tenant shall continue to occupy and possess the
Demised Premises under the terms and conditions of this Lease. If for any reason
such purchase is not closed, this Lease shall continue in full force and effect
as if Tenant had not exercised the aforesaid option to purchase, and Tenant
shall be entitled to retroactively exercise any option for any Extension Term to
the extent the normal option election date occurred after Tenant exercised its
option to purchase the Demised Premises.

          E. Upon Tenant's notice to Landlord of the exercise of Tenant's option
to purchase, Landlord shall provide Tenant with copies of all surveys, title
insurance policies, title instruments and other such documents in Landlord's
possession pertaining to the Demised Premises. Tenant shall pay for the cost of
the title insurance policy, the cost to prepare any survey required by Tenant
and the cost of any escrow closing services, and any cost or expense in
connection with any endorsements to the title policy requested by Tenant.
Landlord shall be responsible for the cost of compliance with any subdivision,
lot split or similar regulations which are applicable to or in connection with
the conveyance of the Demised Premises to Tenant. All rents shall be pro-rated
between the parties as of the date of closing. Tenant shall pay the cost of any
documentary stamp taxes required for recording the deed, as well as any transfer
taxes. Any other matters at closing not specifically provided for herein shall
be handled and the cost hereof charged to one or the other or both of the
parties as shall be the ordinary custom and practice for the handling of such
matters or the apportioning of the cost hereof then prevalent in the City of
Sunnyvale, Santa Clara County, California.

          F. The option hereunder may only be exercised by Tenant or a
subsidiary, affiliate or related entity of Tenant. If neither Tenant or a
subsidiary, affiliate or related entity is then occupying all or a portion of
the Demised Premises, Tenant shall have no rights hereunder.

          53. No Third Party Beneficiaries. The obligations of Tenant set forth
              ----------------------------
hereunder (including, without limitation, the obligations set forth in Sections
5A, 7A, 11B and 50), are covenants from Tenant to Landlord only and do not
create any third party beneficiaries of such obligations.

                                       40

<PAGE>

          54. Counterparts. This Lease may be executed in counterparts, each of
              ------------
which shall be deemed an original but all of which together shall constitute but
one and the same instrument.

          55. Consents and Approvals. Landlord and Tenant agree that any
              ----------------------
consents or approvals to be provided by either party will not be unreasonably
withheld or delayed unless specifically provided otherwise herein.

          56. Limitation on Damages. In no event shall Landlord or Tenant be
              ---------------------
liable under any theory of tort, contract, strict liability or other legal or
equitable theory for any punitive, special, incidental, indirect or
consequential damages, each of which is hereby excluded by agreement of the
parties regardless of whether or not any party has been advised of the
possibility of such damages.

          57. Tenant's Property. All fixtures, equipment, improvements and
              -----------------
appurtenances attached to, or built into, the Demised Premises that are
installed by Tenant at Tenant's expense shall be Tenant's property until the
termination of this Lease. All of the foregoing items installed at Tenant's
expense as well as all paneling, partitions and business and trade fixtures and
communication and office equipment which are installed in the Demised Premises
by Tenant, and all furniture, furnishing and other articles of movable personal
property owned by Tenant and located in the Demised Premises or the Building
(all of which are hereinafter referred to as "Tenant's Property") shall belong
to Tenant, may be removed by Tenant at any time during the term hereof, and may
be removed by Tenant at the end of the term hereof or within fifteen (15) days
thereafter, whether as a result of the normal expiration of the term of this
Lease or of the early termination of this Lease pursuant to the terms hereof (as
a result of Tenant's default hereunder or otherwise). Tenant shall repair any
damage resulting from the removal of Tenant's Property and leave the Demised
Premises in a commercially reasonable condition. Any items of Tenant's Property
not so removed shall, if not required to be removed by Tenant pursuant to
Paragraph 8 hereof, is deemed abandoned and retained by Landlord as its property
thereafter.

          Landlord waives any landlord or other lien it may have on Tenant's
Property and shall not seek to enforce same, whether upon Tenant's default or
otherwise.

                                       41

<PAGE>

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

                                    LANDLORD:

                                    SUNNYVALE PARTNERS LIMITED
                                    PARTNERSHIP, an Illinois limited partnership

                                    By: Ridge Sunnyvale, Inc.

                                    Its:  General Partner

                                    By: /s/
                                        -----------------------------------

                                    Its: President
                                         ----------------------------------

                                    TENANT:

                                    FIRST DATA MERCHANT SERVICES
                                    CORPORATION, a Florida corporation

                                    By:/s/ David Schlapbach
                                       ------------------------------------

                                     Its: Assistant Secretary
                                          ---------------------------------

                                       42

<PAGE>

                                    EXHIBIT B

                                 MASTER SUBLEASE

                                   Exhibit B

                                  Page 1 of 1

<PAGE>

                              ASSIGNMENT OF LEASE
                              -------------------

          Recitals
          --------

          Section 1.        Effective Date of Assignment
          Section 2.        Assignment
          Section 3.        Assumption of Lease Obligations/Indemnity
          Section 4.        Covenants
          Section 5.        Sublease Cash Security Deposit/Letter of Credit
          Section 6.        Brokers
          Section 7.        Condition of Premises
          Section 8.        Successors and Assigns
          Section 9.        Governing Law
          Section 10.       Attorneys' Fees
          Section 11.       Counterparts
          Exhibit A.        Master Lease
          Exhibit B.        Sublease

          This Assignment of Lease ("Assignment") is made to be effective as of
                                     ----------
the Effective Date (as defined below) between beyond.com, a Delaware corporation
("Assignor"), and Interwoven, Inc., a California corporation ("Assignee").
  --------                                                     --------

                                    Recitals
                                    --------

          A. SUNNYVALE PARTNERS LIMITED PARTNERSHIP, an Illinois limited
partnership, as landlord ("Landlord"), and FIRST DATA MERCHANT SERVICES
                           --------
CORPORATION as tenant ("Tenant"), entered into a lease, made as of March 18,
                        ------
1997 ("Master Lease"), with respect to premises described in the Master Lease
       ------------
and commonly known as 1195 West Fremont Boulevard, Sunnyvale, California
("Master Premises").
  ---------------

          B. A copy of the Master Lease (with certain confidential economic
details deleted) is attached to this Assignment as Exhibit A.
                                                   ---------

          C. Tenant, as sublessor, ("Sublessor"), subleased a portion of the
                                     ---------
Premises (the "Subleased Premises") to Software.Net Corporation (whose name was
               ------------------
changed to beyond.com), as sublessee, by means of a an undated Sublease, (the
"Sublease").
 --------

          D. A copy of the Sublease is attached to this Assignment as Exhibit B.
                                                                      ---------

          E. Interwoven occupies the balance of the Master Premises pursuant to
a Sub-Sublease with Tenant.  Interwoven is familiar with the Landlord,
Sublessor, the building in which the Subleased Premises are located and the
operation of the Master Premises.

          F. beyond.com desires to assign to Interwoven, and Interwoven desires
to receive an assignment from beyond.com, all of the Subleased Premises which is
identified in the Sublease ("Subleased Premises").  From and after the Effective
                             ------------------
Date, Interwoven shall be

<PAGE>

responsible for and shall assume all obligations of beyond.com under the
Sublease accruing on or after the Effective Date.

          G. The assignment of the Subleased Premises is conditioned upon
Landlord and Sublessor both consenting to the terms and conditions of this
Assignment.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:

                  Section 1.     Effective Date of Assignment
                  ----------     ----------------------------

          This Assignment shall become effective upon the first day
("Effective Date") on which each of the following have occurred: (i) this
  --------------
Assignment has been executed by Assignor and by Assignee, and each has received
a copy executed by the other party; (ii) Assignee has delivered to Assignor
$297,454.50 in cash in the form of a certified bank check as described in clause
5(a); (iii) Assignee's letter of credit in the amount of $297,454.50 as called
for in Section 5 has been issued with Sublessor as beneficiary; (iv) Sublessor
has released Assignor's letter of credit, as described in clause 5(b); (v)
Sublessor and Master Landlord have consented in writing to this Assignment with
no additions, deletions or amendments; (vi) Assignee has executed the Bill of
Sale for certain personal property and delivered to Assignor the sum of
$288,000, by certified bank check, pursuant to the Bill of Sale; (vii) Assignee
has delivered to Sublessor insurance certificates evidencing all insurance
required under the Sublease, in form acceptable to Sublessor, and (viii)
Assignor has tendered possession of the Subleased Premises to Assignee. If all
of the above have not occurred on or before November 22, 1999, this Assignment
shall automatically terminate and be of no further force and effect. Assignor
and Assignee shall execute a certificate certifying the date that all conditions
have been met.

                           Section 2.     Assignment
                           ----------     ----------

          As of the Effective Date, Assignor hereby assigns and transfers to
Assignee all of Assignor's right, title, and interest in the Sublease and
Assignee hereby accepts from Assignor all of Assignor's right, title, and
interest, subject to the terms and conditions set forth in this Assignment. As
of the Effective Date, Assignor releases all right, title and interest it has or
may have with respect to the cash security deposit provided for in Section 30 of
the Sublease.

            Section 3.     Assumption of Lease Obligations/Indemnity
            ----------     -----------------------------------------

          Effective as of the Effective Date, Assignee assumes and
agrees to perform and fulfill all the terms, covenants, conditions, and
obligations accruing on or after the Effective Date and required to be performed
and fulfilled by Assignor as sublessee under the Sublease, including the making
of all payments due to Sublessor under the Sublease or payable by Assignor as
Sublessee under the Sublease, all as they become due and payable. Assignee shall
indemnify, defend and hold harmless Assignor from and against any and all
claims, costs, expenses, liabilities, obligations and damages of any nature
whatsoever arising from assignee's default under the Sublease (collectively
"Claims"). Without limiting the foregoing, if any Claim is made against
 ------
Assignor, Assignee shall defend Assignor with counsel reasonably acceptable to
Assignor.

                                       2

<PAGE>

                              Section 4. Covenants
                              ---------  ---------

     (a) Assignor covenants as follows: (i) that the copy of the Sublease
attached as Exhibit B is a true and accurate copy of the Sublease as of the
            ---------
Effective Date and that there exists no other agreement affecting Assignor's
tenancy under the Sublease; (ii) the copy of the Master Lease attached as
Exhibit A, to the best of Assignor's knowledge, is a true and accurate copy of
---------
the Master Lease as of the Effective Date; and (iii) the Sublease is in full
effect and, to the best of Assignor's knowledge, no defaults exist under the
Sublease, nor any acts or events which, with the passage of time or the giving
of notice or both, could become defaults.

     (b) Assignee covenants as follows: (i) that it has read the Master Lease
attached hereto and the Sublease; and (ii) that as of the Effective Date it
shall have made such investigations of the Subleased Premises as it deems
necessary to determine that the Subleased Premises ore acceptable to it.

           Section 5. Sublease Cash Security Deposit/Letter of Credit
           ---------- -----------------------------------------------

     (a) On or before the Effective Date, Assignee shall pay Assignor
$297,454.50 in cash in the form of a certified bank check in exchange for
Assignor's assignment to Assignee of all of Assignor's right, title and interest
in the $297,454.50 cash security deposit provided for in Section 30 of the
Sublease ("Sublease Security Deposit").
           -------------------------
     (b) On or before the Effective Date, Assignee shall deliver to Sublessor
$297,454.50 in the form of an irrevocable letter of credit (the "Letter of
                                                                 ---------
Credit Security Deposit") issued by a bank acceptable to Sublessor and in form
-----------------------
and substance acceptable to Sublessor (the "Letter of Credit") and otherwise in
                                            ----------------
full compliance with Section 30 of the Sublease. Concurrently with the delivery
to Sublessor of Assignee's Letter of Credit Security Deposit, Sublessor shall
cause Assignor's letter of credit (which Sublessor currently holds as security
under Section 30 of the Sublease) to be released provided, however, no such
release shall occur unless and until Sublessor has received and approved
Assignee's Letter of Credit Security Deposit. The release by Sublessor of
beyond.com's letter of credit on or before November 22, 1999 shall be a
condition to the effectiveness of Assignor's assignment hereunder. If Assignor's
letter of credit is not released on or before such date, on twenty-four hours
written notice Assignor may rescind this Assignment at any time until its letter
of credit is released.

                               Section 6. Brokers
                               ---------- -------

     Assignor and Assignee acknowledge that no real estate broker brought about
this assignment transaction. Each party hereby agrees to indemnify the other
party against claims of any person claiming by, through or under the first party
in connection with this assignment transaction.

                        Section 7. Condition of Premises
                        ---------- ---------------------
     Assignor makes no representations or warranties with regard to the
conditions of the Subleased Premises. Assignee is in occupancy of the building
in which the Subleased Premises are located and is familiar with the
building systems that service the building and with the custom and practice of
Sublessor. Assignee may investigate the Subleased Premises and all

                                       3

<PAGE>

parts thereof prior to signing this Assignment. To the best of beyond.com's
knowledge, without investigation, beyond.com has received no notice that the
Subleased Premises are in violation of any ordinance, rule, code or regulation
of any governmental agency.

                       Section 8. Successors and Assigns
                       ---------- ----------------------

     This Assignment shall be binding on and inure to the benefit of the parties
to it, their successors-in-interest, and assigns,

                            Section 9. Governing Law
                            ---------- -------------

     This Assignment shall be governed by and construed in accordance with
California law.

                          Section 10. Attorneys' Fees
                          ----------- ---------------

     If either party commences an action against the other in connection with
this Assignment, the Sublease, for indemnity or any matter related thereto, the
prevailing party will be entitled to recover costs of suit and reasonable
attorneys' fees.

                            Section 11. Counterparts
                            ----------- ------------

     This Assignment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     The parties have executed this Assignment as of the date first above
written.

                        Assignor:       beyond.com, a Delaware corporation

                                        By:/s/
                                           -------------------------------------

                                        Title:Director of HR
                                              ----------------------------------

                        Assignee        Interwoven, Inc., a Delaware corporation

                                        By:/s/
                                           -------------------------------------

                                        Title: V.P. and CFO
                                              ----------------------------------

                                       4

<PAGE>

                           Consent of Master Landlord
                           --------------------------

     First Data Merchant Services Corporation ("First Data"), Tenant under the
                                                ----------
Master Lease and Sublandlord under the Sublease and Sunnyvale Partners Limited
Partnership ("Sunnyvale Partners"), Landlord under the Master Lease, hereby
              ------------------
consent to this Assignment of the Sublease to Assignee and Sunnyvale Partners
confirms that the consent given hereby satisfies the requirements for giving
consent as set forth in the Master Lease regarding this Assignment and First
Data confirms that the consent given hereby satisfies the requirements for
giving consent as set forth in the Sublease regarding this Assignment. However,
Assignor and Assignee remain otherwise subject to all terms and conditions of
Section 18 of the Sublease as set forth in the Master Lease. By so consenting to
the Assignment of the Sublease, Sunnyvale Partners and First Data do not hereby
consent to become a party to the Assignment. If the Master Lease is terminated
prior to the termination of the Sublease, the Sublease shall terminate
simultaneously therewith and Assignee's rights to possess to any portion of the
Subleased Premises arise solely from the provisions of the Sublease and neither
the Sublease nor this consent shall be deemed as granting Assignee any greater
tenancy rights than Subtenant under the Sublease. Nothing in this Consent or the
Assignment shall be deemed to be either (i) a modification of or an amendment to
the Sublease or Master Lease; or (ii) a release of beyond.com from its
obligations under the Sublease or a modification of any of beyond.com's
obligations under the Sublease. First Data hereby consents to the right of
beyond.com to cure any defaults by Assignee under the Sublease provided such
defaults are cured within the time periods set forth in the Sublease.
Notwithstanding any provision to the contrary in this Consent, nothing contained
herein shall operate as a consent to or approval or ratification by First Data
or Sunnyvale Partners of any of the provisions of the Assignment or as a
representation or warranty by First Data or Sunnyvale Partners, and neither
First Data nor Sunnyvale Partners shall be bound or estopped in any way by the
provisions of the Assignment. In addition, nothing herein shall be construed to
waive any future or present breach or default on the part of beyond.com under
the Sublease.

                             Sunnyvale Partners

                             Sunnyvale Partners Limited Partnership, a
                             California limited partnership

                             By: Ridge Sunnyvale, Inc.
                                ------------------------------------------------
                                By:  /s/
                                     -------------------------------------------
                                Its: President
                                     -------------------------------------------

                             First Data Merchant Services Corporation, a Florida
                             corporation

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

                                       5

<PAGE>

                                    EXHIBIT C

                         SPACE PLAN OF SUBLEASE PREMISES

                                   Exhibit C

                                  Page 1 of 1

<PAGE>

[GRAPHIC REMOVED HERE]

Second Floor
Suite 2000 has 14,142 SqFt
78 Cubes
12 HW Offices
Second Floor Common Area has 1,930 SqFt

<PAGE>
[GRAPHIC REMOVED HERE]

Suite 1001 has 21,193 SqFt
74 Cubes
18 HW Offices
8 Open Work Stations

First Floor Common Area has 2,788 SqFt

<PAGE>

                                    EXHIBIT D

                           FURNITURE RENTAL AGREEMENT

DATED: January 3, 2002

     1.       FUNDAMENTAL PROVISIONS.

              a.  Parties: Lessor:  INTERWOVEN, INC., a Delaware corporation
                           Lessee:  R2 TECHNOLOGY, INC., a Delaware corporation

              b.  Property:  (Section 2): The property to be leased is the
                  personal  property  belonging to Lessor located at 1195 West
                  Fremont  Avenue,  in the City of  Sunnyvale,  State of
                  California,  and more  particularly  described in Exhibit D-1
                  attached hereto (the "Property").

              c.  Term:  (Section 3):  Beginning on the Commencement  Date and
                  ending on the Termination  Date described below,  unless
                  commenced later or terminated earlier pursuant to the terms of
                  this Furniture Rental Agreement. The term shall be
                  automatically extended and coterminous with the term of the
                  Sublease (as such term is defined hereinafter).

              d.  Commencement Date: (Section 3):  January 15, 2002.

              e.  Termination Date: (Section 3):  August 31, 2003.

              f.  Monthly  Rent:  (Section  4):  $00.00 per month,  Monthly
                  Rent is included in Minimum  Monthly Rent (as such term is
                  defined in the Sublease) due pursuant to the Sublease.

              g.  Prepaid Rent: (Section 4): $00.00.

              h.  Security Deposit: (Section 5):  $00.00.

              i.  Addresses for Notices: (Section 13):

              To Sublessor:                   With a copy to:

              Tom Smith                       Lucy A. Lofrumento, Esquire
              Interwoven, Inc.                Silicon Valley Law Group
              803 11th Avenue                 152 North Third Street, Suite 900
              Sunnyvale, California 94089     San Jose, California 95112
              Facsimile:  (408) 220-7558      Facsimile:  (408) 286-1400

              To Sublessee:

              Dick Enck
              R2 Technology, Inc.
              325 Distel Circle
              Los Altos, California 94022
              Facsimile:  (650) 254-7201

              j.  Exhibits and Addenda: The following exhibits and any addenda
                  are annexed to this Agreement:

                  Exhibit D-1       -       Description of the Property

                                   Exhibit D

                                  Page 1 of 8

<PAGE>

              Each reference in this Furniture Rental Agreement ("Agreement") to
              any provision in Section 1 shall be construed to incorporate all
              of the terms of each such provision. In the event of any conflict
              between this Section 1 and the balance of the Agreement, the
              balance of the Agreement shall control.

     2.       THE PROPERTY.

              a.  Rental  Agreement.  Lessor  hereby  leases to Lessee and
                  Lessee  hereby  leases  from Lessor for the  Agreement  Term
                  (hereinafter defined), at the Rent (hereinafter defined) and
                  upon the terms and conditions hereinafter set forth, the
                  Property.

              b.  Condition of the Property.  Lessee shall accept  possession
                  of the Property on the  Commencement  Date  (hereinafter
                  defined) in its "As Is" condition, without warranty or
                  representation.

              c.  Warranty of Title.  Lessor hereby warrants and represents that
                  except as disclosed in writing to Lessee,  Lessor has clear
                  title in and to the Property, free of any liens, leases or
                  other encumbrances.

     3.       AGREEMENT TERM.

              a.  Term. The term of this Agreement ("Agreement Term") shall be
                  for the period of time commencing on the commencement date
                  described in Section 1 (the "Commencement Date") and ending on
                  the termination date described in Section 1 or on such earlier
                  date of termination as provided herein (the "Termination
                  Date").

              b.  Condition Precedent.  The parties hereto have entered into
                  that certain Sublease Agreement dated January 3, 2002
                  (the  "Sublease")  which  provides for the lease by Lessor
                  (as  Sublessor) to Lessee (as  Sublessee) of the premises
                  where the Property is located (the "Premises"). The parties
                  agree that (i) the commencement of the term of the Sublease is
                  a condition precedent to any rights or obligations of Lessor
                  or Lessee under this Agreement, and (ii) under no
                  circumstances shall the term of this Agreement extend beyond
                  the expiration or earlier termination of the Sublease, unless
                  mutually agreed to by the parties.

     4.       RENT AND ADDITIONAL EXPENSES.

              a.  Payment of Rent. All monies payable by Lessee under this
                  Agreement shall constitute "Rent." All Rent shall be paid in
                  lawful money of the United States, without any deduction or
                  offset, to Lessor at the address of Lessor specified in
                  Section 1 or such other place as Lessor may designate in
                  writing. No payment by Lessee of a lesser amount than the Rent
                  herein stipulated shall be deemed to be other than on account
                  of the earliest stipulated Rent, nor shall any endorsement or
                  statement on any check or any letter accompanying any check or
                  payment of Rent be deemed an accord and satisfaction, and
                  Lessor may accept such check or payment without prejudice to
                  its right to recover the balance of such Rent or to pursue any
                  other remedy. Rent for any partial calendar month at the
                  beginning or end of the Agreement Term shall be prorated based
                  on a thirty (30) day month.

              b.  Monthly Rent.  None.

              c.  Additional Rent. In addition to Monthly Rent, Lessee shall pay
                  to Lessor from time to time upon demand (to the extent that
                  such charges are not billed directly to Lessee and/or not paid
                  by Lessee directly to the party entitled to such payment), the
                  amount of personal property taxes, insurance, and other costs
                  or charges attributable to the Property, and Lessee agrees
                  that any and all charges, fees, impositions and payments of
                  any kind whatsoever appurtenant to the Property shall be
                  payable by Lessee as "Additional Rent" hereunder.

                                   Exhibit D

                                  Page 2 of 8

<PAGE>

              d.  Intentionally Deleted.

              e.  Late Charge. If Lessee fails to pay any Rent due hereunder
                  within three (3) days after Lessor notifies Lessee in writing
                  that such amount is past due, then Lessee shall pay Lessor a
                  late charge equal to ten percent (10%) of such delinquent
                  amount as liquidated damages for Lessee's failure to make
                  timely payment. This provision for a late charge shall not be
                  deemed to grant Lessee a grace period or extension of time for
                  performance. If any Rent remains delinquent for a period in
                  excess of thirty (30) days then, in addition to such late
                  charge, Lessee shall pay to Lessor interest on the delinquent
                  amount from the end of such thirty (30) day period until paid,
                  at the rate of eighteen percent (18%) per annum or the maximum
                  rate permitted by law.

     5.       SECURITY DEPOSIT.  None.

     6.       OWNERSHIP. This Agreement constitutes a lease or bailment of the
              Property and not a sale or the creation of a security interest.
              Lessee shall not have, or at any time acquire, any right, title,
              or interest in the Property except the right to possession and use
              as provided for in this Agreement. Lessor shall at all times be
              the sole owner of the Property. Although Lessor is not required to
              file a financing statement against Lessee to protect Lessor's
              interest in the Property, at Lessor's election, Lessee shall
              execute and deliver a financing statement for filing with the
              Secretary of State for the state in which the Property is located,
              in a form acceptable to Lessor.

     7.       USE. Lessee shall be entitled to use, possess and control the
              Property during the Agreement Term, provided that Lessee is not in
              default of any provision of this Agreement. Lessee shall use the
              Property in a careful and proper manner and shall not permit any
              of the Property to be used in violation of federal, state, or
              local statute, law, ordinance, rule or regulation relating to the
              possession, use, storage or maintenance of the Property. Lessee
              agrees to reimburse Lessor in full for all damage to the Property
              arising from any misuse or negligent act by Lessee, its agents,
              contractors, employees, subtenants, licensees, or invitees. Lessee
              agrees not to remove the Property from the Premises at any time.

     8.       MAINTENANCE AND REPAIRS. Lessee agrees, at its sole cost and
              expense, to maintain the Property in good condition and repair,
              allowing for reasonable wear and tear. Any installations,
              replacements, and substitutions of parts or accessories with
              respect to any of the Property shall constitute accessions and
              shall become part of the Property and shall be owned by Lessor.
              Lessor shall not be under any liability or obligation in any
              manner to provide service, maintenance, or repairs for the
              Property during the Agreement Term.

     9.       TAXES. Lessee shall be liable for and pay before delinquency all
              taxes, assessments, license fees and other public charges levied,
              assessed or imposed during the Agreement Term upon the Property.
              Upon request, Lessee shall furnish Lessor with satisfactory
              evidence of these payments. If any taxing authority requires that
              a tax or assessment set forth in the preceding sentence be paid by
              Lessor, Lessee shall, within fifteen (15) days of written notice
              from Lessor, pay to Lessor the pro rata amount of such tax or
              assessment that pertains to the Property as Additional Rent.

     10.      LESSOR'S RIGHT OF INSPECTION. Lessee shall permit Lessor and its
              agents to enter the premises where the Property is located at any
              reasonable time during non-business hours for the purpose of
              inspecting the Property, provided that Lessor provides at least
              twenty-four (24) hours prior notice (except in the case of
              emergency).

     11.      RETURN OF PROPERTY. Unless Lessee purchases the Property from
              Lessor pursuant to Section 18 above, upon the expiration or
              earlier termination of this Agreement, Lessee shall return the
              Property in the same condition and repair as the Property was
              delivered to Lessee on the Commencement Date, excepting only
              ordinary wear and tear. If Lessee fails or refuses to return the
              Property to Lessor, Lessor shall have the right to take possession
              of the Property and for that purpose to enter the premises

                                   Exhibit D

                                  Page 3 of 8

<PAGE>

              where the property is located without being liable in any suit,
              action, defense or other proceedings to Lessee.

     12.      INSURANCE. Lessee shall, from and after the Commencement Date,
              carry and maintain throughout the Agreement Term, at its sole cost
              and expense, liability insurance (to the extent required in
              Lessor's reasonable discretion) and property insurance covering
              the Property, and any replacements, substitutions or accessions of
              such items, in an amount not less than the full replacement cost
              thereof, providing protection against any peril included within
              the classification "Fire and Extended Coverage," together with
              insurance against sprinkler damage, vandalism and malicious
              mischief. Any policy proceeds shall be used for the repair or
              replacement of the Property. The insurance policies required to be
              carried hereunder shall be issued by a company satisfactory to
              Lessor and shall name Lessor (and such other lenders, persons,
              firms, or corporations as are designated by Lessor) as additional
              insured by endorsement. All policies shall be written as primary
              policies with respect to the interests of Lessor and such other
              additional insureds and shall provide that any insurance carried
              by Lessor or such other additional insureds is excess and not
              contributing insurance with respect to the insurance required
              hereunder. All policies shall also contain "cross liability" or
              "severability of interest" provisions and shall insure the
              performance of the indemnity set forth in Section 14 of this
              Agreement. Lessee shall provide Lessor with copies or certificates
              of all policies, including in each instance an endorsement
              providing that such insurance shall not be cancelled or amended
              except after thirty (30) days prior written notice to Lessor.

     13.      NOTICES. All notices, demands, consents, and approvals which may
              or are required to be given by either party to the other under
              this Agreement shall be in writing and may be given by (i)
              personal delivery, (ii) nationally recognized overnight courier
              such as Federal Express, (iii) facsimile transmission, or (iv)
              United States registered or certified mail addressed as shown in
              Section 1. Any notice or demand so given shall be deemed to be
              delivered or made on (w) the date personal service is effected,
              (x) the next business day if sent by overnight courier, (y) the
              same day as given if sent by facsimile transmission which is
              received by 5:00 p.m. Pacific time with a copy deposited in the
              United States mail, postage prepaid, or (z) the second business
              day after the same is deposited in the United States Mail as
              registered or certified and addressed as above provided with
              postage thereon fully prepaid. Either party hereto may change its
              address at any time by giving written notice of such change to the
              other party in the manner provided herein at least ten (10)
              calendar days prior to the date such change is desired to be
              effective.

     14.      INDEMNITY; EXEMPTION OF LESSOR FROM LIABILITY.

              a.  Lessee Indemnity. Lessee shall indemnify, defend (with counsel
                  reasonably satisfactory to Lessor), protect and hold Lessor
                  harmless from and against any and all claims, demands,
                  actions, suits, proceedings, liabilities, obligations, losses,
                  damages, judgments, costs, expenses (including, but not
                  limited to, attorneys', consultants' and expert witness fees)
                  arising out of or related to any injury or death to any person
                  or injury or damage to property caused by, arising out of, or
                  involving (i) Lessee's use, possession, operation or storage
                  of the Property, (ii) a breach by Lessee in the performance in
                  a timely manner of any obligation of Lessee to be performed
                  under this Agreement, or (iii) the negligence or intentional
                  acts of Lessee or Lessee's agents, contractors, employees,
                  subtenants, licensees, or invitees. This indemnity shall
                  survive the expiration or earlier termination of this
                  Agreement.

              b.  Lessee Waiver. Lessee, as a material part of the consideration
                  to Lessor, hereby assumes all risk of damage to the Property
                  or injury to persons or property of another, and for all other
                  risks and liabilities arising from the use, operation,
                  condition, possession, or storage of the Property and Lessee
                  hereby waives all claims in respect thereof against Lessor,
                  except in connection with damage or injury caused solely by
                  the gross negligence or willful misconduct of Lessor or its
                  authorized agents; provided, however, that in no event shall
                  Lessor be liable for any loss of profits or any special,
                  indirect, incidental, consequential or punitive damages,
                  however caused and on any

                                   Exhibit D

                                  Page 4 of 8

<PAGE>

                  theory of liability. This waiver shall survive the expiration
                  or earlier termination of this Agreement.

               c. Loss or Damage to Property. If any item constituting all or
                  part of the Property becomes lost, stolen, destroyed or
                  damaged beyond repair, Lessee shall give Lessor written notice
                  of such loss or damage within three (3) days of such loss or
                  damage. Within thirty (30) days following the delivery of such
                  notice, Lessee shall, at Lessee's sole cost and expense (less
                  any available proceeds of insurance), replace such item with
                  an item of equal or greater quality and value, subject to
                  Lessor's approval. If Lessee fails to replace such item within
                  such thirty (30) day period, then Lessor may, at Lessor's
                  election, invoice Lessee for the replacement cost of such
                  item, which amount shall be paid by Lessee as Additional Rent
                  along with the next installment of Monthly Rent, and this
                  Agreement shall terminate with respect to that item.

     15.      ASSIGNMENT; ENCUMBRANCES. Except in connection with an assignment
              of the Sublease or a subletting of the Premises, Lessee shall not
              voluntarily or involuntary or by operation of law assign this
              Agreement or enter into license agreement, sublet all or any of
              the Property, or otherwise transfer, mortgage, pledge, hypothecate
              or encumber all or any part of Lessee's interest in this Agreement
              or in the Property. Any attempt to do so shall be wholly void and
              shall constitute a default by Lessee under this Agreement.

     16.      LESSEE  DEFAULT.  Lessor,  at its option,  may by written notice
              to Lessee declare Lessee in default on the occurrence of any of
              the following:

              a.  Failure by Lessee to pay Rent or perform any of its
                  obligations under this Agreement;

              b.  Institution by or against Lessee of any proceeding in
                  bankruptcy or insolvency that is not dismissed within sixty
                  (60) days, or the reorganization of Lessee under any law, or
                  the appointment of a receiver or trustee for the goods and
                  chattels of Lessee, or any assignment by Lessee for the
                  benefit of creditors; or

              c.  Any failure by Lessee to observe or perform any term,
                  covenant, or condition of this Agreement.

     17.      RIGHTS, REMEDIES, AND OBLIGATIONS ON DEFAULT.

              a.  Lessor's  Rights and  Remedies.  After the  default of Lessee,
                  and on notice  from Lessor that Lessee is in default,
                  Lessor shall have the following options:

                        i. To terminate the Agreement and Lessee's rights under
                           the Agreement;

                       ii. To declare the balance of all unpaid Rent required
                           of Lessee under the Agreement to be due and payable
                           immediately, in which event Lessor shall be entitled
                           to the balance due together with interest at the rate
                           of ten percent (10%) per annum, or the maximum rate
                           permitted by law, whichever is less, from the date of
                           notification of default to the date of payment;

                      iii. To repossess the Property without legal process
                           free of all rights of Lessee in and to the Property.
                           Lessee authorizes Lessor or Lessor's agent to enter
                           on any premises where the Property is located and
                           repossess and remove it. Lessee specifically waives
                           any right of action Lessee might otherwise have
                           arising out of the entry and repossession, and
                           releases Lessor of any claim for trespass or damage
                           caused by reason of the entry, repossession, or
                           removal.

              b.  Lessee's  Obligation for Lessor's Costs. After default,
                  Lessee shall reimburse Lessor for all reasonable expenses of
                  repossession and enforcement of Lessor's rights and remedies,
                  together

                                   Exhibit D

                                  Page 5 of 8

<PAGE>

                  with interest at the rate of ten percent (10%) per annum, or
                  the maximum rate permitted by law, whichever is less, from the
                  date of such default.

              c.  Remedies Cumulative. The remedies of Lessor shall be
                  cumulative to the extend permitted by law, and may be
                  exercised partially, concurrently, or separately. The exercise
                  of one remedy shall not be deemed to preclude the exercise of
                  any other remedy.

     18.      OPTION TO PURCHASE PROPERTY. At any time prior to the Termination
              Date, Lessee shall have the right to purchase the Property from
              Lessor by giving Lessor thirty (30) days advance written notice.
              The purchase price for the Property shall be: (a) for the Property
              located in Suite 1001 (as such term is defined in the Sublease),
              as evidenced by the attached Exhibit A, the sum of Zero Dollars
              ($00.00); and (ii) for the Property located in Suite 2000 (as such
              term is defined in the Sublease), as evidenced by the attached
              Exhibit A, the sum of Fifty Five Thousand Seven Hundred Twenty
              Dollars ($55,720.00). Said purchase price, plus applicable taxes
              thereon, shall be paid by Lessee to Lessor, in cash, no later than
              thirty (30) days after the delivery of Lessee's written notice of
              election to purchase the Property. Lessor makes no representations
              or warranties regarding the condition of the Property, and Lessee
              agrees that the Property shall be purchased in its "as if" "where
              is" condition and that Lessee shall rely solely on its own
              examination and inspection of the Property. If Lessee does not
              elect to purchase the Property from Lessor prior to the
              Termination Date, then Lessor may remove the Property from the
              Premises, at Lessor's sole cost and expense, within thirty (30)
              days following the Termination Date or as otherwise mutually
              agreed to by the
              parties.

     19.      GENERAL PROVISIONS.

              a.  Captions. The captions of the paragraphs of this Agreement are
                  for convenience only and shall not be deemed to be relevant in
                  resolving any question of interpretation or construction of
                  any article of this Agreement.

              b.  Attachments. Exhibits attached hereto and addenda are deemed
                  by attachment to constitute part of this Agreement and are
                  incorporated herein.

              c.  Severability. If any term or provision of this Agreement
                  shall, to any extent, be determined by a court of competent
                  jurisdiction to be invalid or unenforceable, the remainder of
                  this Agreement shall not be affected thereby, and each term
                  and provision of this Agreement shall be valid and enforceable
                  to the fullest extent permitted by law.

              d.  Attorneys' Fees; Costs of Suit. If Lessee or Lessor shall
                  bring any action for any relief against the other, declaratory
                  or otherwise, arising out of this Agreement, including any
                  suit by Lessor for the recovery of Rent or possession of the
                  Property, the prevailing party shall be entitled to recover
                  its reasonable attorneys' fees and costs of suit.

              e.  Time.  Time is of the essence of this Agreement and each and
                  every provision hereof.

              f.  Binding Effect; Choice of Law. All the provisions hereof are
                  to be construed as both covenants and conditions, as though
                  the words importing such covenants and conditions were used in
                  each separate paragraph hereof. All of the provisions hereof
                  bind and inure to the benefit of the parties hereto and their
                  respective heirs, legal representatives, successors and
                  assigns. This Agreement shall be governed by the laws of the
                  State of California.

              g.  Waiver.  No covenant,  term or condition or the breach thereof
                  shall be deemed waived,  except by written  consent of
                  the party against whom the waiver is claimed, and any waiver
                  of the breach of any covenant, term or condition shall not be
                  deemed to be a waiver of any other covenant, term or
                  condition. Acceptance by Lessor of any performance by Lessee
                  after the time the same shall have

                                   Exhibit D

                                  Page 6 of 8

<PAGE>

                  become due shall not constitute a waiver by Lessor of the
                  breach or default of any covenant, term or condition unless
                  otherwise expressly agreed to by Lessor in writing.

               h. Binding Effect. Preparation of this Agreement by Lessor or
                  Lessor's agent and submission of the same to Lessee shall not
                  be deemed an offer to lease. This Agreement shall become
                  binding upon Lessor and Lessee only when fully executed by
                  Lessor and Lessee.

              i.  Entire Agreement. This instrument and the Sublease, along with
                  any exhibits and addenda to those documents, constitutes the
                  entire agreement between Lessor and Lessee relative to the
                  Property. This Agreement may be altered, amended or revoked
                  only by an instrument in writing signed by both Lessor and
                  Lessee. There are no oral agreements or representations
                  between the parties affecting this Agreement, and this
                  Agreement supersedes and cancels any and all previous
                  negotiations, arrangements, brochures, agreements,
                  representations and understandings, if any, between the
                  parties hereto.

              j.  Execution. This Agreement may be executed in one or more
                  counterparts, each of which shall be considered an original
                  counterpart, and all of which together shall constitute one
                  and the same instrument. Each person executing this Agreement
                  represents that the execution of this Agreement has been duly
                  authorized by the party on whose behalf the person is
                  executing this Agreement.

                    (signatures to follow on succeeding page)

                                   Exhibit D

                                  Page 7 of 8

<PAGE>

Lessor:                                 Lessee:

INTERWOVEN, INC.                        R2 TECHNOLOGY, INC.
a Delaware corporation                  a Delaware corporation

By:       /s/ D. Allen                  By:      /s/ Richard Enck
     -----------------------------           -----------------------------
Name:         D. Allen                  Name:        Richard Enck
       ---------------------------             -----------------------------
Its:            CFO                     Its:            COO
      ----------------------------            -----------------------------

                                   Exhibit D

                                  Page 8 of 8

<PAGE>

                                   EXHIBIT D-1

                             DESCRIPTION OF PROPERTY

<TABLE>
<S>                                                                       <C>           <C>         <C>
Suite 1001                                                                Qty           Cost        20% of cost
Haworth Cubicles - 7x7 - purchased used) $300/each                        107           32100
Smed Lifespace office walls to build 12 offices                            12           24000
Steel Case Context free standing office furniture                          15           17300
(1 set 3 months old = $3300, used $1000 each)
Leland Marquette chairs (cafeteria) purchased new by beyond 12/98          44           2200
Square tables in cafeteria purchased new by beyond 12/98                    6           600
Conference room tables (modular set in Ste. 1001) new June 1998             1          $4,600
    (6 rectangular tables, 4 wedges, 1 credenza)
Black high back chairs $250/each new                                      136           34000
1 small refrigerator new in 1999                                            1           $400
Teknion maroon cubes 8 X 8                                                 12          $36,000
Black desk set up                                                           1           $1,200
                                                                   Total             $152,400.00    $30,480.00

Suite 2000
Conference rm table - yellow w/ 8 chairs purchased Dec. 1997 used           1         $3,000.00
Conference rm table - black new 1998                                        1          $300.00
Teknion cubes (summer of 1998) 8 X 8 ($3346 each)                          74        $247,604.00
Chairs - black high back cloth $250 each                                   56         $14,000.00
           there are an uncounted number of odd chairs
Free standing office furniture in offices                                   9         $10,800.00
Cubes in fishbowl (Haworth)                                                 7          $2,100.00
1 small refrigerator                                                        1           $50.00
Microwave - purchased new                                                   1          $150.00
Dishwasher (new)                                                            1          $600.00
                                                                   Total             $278,604.00    $55,720.80

</TABLE>

                                  Page 1 of 1

<PAGE>

                                    EXHIBIT E

                               CONSENT TO SUBLEASE

         THIS CONSENT TO SUBLEASE ("Consent") is made by SUNNYVALE PARTNERS
LIMITED PARTNERSHIP, an Illinois limited partnership ("Master Lessor") and FIRST
DATA MERCHANT SERVICES CORPORATION, a Florida corporation ("Master Sublessor")
for the benefit of INTERWOVEN, INC., a Delaware corporation ("Sublessor") and R2
TECHNOLOGY, INC., a Delaware corporation ("Sublessee"), in the context of the
following facts:

                                    RECITALS

     A.       Master Sublessor is leasing from Master Lessor approximately
              seventy five thousand one hundred ninety seven (75,197) rentable
              square feet located at 1195 West Fremont Avenue, in the City of
              Sunnyvale, State of California ("Premises"), on the terms and
              subject to the conditions of that certain Build-to-Suite Lease
              Agreement dated as of March 18, 1997 ("Master Lease").

     B.       Sublessor is leasing from Master Sublessor the Premises plus
              interior common areas consisting of approximately four thousand
              four hundred eighty eight (4,488) square feet on the terms and
              subject to the conditions of that certain Sublease dated as of
              April 24, 1998 and that certain undated Assignment of Lease by and
              between Sublessor, as assignee, and beyond.com, a Delaware
              corporation, as assignor, as subsequently amended or modified
              (collectively, the "Master Sublease").

     C.       Sublessor desires to sublease to Sublessee a portion of the
              Premises consisting of approximately thirty nine thousand five
              hundred seventy five (39,575) rentable square feet (the "Sublease
              Premises"), and Sublessee desires to sublease the Sublease
              Premises from Sublessor, on the terms and conditions set forth in
              the Sublease Agreement to which this Consent is attached (the
              "Sublease").

     D.       Sublessor  and  Sublessee  now desire to obtain the  consent of
              Lessor and Master  Sublessor  to the  Sublease as
              required by the Master Lease and Master Sublease.

         NOW, THEREFORE, Master Lessor and Master Sublessor hereby consent to
the execution and delivery of the Sublease by and between Sublessor and
Sublessee and to the subletting of the Premises by Sublessor to Sublessee,
subject to the following terms and conditions:

                                    AGREEMENT

         1.       Master  Lessor and Master  Sublessor  consent to the  sublease
                  of the  Sublease  Premises,  subject to the terms and
                  conditions hereinafter set forth.

         2.       Master Lessor and Master Sublessor acknowledge that Sublessee
                  will begin occupying the Sublease Premises on or about January
                  11, 2002. Master Lessor consents to such occupancy date.
                  Master Sublessor consents to such occupancy date provided
                  Master Lessor has executed this Consent prior to such date.

         3.       The "Use" provision in the Master Lease and the Master
                  Sublease is hereby amended to permit the assembly of computer
                  system components for distribution, provided such use is in
                  compliance with all applicable laws and further provided that
                  Sublessee otherwise is in full compliance with the Master
                  Lease, Master Sublease and this Consent.

         4.       Provided Sublessee complies with Environmental Laws (as such
                  term is defined in the Sublease), Sublessee shall be permitted
                  to use KODAK Medical X-Ray Developer, Working Solution and
                  KODAK Medical X-Ray Liquid Fixer and Replenisher in an amount
                  not to exceed twenty (20) gallons in the aggregate per month.
                  To the extent Sublessee desires to use different or additional
                  chemicals or greater amounts of said chemicals, Sublessee
                  shall be required to obtain Master

                                   Exhibit E

                                  Page 1 of 4

<PAGE>

                  Lessor, Master Sublessor and Sublessor's consent, which
                  consent may be withheld in said party's sole and absolute
                  discretion. Sublessee acknowledges and agrees that Master
                  Sublessor makes no warranties or representations regarding the
                  physical condition or the zoning of the Sublease Premises or
                  the suitability of the Sublease Premises for Sublessee's
                  intended use thereof. Sublessee has had an opportunity to
                  inspect the Sublease Premises, including the roof and
                  structural components of the Complex; the electrical,
                  plumbing, HVAC, and other building systems serving the
                  Sublease Premises; and the environmental condition of the
                  Sublease Premises and related common areas; and to hire
                  experts to conduct such inspections on its behalf. Sublessee
                  is leasing the Sublease Premises based on its own inspection
                  of the Sublease Premises and those of its agents, and is not
                  relying on any statements, representations or warranties of
                  Master Sublessor, or Master Sublessor's agents regarding the
                  physical condition of the Sublease Premises. Sublessee
                  acknowledges that neither Master Sublessor nor Master
                  Sublessor's agents, has made any representation or warranty
                  with respect to the Sublease Premises, the permitted uses that
                  can be made of the Sublease Premises under existing laws, or
                  the suitability of same for the conduct of Sublessee's
                  business, nor has Master Sublessor agreed to undertake any
                  modification, alteration or improvement to the Sublease
                  Premises.

         5.       Master Lessor consents to Sublessee's alterations to the
                  Sublease Premises set forth on Exhibit F to the Sublease and
                  agrees that such alterations are not required to be removed
                  upon expiration of the Sublease or upon expiration of
                  Sublessee's occupancy under its subsequent sublease with
                  Master Sublessor. Master Sublessor consents to Sublessee's
                  alterations to the Sublease Premises set forth on Exhibit F;
                  provided that Sublessee will provide detailed plans and
                  specifications in association with such items for Sublessor's
                  approval in connection with such alterations, provided
                  Sublessor shall not unreasonably withhold its consent to such
                  alterations and further provided Sublessor shall act in good
                  faith to grant its consent if the detailed plans and
                  specifications are logically consistent with the alterations
                  described on Exhibit F and consistent with the overall
                  character, structure and nature of the Building. Master
                  Sublessor agrees that such alterations do not have to be
                  removed provided Master Lessor has agreed that such removal is
                  not required.

         6.       Neither the Sublease, nor Master Lessor's or Master
                  Sublessor's consent thereto shall be deemed to modify or amend
                  the terms of the Master Lease or Master Sublease, as
                  applicable, except as expressly provided in this Consent.
                  Nothing herein shall be construed to modify, waive, impair or
                  affect any rights of Master Sublessor against any person or
                  entity liable or responsible for the performance of the terms
                  of the Master Lease, or to enlarge or increase Master
                  Sublessor's obligations under the Master Sublease. Without in
                  any way limiting the foregoing, nothing herein shall indicate
                  any waiver by Master Sublessor of any right, title, claim or
                  interest in or to any of the furniture in the Building.

         7.       The Sublease shall be subject and subordinate at all times to
                  the Master Lease and Master Sublease and all of the
                  provisions, covenants and conditions thereof. Neither
                  Sublessor nor Sublessee shall take, permit or suffer any
                  action which would violate the Master Sublease or this
                  consent.

         8.       Neither the Sublease, nor Master Sublessor's consent thereto
                  shall release or discharge Sublessor from any liability under
                  the Master Sublease, as applicable, and Sublessor shall remain
                  liable and responsible for the full performance and observance
                  of all of the provisions, covenants and conditions set forth
                  in the Master Sublease on the part of Sublessor (as sublessee
                  under the Master Sublease) to be performed and observed.

         9.       This consent by Master Lessor and Master Sublessor shall not
                  be construed as a consent by Master Lessor or Master Sublessor
                  to any further subletting either by Sublessor or Sublessee.
                  The Sublease may not be assigned, nor shall the Premises, or
                  any part thereof, be further sublet without the prior written
                  consent of Master Lessor and Master Sublessor in each instance
                  in accordance with the terms of the Master Lease or Master
                  Sublease, as applicable.

                                   Exhibit E

                                  Page 2 of 4

<PAGE>

     10.      Sublessor and Sublessee agreed that Master Sublessor is not
              responsible for payment of any brokerage commissions or finder's
              fees or similar charges of any nature in connection with this
              transaction, whether in connection with this Sublease or in the
              event that Sublessee is to become a direct tenant of Master
              Sublessor upon termination of the Master Sublease prior to the
              expiration thereof. Sublessor and Sublessee each jointly and
              severally agree to indemnify and hold Master Sublessor harmless
              from and against any claims, liability, losses or expenses,
              including reasonable attorneys fees, incurred by Master Sublessor
              in connection with any claims for commission by any broker or
              agent in connection with this transaction or any such direct
              tenancy. The parties agree that Sublessor is not responsible for
              any brokerage commissions claimed or owed in connection with the
              Sublease between Master Sublessor and Sublessee entered
              contemporaneously herewith for certain premises in the Building
              and commencing September 1, 2003.

     11.      Sublessor immediately and irrevocably assigns to Master Sublessor
              all rent and other payments due from Sublessee under the Sublease;
              provided, however, that Sublessor shall have a license to collect
              such rent and other payment until the occurrence or event of
              default under any of the provisions of the Sublease. Master
              Sublessor shall credit Sublessor with any rent received by Master
              Sublessor under such assignment but the acceptance of any payment
              on account of rent from the Sublessee as a result of any such
              default shall no manner whatsoever serve to release Sublessor
              under the terms, covenants, conditions provisions or agreements
              under the Master Sublease. No such payment of rent or any other
              payment by the Sublessee by the Master Sublessor and or acceptance
              of such payment (as Master Sublessor), regardless of the
              circumstances or reasons therefore, shall in any manner whatsoever
              be deemed an attornment by the Sublessee to the Master Sublessor
              in the absence of a specific written agreement signed by Master
              Sublessor to such effect.

     12.      In the event of the expiration or early termination or surrender
              of the Master Sublease as set forth above and in the event that,
              Master Sublessor shall take over all the rights, title and
              interests of Sublessor as Sublessor and the Sublessee shall attorn
              to Master Sublessor pursuant to the then executory provisions of
              the Sublease, except that Master Sublessor shall not be (i) liable
              for any act or omission of Sublessor under the Sublease; (ii)
              subject to any credit, offset claim, counter-claim demand or
              defense which Sublessee may have against Sublessor; (iii) bound by
              any previous modification of the Sublease or by any previous
              prepayment of more than one months rent; (iv) bound by any
              covenant of Sublessor to undertake or complete any construction of
              the Premises or any portion thereof; (v) required to account for
              any security deposit of the Sublessee other than any security
              deposit actually delivered to Master Sublessor by Sublessor; (vi)
              bound by any obligation to make any payment to Sublessee or grant
              any credits excepts for services, repairs, maintenance and
              restoration provided for under the Sublessee to be performed after
              the date of such attornment; (vii) responsible for any monies
              owing by Sublessor to the credit of Sublessee; (viii) required to
              remove any person occupying the Premises or part thereof.
              Similarly, in the event that the Master Sublease and Master Lease
              expire, Master Lessor shall take over all rights, title and
              interests of the Sublessor and shall not disturb the rights and
              estate of Sublessee under the Sublease, and Sublessee shall attorn
              to Master Lessor, subject to the terms and conditions set forth
              above.

     12.      All notices to Master Sublessor shall be delivered in accordance
              with Section 11 of the Sublease.

     13.      Sublessor and Sublessee agree that (i) a fully executed copy of
              the Sublease has been provided to Master Sublessor; (ii) Master
              Sublessor is not a party to the Sublease and is not bound by the
              provisions thereof; (iii) Master Sublessor is not approving or
              disapproving any of the provisions of the Sublease (but does agree
              to the use contemplated by Sublessee as set forth herein); and
              Sublessor represents that the Sublease has not been assigned nor
              has the Premises been sublet to any other party. Nothing herein
              contained shall be construed to as a consent to or approval or
              satisfaction by Master Sublessor of any of the provisions of the
              Sublease, it is merely consent to the act of subletting by the
              Sublessor to Sublessee.

                                   Exhibit E

                                  Page 3 of 4

<PAGE>

         14.      In the event of any conflict between the provisions of the
                  Master Lease or this Consent and the Sublease, the provisions
                  of the Master Sublease or this Consent shall prevail
                  unaffected by the provisions of the Sublease. In the event of
                  any conflict between the provisions of this Consent and the
                  provisions of the Master Sublease, the provisions of this
                  Consent shall prevail.

                    (signature to follow on succeeding page)

                                   Exhibit E

                                  Page 4 of 4

<PAGE>

IN WITNESS WHEREOF, this Consent to Sublease is executed as of the date set
forth below.

Master Lessor:                          Master Sublessor:

SUNNYVALE PARTNERS LIMITED PARTNERSHIP  FIRST DATA MERCHANT SERVICES CORPORATION
an Illinois limited partnership         a Florida corporation

By:      /s/ Jami Martell               By:  /s/ Jeffery B. Baer
     -------------------------------             -------------------------------
Name:    Jami Martell                   Name:    Jeffery B. Baer
       -------------------------                 -------------------------------
Its:     General Partner                Its:     Authorized Agent
      ---------------------------                -------------------------------

Date:  January 11, 2002                 Date:    January 4, 2002
       -------------------------                 -------------------------------

Sublessor:                              Sublessee:

INTERWOVEN, INC.                        R2 TECHNOLOGY, INC.,
a Delaware Corporation                  a Delaware Corporation

By:      /s/ D. Allen                   By:  /s/ Richard Enck
     ----------------------------                -------------------------------
Name:    V.P. and CFO                   Name:    Richard Enck
       ------------------------                  -------------------------------
Its:     January 4, 2002                Its:     COO
      --------------------------                 -------------------------------

Date:                                   Date:    January 3, 2002
       -----------------------------             -------------------------------

                                   Exhibit E

                                  Page 5 of 4

<PAGE>

                                    Exhibit F

                         Sublessee Permitted Alterations

                                   Exhibit F

                                  Page 1 of 1

<PAGE>
[GRAPHIC REMOVED HERE]
Install Roll-up Door Here,
Add Ramp from Sidewalk to Lot Surface

1195 W. Fremont Avenue
First Floor-Left Side
Suite 1001

<PAGE>

                                   EXHIBIT G
                                   ---------

                             SUBLESSOR'S EQUIPMENT

<PAGE>

                              INTERWOVEN EQUIPMENT

                 Equipment must remain until 1/31/02 or 2/15/02
                           DO NOT MOVE OR DISCONNECT

                            [GRAPHIC OF FLOOR PLAN]

                                               (1) 3600 Cisco Router
                                               Must Remain on Rack Until 2/15/02

(1) NEC PBX & Rectifier                                 1195 W. Fremont Avenue
Must Stay Until 1-31-02                                 First Floor--Left Side
                                                        Suite 1001

(1) 7200 Cisco Router                                   Tom Smith (408) 530-7006
Must Stay Until 2-15-02<PAGE>
                                                                   EXHIBIT 10.16

                                    SUBLEASE

                                 BY AND BETWEEN

                    FIRST DATA MERCHANT SERVICES CORPORATION

                                    SUBLESSOR

                                       AND

                               R2 TECHNOLOGY, INC.

                                    SUBTENANT

<PAGE>

                                    SUBLEASE

         THIS SUBLEASE ("Sublease") is made and dated as of the 3 day of
January, 2002 by and between FIRST DATA MERCHANT SERVICES CORPORATION, a Florida
corporation, having an address of c/o First Data Properties, 12500 E. Belford
Ave., Suite M16-S Englewood, CO 80112, Attn: Contract Administrator
("Sublessor") and R2 TECHNOLOGY, INC. a Delaware corporation, having an address
of 325 Distel Circle, Los Altos, California 94022 ("Subtenant").

                                   WITNESSETH:

         WHEREAS, Sublessor is tenant under that certain Build to Suit Lease
Agreement dated as of March 18, 1997, as amended by First Amendment to Build to
Suit Lease dated as of December 19, 1997 (as amended, the "Main Lease") with
Sunnyvale Partners Limited Partnership, an Illinois limited partnership
("Overlandlord") as landlord, whereby Overlandlord leased to Sublessor land and
improvements consisting of a to-be-constructed two-story office building
containing approximately 75,197 rentable square feet of office space located at
1195 West Fremont Avenue, Sunnyvale, CA (the "Building"),

         WHEREAS, the Building has since been constructed;

         WHEREAS, Sublessor desires to sublet to Subtenant a portion of he
Building comprised of approximately 52,185 rentable square feet located on the
first and second floors of the Building, as more particularly shown and
described on Exhibit B attached hereto and incorporated herein by reference (the
"Premises"), and Subtenant desires to sublet the Premises from Sublessor;

         WHEREAS, the parties are agreeable to entering into a sublease of the
Premises on the terms and conditions set forth below; and

         WHEREAS, unless otherwise defined in this Sublease, all capitalized
terms used herein have the meanings set out for them in the Main Lease.

                                    AGREEMENT

         NOW, THEREFORE, for and in consideration of the mutual promises set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Subtenant hereby
agree as follows:

         1. Incorporation of Recitals. The foregoing recitals are incorporated
            --------------------------
into and made a part of this Sublease as if each were specifically recited
herein.

         2. Demise and Term. Sublessor hereby subleases the Premises to
            ---------------
Subtenant, and Subtenant hereby hires and accepts the Premises from Sublessor.
The Premises shall include the appurtenant right to the use, in common with
others, of the lobbies, entrances, stairs, corridors, elevators and other public
portions of the Building, to the extent that Sublessor has the right to use the
same as Tenant under the Main Lease. The term of this Sublease (the "Term")
shall be the period commencing September 1, 2003 (the "Commencement Date"), and
ending on October

<PAGE>

31, 2006 (the "Expiration Date"), unless sooner terminated as herein
provided. Subtenant shall have no option to renew or extend the term of this
Sublease or to expand the Premises except as expressly set forth in Section 36
hereinafter set forth. Subtenant acknowledges that the estimation of the square
footage of the Premises as set forth above shall be binding on Subtenant, and
such square footage amount shall not be decreased even if the actual square
footage is less than said estimate. Notwithstanding any provision in this
Sublease to the contrary, in the event that Sublessor is unable to deliver
possession of the Premises to Subtenant on the Commencement Date, Sublessor
shall have no obligation or liability to Subtenant for such failure (the parties
agreeing that delivery of the portion of the Premises covered by the Interwoven
Subsublease hereinafter defined shall be deemed to have occurred on the
Commencement Date); provided, however, Subtenant shall not be required to pay
rent for that portion of the Premises which Sublessor is not able to deliver,
and further provided that in the event Sublessor is not able to deliver
possession of the Premises by Subtenant on or before the date that is twelve
(12) months after the Commencement Date (the "Deadline"), Subtenant, as its sole
and exclusive remedy hereunder, shall be entitled to terminate this Sublease by
notice to Sublessor within thirty (30) business days after said Deadline.

         3. Subtenant Alterations. Subtenant shall not make any alterations,
            ---------------------
additions or improvements to the Sublet Premises without the prior consent of
Sublessor. All alterations, installation, removals and restoration shall be
performed in a good and workmanlike manner so as not to damage or alter the
primary structure or structural facilities of the Building and other
improvements situated on the Sublet Premises or of which the Sublet Premises are
a part. All alterations, installations, removals and restoration shall, at
Sublessor's sole discretion, either be removed by Subtenant prior to the end of
the term or earlier termination thereof, or shall remain on the Premises at the
end of the term, provided that when Subtenant requests Sublessor consent,
Subtenant shall at such time request whether removal will be required at the end
of the Term and if Sublessor does not state in its consent that removal will be
required, Subtenant shall not be required to remove such approved alterations,
installations or restorations. All contractors performing any alterations on
behalf of Subtenant shall be subject to Sublessor's approval. Along with
Subtenant's request for Sublessor's consent to Subtenant's proposed general
contractors and/or subcontractors, Subtenant shall notify Sublessor of its
estimate of the total cost of the work involved and, at Sublessor's option,
Subtenant must provide to Sublessor adequate assurance that Subtenant has the
financial resources to pay for such cost. Subtenant's contractor shall be duly
licensed and shall obtain and provide Sublessor with certificates evidencing
worker's compensation, public liability and property damage insurance in amounts
and forms and with companies satisfactory to Sublessor. Subtenant's agreement
with its contractors shall require such contractors to provide daily cleanup of
the work area to the extent such cleanup is necessitated by any such work, and
to take reasonable steps to minimize interference with other tenants' use and
occupancy of the Building. Subtenant and Subtenant's contractors shall comply
with any other reasonable rules, regulations or requirements that Sublessor or
Overlandlord shall impose. Subtenant shall promptly pay any and all costs and
expenses in connection with or arising out of the performance of any such
alterations and shall furnish to Sublessor evidence of such payment upon
request. On completion of any alterations, Subtenant shall submit to Sublessor
(i) as-built drawing showing all the applicable improvements; (ii) a certified
written statement from the architect that the improvements have been completed
in compliance with the approved drawings and applicable laws; (iii) final lien
waivers and releases from the architect showing all contractors and all
subcontractors and

                                       2

<PAGE>

suppliers; and (iv) copy of any certificate of occupancy or other
governmental certificates or permits required by law. In addition, Subtenant
hereby acknowledges that it is Subtenant's sole and exclusive responsibility to
cause the Premises and any alterations, improvements or modifications thereto to
comply with all applicable laws, including the Americans with Disabilities Act
and other ordinances, orders, rules, regulations and requirements of all the
governmental authorities having jurisdiction thereof. Subtenant shall repair or
replace (or at Sublessor's election, reimburse Sublessor for the costs of
repairing or replacing) any portion of the Building or Premises or Sublessor's
property damaged, lost, or destroyed in connection with any such alterations and
shall indemnify, defend and hold the Sublessor harmless from and against any and
all losses, costs, damages, expenses and liabilities, including without
limitation, reasonable attorneys' fees, incurred by Sublessor in connection with
the work, including incurred by Sublessor in connection with any such
alteration, improvement or modification, including but not limited to, claims
based on personal injury or property damage, contract claims or lien claims.

         4. Use. Subtenant shall use and occupy the Premises only for research
            ---
and development and for general office purposes and assembly of computer system
components for distribution and otherwise in strict compliance with the
allowable uses set forth in Section 5 of the Main Lease, as well as all
applicable laws and insurance requirements. Subtenant shall not commit or suffer
to be committed any annoyance, waste, nuisance or any act or thing which is
against public policy or which may disturb the quiet enjoyment of any other
tenant or occupant of the Building. Subtenant agrees not to deface or damage the
Building in any manner.

         5. Subordinate to Main Lease; Quiet Enjoyment. This Sublease is and
            ------------------------------------------
shall be subject and subordinate to the Main Lease. A copy of the Main Lease
(from which certain economic terms have been excised) is attached hereto as
Exhibit A and made a part hereof. Sublessor agrees that upon performance of all
---------
terms, covenants, obligations, conditions provisions hereof on Subtenant's part
to be kept and performed, but subject to the terms of Paragraph 13 hereof,
Sublessor shall not disturb Subtenant in the quiet enjoyment and possession of
the Premises during the term of this Sublease, subject to the terms of the Main
Lease, any ground lease and any financing encumbering the Building. Sublessor
agrees that it will not voluntarily enter into any agreement with Overlandlord
which would result in the termination of the Main Lease prior to the Expiration
Date or which would negatively affect the rights or obligations of Sublessor
under this Sublease. Sublessor shall notify Subtenant of any involuntary change.

         6. Compliance with Main Lease.
            --------------------------

            (a) Except as set forth in the immediately succeeding sentence, the
     terms, covenants and conditions of the Main Lease (the "Incorporated
     Provisions") are incorporated herein by reference. Those sections of the
     Main Lease listed on Exhibit C attached hereto and made a part hereof are
     specifically excluded from the Incorporated Provisions. Except to the
     extent that the Incorporated Provisions are inapplicable or are modified by
     the provisions of this Sublease, the Incorporated Provisions binding or
     inuring to the benefit of the landlord thereunder shall, in respect of this
     Sublease, bind or inure to the benefit of Sublessor, and the Incorporated
     Provisions, binding or inuring to the benefit of the tenant thereunder
     shall, in respect of this Sublease, bind or inure to the

                                       3

<PAGE>

     benefit of Subtenant, with the same force and effect as if such
     Incorporated Provisions were completely set forth in this Sublease, and as
     if the words "Landlord" and "Tenant" or words of similar import, wherever
     the same appear in the Incorporated Provisions, were construed to mean,
     respectively, "Sublessor" and "Subtenant" in this Sublease, and as if the
     words "Premises," or words of similar import, wherever the same appear in
     the Incorporated Provisions, were construed to mean "Premises" in this
     Sublease, and as if the word "Lease," or words of similar import, wherever
     the same appear in the Incorporated Provisions, were construed to mean this
     "Sublease."

            (b) The time limits contained in the Main Lease for the giving of
     notices, making of demands or performing of any act, condition or covenant
     on the part of the tenant thereunder, or for the exercise by the tenant
     thereunder of any right, remedy or option, are changed for the purposes of
     incorporation herein by reference by shortening the same in each instance
     by 5 days, so that in each instance Subtenant shall have 5 days less time
     to observe or perform hereunder than Sublessor has as the tenant under the
     Main Lease, except that:

                 (i) any such time limits which are 7 days or less shall instead
            be shortened in each instance by 3 business days, and

                 (ii) any such time limits which are 3 days or less shall
            instead be shortened in each instance so that such time limits shall
            expire 1 business day prior to the expiration of such time limits
            under the Main Lease.

            (c) If any of the express provisions of this Sublease shall conflict
     with any of the Incorporated Provisions, such conflict shall be resolved in
     every instance in favor of the express provisions of this Sublease. If
     Subtenant receives any notice or demand from Overlandlord under the Main
     Lease, Subtenant shall deliver a copy thereof to Sublessor by overnight
     courier the next business day or as soon thereafter as is reasonably
     possible but in no event later than two business days after Subtenant's
     receipt of such notice. If Sublessor receives any notice of default from
     Overlandlord under the Main Lease, Sublessor shall deliver a copy thereof
     to Subtenant by overnight courier the next business day or as soon
     thereafter as is reasonably possible but in no event later than two
     business days after Sublessor's receipt of such notice.

         7. Performance by Sublessor. Sublessor shall not be required to
            ------------------------
furnish, supply or install anything required under any article of the Main
Lease. Sublessor shall have no liability or responsibility whatsoever for
Overlandlord's failure or refusal to perform under the Incorporated Provisions.
Subtenant shall have the right to instruct Overlandlord with respect to the
performance by Overlandlord of Overlandlord's obligations as landlord under the
Main Lease. Upon Sublessor's receipt of a written notice from Subtenant that
Sublessor has failed to perform an obligation under the Incorporated Provisions,
(because of a failure of Overlandlord to perform its obligation under the Main
Lease) then Sublessor shall use its commercially reasonable efforts to cause
Overlandlord to observe and perform the same, provided, however, that Sublessor
does not guarantee Overlandlord's compliance with the Incorporated Provisions
and further provided that in no event shall Sublessor be required to initiate
any litigation proceedings or file suit against Overlandlord. Any action
undertaken or done by Sublessor or Subtenant shall be at

                                       4

<PAGE>

Subtenant's sole cost and expense, Sublessor shall not be responsible for any
cost or expense related thereto, and Sublessor shall not be subject to
unreasonable administrative burden in connection therewith. Subtenant shall not
in any event have any rights in respect of the Premises greater than Sublessor's
rights under the Main Lease. Notwithstanding any provision to the contrary
contained herein, as to Incorporated Provisions, Sublessor shall not be required
to make any payment or perform any obligation, and Sublessor shall have no
liability to Subtenant for any matter whatsoever, except for (i) Sublessor's
obligation to pay the rent due under the Main Lease, and (ii) Sublessor's
obligation to use reasonable efforts, upon the written request of and at the
expense of Subtenant, to cause Overlandlord to observe and/or perform its
obligations under the Main Lease (or, in the alternative, to direct Subtenant to
pursue its claim against Overlandlord). Sublessor shall not be responsible for
any failure or interruption, for any reason whatsoever, of the services or
facilities that may be appurtenant to or supplied at the Building, by
Overlandlord or otherwise, including, without limitation, heat, air
conditioning, water, elevator service and cleaning service, if any; and no
failure to furnish, or interruption of, any such services or facilities shall
give rise to any: (i) abatement, diminution or reduction of Subtenant's
obligations under this Sublease; (ii) constructive eviction, whether in whole or
in part; or (iii) liability on the part of Sublessor.

         8. No Breach of Main Lease. Subtenant shall not do or permit to be done
            -----------------------
any act or thing which may constitute a breach or violation of any term,
covenant or condition of the Main Lease.

         9. No Privity of Estate. Nothing contained in this Sublease shall be
            --------------------
construed to create privity of estate or privity of contract between Subtenant
and Overlandlord.

         10. Indemnity. Subtenant hereby does and shall indemnify, defend and
             ---------
hold harmless Sublessor and Overlandlord from and against all losses, costs,
damages, expenses and liabilities, including, without limitation, reasonable
attorneys' fees, which Sublessor and/or Overlandlord may incur or pay by reason
of: (i) Subtenant's use, occupancy or management of the Premises; (ii) any
accidents, damages or injuries to persons or property occurring in, on or about
the Premises; (iii) any breach or default hereunder on Subtenant's part; (iv)
any work done by or on behalf of Subtenant in or to the Premises, or (v) any
act, omission or negligence occurring in, on or about the Premises on the part
of Subtenant and/or its officers, employees, agents, customers, invitees or any
person claiming through or under Subtenant. The foregoing indemnification of
Sublessor shall exclude the gross negligence and willful misconduct of
Sublessor, its agents and employees. The foregoing indemnification of
Overlandlord shall exclude the gross negligence of Overlandlord, its agents and
employees.

         11. Rent.
             ----

            (a) Subtenant shall pay to Sublessor Base Rent (the "Base Rent") in
     accordance the following table:

            Period       Rent Per s.f. per   Monthly Base      Annual Base Rent
                            month                 Rent
       9/1/03 - 8/31/04     $2.59              $135,159.15      $1,621,909.80

                                       5

<PAGE>

       9/1/04 - 8/31/05     $2.69              $140,377.65      $1,684,531.80
       9/1/05 - 8/31/06     $2.80              $146,118.00      $1,753,416.00
      9/1/06 - 10/31/06     $2.91              $151,858.35      $1,822,300.20

     (b)    Subtenant shall pay the Monthly Base Rent to Sublessor in advance of
            the first day of each month during the Term at the offices of
            Sublessor identified at the beginning of this Sublease or elsewhere
            as Sublessor shall direct. In addition to the Monthly Base Rent,
            Subtenant shall also be responsible for and shall pay the applicable
            material or service provider (including as the case may be,
            Sublessor or Overlandlord) directly for any and all other amounts
            payable with respect to providing: (i) gas, heat, air conditioning,
            electricity, telephone, water, sewer, security services and
            janitorial services to the Premises; and (ii) Subtenant's
            Proportionate Share (as defined in the following sentence) of all
            costs with respect to the Building's common area and systems and the
            Building structure, including without limitation, costs of
            maintenance, repair and replacement of the Building structure,
            common area and systems, costs of utilities and security for the
            common areas and a property management fee to the property manager
            selected by Sublessor or Overlandlord; and (iii) Subtenant's
            Proportionate Share of any other operating expenses to be paid by
            Sublessor under the Main Lease (including without limitation, the
            Impositions and insurance costs). Subtenant's Proportionate Share
            shall be 69.4%. The cost of any repair which is capital in nature
            shall be amortized on a straight line basis over its useful life
            ("Useful Life") at an interest rate not to exceed ten percent (10%)
            and Subtenant shall pay Sublessor the amount equal to Subtenant's
            prorata share of the annualized (2) amortization during the Term of
            this Sublease. The Useful Life of a capital item shall be determined
            by the United States Internal Revenue Services standard depreciation
            schedule in effect on the date that the applicable capital
            expenditure is made. Subtenant shall also pay Sublessor for
            Subtenant's Proportionate Share of the annualized amortization of
            any improvement or replacement which is capital in nature, provided
            that the item is intended to result in a cost savings, then only to
            the extent of savings actually realized. All the foregoing amounts
            shall hereinafter collectively be referred to as the "Additional
            Charges."

     (c)    In addition to the Base Rent obligations set forth above and the
            Additional Charges obligations set forth above, Subtenant shall pay
            the Rent Reimbursement (as hereinafter defined) to Sublessor as
            hereinafter set forth. The parties acknowledge and agree that for
            the period commencing on or about January 15, 2002 and expiring
            September 1, 2003, Subtenant is occupying the Premises pursuant to a
            Subsublease with the current Subtenant of the Premises, Interwoven,
            Inc. ("Interwoven"). In order to induce Interwoven to enter into
            such Sublease, Sublessor agreed to provide Interwoven with a Base
            Rent abatement in the amount of $360,000. Subtenant has agreed to
            reimburse Sublandlord for such amount (the "Rent Reimbursement"),
            which amount shall be reimbursed on a monthly basis in equal amounts
            over the term of the Sublease. Said $360,000 Rent Reimbursement
            shall be amortized over the course of the initial Sublease term
            without interest, with $9,473.68 due each month at the same time
            that Monthly Base Rent is due.

                                       6

<PAGE>

     (d)    "Rent" (which term shall include the Base Rent, the Rent
            Reimbursement and any Additional Charges) shall be paid promptly
            when due, without notice or demand therefor and without deduction,
            abatement, counterclaim or setoff of any amount for any reason
            whatsoever. Base Rent, the Rent Reimbursement and Additional Charges
            shall be paid to Sublessor by good unendorsed check of Subtenant at
            the address of Sublessor set forth at the beginning of this Sublease
            or to such other person and/or at such other address as Sublessor
            may from time to time designate by notice to Subtenant. No payment
            by Subtenant or receipt by Sublessor of any lesser amount than the
            amount stipulated to be paid hereunder shall be deemed other than on
            account of the earliest stipulated Base Rent, Rent Reimbursement or
            Additional Charges due under this Sublease; nor shall any
            endorsement or statement on any check or letter be deemed an accord
            and satisfaction, and Sublessor may accept any check or payment
            without prejudice to Sublessor's right to recover the balance due or
            to pursue any other remedy available to Sublessor.

     (e)    Upon the execution of (i) this Sublease by both Sublessor and
            Subtenant and (ii) consent to this Sublease by Overlandlord as
            provided herein, this Sublease shall become effective.
            Notwithstanding anything in this Sublease to the contrary, Subtenant
            shall pay all charges incurred by Subtenant (including but not
            limited to fees, if any, charged by Overlandlord) in connection with
            Subtenant's relocation to the Premises and the installation of all
            equipment and utility services for the Premises which are required
            by Subtenant, including, but not limited to, telephones, computers,
            and additional electric service.

         12. Condition of Premises. Sublessor shall deliver the Premises to
             ---------------------
Subtenant and Subtenant shall accept the Premises on the Commencement Date in
"AS IS WITH ALL FAULTS" condition and subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations, restrictions of
record and other requirements governing and regulating the use of the Premises
(sometimes hereinafter, the "Laws") and to all matters disclosed thereby.
Subtenant hereby acknowledges that the Premises is otherwise in good condition
and satisfactory in all respects for Subtenant's occupancy. Sublessor shall have
no obligations under this Sublease or otherwise to perform any work,
alterations, installations or to remove any asbestos or asbestos containing
material or other hazardous or toxic materials or substances, if any, from the
Premises or elsewhere ("Hazardous Materials"). Sublessor makes no
representations or warranties whatsoever with respect to the presence of
Hazardous Materials in the Premises or Building, or with respect to whether or
not the Building and/or Premises is in compliance with Laws (including, without
limitation, environmental laws and the Americans with Disabilities Act). In
addition, Sublessor makes no representations or warranties as to the suitability
of the Premises for the conduct of Subtenant's business. In making and executing
this Sublease, Subtenant has relied solely on such investigations, examinations
and inspections as Subtenant has chosen to make. Subtenant acknowledges that
Sublessor has afforded Subtenant the opportunity for full and complete
investigations, examinations, and inspections of the Premises. Subtenant shall
at Subtenant's expense promptly comply with all Laws in effect during the term
hereof. Sublessor acknowledges that Subtenant has no responsibility for
repairing or remediating the presence of Hazardous Materials or ADA violations
with respect to the period predating Subtenant's occupancy of the Premises under
the above-referenced Subsublease with Interwoven with respect to the Premises,
subject to such Subsublease. With respect to the

                                       7

<PAGE>

additional premises occupied by Subtenant hereunder (the Suite 1000 portion
shown on Exhibit B) Sublessor acknowledges that Subtenant has no responsibility
for repairing or remediating the presence of Hazardous Materials or ADA
violations with respect to the period preceding the Commencement Date.

         13. Consents and Approvals. In any instance when Sublessor's consent or
             ----------------------
approval is required under this Sublease, Sublessor's refusal to consent to or
approve any matter or thing shall be deemed reasonable and in good faith if such
consent or approval has not been obtained from Overlandlord; provided however,
if Sublessor has no independent objection to such matter, Sublessor agrees to
use reasonable efforts, at the sole cost and expense of Subtenant (including,
without limitation, reasonable attorneys' fees and expenses), to obtain the
consent or approval of Overlandlord and will indicate to Overlandlord in those
cases where its approval is conditioned upon Overlandlord's approval that it has
no objection thereto and agrees that if such consent of Overlandlord shall not
be required, Sublessor shall not unreasonably withhold or delay its consent to
such matter. In the event that Subtenant shall seek the approval by or consent
of Sublessor and Sublessor shall fail or refuse to give such consent or
approval, Subtenant shall not be entitled to any damages from Sublessor for any
withholding or delay of such approval or consent by Sublessor.

         14. Notice. All notices, consents, approvals, demands and requests
             ------
which are required or desired to be given by either party to the other hereunder
shall be in writing and shall be personally delivered, sent by telefax or by
reputable overnight courier delivery service or sent by United States registered
or certified mail and deposited in a United States post office, return receipt
requested and postage prepaid. Notices, consents, approvals, demands and
requests which are served upon Sublessor or Subtenant in the manner provided
herein shall be deemed to have been given or served for all purposes hereunder
on the day personally delivered or refused, the next business day after sending
by overnight courier as aforesaid or on the third business day after mailing as
aforesaid. All notices, consents, approvals, demands, and requests given to
Sublessor or Subtenant shall be addressed to the address set forth at the
beginning of this Sublease with notices to Sublessor being addressed to the
attention of Contract Administrator, First Data Properties, 12500 East Belford
Avenue, Suite M16-S, Englewood, CO 80112, facsimile: (720) 332-0098, with a copy
at the same time and in the same manner to Blackwell Sanders Peper Martin LLP,
720 Olive Street, 24th Floor, St. Louis, MO 63101 Attention: Susan M. Altnether,
Real Estate Paralegal, facsimile: (314) 345-6060. The facsimile number of
Subtenant is (650) 254-7201. Either party may from time to time change the names
and/or addresses to which notices , consents, approvals, demands and requests
shall be addressed by a notice given in accordance with the provisions of this
Paragraph.

         15. Termination of Main Lease. It is understood and agreed by and
             -------------------------
between the parties hereto that the existence of this Sublease is dependent and
conditioned upon the continued existence of the Main Lease and this Sublease
shall automatically terminate on the termination, cancellation or expiration of
the Main Lease for any reason (whether pursuant to a termination right in the
Main Lease or otherwise) and in such event Sublessor shall not have any
liability to Subtenant except as expressly provided in the following sentence.
If for any reason the term of the Main Lease shall terminate prior to the
Expiration Date, this Sublease shall thereupon be terminated and Sublessor shall
not be liable to Subtenant by reason thereof unless

                                       8

<PAGE>

both (a) Subtenant  shall not then be in default hereunder,  and (b) said
termination shall have been effected because of the breach or default of
Sublessor as tenant under the Main Lease.

         16. Maintenance and Repairs. Subtenant shall, at Subtenant's sole cost
             -----------------------
and expense, keep and maintain the Premises in good condition and repair,
including without limitation, all necessary maintenance and repairs to all
portions of the Premises and all exterior entrances, all glass, window
casements, show window moldings, all partitions, doors, door jams, door closers
and hardware fixtures exclusive of normal maintenance services. All damage or
injury to the Building and/or common areas caused by the act or negligence of
Subtenant, its employees, agents, or visitors shall be repaired by Subtenant at
Subtenant's sole cost and expense. Subtenant shall promptly replace any portion
of the Premises which cannot be fully repaired, regardless of whether the
benefit of such replacement extends beyond the Term. It is the intention of
Sublessor and Subtenant that at all times during the Term Subtenant shall at its
cost maintain the Premises in an attractive, first-class and fully operative
condition and in compliance with all applicable laws. Notwithstanding the
foregoing, Sublessor hereby agrees: (a) to perform the repair obligations as
described in Section 7(A) of the Main Lease and Subtenant agrees to pay for its
share of such repair costs after the opportunity to review Sublessor's receipts
for such repair costs. The cost of any repair which is capital in nature shall
be amortized in accordance with the terms and provisions of Paragraph 11(b)
above; or (b) in the alternative, Sublessor may elect to have Sublessee perform
such repair obligations as described in Section 7(A) and any such repair that is
capital in nature shall be amortized in accordance with the terms and provisions
of Paragraph 11(b) above.

         17. Assignment and Sublettings. Subtenant shall not, by operation of
             --------------------------
law, merger, consolidation or otherwise, assign, sell, mortgage, pledge or in
any manner transfer this Sublease or any interest therein, or sublet the
Premises or any part or parts thereof, or grant any concession or license or
otherwise permit occupancy of all or any part of the Premises by any person,
except with the prior written consent of Sublessor. Any change in control of the
Subtenant shall be deemed an assignment requiring Sublessor's consent . Change
in control shall be defined as the transfer of any majority or controlling
interest in any entity which is the Subtenant hereunder. Sublessor shall not
unreasonably withhold its consent to an assignment of this Sublease or a
sublease of the Premises by Subtenant (which assignment or sublease may
nevertheless require the consent of Overlandlord), provided that it shall be
deemed reasonable of Sublessor to withhold its consent if: (a) the assignee or
sublessee proposed by Subtenant does not demonstrate to the reasonable
satisfaction of Sublessor that such proposed assignee or sublessee has a net
worth and financial capacity equal to or greater than the net worth and
financial capacity of Subtenant; or (b) the proposed assignment or sublease
would violate the exclusive use provisions of any other sublease or occupancy
agreement affecting the Building. Neither the consent of Sublessor to an
assignment, subletting ,concession or license, nor the references in this
Sublease to assignees, subtenants, concessionaires or licensees, shall in any
way be construed to relieve Subtenant of the requirement of obtaining the
consent of Sublessor to any further assignment, subletting, concession or
license for all or any part of the Premises. In the event Sublessor consents to
any assignment of this Sublease or sublease of the Premises, the assignee or
sublessee shall execute and deliver to Sublessor an agreement in form and
substance satisfactory to Sublessor whereby the assignee or sublessee shall
assume all of Subtenant's obligations under this Sublease from and after the
date of the applicable transfer. Notwithstanding any assignment or subletting,
including, without limitation, any assignment or subletting permitted or
consented

                                       9

<PAGE>

to, the original Subtenant named herein and any other person(s) who at any
time was or were Subtenant shall remain fully liable on this Sublease, and if
this Sublease shall be amended, modified, extended or renewed, the original
Subtenant named herein and any other person(s) who at any time was or were
Subtenant shall remain fully liable on this Sublease as so amended, modified,
extended or renewed. Any violation of any provision of this Sublease by any
assignee, subtenant or other occupant shall be deemed a violation by the
original Subtenant named herein, the then Subtenant and any other person(s) who
at any time was or were Subtenant, it being the intention and meaning that the
original Subtenant named herein, the then Subtenant and any other person(s) who
at any time was or were Subtenant shall all be liable to Sublessor for any and
all acts or omissions of any and all assignees, subtenants and other occupants
of the Premises claiming by, through or under Subtenant. If this Sublease shall
be assigned or if the Premises or any part thereof shall be sublet or occupied
by any person or persons other than the original Subtenant named herein,
Sublessor may collect rent from any such assignee and/or any subtenants or
occupants, and apply the net amounts collected to the Base Rent, Rent
Reimbursement and Additional Charges, but no such assignment, subletting,
occupancy or collection shall be deemed a waiver of any of the provisions of
this Paragraph, or the acceptance of the assignee, subtenant or occupant as
Subtenant, or a release of any person from the further performance by such
person of the obligations of Subtenant under this Sublease. Sublessor shall be
entitled to 50% of profits arising from any such transaction. Subtenant shall be
responsible for the payment of all costs and expenses (including without
limitation reasonable attorneys' fees) incurred by Sublessor in connection with
any request for consent to assignment or subsublease, whether or not such
consent is granted. No consent shall be required in the event of an initial or
subsequent public offering, or in the event Subtenant becomes a public company
Subtenant returns to a private company status. Subtenant shall provide Sublessor
with notice of any such public offering or change in status to a private company
within thirty (30) days after the operative event.

         18. Insurance. Subtenant shall provide and maintain throughout the term
             ---------
of this Sublease a policy or policies of comprehensive public liability
insurance in standard form naming Sublessor and Overlandlord as additional
insureds and otherwise complying with the requirements of the Main Lease with
limits of not less than $2,000,000.00 combined single limit for both bodily
injury or death and for property damage, including water damage. Subtenant shall
also provide and maintain throughout the term of this Sublease all other
insurance coverage required by the Main Lease, naming Sublessor and Overlandlord
as additional insureds. A policy, binder or other reasonable satisfactory
evidence of such insurance shall be delivered to Sublessor by Subtenant no less
than ten (10) days before the Commencement Date. Subtenant shall procure and pay
for renewals or replacements of such insurance from time to time before the
expiration thereof, and Subtenant shall deliver to Sublessor such renewal or
replacement policy or binder or other reasonably satisfactory evidence of such
insurance at least 30 days before the expiration of any existing policy. All
such policies shall be issued by companies licensed to do business in the state
where the Building and Premises are located and shall contain a provision
whereby the same cannot be cancelled or modified unless Sublessor is given at
least 30 days' prior written notice by certified or registered mail of such
cancellation or modification.

         19. Right to Cure Subtenant's Defaults and Damages. If Subtenant shall
             ----------------------------------------------
at any time fail to make any payment or perform any other obligation of
Subtenant hereunder within the applicable cure period, if any, then Sublessor
shall have the right, but not the obligation, after

                                       10

<PAGE>

five days' notice to Subtenant, or without notice to Subtenant in the case
of any emergency, and without waiving or releasing Subtenant from any
obligations of Subtenant hereunder, to make such payment or perform such other
obligation of Subtenant in such manner and to such extent as Sublessor shall
deem necessary, and in exercising any such right, to pay any incidental costs
and expenses, employ attorneys, and incur and pay reasonable attorneys' fees.
Subtenant shall pay to Sublessor upon demand all sums so paid by Sublessor and
all incidental costs and expenses of Sublessor in connection therewith, together
with interest thereon at the rate of 2% per calendar month or any part thereof
or the then maximum rate of interest which may lawfully be collected from
Subtenant, whichever shall be less, from the date of the making of such
expenditures.

         20. Remedies of Sublessor.
             ---------------------

            (a) "Default" shall mean a default by Subtenant under any provision
         of this Sublease which default has not been cured within any applicable
         grace or cure period.

            (b) If a Default occurs, Sublessor shall have, in addition to all
         its rights and remedies contained in the Incorporated Provisions
         pursuant to Section 6 hereof, the following rights and remedies; all of
         Sublessor's rights and remedies under this Sublease are distinct,
         separate and cumulative, and none will exclude any other right or
         remedy allowed by law:

                 (i) Sublessor may, with or without notice of such election and
            with or without entry or other action by Sublessor, immediately
            terminate this Sublease, in which event the Term of this Sublease
            shall end and all right, title, and interest of Subtenant hereunder
            shall expire; or

                 (ii) Sublessor may enforce the provisions of this Sublease and
            may enforce and protect the rights of the Sublessor hereunder by a
            suit or suits in equity or at law for the specific performance of
            any covenant or agreement herein or for the enforcement of any other
            appropriate legal or equitable remedy, including the recovery of all
            moneys due or to become due under any of the provisions of this
            Sublease.

                 (iii) If Sublessor elects to terminate the right to possession
            only without terminating the Sublease, Subtenant shall immediately
            surrender the Premises to Sublessor, and if Subtenant fails to do
            so, Sublessor may, without prejudice to any other remedy which it
            may have for possession or arrearages in rent, enter upon and take
            possession of the Premises and expel or remove Subtenant and any
            other person who may be occupying the Premises or any part thereof,
            without being liable for prosecution or any claim or damages
            therefor; and Sublessor may recover from Subtenant the following:

                     (aa) The worth at the time of award of any unpaid rent
                 which has been earned at the time of such termination; plus

                     (bb) The worth at the time of award of the amount by which
                 the unpaid rent which would have been earned after termination
                 until

                                       11

<PAGE>

                 the time of award exceeds the amount of such rental loss that
                 Subtenant proves could have been reasonably avoided; plus

                     (cc) The worth at the time of award of the amount by which
                 the unpaid rent for the balance of the Term after the time of
                 award exceeds the amount of such rental loss that Subtenant
                 proves could have been reasonably avoided; plus

                     (dd) Any other amount necessary to compensate Sublessor for
                 all the detriment proximately caused by Subtenant's failure to
                 perform its obligations under this Sublease or which in the
                 ordinary course of things would be likely to result therefrom,
                 specifically including but not limited to, brokerage
                 commissions and advertising expenses incurred, expenses of
                 remodeling the Premises or any portion thereof for a new
                 subtenant, whether for the same or a different use, and any
                 special concessions made to obtain a new subtenant; and

                     (ee) At Sublessor's election, such other amounts in
                 addition to or in lieu of the foregoing as may be permitted
                 from time to time by applicable law.

            The term "rent" as used in this Section 20 shall be deemed to be and
            to mean all sums of every nature required to be paid by Subtenant
            pursuant to the terms of this Sublease, whether to Sublessor or to
            others. As used in Paragraphs 20 (b)(iii), (aa) and (bb) above, the
            "worth at the time of award" shall be computed by allowing interest
            at the interest rate set forth in Section 19 of this Sublease. As
            used in Paragraph 20(b)(iii)(cc) above, the "worth at the time of
            award" shall be computed by discounting such amount at the discount
            rate of the Federal Reserve Bank of San Francisco at the time of
            award plus one percent (1%).

            (c) Sublessor shall have the remedy described in California Civil
         Code Section 1951.4 (lessor may continue lease in effect after lessee's
         breach and abandonment and recover rent as it becomes due, if lessee
         has the right to sublet or assign, subject only to reasonable
         limitations). Accordingly if Sublessor does not elect to terminate this
         Sublease on account of any default by Subtenant, Sublessor may, from
         time to time, without terminating this Sublease, enforce all of its
         rights and remedies under this Sublease, including the right to recover
         all rent as it becomes due.

            (d) Subtenant will pay upon demand all of Sublessor's costs,
         charges, and expenses, including reasonable attorneys' fees, and fees
         and expenses of agents and others retained by Sublessor in any
         litigation, negotiation, or transaction in which Sublessor seeks to
         enforce the terms or provisions of this Sublease.

         21. Brokerage. Sublessor and Subtenant each represents to the other
             ---------
that no broker or other person had any part, or was instrumental in any way, in
bringing about this Sublease.

                                       12

<PAGE>

Sublessor and Subtenant each agree to indemnify, defend and hold harmless
the other from and against, any claims made by any broker or any person for a
brokerage commission, finder's fee, or similar compensation, by reason of or in
connection with this Sublease, and any loss, liability, damage, cost and expense
(including, without limitation, reasonable attorneys' fees) in connection with
such claims if such broker or other person had, or claimed to have, dealings
with such party in bringing about this Sublease. The provisions of this
Paragraph shall survive the expiration or termination of this Sublease.

         22. Waiver of Jury Trial and Right to Counterclaim. Subtenant hereby
             ----------------------------------------------
waives all right to trial by jury in any summary or other action, proceeding or
counterclaim arising out of or in any way connected with this Sublease.
Subtenant also hereby waives all right to assert or interpose a counterclaim in
any summary proceeding or other action or proceeding to recover or obtain
possession of the Premises unless legally required to do so to preserve the
claim.

         23. No Waiver. The failure of Sublessor to insist in any one or more
             ---------
cases upon the strict performance or observance of any obligation of Subtenant
hereunder or to exercise any right or option contained herein shall not be
construed as a waiver or relinquishment for the future of any such obligation of
Subtenant or any right or option of Sublessor. Sublessor's receipt and
acceptance of Base Rent, Rent Reimbursement or Additional Charges, or
Sublessor's acceptance of performance of any other obligation by Subtenant, with
knowledge of Subtenant's breach of any provision of this Sublease, shall not be
deemed a waiver of such breach. No waiver by Sublessor of any term, covenant or
condition of this Sublease shall be deemed to have been made unless expressed in
writing and signed by Sublessor.

         24. Complete Agreement. There are no representations, agreements,
             ------------------
arrangements or understandings, oral or written, between the parties relating to
the subject matter of this Sublease which are not fully expressed in this
Sublease. This Sublease cannot be changed or terminated orally or in any other
manner other than by a written agreement executed by both parties.

         25. Successors and Assigns. The provisions of this Sublease, except as
             ----------------------
herein otherwise specifically provided, shall extend to, bind and inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors and permitted assigns. In the event of any assignment or
transfer of the leasehold estate under the Main Lease, the transferor or
assignor, as the case may be, shall be and hereby is entirely relieved and freed
of all obligations under this Sublease arising after the date of any such
assignment or transfer.

         26. Interpretation. Irrespective of the place of execution or
             --------------
performance, this Sublease shall be governed by and construed in accordance with
the laws of the state where the Premises is located. If any provision of this
Sublease or the application thereof to any person or circumstance shall, for any
reason and to any extent, be invalid or unenforceable, the remainder of this
Sublease and the application of that provision to other persons or circumstances
shall not be affected but rather shall be enforced to the extent permitted by
law. The table of contents, captions, headings and titles, if any, in this
Sublease are solely for convenience of reference and shall not affect its
interpretation. This Sublease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Sublease to be drafted. Each covenant, agreement, obligation or other provision
of this Sublease shall be deemed and construed as a separate and independent
covenant of the party bound by,

                                       13

<PAGE>

undertaking or making same, not dependent on any other provision of this
Sublease unless otherwise expressly provided. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the parties may require. The word "person" as used
in this Sublease shall mean a natural person or persons, a partnership, a
corporation or any other form of business or legal association or entity. This
Sublease may be executed in counterparts or with counterpart signature pages.

         27. Consent of Landlord Under Main Lease. This Sublease shall not be
             ------------------------------------
operative or effective for any purpose whatsoever unless and until Overlandlord
shall have given its written consent as provided hereto or in a separate consent
making reference to this Sublease and any conditions precedent with respect to
such consent have been satisfied or waived. Sublessor shall have no obligation
to satisfy any such conditions precedent provided, however, that Subtenant may,
but shall not be obligated to, satisfy any such conditions precedent and
Sublessor shall reasonably cooperate with Subtenant (at no cost or expense to
Sublessor) in this regard.

         28. Holding Over. Subtenant shall pay Sublessor a sum for each day that
             ------------
Subtenant retains possession of the Premises or any part thereof after
termination of this Sublease, by lapse of time or otherwise, equal to two (2)
times the sum which Sublessor is required to pay Overlandlord for the Premises,
and Subtenant shall also pay damages consequential as well as direct, sustained
by Sublessor by reason of such retention. Nothing in this Section contained,
however, shall be construed or operate as a waiver of Sublessor's right of
reentry or any other right of Sublessor under this Sublease or of Overlandlord
under the Main Lease.

         29. Security Deposit. Subtenant agrees to deposit with Sublessor, no
             ----------------
later than four (4) months prior to the Commencement Date of this Sublease,
$270,318.30 as security for the full and faithful performance by Subtenant of
every term, provision, covenant, and condition of this Sublease. The security
deposit will be held by Sublessor, provided however, that Sublessor will have no
obligation to segregate the amount from Sublessor's other funds or to pay any
interest on such funds. Upon the occurrence of a Default by Subtenant in respect
to any of the terms, provisions, covenants, or conditions of this Sublease,
including, but not limited to, payment of Rent, Sublessor may use, apply, or
retain the whole or any part of the security so deposited for the payment of any
such Rent in default, or for any other sum which Sublessor may expend or be
required to expend by reason of Subtenant's Default, including, without
limitation, any damage or deficiency in the reletting of the Premises, whether
such damage or deficiency accrued before or after any reentry by Sublessor. If
any of the deposit is so used, Subtenant, on written demand by Sublessor, will
promptly pay to Sublessor such additional sum as may be necessary to restore the
deposit to the original amount set forth in this Section. If Subtenant fully and
faithfully complies with all of the terms, provisions, covenants, and conditions
of this Sublease, the deposit, or any balance thereof will be returned to
Subtenant after the last to occur of the following:

            (a) the time fixed as the expiration of the Term of this Sublease;

            (b) the surrender of the Premises by Subtenant to Sublessor in
         accordance with this Sublease;

                                       14

<PAGE>

            (c) the receipt of Sublessor of all sums due pursuant to the
         Sublease. Except as otherwise required by law, Subtenant will not be
         entitled to any interest on such deposit.

         30. Liens. In addition to, and not in limitation of, the obligations of
             -----
Sublessor contained in Section 3 hereof, Subtenant shall at all times keep the
Premises free from mechanic's liens, materialmen or supplier liens arising out
of or related to work or services performed, materials or supplies furnished or
obligations incurred by Subtenant or in connection with work made, permitted or
done by or on behalf of Subtenant in, on or around the Premises. In the event
any lien is filed or imposed and not released of record by payment or posting of
a proper bond within ten (10) days following the imposition of any such lien,
Sublessor shall have, in addition to all other remedies provided herein, under
the Main Lease and at law, the right, but not the obligation, to cause the same
to be released by such means as Sublessor shall deem proper, including payment
of the claim giving rise to such lien. All sums paid by Sublessor on behalf of
Subtenant and all expenses incurred by Sublessor in connection therewith shall
be payable to Sublessor by Subtenant on demand with interest at the interest
rate provided in the Main Lease or if none is provided in the Main Lease, at the
lower of the following: (a) eighteen percent (18%); or (b) the maximum rate
permitted by law (the "Interest Rate"). Sublessor shall have the right at all
times to post and keep posted on the Premises any notice permitted or required
by law, or which Sublessor shall deem proper, for the protection of Sublessor,
Overlandlord, the Premises and any other party having an interest therein, from
mechanic's and materialmen's liens, and Subtenant shall give Sublessor not less
than five (5) business days prior written notice of the commencement of any work
in the Premises which could give rise to a claim for mechanic's or materialmen's
liens to permit Sublessor to post and record a timely notice of
non-responsibility. NOTICE IS HEREBY GIVEN THAT SUBLESSOR IS NOT AND SHALL NOT
BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
SUBTENANT OR TO ANYONE HOLDING THE PREMISES OR ANY PART THEREOF, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFFECT THE INTEREST OF SUBLESSOR IN AND TO THE PREMISES, AGGREGATE
PREMISES OR BUILDING.

         31. Surrender. Subtenant shall, on the Expiration Date, surrender the
             ---------
Premises to Sublessor in the condition required by the Main Lease (which
obligation shall include the removal of any improvements, additions, fixtures or
alterations located in the Premises and designated by Overlandlord for removal,
as well as the repair and restoration of any damage caused by such removal).

         32. Late Charges and Interest. Subtenant acknowledges that any failure
             -------------------------
by it to timely pay any of its obligations hereunder will result in and cause
monetary loss to Sublessor beyond the amount unpaid by Subtenant, the exact
amount of such costs being extremely difficult and impracticable to fix. Such
costs include, without limitation, processing and accounting charges and late
charges that may be imposed on Sublessor by the Overlandlord under the Main
Lease. Therefore, in addition to any other rights and remedies provided
Sublessor, and any and all late charges that Sublessor is required to pay
Overlandlord under the Main Lease, any and all payments, whether for rentals due
or other charges, adjustments or assessments, which remain unpaid for five (5)
days after the respective due date, will be subject to an administrative service

                                       15

<PAGE>

charge of five percent (5%) of the late payment. The parties agree that this
charge represents a fair and reasonable estimate of the costs Sublessor will
incur by reason of such late payment by Subtenant and that such administrative
service charge is intended to be liquidated damages and not a penalty with
respect to any such late payment. Acceptance of any such administrative service
charge shall not constitute a waiver of Subtenant's default with respect to the
overdue amount, or prevent Sublessor from exercising any of the other rights and
remedies available to Sublessor. In addition to the foregoing and all other
rights and remedies provided Sub lessor, all amounts payable hereunder which
remain unpaid for five (5) days after their respective due dates shall bear
interest at the Interest Rate from the date that the same became due and payable
to and including the date of payment, whether or not demand is made therefor.

         33. Access. Sublessor and/or Overlandlord shall have the right to enter
             ------
into and upon the Premises at all reasonable hours and, except in the case of
emergency (for which no notice shall be required) upon reasonable prior verbal
notice, for any purpose permitted pursuant to the terms of the Main Lease or
this Sublease, and to show the Premises to prospective mortgagees, purchasers,
and tenants.

         34. Access to Utility Controls and Roof. Sublessor and Subtenant
             -----------------------------------
acknowledge that access to the roof of the Building and the controls for the
HVAC system, public address system and certain other utilities serving the
Premises are located on a portion of the second floor of the Building which is
not within the Premises. Sublessor agrees that it shall provide Subtenant with
access to such roof access and utility controls to the extent they serve the
Premises upon reasonable prior notice given by Sublessor to Subtenant. Sublessor
shall have the right to require Subtenant's agents or employees to be
accompanied by an agent or employee of Sublessor during such periods of access.
Subtenant's access shall not unreasonably interfere with the occupant of the
space where the roof access and utility controls are located.

         35. No Offer. The submission of this Sublease shall not be deemed to be
             --------
an offer, an acceptance, or a reservation of the Premises; and Sublessor shall
not be bound hereby until Sublessor has delivered to Subtenant a fully executed
copy of this Sublease, signed by both of the parties on the last page of this
Sublease in the spaces herein provided. Until such delivery, Sublessor reserves
the right to exhibit and lease the Premises to other prospective tenants

         36. Parking. Sublessor agrees that Subtenant will be permitted to use
             -------
no more than a proportionate number of the spaces allocated to Sublessor, based
on the ratio that the square footage of the Premises bears to the square footage
of the Building. Such spaces shall be available to Subtenant hereunder only to
the extent they are available to Sublessor under the Main Lease and shall be
subject to all of the terms and conditions of the Main Lease. Subtenant shall
have no rights or privileges greater that the rights and privileges accorded to
Sublessor under the Main Lease and Subtenant covenants to comply with all
parking regulations and requirements imposed by Sublessor or Overlandlord
regarding parking.

         37. Renewal Option. Provided Subtenant is not in default and has not
             --------------
been in default, Subtenant may renew the term of this Sublease for an additional
38 months (commencing November 1, 2006 and terminating at 5:00 p.m. on December
31, 2009), on the terms and conditions hereinafter set forth. Subtenant shall
provide Sublessor with at least 12 months and no more than 18 months advance
notice of Subtenant's exercise of such option. Subtenant shall

                                       16

<PAGE>

execute and deliver an amendment to the Sublease evidencing the exercise of
such option and in a form otherwise reasonably satisfactory to Sublessor within
ten (10) business days after Sublessor's request or such renewal shall have no
effect. All terms and conditions of such renewal shall be on the same terms and
conditions as the original Sublease with the exception of the following: (1)
this renewal option shall be null and void and shall no longer apply; and (2)
Base Rent for the initial 12 months shall be at the rate of $3.03 per rentable
square foot per month, and shall therefore increase at a rate of 4% per year on
an annual basis.

         38. Hazardous Materials.
             -------------------

            (a) Definitions. As used herein, the term "Hazardous Material" shall
                -----------
         mean any hazardous or toxic substance, material or waste which is or
         becomes regulated by any state, federal, or local government authority,
         including without limitation all of those materials and substances
         designated as hazardous or toxic by the Environmental Protection
         Agency, the Department of Labor, the Department of Transportation, the
         Department of Agriculture, the Department of Health Services or the
         Food and Drug Agency, as well as any chemicals, materials, substances
         or wastes which are now or hereafter defined as or included in the
         definition of "hazardous substances", "hazardous materials", "toxic
         substances", "extremely hazardous substances", "toxic pollutants", or
         words of similar import, under any applicable Environmental Laws.
         Without limiting the generality of the foregoing, the term "Hazardous
                                                                     ---------
         Material" shall include (1) any substance, product, waste or other
         --------
         material of any nature whatsoever which may give rise to liability
         under any statutory or common law theory based on negligence, trespass,
         intentional tort, nuisance or strict liability or under any reported
         decisions of a state or federal court; (2) gasoline, diesel fuel, or
         other petroleum hydrocarbons; (3) polychlorinated biphenyls; (4)
         asbestos containing materials; (5) urea formaldehyde foam insulation;
         (6) radon gas; (7) mercury; and (8) lead-based paints. As used herein,
         the term "Environmental Laws" shall mean all applicable statutes,
         regulations, rules, ordinances, codes, licenses, permits, orders,
         approvals, authorizations and similar items, of any state, federal, or
         local government authority, and all principles of common law pertaining
         to the regulation and protection of human health, safety, and damages
         to natural resources, including, without limitation, Releases and
         threatened Releases or otherwise relating to the operation,
         manufacture, processing, distribution, use, treatment, storage,
         disposal, transport, or handling of Hazardous Materials. As used
         herein, the term "Release" shall mean any emission, spill, seepage,
         leak, escape, leaching, discharge, injection, pumping, pouring,
         emptying, dumping, disposing or release of Hazardous Materials.

            (b) Use Restriction. To the extent permitted by Overlandlord,
                ---------------
         provided Subtenant complies with Environmental Laws (as such term is
         defined hereinafter), Subtenant shall be permitted to use KODAK Medical
         X-Ray Developer, Working Solution and KODAK Medical X-Ray Liquid Fixer
         and Replenisher in an amount not to exceed twenty (20) gallons in the
         aggregate per month. To the extent Subtenant desires to use different
         or additional Hazardous Materials or greater amounts of said Hazardous
         Materials, Subtenant shall be required to obtain Sublessor and
         Overlandlord's consent, which consent may be withheld in said party's
         sole and absolute discretion. Except as expressly set forth above,
         Subtenant shall not cause or permit any Hazardous Material to

                                       17

<PAGE>

         be used, stored, generated, discharged, treated, transported to or
         from, Released or disposed of in, on, over, through, or about the
         Premises, or any other land or improvements in the vicinity of the
         Premises, without the prior written consent of Overlandlord and
         Sublessor, which consent may be withheld in the sole and absolute
         discretion of Sublessor; provided, however, that Subtenant may use
         small quantities of household cleaners and office supplies typically
         used in connection with professional offices. Without limiting the
         generality of the foregoing, (a) any use, storage, generation,
         discharge, treatment, transportation, Release, or disposal of Hazardous
         Material by Subtenant shall strictly comply with all applicable
         Environmental Laws, and (b) if the presence of Hazardous Material on
         the Premises caused or permitted by Subtenant or its agents, employees,
         invitees, visitors or contractors results in contamination of the
         Premises or any soil, air, ground or surface waters under, through,
         over, on, in or about the Premises, Subtenant, at its expense, shall
         promptly take all actions necessary to report, investigate and/or
         remediate such condition in accordance with all applicable
         Environmental Laws.

            (c) Notification. In addition, if the Subtenant knows or has
                ------------
         reasonable cause to believe that a Release or other environmental
         condition required to be reported to local, state, or federal
         regulatory authorities has occurred on the Premises, Subtenant must
         give written notice of the Release and/or condition to Overlandlord and
         Sublessor within a reasonable period of time following the discovery of
         the Release or environmental condition. Subtenant must provide notice
         of any local, state, or federal governmental filings or claims made or
         notices received by Subtenant from any regulatory authority or third
         party relating to any threatened claim or alleged violation of
         Environmental Laws or environmental matters.

         39. Rules and Regulations; Common Areas. Subtenant shall comply with
             -----------------------------------
all reasonable rules and regulations and all subsequent amendments and
modifications established by Sublessor or Overlandlord with respect to the
Building and common areas thereof, and shall cause its employees, customers,
contractors, agents and invitees to so comply. Sublessor agrees that Subtenant
shall not be required to comply with any such rules or regulations if they will
have a material adverse effect on Subtenant's use of the premises. Without
liability to Subtenant and without effecting an eviction or disturbance of
Subtenant's use or possession or giving rise to any claim for set-offs or
abatement of Rent, and without imposing any obligation on Sublessor or
Overlandlord to undertake any of the same, Sublessor (or Overlandlord, as the
case may be) shall have the right to: (a) make changes, repairs, additions or
alterations to the common areas of the Building, including without limitation
changes in the location, size, shape and number of driveways, entrances, parking
areas, loading areas, ingress/egress, direction of traffic, landscaped areas and
walkways and changes in the arrangement or location of entrances or passageways,
doors and doorways, corridors, stairs, toilets or other public parts of the
Building; (b) close any of the common areas for maintenance purposes, including
entrances, doors, corridors or other facilities; (c) perform any acts related to
the safety, protection, preservation, reletting or improvement of the Building;
(d) change the name or street address of the Building or suite number of the
Premises; (e) to require all persons entering or leaving the Building to
identify themselves to security personnel by registration or otherwise; and (f)
to close the Building after-hours and on week-ends. With respect to items a, b,
and c, Sublessor may not undertake any such actions if they will have a material
adverse effect on Subtenant's use of the Premises. With

                                       18

<PAGE>

respect to item (d), if Sublessor elects on its own (as opposed to being
required by the Post office or other authority) to change the name or street
address of the Building or suite number of the Premises, Sublessor will
reimburse Subtenant for the actual reasonable costs of replacing Subtenant's
stationery. With respect to item (f), Subtenant may request that Sublessor keep
the Building open after hours, provided that Subtenant shall pay all costs of
keeping the Building open during such hours.

         IN WITNESS WHEREOF, Sublessor and Subtenant have executed this Sublease
as of the day and year first above written.

         SUBLESSOR:         FIRST DATA MERCHANT SERVICES CORPORATION

                            By:      /s/ Jeffery B. Baer
                                  --------------------------------------
                            Name:    Jeffery B. Baer
                                  --------------------------------------
                            Title:   Authorized Agent
                                  --------------------------------------

         SUBTENANT:         R2 TECHNOLOGY, INC.

                            By:      /s/ Richard Enck
                                  --------------------------------------
                            Name:    Richard Enck
                                  --------------------------------------
                            Title: Chief Operating Officer
                                  --------------------------------------

ACKNOWLEDGED AND CONSENTED TO:

         Sunnyvale Partners Limited Partnership, Landlord under the Main Lease,
hereby consents to the sublease of the Premises as described in the foregoing
Sublease and confirms that the consent given hereby satisfies the requirements
for landlord's consent of the subletting of the Premises set forth in the Main
Lease. Landlord agrees not to disturb Subtenant's quiet enjoyment and possession
of the Premises for so long as Subtenant faithfully performs its obligations
under the Sublease. If during the term of this Sublease, the Main Lease is
terminated and Subtenant's is not in default of the Sublease or the Incorporated
Provisions of the Main Lease, then: (a) Overlandlord shall not terminate or
disturb Subtenant's possession of the Premises under the Sublease; (b)
Overlandlord shall be bound to Subtenant Under all of the terms and conditions
of the Sublease; (c) Subtenant shall recognize and attorn to Overlandlord as
Subtenant's direct landlord under the Sublease; and (d) the sublease shall
continue in full force and effect as a direct lease in accordance with its
terms, between Overlandlord and Subtenant.

         OVERLANDLORD:      SUNNYVALE PARTNERS LIMITED PARTNERSHIP

                            By: Sunnyvale, Inc.

                            By:      /s/ Jami G. Mantell
                                  --------------------------------------
                            Name:    Jami G. Mantell
                                  --------------------------------------
                            Title:   Manager
                                  --------------------------------------

                                       19

<PAGE>

                                    EXHIBIT A

                                 THE MAIN LEASE
                                 --------------

<PAGE>

                          BUILD-TO-SUIT LEASE AGREEMENT
                          -----------------------------

                Landlord: SUNNYVALE PARTNERS LIMITED PARTNERSHIP

                Tenant: FIRST DATA MERCHANT SERVICES CORPORATION

                                 March 18, 1997

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page

<S>      <C>                                                                     <C>
1.       Description                                                              1
2.       Term and Occupancy                                                       1
3.       Rent                                                                     2
4.       Construction                                                             3
5.       Use                                                                      6
6.       Condition of Demised Premises                                            7
7.       Maintenance and Repairs                                                  8
8.       Alterations                                                              9
9.       Signs                                                                   10
10.      Services                                                                11
11.      Compliance with Law                                                     11
12.      Landlord's Title, Authority, and Quiet Enjoyment:  Tenant's Authority   12
13.      Subordination                                                           13
14.      Assignment and Sublease                                                 14
15.      Lease Extension                                                         15
16.      Impositions                                                             15
17.      Insurance                                                               17
18.      Destruction and Restoration                                             20
19.      Condemnation                                                            21
20.      Default by Tenant                                                       25
21.      Landlord's Remedies                                                     26
22.      Default by Landlord                                                     28
23.      Tenant's Remedies                                                       28
24.      Delivery of Executed Lease                                              28
25.      Termination                                                             28
</TABLE>
                                       i

<PAGE>

26.      Notices                                                              29
27.      Brokerage                                                            29
28.      Estoppel                                                             29
29.      Hazardous Substances                                                 30
30.      Holdover                                                             31
31.      Surrender                                                            32
32.      Liens                                                                32
33.      Interest; Late Charge                                                33
34.      Inspections                                                          34
35.      Transfer of Landlord's Interest                                      34
36.      Indemnity                                                            34
37.      Modification of Lease                                                35
38.      Memorandum of Lease                                                  35
39.      Paragraph Captions                                                   35
40.      Entire Agreement                                                     35
41.      Choice of Law and Interpretation                                     35
42.      Prevailing Party                                                     36
43.      Exhibits                                                             36
44.      Guarantee                                                            36
45.      Independent Covenants                                                36
46.      Entry by Landlord                                                    37
47.      [Deleted by intent of parties.]                                      37
48.      Survival of Obligations                                              37
49.      Subject to Landlord's Acquisition of Demised Premises                37
50.      Americans With Disabilities Act                                      38
                                       ii

<PAGE>

51.      Reports by Tenant                                                    39
52.      Option to Purchase                                                   39
53.      No Third Party Beneficiaries                                         40
54.      Counterparts                                                         41
55.      Consents and Approvals                                               41
56.      Limitation on Damages                                                41
57.      Tenant's Property                                                    41

Exhibit A         -        Legal Description

Exhibit B         -        Site Plan

Exhibit C         -        Plans

Exhibit C-1       -        Construction Schedule

Exhibit D         -        Schedule of Rents

Exhibit E         -        Lease Term Agreement

Exhibit F         -        Memorandum of Lease

Exhibit G         -        Landlord's Development Costs

Exhibit H         -        Permitted Exceptions

Exhibit I         -        Escrow Agreement

                                      iii

<PAGE>

          THIS BUILD-TO-SUIT LEASE AGREEMENT (this "Lease") is made as of the
_18_th day of March, 1997 (the "date hereof") between SUNNYVALE PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership, having its principal office at c/o
Ridge Sunnyvale, Inc., c/o Ridge Capital Corporation, 257 East Main Street,
Barrington, Illinois 60010 (hereinafter referred to as "Landlord"), and FIRST
DATA MERCHANT SERVICES CORPORATION, having its principal office at 5660 New
Northside Drive, Suite 1400, Atlanta, Georgia 30328 (hereinafter referred to as
"Tenant").

                              W I T N E S S E T H:
                              --------------------

         Landlord, for and in consideration of the rents, covenant and
agreements hereinafter set forth on the part of Tenant to be paid, kept,
observed and performed does hereby lease unto Tenant, and Tenant does hereby
take subject to the conditions herein expressed, all that parcel of land
situated in the City of Sunnyvale, County of Santa Clara, State of California
and legally described on Exhibit A attached hereto and made a part hereof (the
"Land"), together with all improvements located and to be constructed thereon by
Landlord, which are hereinafter called "Landlord's Improvements." Landlord's
Improvements and all improvements, machinery, building equipment, fixtures and
other property of Landlord, real, personal or mixed (except Tenant's trade
fixtures and any other property of Tenant), installed or located thereon,
together with all additions, alterations and replacements thereof are
collectively referred to herein as the "Improvements." The Land and the
Improvements am sometimes hereinafter collectively referred to as the "Demised
Premises". The structure located upon and being a part of the Demised Premises
which is constructed to be used as a two story office building containing
approximately 80,000 "useable square feet" (as defined in Paragraph 4 below) is
hereinafter referred to as the "Building".

          1. Description. Landlord will cause Landlord's Improvements (including
             -----------
the Building and other site improvements depicted on the Site Plan attached
hereto and made a part hereof as Exhibit B) to be constructed in substantial
accordance with the plans and specifications enumerate on Exhibit C (the
"Plans"). Landlord agrees that Landlord shall not make any modifications or
changes to the Plans without Tenant's prior written consent. Landlord further
agrees to make any changes to the Plans requested by Tenant in writing and if
the change requested by Tenant increases or decreases the cost of the Demised
Premises, the Base Rent provided for herein shall be adjusted in accordance with
the provisions of the formula provided on Exhibit D.

          2. Term and Occupancy. A. The term of this Lease shall commence on the
             ------------------
Construction Completion Date, as provided in Paragraph 4 below (hereinafter
referred to as the "Commencement Date"), and shall end on the date which is the
last day of the month that includes the twelfth (12th) anniversary of the
Commencement Date (hereinafter referred to as the "Expiration Date"), unless the
term be extended or earlier terminated as provided herein.

         Landlord shall notify Tenant of the anticipated Construction Completion
Date. Landlord agrees to notify Tenant promptly from time to time of any changes
in the anticipated Construction Completion Date. Tenant shall have the right to
enter the Demised Premises during the approximately ninety (90) day period
preceding the Construction Completion Date for the purpose of installing its
equipment and Tenant does hereby agree to assume all risk of loss or

                                       1

<PAGE>

damage to such equipment, and to indemnify, defend and hold harmless Landlord
from and against any loss or damage to such equipment and all liability, loss or
damage arising from any injury to the property of Landlord, or its contractors,
subcontractors or materialmen, and any death or personal injury to any person or
persons arising out of such installation. Landlord agrees to cooperate with
Tenant so that Tenant's contractors and tradespeople will be permitted to
reasonably perform their work without material interference. Tenant agrees to
cooperate with Landlord so that Landlord's contractors and tradespeople will be
permitted to reasonably perform their work without material interference.

          B. Notwithstanding anything else in this Lease to the contrary, Tenant
shall have the right to terminate this Lease as of the end of the eighth (8th)
Lease Year (the "Early Termination Date") provided that Tenant shall (a) notify
Landlord in writing of its election to terminate at least one (1) year prior to
the Early Termination Date, and (b) pay to the Landlord, concurrently with the
notification to Landlord hereunder, a termination fee by certified or cashier's
check or wire transfer of available funds ("Termination Amount") equal to the
discounted present value (using Landlord's financing interest rate) amount
needed to reduce the remaining unamortized principal balance due on the
indebtedness originally incurred by Landlord to finance the Landlord's
Development Costs (as defined in Paragraph 19F). If Tenant gives such notice as
required hereunder and pays the Termination Amount concurrently therewith, this
Lease shall be deemed terminated as to all rights or obligations hereunder
(except such rights and obligations as Landlord and Tenant would otherwise have
upon normal expiration of the term of this Lease). Any such notice hereunder,
not accompanied by the Termination Amount as provided hereinabove, shall be
deemed invalid and of no force or effect. Upon Landlord's closing on the
permanent loan for the financing of the Landlord's Development Costs, Landlord
shall provide to Tenant a copy of the twenty (20) year permanent loan
amortization (the "Loan Amortization"), which shall include the principal amount
that will be due at the end of the eighth (8th) Lease Year.

          Tenant shall have the right to pay the Termination Amount to any
mortgagee of the Demised Promises or other person with a lien on the Demised
Premises or the rents derived therefrom, but Tenant shall have no such
obligation to do so unless such obligation is specifically set forth in a
non-disturbance or other agreement between Tenant and such mortgagee or other
lienholder. Notwithstanding the foregoing, Tenant acknowledges and agrees that
any payment to any such mortgagee or other lienholder shall only be effectuated
by a two-party or two-payee certified or cashier's check, made payable to both
Landlord and any such mortgagee or other lienholder.

          3. Rent. The annual base rental ("Base Rent") shall be calculated in
             ----
accordance with the provisions set forth on the Schedule of Rents attached
hereto and made a part hereof as Exhibit D. Base Rent shall be paid monthly, in
advance, in equal installments, without offset or deduction by wire transfer in
accordance with separate instruction given by Landlord to Tenant, on the
Commencement Date and on the first day of each month thereafter during the term
hereof; provided however, that if the term of this Lease shall commence on a
date other than the first day of a calendar month or end on a date other than
the last day of a calendar month (i) the first and last month's Base Rent shall
be prorated based upon the ratio that the number of days in the term within such
month bears to the total number of days in such month, and (ii) Base Rent
reserved for the calendar month of any scheduled rent escalation shall be
equitably adjusted upon due

                                       2

<PAGE>

         consideration of the number of days in such month falling within the
preceding Lease Year (as herein defined) and the number of days in such month
falling within the current Lease Year. For purposes of this Lease, the term
"Lease Year" shall mean the 12-month period commencing on the Commencement Date
and each 12-month period thereafter during the term of this Lease (and any
renewal or extension thereof), provided that, if the Commencement Date is not
the first day of a calendar month, the first "Lease Year" shall be the period
commencing on the Commencement Date and ending on the last day of the twelfth
(12th) full calendar month following the Commencement Date and all Base Rent
payable for the month in which the Commencement Date occurs shall be paid on the
first day of the following calendar month. Notwithstanding the foregoing, on or
prior to the date of closing under the Sale Agreement (as defined herein),
Tenant shall also deposit into escrow with First American Title Guaranty Company
the sum of Two Million Dollars ($2,000,000.00) to cover a portion of the
Landlord's Development Costs which shall be disbursed in accordance with the
Escrow Agreement attached hereto as Exhibit I.

          4. Construction.
             ------------

          A. Landlord agrees, at Landlord's sole cost and expense, to cause
construction of Landlord's Improvements in accordance with the following
schedule:

             (a) Landlord shall use reasonable efforts to commence the Site
Preparation Phase (as defined in that certain Real Estate Purchase and Sale
Agreement and Joint Escrow Instructions dated March 18, 1997 (the "Sale
Agreement") between Regis Homes of Northern California, Inc. and Landlord) as
soon as possible following the date Landlord acquires the Land and in any event
on or before the date four (4) business days following the date Landlord
acquires the Land (the "Estimated Construction Commencement Date"), in
accordance with the Plans and in accordance with the construction schedule
attached hereto as Exhibit C-1 (the "Construction Schedule") and shall
                   -----------
diligently pursue construction in an effort to complete Landlord's Improvements
on or before the Estimated Construction Completion Date (as herein defined);
provided, however, if delay is caused or contributed to by act or neglect of
Tenant, or those acting for or under Tenant including, without limitation,
changes ordered by Tenant, or delays caused by labor disputes, casualties, acts
of God or the public enemy, governmental embargo restrictions, shortages of
fuel, labor, or building materials, action or non-action of public utilities, or
of local, State or Federal governments affecting the work, or other similar
causes beyond the Landlord's reasonable control, then the time of commencement
of said construction shall be extended for the additional time caused by such
delay (such delays are each hereinafter referred to as an "excused delay"). The
date on which Landlord actually commences construction of Landlord's
Improvements shall be referred to as the "Construction Commencement Date."

             (b) Landlord shall use all reasonable efforts to substantially
complete construction of Landlord's Improvements as soon as possible following
the Construction Commencement Date in accordance with the Construction Schedule
attached hereto as Exhibit C-1, as may be extended by excused delays (the
"Estimated Construction Completion Date"). The date on which Landlord
substantially completes construction of Landlord's Improvements (except for work
to be performed by Tenant) shall be referred

                                       3

<PAGE>

to as the "Construction Completion Date." Landlord acknowledges that Tenant will
suffer significant damages if Landlord fails to deliver the Demised Premises on
or before the Estimated Construction Completion Date and that time is of the
essence with respect to Landlord's completion of the Landlord's Improvements as
required herein. If Landlord fails to cause the Landlord's Improvements to be
substantially completed on or before the Estimated Construction Completion Date,
as said date may be extended from time to time due to excused delays, Landlord
shall be obligated to pay to Tenant the following sums for each day after the
Estimated Construction Completion Date until the Construction Completion Date up
to the maximum of sixty-five (65) days of delay and thereafter, Landlord shall
be liable for Tenant's actual damages for the delay (which shall include
Tenant's actual costs incurred in connection with holding over at its present
location and/or renting reasonably acceptable substitute space): (a) for the
first thirty (30) days of delay, the sum of One Thousand Dollars ($1,000.00) per
day for each calendar day of delay; (b) for the thirty-first (31st) day through
the sixtieth (60th) day of delay, the sum of Two Thousand Five Hundred Dollars
($2,500.00) per day for each calendar day of delay; and (c) for the sixty-first
(61st) day through the sixty-fifth (65th) day of delay, the sum of Seven
Thousand Five Hundred Dollars ($7,500.00) per day for each calendar day of
delay. Notwithstanding the foregoing, in no event shall Landlord be liable to
Tenant for any punitive, special, incidental, indirect or consequential damages
of any kind whatsoever, each of which is hereby excluded by agreement of the
parties regardless of whether or not any party has been advised of the
possibility of such damages. Landlord shall pay the sums calculated above (other
than actual damages accrued after the 95th day of delay) within thirty (30) days
after the Commencement Date. In connection with the foregoing, Landlord agrees
to deposit into escrow for the benefit of Tenant all damages received from Regis
Contractors of Northern California, L.P. pursuant to Section 1.7 of that certain
Construction Management Agreement dated March 18, 1997. Tenant agrees to deliver
to Landlord an accounting of Tenant's actual damages upon request.

          B. Tenant or its architect will from time to time upon written request
of Landlord or Landlord's construction lender certify that the construction of
Landlord's Improvements has been completed to that point to the reasonable
satisfaction of Tenant. Notwithstanding the foregoing, nothing contained herein
shall be deemed to abrogate, waive or compromise any of Tenant's rights
hereunder with respect to the construction and completion of Landlord's
improvements.

          C. In the event this Lease has not been terminated pursuant to
Paragraph 49 of the Lease, Landlord and Tenant promptly shall execute a document
substantially in the form attached hereto as Exhibit E and made a part hereof,
to establish the Commencement Date and the Expiration Date.

          D. The following phrases shall have the meanings set forth below:

              (a) The phrase "commence[d][s] construction of Landlord's
improvements" as used herein means issuance of all necessary permits needed to
commence construction, a building permit, execution of a construction contract
or contracts for the completion of Landlord's Improvements in accordance with
the Plans, execution of this Lease, and

                                       4

<PAGE>

excavation work has commenced.

              (b) The phrase "substantial[ly] complete[ed] [ion] [of]
construction of Landlord's Improvements as used in this Lease shall mean the
municipality having jurisdiction thereof issues a certificate of occupancy
permitting Tenant to occupy Landlord's Improvements or takes such other action
as may be customary to permit occupancy or use thereof for the purposes provided
herein and Landlord's Improvements am otherwise ready for beneficial use and
occupancy by Tenant subject to completion of any punchlist items (as defined
herein) by Landlord and Landlord's architect certified to Tenant in writing that
Landlord's improvements have been constructed and completed in a good and
workmanlike manner in substantial accordance with the Plans and that to the best
of its knowledge the Plans comply with applicable laws, including without
limitation all building codes, zoning ordinances and regulations and the Act (as
defined herein) and Landlord's Improvements are otherwise ready for beneficial
use and occupancy by Tenant subject to completion of any punchlist items by
Landlord; provided, however, the issuance of a certificate of occupancy or such
other action as may be customary to permit occupancy or use thereof and the
issuance of the architect's certificate shall not be a condition to payment of
rent or commencement of the term if failure to secure such certificate of
occupancy or action or architect's certificate is caused by the act or neglect
of Tenant or if matters required for issuance are the responsibility of Tenant.

              (c) The phrase "usable square feet" means the square feet
contained within the inside of the exterior walls of the Building.

          E. Within fifteen (15) days after the Construction Completion Date,
Tenant, Landlord and Landlord's Architect shall prepare and execute a punchlist
(the "punchlist") of incomplete and incorrect items which shall include details
of construction and mechanical and electrical adjustments which are minor in
character and do not materially interfere with Tenant's use or enjoyment of the
Demised Premises in accordance with the provisions of this Lease, and may also
include landscaping and other items which do not materially affect Tenant's use
of the Demised Premises but which cannot be immediately completed because of
weather, or any items listed on the Plans or the Construction Schedule as items
to be completed after substantial completion of the Landlord's Improvements, if
any (such items are sometimes hereinafter referred to as "punchlist items").
Landlord shall use all reasonable efforts to complete the punchlist items as
soon as possible after its receipt of the punchlist, and to minimize disruption
of Tenant's business and other inconveniences to Tenant, subject to excused
delays. If Landlord fails to complete the punchlist items within ninety (90)
days after the receipt by Landlord of the completed punchlist by Tenant, subject
to excused delays, then Tenant shall have the right, but not the obligation, to
complete the punchlist items and Landlord shall reimburse Tenant for its
reasonable out-of-pocket expenditures in connection there upon presentation of
invoices in sufficient detail and lien waivers covering performance of the work.
Nothing herein contained shall be deemed or construed to permit Tenant to offset
against Base Rent or other charges payable by Tenant hereunder. Landlord shall
deliver to Tenant "as built" working drawings of the Landlord's Improvements
within sixty (60) days after completion of the punchlist items.

          Landlord shall maintain a retainage of a minimum of ten percent (10%)
of the cost the so-called tenant improvement portion of the Landlord
Improvements (the "TI Work") or based on

                                       5

<PAGE>

         an estimated approximate cost for the TI Work. The aforementioned
retainage shall not be released until the punchlist items for TI Work have been
completed to Tenant's reasonable satisfaction.

          F. Landlord shall at its own expense correct or repair any parts of
Landlord's Improvements that fail to conform with the requirements of the Plans
during the period of construction of Landlord's Improvements (unless Tenant is
willing to accept such non-conforming work and so notifies Landlord thereof in
writing). Landlord shall correct any defects in the construction of Landlord's
Improvements not caused by Tenant which appear within a period of one (1) year
from the Construction Completion Date, but not otherwise. Landlord shall obtain
for the joint benefit of Landlord and Tenant, a joint, non-exclusive assignment
of all contractor, subcontractor, equipment, material and manufacturers'
warranties relating to the Landlord's Improvements which shall contain a minimum
of a one (1) year warranty period commencing with the contractors' or
subcontractors' completion of the work included in Landlord's Improvements (the
"Warranties"). Furthermore, on the Construction Completion Date, Landlord shall
assign to Tenant the non-exclusive right to enforce any and all Warranties and
Landlord agrees to reasonably cooperate with Tenant's pursuit of any and all
claims under the Warranties.

          G. Tenant shall have the right to request that changes be made to the
Plans. Within ten (10) days after Tenant's requests, Landlord shall provide an
estimate of the amount that the change will increase or decrease the cost of
completing the Landlord's Improvements and the time adjustment to the
Construction Schedule, if any. If Tenant approves the change following receipt
of the estimates, Landlord shall submit a change order to its contractors to
implement the change requested by Tenant. The estimated increase or decrease in
the time required to complete the Landlord's Improvements resulting from
Tenant's change shall be reflected as an adjustment to the Construction Schedule
and shall be deemed an "excused delay" and any net increase or decrease in
Landlord's construction costs due to Tenant's change order, shall be borne by or
credited to Tenant, as the case may be, by means of an adjustment to the
Schedule of Rents in accordance with the formula established on Exhibit D.

          H. If due to change orders initiated by Tenant, Landlord's Development
Costs exceed the amount of then concurrent with any such change order, Tenant
agrees to deposit into the escrow created by the Escrow Agreement (as defined in
Paragraph 3 hereof) the total amount of any such increase in Landlord's
Development Costs in excess of. Notwithstanding the foregoing, upon the closing
of the permanent financing for the Demised Premises occurring on or after the
Commencement Date, Landlord shall reimburse Tenant for all such increased costs
and the Base Rent shall be adjusted in accordance with the formula established
on Exhibit D; provided, however, Base Rent shall not be adjusted until such time
as Tenant is reimbursed hereunder.

          5. Use.
             ---

          A. The Demised Premises shall be used and occupied for general office
purposes and for any other purpose which does not violate any applicable law,
rule, ordinance or regulation of any applicable government authority having
jurisdiction ("Tenant's Use"). Landlord represents that, to its actual
knowledge, the Demised Premises are currently zoned "O," Administrative

                                       6

<PAGE>

Professional District and R1.7/PD, low medium density residential district
under the zoning ordinance of the City of Sunnyvale, California, which zoning
classification, to Landlord's actual knowledge, will not restrict or limit
Tenant's Use; provided, however, Landlord makes no representation as to whether
a special use permit, zoning, variance or comparable relief from the local
zoning ordinance is required to conduct Tenants Use, and if such special use,
variance or comparable relief is required, Tenant shall obtain the same (at its
sole cost and expense). Landlord further represents, to its actual knowledge
without independent investigation or inquiry and subject to the foregoing
proviso, that there are no other zoning ordinances or any prohibitions
restricting or limiting Tenant's Use in any material respect. In addition,
Tenant may use all or any part of the Demised Premises for any lawful purpose
then permitted by local zoning ordinances and the certificate of occupancy, if
available; provided, however, Tenant may not use or occupy the Demised Premises,
or knowingly permit the Demised Premises to be used or occupied (including
without limitation subleasing the Demised Premises or any part thereof or
assigning this Lease to any other party conducting a business other than
Tenant's Use) or in such a manner as to cause the value or usefulness of the
Demised Premises, or any part thereof, substantially to diminish (reasonable
wear and tear excepted). Tenant shall have the exclusive right to use of and
shall have full access to the Demised Premises twenty-four (24) hours per day,
seven (7) days per week, three hundred sixty-five (365) days per year during the
term.

          B. Tenant may, if Tenant so elects, and for Tenant's sole use, install
and operate within the Building microwave ovens and install and operate within
the Building vending machines to dispense hot and cold beverages, ice cream,
candy, food and cigarettes; such machines shall be maintained in a neat and
sanitary condition and shall comply with all applicable laws and ordinances.
Tenant shall also have the right to use, install and operate within the
Building, all telecommunication lines and other telecommunication and electronic
facilities relating to services to be provided to Tenant and its subtenants and
Landlord agrees to provide all necessary easements upon the Demised Premises
reasonably required by said service provider. Upon termination of the Lease, and
if so requested by Landlord, Tenant shall, at its sole cost and expense, in a
good and workmanlike manner and in as expeditious a manner as possible, remove
any or all of such items from the Demised Premises, to the extent required by
Landlord. Tenant further agrees to repair any damage to the Demised Premises
caused by the removal of such items. In connection with any easements granted
hereunder to service providers, Landlord reserves the right to condition any
such grant upon receipt of acknowledgment from the relevant service provider(s)
that such service provider agrees to vacate the easement, and relinquish all of
its rights in the Demised Premises, effective upon the termination of the Lease.
Notwithstanding anything contained herein to the contrary, if the Lease is in
full force and effect as of the thirteenth (13th) anniversary of the
Commencement Date and Tenant is not then in default hereunder. Landlord waives
its rights hereunder to require Tenant to remove from the Demised Premises any
or at of the items referred to above, upon termination of this Lease.

          6. Condition of Demised Premises. Landlord shall construct and Tenant
             -----------------------------
shall reasonably accept Landlord's Improvements in accordance with the Plans. As
of the Commencement Date, Landlord's Improvements shall be in good working order
and condition and, subject to the items on or to be inserted on the punchlist,
constructed in substantial accordance with the Plans.

                                       7

<PAGE>

          7. Maintenance and Repairs.
             -----------------------
          A. Except as otherwise provided herein, during the term of this Lease,
Tenant shall, at Tenant's sole expense, keep the Demised Premises in good
working order, condition and repair and in compliance with all applicable laws
and shall perform all routine maintenance thereof and all necessary repairs
thereto, interior and exterior, structural and nonstructural ordinary and
extraordinary, foreseen or unforeseen, of every nature, kind and description.
When used in this Paragraph 7, "repairs" shall include all necessary
replacements, renewals, alterations, additions and betterments. If Tenant cannot
keep the Demised Premises or any portion thereof in good working order,
condition and repair, then Tenant shall replace the same in a first-class
manner. Tenant shall comply with manufacturers' recommended schedules for
warranty work. Tenant shall furnish its own cleaning services. All repairs and
replacements made by Tenant shall be at least equal in quality to the original
work and shall be made by Tenant in accordance with all applicable laws. The
necessity for or adequacy of maintenance, repairs and replacements shall be
measured by the standards which are appropriate for improvements of similar
construction and class, provided that Tenant shall in any event make all repairs
and replacements necessary to avoid any structural damage or other damage or
injury to the Demised Premises.

          B. Notwithstanding the provisions of Paragraph 7A, and Tenant's
obligations to pay for all repairs, in the event that at any time during the
term of this Lease after the expiration of the twentieth (20th) Lease Year
(commencing with the Third Extension Term), Tenant reasonably determines that
capital expenditures are required to be expended by Tenant in connection with
maintaining, repairing or replacing the roof or structural components of the
Building, or replacing the parking areas, Building plumbing, electrical heating,
ventilation, or cooling equipment, sprinkler systems, or making any other
capital expenditure required by subsequent law (any such capital expenditure
being herein referred to as a "Specified Capital Item"), then the Tenant shall
submit to Landlord a proposed budget for such capital expenses for the Specified
Capital Items and obtain Landlord's prior written approval thereof, which
approval shall not be unreasonably withheld or delayed. Upon Tenant's obtaining
Landlord's prior written approval of such Specified Capital Items and Tenant
completing such work in accordance with the requirements set forth in this
Lease, then and in that event, the Landlord agrees that it shall reimburse
Tenant for an amount ("Reimbursement Amount") equal to the actual costs incurred
in connection with the Specified Capital Item previously approved by Landlord
multiplied by a fraction, the numerator of which is the portion of the useful
life of such Specified Capital Items remaining after the then existing term and
the denominator of which is the useful life of such Specified Capital Item
(i.e., by way of example, in the event that the approved cost for an approved
Specified Capital Item was Out Thousand Dollars ($1,000) and the useful life of
such Specified Capital Item was eight (8) years and such work was commenced at
the end of the twentieth (20th) Lease Year, then in such event, Landlord would
reimburse Tenant for Five Hundred Dollars ($500) as the Reimbursement Amount).
The "useful life" of a Specified Capital Item shall be determined using the
United States Internal Revenue Service standard depreciation schedule in effect
on the date that the applicable capital expenditure is made. Notwithstanding
anything contained herein to the contrary, in the event that the Tenant
exercises its option to extend the term of the Lease, then simultaneous with the
exercise of such renewal option, the Tenant shall pay to Landlord an amount
equal to the difference between the Reimbursement Amount and the amount Landlord
would have paid as a Reimbursement Amount

                                       8

<PAGE>

had the term been extended by the Extension Term at the time such Specified
Capital Item was commenced (i.e., by way of example, in the event that the
Specified Capital Item was One Thousand Dollars ($1,000) and that the useful
life of the Specified Capital Item was eight (8) years, with such work having
been commenced at the end of the twentieth (20th) Lease Year, whereby Landlord
reimbursed Tenant a Reimbursement Amount of Five Hundred Dollars ($500), then
simultaneous with the exercise of its option to extend the Term for the Fourth
Extension Term, the Tenant would pay to Landlord an amount equal to Five Hundred
Dollars ($500)). The allocation of the costs of Specified Capital Items as set
forth in this Paragraph 7.B. shall not relieve Tenant of Tenant's maintenance
and repair obligations under this Lease

          8. Alterations. Tenant may install tenant finishes in the Demised
             -----------
Premises and make interior alterations, additional installations, modifications,
substitutions, improvements and decorations (collectively, "Alterations") in and
to the Demised Premises, subject only to the following conditions:

                  (i) any Alterations shall be made at Tenant's sole cost and
expense so that the Demised Premises shall at all times be free of liens for
labor and materials supplied to the Demised Premises;

                  (ii) without the prior written approval of Landlord, Tenant
shall make no Alterations (x) which are structural in nature or adversely affect
in any way the structure of the Demised Premises; or (y) which adversely affect
or could render void or invalidate any Warranties under this Lease. In addition,
without the prior written approval of Landlord, Tenant shall make no Alterations
to any portion of the exterior or elevation of the Building.

                  (iii) any Alterations shall be performed in a good and
workmanlike manner and in compliance with all applicable laws and requirements
of governmental authorities having jurisdiction and applicable insurance
requirements and shall not violate any term of any agreement or restriction to
which the Demised Premises are subject;

                  (iv) Tenant, at its sole cost and expense, shall cause its
contractors to maintain builder's risk insurance and such other insurance
(including, without limitation, workers compensation insurance) as is then
customarily maintained for such work, all with insurers licensed by the State of
California;

                  (v) At least fifteen (15) days prior to Tenant's commencement
of any Alterations costing in excess of One Million Dollars ($1,000,000.00), the
plans and specifications therefor shall be submitted to Landlord for Landlord's
review and approval, which approval shall not be unreasonably "withheld or
delayed provided that the provisions of this subparagraph (v) shall not apply to
initial tenant improvements needed to locate a subtenant in the Demised
Premises; and

                  (vi) To the extent not inconsistent with the requirement set
forth above, Tenant shall not be required to obtain Landlord's consent to
Alterations which are a subtenant's initial tenant improvements.

Any Alteration shall, when completed, be of such character as not to reduce the
value or

                                       9

<PAGE>

utility of the Demised Premises or the Building to which such Alteration is made
below its value or utility to Landlord immediately before such Alteration, nor
shall such Alteration alter the exterior of the Improvements or reduce the area
or cubic content of the Building, nor change the character of the Demised
Premises or the Building as to use without Landlord's express written consent.

         No change, alteration, restoration or new construction shall be in or
connect the improvements with any property, building or other improvement
located outside the boundaries of the Land, nor shall the same obstruct or
interfere with any existing casement.

         Tenant shall notify Landlord in writing 30 days prior to commencing any
alterations, additions or improvements to the Demised Premises so that Landlord
shall have the right to record and post notices of nonresponsibility on the
Demised Premises. Within a reasonable time period prior to commencing the
alterations, additions or improvements, Tenant shall provide Landlord with
copies of all plans and specifications prepared in connection with any such
alteration, addition or improvement, as well as copies of each material
amendment and change thereto, if and when applicable.

         All of Tenant's generators and uninterruptible power supply equipment
(but in no event including the primary HVAC system serving the Building), trade
fixtures, movable partitions, furniture, machinery and furnishings installed by
Tenant or assignees, subtenants or licensees of Tenant shall remain the property
of the owner thereof with the right of removal, whether or not affixed and or
attached to the real estate and the owner thereof shall be entitled to remove
the same or any part thereof during the term or at the end of the term provided
herein, provided that such owner shall repair any damage caused by such removal.
Except as otherwise provided herein, all Alterations made or installed by Tenant
shall remain the Property of Tenant and Tenant shall have the right to remove
the Alterations at any time during the term hereof provided Tenant shall repair
any damage resulting therefrom and leave the Demised Premises in a commercially
reasonable condition. Notwithstanding the foregoing, any Alterations on the
Demised Premises at the end of the term shall become the property of Landlord
without payment therefor by Landlord, and shall be surrendered to Landlord at
the expiration of the term of this Lease; provided however, if the Lease term
ends prior to the thirteenth (13th) anniversary of the Lease Commencement Date,
if so requested by Landlord, Tenant shall, at its sole cost and expense and in
as expeditious a manner as possible remove any or all of such Alterations from
the Demised Premises, to the extent required by Landlord. Tenant further agrees
to repair any damage resulting therefrom and leave the Demised Premises in a
commercially reasonable condition.

9.       Signs.
         -----

Tenant may install, at its expense and pursuant to the Plans, a monument
identification sign containing Tenant's name at a location depicted on Exhibit B
unless such location would cause a violation of applicable laws in which event
said monument identification sign shall be moved to a location mutually
acceptable to the parties. Tenant shall also have the right to place any
additional signs at the Demised Premises without the prior consent of Landlord,
provided that such sign or signs (a) do not cause any structural damage or other
damage to the Building; (b) do not violate applicable governmental laws,
ordinances, rules or

                                       10

<PAGE>

regulations; (c) do not violate any existing restrictions affecting the Demised
Premises; and (d) are compatible with the architecture of the Building and the
landscaped area adjacent thereto. Tenant shall remove all signage from the
Demised Premises at the end of the term.

          B. Landlord may place signs on the Demised Premises identifying Tenant
prior to the Construction Completion Date, provided Tenant has approved each
sign, such approval not to be unreasonably withheld.

          10. Services.
              --------

          A. Landlord shall provide all utility equipment, distribution systems,
fixtures and parts to the Demised Premises in accordance with the Plans, and
shall in all other respects prepare the Demised Premises to accept all utilities
to be used by Tenant during the terra of the Lease as contemplated by the Plans
including all connection, tap-in and impact fees, any charges for the
underground installation of electric, gas or other utilities or services, and
other charges relating to the extension of or change in the facilities necessary
to provide the Demised Premises with adequate utilities services. Tenant shall
contract for and pay directly for the cost of usage of all utilities including
all charges for water, heat, gas, light, garbage, electricity, telephone,
sewage, steam, power or other public or private utility services. If after
Landlord's installation of the utility systems required to be provided herein,
any bond, charge or fee is required by the state in which the Demised Premises
are located, or any city or other agency, subdivision, or instrumentality
thereof, or by any utility company furnishing services or utilities to the
Demised Premises, as a condition precedent to continuing to furnish utilities or
services to the Demised Premises, such bond, charge or fee shall be deemed to be
a utility charge payable by Tenant. To the extent existing utility easements on
the Demised Premises are not sufficient to provide utility and communication
services to the Demised Premises for Tenant's Use, Landlord agrees to grant
additional easements to utility providers, including telecommunication and
electronic service providers, if reasonably required by Tenant.

          B. The Demised Premises shall include all of the improvements shown on
the Site Plan, including, without limitation, exclusive use of the paved parking
as set forth on the Site Plan.

          C. Tenant acknowledges that any one or more of the services provided
for in paragraph 10 hereof may be interrupted or suspended by reason of
accident, repair, alterations or improvements necessary to be made, strike,
lockout, misuse or neglect by Tenant or Tenant's agents, employees or invitees,
or by shortages of fuel or other energy supplies to be provided by public or
private utilities or supplies or by other matters, and Landlord shall not be
liable to Tenant therefor, nor shall Tenant have any right to terminate the
Lease or other rights against Landlord in the event of a failure, interruption
or suspension of any of the aforesaid services.

          11. Compliance with Law.
              -------------------

          A. Landlord covenants that the Demised Premises (except trade
fixtures, equipment, machinery or any other item constructed or installed by
Tenant) will materially conform as of the Commencement Date to any applicable
laws, orders, statutes, ordinances, rules, regulations and requirements of
federal, state and municipal governments, including, without limitation, all

                                       11

<PAGE>

applicable rules and regulations of the Board of Fire Underwriters and any
requirements of the certificate of occupancy or any permit with respect to the
Demised Premises and the sidewalks, curbs, roadways, alleys, entrances or other
facilities adjacent or appurtenant thereto. Landlord shall be responsible for
procuring building and other permits and licenses necessary for construction of
Landlord's Improvements.

          B. Tenant shall throughout the term of this Lease, at Tenant's sole
cost, materially comply with or remove or cure any violation of any applicable
laws, orders, statutes, ordinances, rules, regulations and requirements of
federal, state and municipal governments, including, without limitation, any
applicable laws, orders, statutes, ordinances, rules, regulations and
requirements of any federal, state or local government relating to occupational
safety and health (collectively, the "OSHA Regulations"), all applicable rules
and regulations of the Board of Fire Underwriters and any requirements of the
certificate of occupancy or any permit with respect to the Demised Premises and
the sidewalks, curbs, roadways, alleys, entrances or railroad track facilities
adjacent or appurtenant thereto, and whether the compliance, curing or removal
of any such violation and the costs and expenses necessitated thereby shall have
been foreseen or unforeseen, ordinary or extraordinary, and whether or not the
same shall be presently within the contemplation of Landlord or Tenant or shall
involve any change of governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and irrespective of
the costs thereof; provided, however, that Landlord shall be responsible, at
Landlord's sole cost, to make all repairs needed for the Demised Premises to
comply with all laws if said repair is required within one (1) years after the
Commencement Date and is necessary due to a defect in the construction of the
Landlord's Improvements including without limitation, a failure to construct the
Landlord's improvements so that the Demised Premises are in compliance with all
laws as of the Commencement Date. Tenant, at its sole cost and expense, shall
comply with all agreements, contracts, easements, restrictions, reservations or
covenants, if any, affecting the Demised Premises or hereafter created by Tenant
and consented to, in writing, by Tenant or requested, in writing, by Tenant.
Tenant shall also comply with, observe and perform all provisions and
requirements of all policies of insurance at any time in force with respect to
the Demised Premises and shall comply with all development permits issued by
governmental authorities issued in connection with development of the Demised
Premises. Tenant shall procure and maintain all permits and licenses required
for the transaction of Tenant's business at the Demised Premises, including with
limitation, any special use permit, zoning variance or comparable zoning relief
necessary for Tenant's Use.

          12. Landlord's Title, Authority, and Quiet Enjoyment: Tenant's
              ----------------------------------------------------------
Authority.
---------

          A. Landlord represents that it will have, as of the Commencement Date,
marketable fee simple title to the Demised Premises, subject to the exceptions
to title currently encumbering the Premises as described in Exhibit H, and any
additional exceptions to title created in connection with Landlord's acquisition
or development of the Demised Premises, or financing of such acquisition of
development (collectively referred to herein as the "Permitted Exceptions").
Landlord represents that any such additional exceptions to title created in
connection with Landlord's acquisition or development of the Demised Premises or
financing of such acquisition or development shall not materially interfere with
Tenant's intended use of the Demised Premises. Any lien claims properly bonded
over or insured over by title insurance shall be deemed to be Permitted
Exceptions hereunder.

                                       12

<PAGE>

          B. Landlord represents and warrants that it has full and complete
authority to enter into this Lease under all of the terms, conditions and
provisions set forth herein, and so long as Tenant keeps and substantially
performs each and every term, provision and condition herein contained on the
part of Tenant to be kept and performed, Tenant shall peacefully and quietly
enjoy the Demised Premises without hindrance or molestation by Landlord or by
any other person claiming by, through or under Landlord, subject to the terms of
the Lease. Without limiting the foregoing, Landlord covenants to perform all
obligations to be performed by Landlord and to pay as and when due all amounts
to be paid by Landlord under any mortgage, deed of trust, ground lease or other
instrument encumbering the Demised Premises. Each individual executing this
Lease on behalf of Landlord represents and warrants to Tenant that he or she is
duly authorized to do so.

          C. Tenant represents and warrants that it has full and complete
authority to enter into this Lease under all of the terms, conditions and
provisions set forth herein.

          D. Tenant hereby approves the condition of Landlord's title to the
Demised Premises. This Lease shall be subject to the Permitted Exceptions and
Landlord shall not permit or cause any easements, covenants, restrictions,
conditions or other changes in Landlord's title which would materially and
adversely impact Tenant's Use. Landlord shall notify Tenant in writing prior to
permitting or causing any easements, covenants, restrictions, or conditions to
be placed of record.

          13. Subordination. The priority of this Lease and the leasehold estate
              -------------
of Tenant created hereunder are and shall be subject and subordinate to the lien
of any mortgage, deed of trust, sale-leaseback, ground lease or similar
encumbrance, whether such encumbrance is placed against the fee or leasehold
estate, affecting the Demised Premises and to all renewals, modifications,
consolidations, replacements and extensions thereof, and advances thereunder;
provided, however, with respect to any mortgage, deed of trust, sale-leaseback,
ground lease or similar encumbrance such subordination shall be subject to
receipt by Tenant of a nondisturbance agreement in form reasonably required by
any such lienholder or ground Lessor (collectively, a "Mortgagee")and reasonably
acceptable to Tenant. Tenant agrees at any time hereafter, upon twenty (20) days
prior written notice, to execute and deliver any instruments, releases or other
documents that may reasonably be required for the purpose of subjecting and
subordinating this Lease, as above provided, to the lien of any such mortgage,
deed of trust, ground lease, sale-leaseback or similar encumbrance in a form
reasonably acceptable to Tenant and the holder of such mortgage, provided said
subordination provides that all insurance proceeds and condemnation awards will
be made available for the restoration of the Demised Premises, as provided
herein, and that Tenant's rights hereunder will not be disturbed unless Tenant
is in default beyond all applicable cure periods. Any fee which Landlord's
lender or ground lessor may charge for such agreement shall be paid by Landlord.

          In the event of any act or omission of Landlord constituting a default
by Landlord, Tenant shall not exercise any remedy until Tenant his given
Landlord and any mortgagee, ground lessor or sale-leaseback lessor of the
Demised Premises that has provided Tenant with written notice of its interest in
the Demised Premises and a notice address for each such party a prior thirty
(30) day written notice of such act or omission and until a reasonable period of
time to allow Landlord or the mortgagee, ground lessor or sale-leaseback lessor
to remedy such act or

                                       13

<PAGE>

omission shall have elapsed following the giving of such notice; provided,
however, if such act or omission cannot, with due diligence and in good faith,
be remedied within such thirty (30) day period, then Landlord or any such
mortgagee, ground lessor or sale-leaseback lessor shall be allowed such further
period of time as may be reasonably necessary provided that it commence
remedying the same with due diligence and in good faith within said thirty (30)
day period.

          If any Mortgagee shall succeed to the rights of Landlord under this
Lease or to ownership of the Demised Premises, whether through possession or
foreclosure or the delivery of a deed to the Demised Premises, then, upon
written request of such mortgagee so succeeding to Landlord's rights hereunder,
Tenant shall attorn to and recognize such mortgagee, ground lessor or
sale-leaseback lessor as Tenant's landlord under this Lease, and shall promptly
execute and deliver any instrument that such mortgagee may reasonably request to
evidence such attornment (whether before or after making of the mortgage, ground
lease or sale-leaseback lease). In the event of any other transfer of Landlord's
interest hereunder, upon the written request of the transferee and Landlord,
Tenant shall attorn to and recognize such transferee as Tenant's landlord under
this Lease and shall promptly execute and deliver any instrument that such
transferee and Landlord may reasonably request to evidence such attornment.

          14. Assignment and Sublease. Tenant, if there is no Material Breach
              -----------------------
(as herein defined) by Tenant hereunder, shall have the right to assign this
Lease or to sublease all or any portion of the Demised Premises, without
Landlord's written consent in accordance with the terms of this Paragraph 14.

          Tenant may assign this Lease or sublet the Demised Premises to an
affiliate or subsidiary more than fifty percent (50%) of the voting stock of
which is owned directly or indirectly by the direct or remote parent of Tenant
(without Landlord's consent, upon prior written notice to Landlord) and further
Tenant's interest in this Lease may be assigned to and assumed by a successor to
Tenant pursuant to a purchase of all or substantially all of the assets of
Tenant in connection with the sale of such assets or to any entity which
acquires all of Tenant's capital stock (without Landlord's consent upon prior
written notice to Landlord).

          Any assignment or sublease shall require the assignee or subtenant to
comply with all terms of this Lease except for any sublease term, which shall be
at Tenant's discretion (but in no event extend beyond the term of this Lease),
and a copy of such sublease or assignment shall be delivered to Landlord at
least ten (10) days prior to the commencement of such sublease or assignment.

          Any assignee shall assume, by instrument in form and content
satisfactory to Landlord, the due performance of all of Tenant's obligations
under this Lease, including any accrued obligations at the time of the effective
date of the assignment, and such assumption agreement shall state that the same
is made by the assignee for the express benefit of Landlord as a third party
beneficiary thereof.

          Each sublease permitted by this Paragraph 14 shall be subject and
subordinate to all of the terms, covenants and conditions of this Lease and to
all of the rights of Landlord hereunder; and in the event this Lease shall
terminate before the expiration of such sublease, the sublessee thereunder will,
at Landlord's option, attorn to Landlord and waive any rights the sublessee may

                                       14

<PAGE>

have to terminate the sublease or to surrender possession thereunder, as a
result of the termination of this Lease.

          Tenant agrees to pay on behalf of Landlord any and all costs of
Landlord or otherwise occasioned by such assignment or subletting, including
without limitation, the cost of any alteration, addition, improvement or other
renovation or refurbishment to the Demised Premises made in connection with such
assignment or subletting and any cost imposed by any governmental authority in
connection with any of the foregoing.

          Any assignment or subletting under this Paragraph 14 shall not relieve
Tenant (or any guarantor of Tenant's obligations under the Lease or any
assignee) of its obligations hereunder. Any assignment or subletting of this
Lease which is not in compliance with the provisions of this Paragraph 14 shall
be of no effect and void. Except as permitted in this Paragraph 14, Tenant shall
not transfer, sublet, assign, or otherwise encumber its interest in the Lease or
the Demised Premises, unless consented to by Landlord.

          No assignment or subleasing hereunder shall relieve Tenant from any of
Tenant's obligations in this Lease contained.

          All profits from any such assignment or subletting shall be the
property of Tenant and not Landlord.

          15. Lease Extension. If this Lease shall not have been terminated
              ---------------
pursuant to any provisions hereof and there is no Material Breach (as defined
herein) by Tenant hereunder at the time set for exercise of the Extension Terms
(as herein defined) and at the time set for commencement thereof, then Tenant
may, at Tenant's option, extend the term of this Lease for five (5) successive
additional terms of four (4) years each (each an "Extension Term," collectively
the "Extension Terms") commencing on the expiration of the original term, or the
immediately preceding Extension Term, as the case may be. Tenant may exercise
such option by giving Landlord written notice at least ten (10) months prior to
the expiration of the original or the immediately preceding Extension Term, as
the case may be. Upon the giving by Tenant to Landlord of such written notice
and the compliance by Tenant with the foregoing provisions of this Paragraph 15,
this Lease shall be deemed to be automatically extended upon all the Covenants,
agreements, terms, provisions and conditions set forth in this Lease, except
that Base Rent for each such Extension Term shall be as provided on Exhibit D.

          If Tenant fails or omits to so give to Landlord the written notice
referred to above, Landlord shall provide Tenant with written notice of Tenant's
failure to exercise the Extension Term, and upon receipt of such notice, Tenant
shall be allowed fifteen (15) days to exercise the extension option allowed for
herein. If Landlord fails to provide such notice, Tenant's renewal option shall
expire upon the expiration of the then current term. Failure to respond to
Landlord's notice within such fifteen (15) days shall be deemed to be a waiver
by Tenant of its extension option hereunder.

          16. Impositions.
              -----------

          A. Tenant covenants and agrees to pay during the term of this Lease,
as Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof,

                                       15

<PAGE>

all impositions described herein that accrue on or after the Commencement
Date, which include without limitation, all real estate taxes, special
assessments, water rates and charges, sewer rates and charges, including any sum
or sums payable for future sewer or water capacity increases, charges for public
utilities, street lighting, excise levies, licenses, permits, inspection fees,
other governmental charges, and all other charges or burdens of whatsoever kind
and nature (including costs, fees, and expenses of complying with any
restrictive covenants or similar agreements to which the Demised Premises are
subject), incurred in the use, occupancy, ownership, operation, leasing or
possession of the Demised Premises, without particularizing by any known name or
by whatever name hereafter called, and whether any of the foregoing be general
or special, ordinary or extraordinary, foreseen or unforeseen (all of which are
sometimes herein referred to as Impositions"), which at any time during the term
may have been or may be assessed, levied, confirmed, imposed upon, or become a
lien on the Demised Premises, or any portion thereof, or any appurtenance
thereto, rents or income therefrom, and such easements or rights as may now or
hereafter be appurtenant or appertain to the use of the Demised Premises.

          B. If, at any time during the term of this Lease, any method of
taxation shall be such that there shall be levied, assessed or imposed on
Landlord, or on the Basic Rent or Additional Rent, or on the Demised Premises or
on the value of the Demised Premises, or any portion thereof, a capital levy,
sales or use tax, gross receipts tax or other tax on the rents received
therefrom, or a franchise tax, or an assessment, levy or charge measured by or
based in whole or in part upon such rents or value, Tenant covenants to pay and
discharge the same, it being the intention of the parties hereto that the rent
to be paid hereunder shall be paid to Landlord absolutely net without deduction
or charge of any nature whatsoever foreseeable or unforeseeable, ordinary or
extraordinary, or of any nature, kind or description, except as in this Lease
otherwise expressly provided. Nothing in this Lease contained shall require
Tenant to pay any municipal, state or federal net income or excess profits taxes
assessed against Landlord, or any municipal, state or federal capital levy,
estate succession, inheritance or transfer taxes of Landlord, or corporation
franchise taxes imposed upon any corporate owner of the fee of the Demised
Premises.

          C. Tenant covenants to furnish Landlord, within 30 days after the date
upon which any Imposition or other tax assessment, levy or charge is payable by
Tenant, official receipts of the appropriate taxing authority, or other
appropriate proof satisfactory to Landlord, evidencing the payment of the same.
The certificate, advice or bill of the appropriate official designated by law to
make or issue the same or to receive payment of any Imposition or other tax,
assessment, levy or charge may be relied upon by Landlord as sufficient evidence
that such Imposition or other tax, assessment, levy or charge is due and unpaid
at the time of the making or issuance of such certificate, advice or bill,
unless Tenant provides Landlord with evidence to the contrary.

          D. At Landlord's written demand after any Event of Default (as defined
in Section 20 hereinafter) and for as long as such Event of Default is uncured,
or upon the request of any Mortgagee of the Demised Premises, (but only after an
Event of Default and for as long as such Event of Default is uncured) Tenant
shall pay to Landlord the known or estimated yearly real estate taxes and
assessments payable with respect to the Demised Premises in monthly payments
equal to one-twelfth of the known or estimated yearly real estate taxes and
assessments next payable with respect to the Demised Premises. From time to time
Landlord may re-estimate the amount of real estate taxes and assessments, and in
such event Landlord shall notify Tenant,

                                       16

<PAGE>

in writing, of such re-estimate and fix future monthly installments for the
remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-estimated amount over the balance of such period after
giving credit for payments made by Tenant on the previous estimate. If the total
monthly payments made by Tenant pursuant to this Paragraph 16D shall exceed the
amount of payments necessary for said taxes and assessments, such excess shall
be credited on subsequent monthly payments of the same nature; but if the total
of such monthly payments so made under this paragraph shall be insufficient to
pay such taxes and assessments when due, then Tenant shall pay to Landlord such
amount as may be necessary to make up the deficiency.

          E. Tenant shall have the right at its own expense to contest the
amount or validity, in whole or in part, of any Imposition by appropriate
proceedings diligently conducted in good faith, but only after Tenant provides
Landlord or the Mortgagee reasonable security, or Tenant makes payment of such
Imposition, unless such payment, or a payment thereof under protest, would
operate as a bar to such contest or interfere materially with the prosecution
thereof, in which event, notwithstanding the provisions of Paragraph 16A hereof
Tenant may postpone or defer payment of such Imposition if neither the Demised
Premises nor any portion thereof would, by reason of such postponement or
deferment, be in danger of being forfeited or lost, and (b) Tenant is not then
in Material Breach of this Lease. Upon the termination of any such proceedings,
Tenant shall pay the amount of such Imposition or part thereof, if any, as
finally determined in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings, together with any costs,
fees, including attorney's fees, interest, penalties, fines and other liability
in connection therewith, and upon such payment Landlord shall return all amounts
or certificates deposited with it with respect to the contest of such
Imposition, as aforesaid, or, at the written direction of Tenant, Landlord shall
make such payment out of the funds on deposit with Landlord and the balance, if
any, shall be returned to Tenant. Tenant shall be entitled to the refund of any
Imposition, penalty, fine and interest thereon received by Landlord which have
been paid by Tenant or which have been paid by Landlord but for which Landlord
has been previously reimbursed in full by Tenant. Landlord shall not be required
to join in any proceedings referred to in this Paragraph 16E unless the
provisions of any law, rule or regulation at the time in effect shall require
that such proceedings be brought by or in the name of Landlord, in which event
Landlord shall join in such proceedings or permit the same ________ brought in
Landlord's name upon compliance with such conditions as Landlord may reasonably
require. Landlord shall not ultimately be subject to any liability for the
payment of any fees, including attorney's fees, costs and expenses in connection
with such proceedings. Tenant agrees to pay all such fees (including reasonable
attorney's fees), costs and expenses or, on demand, to make reimbursement to
Landlord for such payment. If Landlord is provided a certificate of deposit or
other interest bearing instrument as security for the payment of the contested
Imposition, during the time when any such certificate of deposit or other
interest bearing instrument is on deposit with Landlord, and prior to the time
when the same is returned to Tenant or applied against the payment, removal or
discharge of Impositions, as above provided, Tenant shall be entitled to receive
all interest paid thereon, if any. Cash deposits shall not bear interest.

17.      Insurance.
         ---------

          A. During the term of this Lease, during any extension thereof, and
during any

                                       17

<PAGE>

holdover period, Tenant shall at its cost and expense procure and keep in force
a policy of comprehensive public liability insurance, with limits of not less
than $1,000,000 for injury to any one person, $2,000,000 as to any one accident,
and $100,000 as to property damage, all on a per occurrence basis which policy
shall name Landlord and its managing agent as additional insureds. A certificate
of such insurance shall be delivered to Landlord prior to the Commencement Date
and shall provide that same may not be cancelled or lowered in amounts without
prior written notice of not less than thirty (30) days to Landlord and Landlords
mortgagee. Notwithstanding the foregoing, Tenant may insure the foregoing risks
under its blanket policy or elect to self-insure such risks as provided in
Paragraph 17E below. Any such liability insurance shall contain a contractual
liability endorsement covering Tenants indemnification obligations under this
Lease.

          B. During the term of this Lease and any extension thereof, Tenant, at
its sole cost and expense, shall obtain and continuously maintain in full force
and effect, policies of insurance covering the Improvements constructed,
installed or located on the Demised Premises naming the Landlord, as loss payee
as its interest may appear, against (a) loss or damage by fire; (b) loss or
damage from such other risks or hazards now or hereafter embraced by an
"Extended Coverage Endorsement," including, but not limited to, windstorm, hail,
explosion, vandalism, riot and civil commotion, damage from vehicles, smoke
damage, water damage and debris removal; (c) loss for flood if the Demised
Premises are in a designated flood or flood insurance area; (d) loss for damage
by earthquake if the Demised Premises are located in an earthquake-prone area;
(e) loss from so-called explosion, collapse and underground hazards; and (f)
loss or damage from such other risks or hazards of a similar or dissimilar
nature which are now or may hereafter be customarily insured against with
respect to improvements similar in construction, design, general location, use
and occupancy to the Improvements. At all times, such insurance coverage shall
be in an amount equal to 100% of the then "full replacement cost" of the
Improvements. "Full Replacement Cost" shall be interpreted to mean the cost of
replacing the improvements without deduction for depreciation or wear and tear,
and it shall include a reasonable sum for architectural, engineering, legal,
administrative and supervisory fees connected with the restoration or
replacement of the Improvements in the event of damage thereto or destruction
thereof. If a sprinkler system shall be located in the Improvements, sprinkler
leakage insurance shall be procured and continuously maintained by Tenant at
Tenant's sole cost and expense. Tenant shall cause to be inserted in the policy
of insurance required by this Paragraph 17B a so-called "waiver of subrogation"
clause as to Landlord and Landlord's insurer.

          C. During the term of this Lease and any extension thereof, Tenant
shall maintain Workman's Compensation Insurance in accordance with the laws of
the State of California.

          D. Tenant shall maintain insurance coverage (including loss of use and
business interruption coverage) upon Tenant's business and upon all personal
property of Tenant or the personal property of others kept, stored or maintained
on the Demised Premises against loss or damage by fire, windstorm or other
casualties or causes for such amount as Tenant may desire, and Tenant agrees
that such policies shall contain a waiver of subrogation clause as to Landlord
and Landlord's insurer.

          E. Tenant's right to self-insure with respect to liability insurance
is conditioned upon

                                       18

<PAGE>

Tenant or Tenant's guarantor maintaining a net worth of at least
$100,000,000.00. Tenant shall furnish Landlord written confirmation that Tenant
has elected to self-insure with respect to liability insurance (if that is the
case), and if so, that Tenants or Tenants guarantor's net worth is at least
$100,000,000.00 as evidenced by audited financial statements of Tenant or
Tenant's guarantor or an affidavit from Tenant's or Tenant's guarantor's chief
financial officer. If Tenant self-insures with respect to liability insurance,
then Tenant agrees to indemnify, defend, and hold Landlord harmless from and
against any loss, damage, costs, fees (including attorney's, fees), claims,
demands, actions, causes of action, judgments, suits and liability that was or
would have been covered by the insurance policy or policies replaced by
self-insurance and such self-insurance shall not affect the nonliability of
Landlord under Paragraph 17F as to any loss or damage caused by the perils
described therein. The indemnification contained in this Paragraph 17E is in
addition to, and not in lieu of, any covenants or obligations of Tenant
contained in the other Paragraphs of this Lease. If Tenant so elects to become a
self-insurer with respect to liability insurance, Tenant shall deliver to
Landlord notice in writing of the required coverages which it is self-insuring
setting forth the amount, limits, and scope of the self-insurance in respect to
each type of coverage self-insured. Tenant, at Landlord's request, shall provide
to Landlord's mortgagee or assignee a certificate satisfactory to such mortgagee
or assignee setting forth the self-insured coverages, if any, and stating that
all losses shall be payable to such mortgagee and/or assignee as its interests
may appear.

          Nothing in this Paragraph shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
Paragraphs of this Paragraph under a blanket insurance policy or policies
(certificates thereof reasonably satisfactory to Landlord shall be delivered to
Landlord) which may cover other properties owned or operated by Tenant as well
as the Demised Premises; provided, however, that any such policy of blanket
insurance of the kind provided for shall specify therein the amounts thereof
exclusively allocated to the Demised Premises or Tenant shall furnish Landlord
and the holder of any fee mortgage with a written statement from the insurers
under such policies specifying the amounts of the total insurance exclusively
allocated to the Demised Premises; and provided, further, however, that such
politics of blanket insurance shall, as respects the Demised Premises, contain
the various provisions required of such an insurance policy by the foregoing
provisions of this Paragraph 17.

          F. Tenant hereby releases Landlord (and Landlord's assignees,
employees, agents and servants) and waives any claims it may have against
Landlord from any liability for damage to or destruction of Tenant's trade
fixtures, personal property (including also property under the cam, custody, or
control of Tenant), machinery, equipment, furniture, fixtures and business
interests on the Demised Premises, except arising from Landlord's or Landlord's
assignees', employees', agents' or servants' negligence. This Paragraph shall
apply especially, but not exclusively, to damage or destruction caused by the
flooding of basements or other subsurface areas, or by refrigerators, sprinkling
devices, air conditioning apparatus, water, snow, frost steam, excessive heat or
cold, falling plaster, broken glass, sewage, gas, odors or noise, or the
bursting or leaking of pipes or plumbing fixtures, and shall apply equally,
whether any such damage results from the act or omission of other tenants or
occupants in the Demised Premises or any other persons, and whether such damage
be caused by or result from any of the aforesaid, or shall be caused by or
result from other, circumstances of a similar or dissimilar nature.

          G. Tenant shall require each of its contractors and tradespeople to
carry contractors

                                       19

<PAGE>

liability/completed operations insurance, in the amounts specified in Paragraph
17A above, from companies licensed to do business in the State of California.

          H. Upon expiration of the term of this Lease, the unearned premium
upon any insurance policies or certificates thereof lodged with Landlord by
Tenant shall be payable to Tenant, provided that Tenant shall not then be in
default in keeping, observing or performing the terms and conditions of this
Lease.

          18. Destruction and Restoration.
              ---------------------------

          A. Tenant covenants and agrees that in case of damage to or
destruction of the Improvements after the Commencement Date of the term of this
Lease, by fire or otherwise, Tenant, at its sole cost and expense, shall
promptly restore, repair, replace and rebuild the same as nearly as possible to
the condition that the same were in immediately prior to such damage or
destruction with such changes or alterations (made in conformity with Paragraph
8 hereof) as may be reasonably acceptable to Landlord or required by law. Tenant
shall forthwith give Landlord written notice of such damage or destruction upon
the occurrence thereof and specify in such notice, in reasonable detail, the
extent thereof. Such restoration, repairs, replacements, rebuilding, changes and
alterations, including the cost of temporary repairs for the protection of the
Demised Premises, or any portion thereof, pending completion thereof are
sometimes hereinafter referred to as the "Restoration." The Restoration shall be
carried on and completed in accordance with the provisions and conditions of
Paragraphs 8 and 18B hereof. If the net amount of the insurance proceeds (after
deduction of all costs, expenses and fees related to recovery of the insurance
proceeds) recovered by Landlord and held by Landlord and Tenant as co-trustees
is reasonably deemed insufficient by Landlord to complete the Restoration of
such improvements (exclusive of Tenant's personal property and trade fixtures;
which shall be restored, repaired or rebuilt out of Tenant's separate funds),
Tenant shall, upon request of Landlord, deposit with Landlord and Tenant, as
co-trustees, a cash deposit equal to the reasonable estimate of the amount
necessary to complete the Restoration of such improvements less the amount of
such insurance proceeds available.

          B. All insurance moneys recovered by Landlord held by Landlord and
Tenant as co-trustees on account of such damage or destruction, less Landlord's
reasonable out-of-pocket costs, if any, to Landlord of such recovery, shall be
applied to the payment of the costs of the Restoration and shall be paid out
from time to time as the Restoration progresses upon the written request of
Tenant, accompanied by a certificate of the architect or a qualified
professional engineer in charge of the Restoration stating that as of the date
of such certificate (a) the sum requested is justly due to the contractors,
subcontractors, materialmen, laborers, engineers, architects, or persons, firms
or corporations furnishing or supplying work, labor, services or materials for
such Restoration, or is justly required to reimburse Tenant for any expenditures
made by Tenant in connection with such Restoration, and when added to all sums
previously paid out by Landlord does not exceed the value of the Restoration
performed to the date of such certificate by all of said parties; (b) except for
the amount, if any, stated in such certificates to be due for work, labor,
services or materials, there is no outstanding indebtedness known to the person
signing such certificate, after due inquiry, which is then due for work, labor,
services or materials in connection with such Restoration, which, if unpaid,
might become the basis of a mechanic's lien or similar lien with respect to the
Restoration or a lien upon the

                                       20

<PAGE>

Demised Premises, or any portion thereof; and (c) the costs, as estimated by the
person signing such certificate, of the completion of the Restoration required
to be done subsequent to the date of such certificate in order to complete the
Restoration do not exceed the sum of the remaining insurance moneys, plus the
amount deposited by Tenant, if any, remaining in the hands of Landlord after
payment of the sum requested in such certificate.

          Tenant shall furnish Landlord within thirty (30) days after Tenant's
receipt of each progress payment with evidence reasonably satisfactory to
Landlord that Tenant has paid all bills in respect to any work, labor, services
or materials performed, furnished or supplied in connection with such
Restoration which was covered by the previous progress payment. Landlord shall
not be required to pay out or consent to any additional insurance moneys where
Tenant fails to supply satisfactory evidence of the payment of work, labor,
services or materials performed, furnished or supplied, as aforesaid. If the
insurance moneys in the hands of Landlord and Tenant as co-trustees, and such
other sums, if any, deposited with Landlord and Tenant as co-trustees pursuant
to this Paragraph 18, shall be insufficient to pay the entire costs of the
Restoration, Tenant agrees to pay any deficiency promptly upon demand so long as
Tenant has participated in the adjustment of the insurance proceeds; provided,
however, Landlord shall retain ultimate control over any final adjustment with
the property insurer, and provided further that notwithstanding that the
insurance moneys are insufficient to pay the cost of the Restoration, Tenant
shall continue to be liable for full payment of Base Rent, Additional Rent and
any other amounts due and payable hereunder. Upon completion of the Restoration
and payment in full thereof by Tenant, Landlord shall within a reasonable period
of time thereafter, turn over to Tenant all insurance moneys or other moneys
then remaining upon submission of proof reasonably satisfactory to Landlord that
the Restoration has been paid for in full and the damaged or destroyed Building
and other improvements repaired, restored or rebuilt as nearly as possible to
the condition they were in immediately prior to such damage or destruction, or
with such changes or alterations as may be made in conformity with Paragraphs 8
and 18A hereof.

          C. No destruction of or damage to the Demised Premises, or any portion
thereof, by fire, casualty or otherwise shall permit Tenant to surrender this
Lease or shall relieve Tenant from its liability to pay to Landlord the Base
Rent and Additional Rent payable under this Lease or from any of its other
obligations under this Lease, an ___tenant waives any rights now or hereafter
conferred upon Tenant by present or future law or otherwise to quit or surrender
this Lease or the Demised Premises, or any portion thereof, to Landlord or to
any suspension, diminution, abatement or reduction of rent on account of any
such damage or destruction.

          D. Landlord agrees, subject to the provisions of Paragraphs 8 and 18
hereof, to in all instances turn over and make available to Tenant all insurance
moneys contemplated by Paragraph 18B hereof.

          19. Condemnation.
              ------------

          A. If, during the term of this Lease, the entire Demised Premises
shall be taken as the result of the exercise of the power of eminent domain
(hereinafter referred to as the "Proceedings"), this Lease and all right, title
and interest of Tenant hereunder shall cease and come to an end on the date of
vesting of title pursuant to such Proceedings and Landlord shall be entitled to
and shall receive the total award made in such Proceedings; provided that Tenant
shall

                                       21

<PAGE>

have the right to state a claim separate from Landlord's claim against the
condemning authority for Tenant's moving costs and the loss of the bargain of
this Lease, to the extent that such a claim by Tenant does not otherwise reduce
Landlord's award.

          In any taking of the Demised Premises, or any portion thereof, whether
or not this Lease is terminated as in this Paragraph provided, Tenant shall not
be entitled to any portion of the award for the taking of the Demised Premises
or damage to the Improvements, except as otherwise provided for in Paragraph 19C
with respect to the restoration of the Improvements, or for the estate or
interest of Tenant therein, all such award, damages, consequential damages and
compensation being hereby assigned to Landlord, and Tenant hereby waives any
right it now has or may have under present or future law to receive any separate
award of damages for its interest in the Demised Premises, or any portion
thereof, or its interest in this Lease, except that Tenant shall have,
nevertheless, the limited right to prove in the Proceedings and to receive any
award which may be made for damages to or condemnation of Tenant's movable trade
fixtures and equipment, and for Tenant's relocation costs in connection
therewith.

          B. If, during the initial term of this Lease, or any extension or
renewal thereof, less than the entire Demised Premises, bid more than 15% of the
floor area of the Building, or more than 25% of the land area of the Demised
Premises, or more than 20% of the parking spaces, shall be taken in any such
Proceedings, this Lease shall, upon vesting of title in the Proceedings,
terminate as to the portion of the Demised Premises so taken, and Tenant may, at
its option, terminate this Lease as to the remainder of the Demised Premises.
Tenant shall not have the right to terminate this Lease pursuant to the
preceding sentence unless (a) the business of Tenant conducted in the portion of
the Demised Premises taken cannot reasonably be carried on with substantially
the same utility and efficiency in the remainder of the Demised Premises (or any
substitute space securable by Tenant pursuant to clause (b) hereof) and (b)
Tenant cannot construct or secure or Landlord cannot provide substantially
similar space to the space so taken, on the remainder of the Demised Premises,
or Landlord cannot provide replacement parking spaces on additional property
located in close proximity to the Demised Premises that are reasonably
acceptable to Tenant. Such termination as to the remainder of the Demised
Premises shall be effected by notice in writing given not more than 60 days
after the date of vesting of title in such Proceeding and shall specify a date
not more than 160 days after the giving of such notice as the date for such
termination. Upon the date specified in such notice, the term of this Lease, and
all right, title and interest of Tenant hereunder, shall cease and come to an
end. If this Lease is terminated as in this Paragraph 19B provided, Landlord
shall be entitled to and shall receive the total award made in such Proceedings,
Tenant hereby assigning any interest in such award, damages, consequential
damages and compensation to Landlord, and Tenant hereby waiving any right Tenant
has now or may have under present or future law to receive any separate award of
damages for its interest in the Demised Premises, or any portion thereof, or its
interest in this Lease except as otherwise provided in Paragraph 19A. The right
of Tenant to terminate this Lease, as in this Paragraph 19B provided, shall be
exercisable only upon condition that Tenant is not then in default in the
performance of any of the terms, covenants or conditions of this Lease on its
part to be performed, and such termination upon Tenant's part shall become
effective only upon compliance by Tenant with all such terms, covenants and
conditions to the date of such termination. In the event that Tenant elects not
to terminate this Lease as to the remainder of the Demised Premises, the rights
and obligations of Landlord and Tenant shall be governed by the provisions of
Paragraph 19C hereof.

                                       22

<PAGE>

          C. If 15%, or less, of the floor area of the Building, or 25%, or
less, of the land area of the Demised Premises or 20% or less, of the parking
spaces shall be taken in such proceedings, or if more than 15% of the floor area
of the Building or more than 25% of the land area of the Demised Premises or
more than 20% of the parking spaces is taken (but less than the entire Demised
Premises), and this Lease is not terminated as in Paragraph 19B hereof provided,
this Lease shall, upon vesting of title in the Proceedings, terminate as to the
parts so taken, and Tenant shall have no claim or interest in the award,
damages, consequential damages and compensation, or any part thereof except as
otherwise provided in Paragraph 19A. Landlord shall be entitled to and shall
receive the total award made in such Proceedings, Tenant hereby assigning any
interest in such award, damages, consequential damages and compensation to
Landlord, and Tenant hereby waiving any right Tenant, has now or may have under
present or future law to receive any separate award of damages for its interest
in the Demised Premises, or any portion thereof, or its interest in this Lease
except as otherwise provided in Paragraph 19A. The net amount of the award
(after deduction of all costs and expenses, including attorney's fees), shall be
held by Landlord as trustee and applied as hereinafter provided. Tenant, in such
case, covenants and agrees, at Tenant's sole cost and expense (subject, to
reimbursement to the extent hereinafter provided), promptly to restore that
portion of the Improvements on the Demised Premises not so taken to a complete
architectural and mechanical unit for the use and occupancy of Tenant as in this
Lease provided. In the event that the net amount of the award (after deduction
of all costs and expenses, including attorney's fees) that may be received by
Landlord and held by Landlord as trustee in any such Proceedings as a result of
such taking is insufficient to pay all costs of such restoration work, Tenant
shall deposit with Landlord as trustee such additional sum as may be required
upon the written request of Landlord so long as Tenant has participated in the
Proceedings or otherwise provide reasonably adequate assurances to Landlord that
Tenant has the financial resources to fund such additional sum; provided,
however, Landlord shall retain, ultimate control over any final settlement or
litigation with the condemning authority, and provided further that
notwithstanding that the net amount of the award may be insufficient to pay all
costs of the restoration work, Tenant shall continue to be liable for payment of
Base Rent, Additional Rent and any other amount due and payable hereunder, which
amounts shall not be abated except as provided in Paragraph 19E below. The
provisions and conditions in Paragraph 8 applicable to changes and alterations
shall apply to Tenant's obligations to restore that portion of the Improvements
to a complete architectural and mechanical unit. Landlord agrees in connection
with such restoration work to apply so much of the net amount of any award
(after deduction of all costs and expenses, including attorneys fees) that may
be received by Landlord and held by Landlord as trustee in any such Proceedings
as a result of such taking to the costs of such restoration work thereof and the
said net award as a result of such taking shall be paid out from time to time to
Tenant, or on behalf of Tenant, as such restoration work progresses upon the
written request of Tenant, which shall be accompanied by a certificate of the
architect or the registered professional engineer in charge of the restoration
work stating that (a) the sum requested is justly due to the contractors,
subcontractors, materialmen, laborers, engineers, architects or other persons,
firms or corporations furnishing or supplying work, labor, services or materials
for such restoration work or as is justly required to reimburse Tenant for
expenditures made by Tenant in connection with such restoration work, and when
added to all sums previously paid out by Landlord as trustee does not exceed the
value of the restoration work performed to the date of such certificate; and (b)
the net amount of any such award as a result of such taking remaining in the
hands of Landlord, together with the sums,

                                       23

<PAGE>

if any, deposited by Tenant with Landlord as trustee pursuant to the provisions
hereof, will be sufficient upon the completion of such restoration work to pay
for the same in full. If payment of the award as a result of such taking, as
aforesaid, shall not be received by Landlord in time to permit payments as the
restoration work progresses (except in the event of an appeal of the award by
Landlord), Tenant shall not be required to proceed with any restoration work
until payment of such award is received by Landlord; provided, however, delay in
payment of such amount shall not release Tenant of its obligation to pay Base
Rent, Additional Rent and other amounts due and payable hereunder during any
such delay and there shall be no abatement of Base Rent, Additional Rent or any
other amounts except as provided in Paragraph 19E below. If Landlord appeals an
award and payment of the award is delayed pending appeal Tenant shall,
nevertheless, perform and fully pay for such work without delay, and payment of
the amount to which Tenant would have been entitled had Landlord not appealed
the award (in an amount not to exceed the net award prior to such appeal) shall
be made by Landlord to Tenant as restoration progresses pursuant to this
Paragraph 19C, in which event Landlord shall be entitled to retain an amount
equal to the sum disbursed to Tenant pursuant to the preceding sentence out of
the net award as and when payment of such award is received by Landlord. Tenant
shall also furnish Landlord as trustee with each certificate hereinabove
referred to, together with evidence reasonably satisfactory to Landlord that
them are no unpaid bills in respect to any work, labor, services or materials
performed, furnished or supplied, or claimed to have been performed, furnished
or supplied, in connection with such restoration work (relating to prior
payments made by Landlord to Tenant), and that no liens have been filed against
the Demised Premises, or any portion thereof. Landlord as trustee shall not be
required to pay out any funds when there are unpaid bills for work, labor,
services or materials performed, furnished or supplied in connection with such
restoration work relating to prior payments made by Landlord to Tenant, or where
a lien for work, labor, services or materials performed, furnished or supplied
has been placed against the Demised Premises, or any portion thereof. Upon
completion of the restoration work and payment in full therefor by Tenant, and
upon submission of proof reasonably satisfactory to Landlord that the
restoration work has been paid for in full and that the Improvements have been
restored or rebuilt to a complete architectural and mechanical unit for the use
and occupancy of Tenant as provided in this Lease, Landlord as trustee shall pay
over to Tenant any portion of the cash deposit furnished by Tenant then
remaining; provided, however, any other amounts awarded in such Proceedings and
made available for restoration) which remain following restoration of the
Demised Premises shall be the property of Tenant and Landlord shall have no
claim thereto.

          D. In the event of any partial termination of this Lease as a result
of any such Proceedings, Tenant shall pay to Landlord all Base Rent and all
Additional Rent and other charges payable hereunder with respect to that portion
of the Demised Premises so taken in such Proceedings with respect to which this
Lease shall have terminated justly apportioned to the date of such termination.
From and after the date of vesting of title in such Proceedings, Tenant shall
continue to pay the Base Rent and Additional Rent and other charges payable
hereunder, as in this Lease provided, to be paid by Tenant, subject to
abatement, if any, as provided for in Paragraph 19E hereof.

          E. In the event of a partial taking of the Demised Premises under
Paragraph 19C hereof, or a partial taking of the Demised Premises under
Paragraph 19B hereof, followed by Tenant's election not to terminate this Lease,
the fixed Base Rent payable hereunder during the

                                       24

<PAGE>

period from and after the date of vesting of title in such Proceedings to the
termination of this Lease shall not be reduced unless Tenant shall have
completed the restoration work with its own funds in accordance with the
provisions of the Lease and Landlord shall have applied the net amount of any
award to reduce the indebtedness secured by any financing encumbering the
Demised Premises or otherwise to reduce the amount of Landlord's Development
Costs (as herein defined), in which event fixed Base Rent payable hereunder
shall be reduced to a sum equal to the product of the Base Rent provided for
herein multiplied by a fraction, the numerator of which shall be Landlord's
Development Costs less any amounts so paid to and applied by Landlord less
Tenant's $2,000,000 contribution, and the denominator of which shall be
Landlord's Development Costs less Tenant's $2,000,000 contribution without
regard to any amounts so paid to and applied by Landlord.

          F. Anything herein to the contrary notwithstanding, upon the
occurrence of any Proceedings which would otherwise result in a termination of
this Lease, Tenant shall, as a condition precedent to such termination so long
as Tenant has participated in such Proceedings, (provided, however, Landlord
shall retain ultimate control over any final settlement or litigation with the
condemning authority), pay to Landlord an amount, reasonably estimated by
Landlord, equal to the excess, if any, of the unamortized portion of Landlord's
Development Costs, less the $2,000,000 referred to below, over the net award to
be received by Landlord after deduction of all costs of the Proceedings. In
making the foregoing calculation, Landlord shall use an interest rate equal to
the interest rate associated with the project financing from time to time during
the term of this Lease. "Landlord's Development Costs" shall mean and include
any and all amounts incurred by Landlord in connection with the acquisition and
development of the Demised Premises, including, without limitation,
consideration paid for acquisition of the Demised Premises, costs for required
offsite improvements, including relocating electric lines underground, all
architectural, engineering, environmental, land planning and other consulting
fees, all title and survey expenses, any and all fees and expenses associated
with procuring construction and/or other financing for the project, any other
costs or expenses that would not have been incurred by Landlord had Landlord not
been involved in the acquisition of the Demised Premises, and all attorneys'
fees associated with any of the foregoing. A preliminary estimate of Landlord's
Development Costs (which includes Tenant's initial contribution of $2,000,000 as
deposited into escrow under Paragraph 3) is attached hereto and made a part
hereof as Exhibit G, provided, however, the parties agree and acknowledge that
the amounts and categories of costs and expenses set forth on Exhibit G
represent an estimate of such items only, and that Landlord anticipates changes
in, additions to and modifications of such items, including, without limitation,
changes, additions and modifications of such items as development of the project
and construction of the Demised Premises progresses including, without
limitation, changes, additions and modifications relating to actual design and
construction costs, and in securing construction and permanent financing for the
project from time to time. The parties agree to update the estimate provided for
in Exhibit G within sixty (60) days after the Commencement Date and attach the
updated Exhibit G initialed and dated by the parties in place of the Exhibit G
attached as of the date hereof.

          20. Default by Tenant. The occurrence of any one or more of the
              -----------------
following events shall constitute an "Event of Default" by Tenant:

          A. The failure by Tenant to make any payment of rental or any other
payment

                                       25

<PAGE>

required to be made by Tenant hereunder, and any interest for late payment
thereof, as and when due, where such failure shall continue for a period of five
(5) days after receipt by Tenant of a written notice thereof from Landlord.

          B. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease (other than the failure by Tenant
described in subparagraph E below) where such failure shall continue for a
period of thirty (30) days after receipt by Tenant of written notice thereof
from Landlord; provided, however, that if the nature of Tenant's default is such
that it cannot be cured solely by payment of money (and in the reasonable
judgment of Landlord said default is susceptible to cure) and that more than
thirty (30) days may be reasonably required for such cure, then Tenant shall not
be deemed to be in default if Tenant shall commence such cure within such thirty
(30) day period and shall thereafter diligently prosecute such cure to
completion.

          C.  (a) the making of any general arrangement or any assignment by
Tenant for the benefit of creditors;

              (b) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition of reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the petition is dismissed within ninety (90) days of the date filed);

              (c) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets; and

              (d) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets.

          D. An assignment or subletting by Tenant in violation of Paragraph 14
hereof.

          E. The failure by Tenant in keeping, observing or performing any of
the terms contained in this Lease, other than those referred to in Subparagraphs
14 A, B, C and D above, and which exposes Landlord to criminal liability, and
such default shall continue after written notice thereof given ______ Landlord
to Tenant, and Tenant fails to proceed timely and promptly with all due
diligence and in good faith to cure the same and thereafter to prosecute the
curing of such default with all due diligence, it being intended that in
connection with a default which exposes Landlord to criminal liability that
Tenant shall proceed immediately to cure or correct such condition with
continuity and with all due diligence and in good faith.

          21. Landlord's Remedies. In the event of any Material Breach of this
              -------------------
Lease by Tenant, then Landlord, in addition to other rights or remedies it may
have, shall have the right to terminate this Lease, or without terminating this
Lease, terminate Tenant's right to possession of the Demised Premises, and in
either event Tenant shall immediately surrender possession of the Demised
Premises to Landlord and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy it may have for possession or arrearage of
rentals, enter upon and take possession of the Demised Premises and expel or
remove Tenant and any other person who may be occupying the Demised Premises or
any part thereof, with or without legal proceedings, by force if necessary,
without being liable for prosecution or any claim or damage therefor. In such

                                       26

<PAGE>

event, Landlord shall be entitled to recover from Tenant all reasonable damages
incurred by Landlord by reason of Tenant's default, including without
limitation, the cost of recovering possession of the Demised Premises, expenses
of reletting including reasonable renovation and alteration of the Demised
Premises, reasonable attorneys', fees, real estate commissions, and any other
sum of money, late charges and damages caused by Tenant to Landlord. As used
herein, "Material Breach" shall mean any breach by Tenant in any of the terms
and conditions of this Lease which upon an Event of Default would have a
material and adverse impact of any kind upon Landlord and/or the Demised
Premises, as opposed to a technical breach by Tenant which is de minimis in
nature.

          If Tenant's right to possession of the Demised Premises is terminated
without termination of the Lease, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under the Lease, including the right to recover
the rent as it becomes due hereunder. Should Landlord elect to relet the Demised
Premises or any part thereof, Landlord may do so for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord may
deem appropriate. Rental and other amounts received by Landlord in connection
with such reletting shall be applied against the amounts due from Tenant
hereunder after deducting any expenses incurred by Landlord with respect to such
reletting as provided above. Tenant shall pay any deficiency to Landlord. Such
deficiency shall be calculated on a cumulative basis with all excess payments
received by Landlord from such reletting to be applied against future amounts
due from Tenant and any deficiencies to be paid monthly. No such reentry or
taking possession of the Demised Premises by Landlord shall be construed as an
election on its part to terminate this Lease, unless a written notice of such
intention be given to Tenant, in which event Tenant's obligations to Landlord
shall forthwith cease, or unless the termination thereof be decreed by a court
of competent jurisdiction.

          In the event Landlord terminates this Lease in accordance with this
Paragraph, then, Tenant shall be liable and shall pay to Landlord, the sum of
all rent and other payments owed to date to Landlord, all sums owed to date to
third parties (including without limitation, all Impositions) hereunder accrued
to the date of such termination, all reasonable amounts required to be spent by
Landlord to fulfill any of Tenant's obligations which Tenant did not fulfill
prior to termination by Landlord, plus, as damages, an amount equal to the
present value discounted at ten percent (10%) _________ (i) the total rental
payments hereunder _______ the remaining portion of the term of the Lease,
calculated as if such term expires on the date set forth in Paragraph 2, unless
Tenant has extended this Lease, in which case such calculation shall be as if
the term expires on the final day of the extension term then in effect, less
(ii) the fair market rental value of the Demised Premises for such remaining
period. Nothing herein contained shall limit or prejudice the right of Landlord
to prove for and obtain, as damages by reason of such expiration or termination,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount be greater, equal to or less than the amount
of the difference referred to above.

          Landlord shall have the obligation to mitigate its damages to the
extent required by state law.

          In addition to the aforesaid remedies, Landlord shall be entitled to
pursue any other

                                       27

<PAGE>

remedy now or hereafter available to Landlord at equity or under the laws or
judicial decisions of the state where the Demised Premises is located or by
statute or otherwise. All rights and remedies of Landlord herein enumerated
shall be cumulative, and the exercise or the commencement of the exercise by
Landlord of any one or more of such rights or remedies should not preclude the
simultaneous or later exercise by Landlord of any or all other rights or
remedies. Tenant shall pay, upon demand, all of Landlord's costs, including
reasonable attorneys' fees and court costs, incident to the enforcement of
Tenant's obligations hereunder. A receipt by Landlord of rent with knowledge of
the breach of any covenant hereof (other than breach of the obligation to pay
the portion of such rent paid) shall not be deemed a waiver of such breach, and
no waiver by Landlord of any provisions of this Lease shall be deemed to have
been made unless expressed in writing and signed by Landlord. Without limiting
the generality of the foregoing, no failure by Landlord to insist upon the
performance of any of the terms of this Lease or to exercise any right or remedy
consequent upon a breach thereof shall constitute a waiver of such breach or any
of the terms of this Lease, and no express waiver shall affect any default other
than the default specified in the express waiver and that only for the time and
to the extent therein stated. One or more waivers by Landlord shall not be
construed as a waiver of a subsequent breach of the same covenant, term or
condition. In addition to other remedies in this Lease provided, Landlord shall
be entitled to seek a restraint by injunction of the violation or attempted or
threatened violation of the covenants, conditions and provisions of this Lease.

          22. Default by Landlord. The following shall constitute a "Material
              -------------------
Breach" by Landlord:

          The failure by Landlord to observe or perform any of the covenants,
conditions or provisions of this Lease where such failure shall continue for a
period of thirty (30) days after receipt by Landlord of written notice thereof
from Tenant; provided, however, that if the nature of Landlord's default is such
that it cannot be cured solely by payment of money and that more than thirty
(30) days may be reasonably required for such cure, then Landlord shall not be
deemed to be in default if Landlord shall commence such cure within such thirty
(30) day period and shall thereafter diligently prosecute such cure to
completion.

          23. Tenant's Remedies. In the event of any Material Breach of this
              -----------------
Lease by Landlord, then Tenant in addition to other rights or remedies it may
have at law or in equity (subject to the terms of this Lease), at Tenant's sole
option may perform such obligations of Landlord provided that Tenant has
furnished to any party having a recorded mortgage, deed of trust, ground lease
or similar lien against the Demised Premises (for which Tenant has received
written notice) with written notice of such default and such party has failed to
cure the same within the limits prescribed herein for Landlord to cure such
default, and Tenant may invoice Landlord for the costs and expenses thereof,
which invoice Landlord shall promptly pay. Notwithstanding the foregoing,
despite such notice and expiration of such cure period, no rent or other
payments due from Tenant may be offset by Tenant, and Tenant shall have no right
to perform any obligation of Landlord unless such performance by Tenant is
necessary to prevent imminent injury or damage to persons or Tenant's property.

          24. Delivery of Executed Lease. Deleted by intent of parties.
              --------------------------

          25. Termination. Deleted by intent of parties.
              -----------

                                       28

<PAGE>

          26. Notices. All notices shall be sent by registered mail, return
              -------
receipt requested, or by recognized overnight courier providing proof of
delivery, to the following addresses:

To Landlord:                                To Tenant:

Sunnyvale Limited Partnership               First Data Merchant Services
Ridge Sunnyvale, Inc.,                      Corporation
c/o Ridge Capital Corporation               Attention:  David L. Schlapbach,
Attention: James G. Martell                             Director of Red Estate
257 East Main Street                                    and Counsel
Barrington, Illinois 60010                  5660 New Northside Drive
                                            Suite 1400
                                            Atlanta, Georgia 30328

With a copy to:                             With a copy to:
Gardner, Carton & Douglas                   First Data Merchant Services
Attention. Glenn W. Reed                    Corporation
321 North Clark Street                      Attention: Roger L Pierce, President
Suite 3400                                  700 Hansen Way
Chicago, Illinois 60610-4795                Palo Alto, CA 94303

          Any notice shall be deemed to have been given three (3) days after the
date deposited in the United States mail, or on the first business day after
sending when delivery by recognized overnight courier providing proof of
delivery, in the manner aforesaid.

          Either party, by written notice to the other, shall have the right to
change the addresses for notice(s) to be sent to such party, and to add or
substitute entities to which a copy of any notice shall be sent by the other
party

          27. Brokerage. Landlord and Tenant acknowledged that no real estate
              ---------
broker brought about this lease transaction. Landlord hereby indemnifies Tenant
against the claims of any party claiming by, through or under Landlord in
connection with this Lease transaction, and Tenant hereby indemnifies Landlord
against the claims of any party claiming by, through or under Tenant in
connection with this Lease transaction.

          28. Estoppel. Landlord and Tenant shall, at any time upon not less
              --------
than twenty (20) days prior written notice, execute and deliver to a prospective
new landlord, lender, or assignee or subtenant of Tenant, as the case may be, 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 the party's knowledge, any uncured defaults
on the part of the other party hereunder, or so specifying such defaults if any
are claimed, and (iii) other reasonable requests that relate to the Lease.

                                       29

<PAGE>

          29. Hazardous Substances.
              --------------------

          A. For purposes of this Paragraph 29, "Hazardous Substance" means:

                  (i) "Hazardous Substances" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42
U.S.C.ss.9601 et. seq., as amended, and all regulations promulgated thereunder,
              --------
the Federal Clean Air Act, as amended (42 U.S.C.ss.7401 et. seq.) and the
                                                        --------
Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C.ss.1317 et. seq. as
                                                                --------
amended and all regulations promulgated thereunder;

                  (ii) "Hazardous Waste" as defined by the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C.ss.6602 et. seq. as amended and all
                                            --------
regulations promulgated thereunder;

                  (iii) Any pollutant or contaminant or hazardous, dangerous or
toxic chemicals, materials or substances within the meaning of any other
applicable federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended;

                  (iv) More than 100 gallons of crude oil which is liquid at
standard conditions of temperature and pressure (80 degrees Fahrenheit and 14.7
pounds per square inch absolute);

                  (v) Any radioactive material, including any source, special
nuclear or by-product material as defined in 42 U.S.C.ss.2011 et. seq. as
                                                              --------
amended or hereafter amended, and all regulations promulgated thereunder;

                  (vi) Friable asbestos or any asbestos which becomes friable
during the term of this Lease; and

                  (vii) Anything defined as a hazardous, toxic or radioactive
material, waste substance or the use, transportation or disposal of which is
regulated under applicable California laws or rules and regulations issued
pursuant thereof;

(all of the foregoing statutes, laws, ordinance, rules, regulations, and common
law theories being sometimes hereinafter collectively referred to as "Envlaws").

          B. Landlord and Tenant acknowledge the environmental condition of the
Land described in that certain Site Management Plan prepared by Geomatrix
Consultants dated September 5, 1996, a copy of which Landlord has provided to
Tenant. Prior to the Construction Completion Date, Landlord shall cause to be
performed all asbestos and soil removal and disposal or other remediation
provided for under and in compliance with Section 4.4.7 of the Sale Agreement,
as well as all additional environmental clean-up of Hazardous Substances
required by Section 4.4.7 of the Sale Agreement. Landlord shall indemnify,
defend and hold Tenant harmless from all damages, costs, losses, expenses
(including but not limited to

                                       30

<PAGE>

reasonable attorneys' fees and engineering fees) arising from any breach by
Landlord of the preceding covenant; provided however, the foregoing
indemnification shall terminate upon the expiration of one (1) year from the
Construction Completion Date. Notwithstanding the foregoing, in no event shall
Tenant have the right to terminate this Lease or have any right of sell off
arising out of any breach or claimed breach by Landlord in its obligations
hereunder; it being expressly acknowledged and agreed that the Base Rent and
Additional Rent, and all other charges and sums payable by Tenant hereunder,
shall commence at the times provided herein and shall continue to be payable as
provided under this Lease.

          C. Tenant shall not allow any Hazardous Substance to be brought on to
the Demised Premises and shall not conduct or authorize the generation,
transportation, storage, treatment and disposal at the Demised Premises, of any
Hazardous Substance other than in quantities incident to the conduct of Tenant's
Use and in compliance with Envlaws; provided, however, nothing herein contained
shall permit Tenant to allow any so-called "acutely hazardous,"
"ultra-hazardous," "imminently hazardous chemical substance or mixture" or
comparable Hazardous Substance to be located on or about the Demised Premises.

          D. If the presence, release, threat of release, placement on or in the
Demised Premises, or the generation, transportation, storage, treatment, or
disposal at the Demised Premises of any hazardous substances as a result of
Tenant's operations at the Demised Premises (i) gives rise to liability
(including, but not limited to, a responses action, remedial action, removal
action) under Envlaws, (ii) causes a significant public health effect, or (iii)
pollutes, threatens to pollute the environment, Tenant shall promptly take any
and all remedial and removal action necessary to clean up the Demised Premises
and mitigate exposure to liability arising from the hazardous substance, whether
or not required by law.

          E. Tenant shall indemnify, defend and hold Landlord harmless from all
damages, costs, losses, expenses (including, but not limited to, actual
attorneys' fees and engineering fees) (i) arising from or attributable to the
existence of any hazardous substances at the Demised Premises as a result of
Tenant's operations at the Demised Premises, and (ii) any breach by Tenant of
any of its covenants covered in this Paragraph 29.

          F. Upon request by Landlord during the term of this Lease, prior to
the exercise of any Extension Term, Tenant shall undertake and submit to
Landlord an environmental audit from an environmental consulting firm reasonably
acceptable to Landlord which audit shall evidence Tenant's compliance with this
Paragraph 29. Tenant shall bear the cost of such environmental audit unless such
audit discloses that Tenant has complied with the provisions of this Paragraph
29 in which event Landlord shall pay for such audit.

          G. Landlord or Tenant shall give the other prompt written notice upon
discovery of any Hazardous Substance at or adjacent to the Demised Premises.
Landlord and Tenant's obligations under this Paragraph 29 shall survive
termination of the Lease.

          30. Holdover. Should Tenant continue to occupy the Demised Premises
              --------
after expiration of the term or any renewal thereof and provided Landlord has
notified Tenant thirty (30) days prior to the expiration of the term or any
renewal term that Landlord is negotiating or has executed a lease with a third
party for the Demised Premises or any portion thereof, Tenant

                                       31

<PAGE>

shall be deemed to be occupying the Demised Premises without claim or right and
Tenant shall pay Landlord all costs arising out of loss or liability resulting
from delay by Tenant in so surrendering the Demised Premises as above provided
and shall pay a charge for each day of occupancy an amount equal to 150% the
Base Rent (on a per diem basis) then reserved hereunder. In the event Landlord
has failed to notify Tenant in writing within thirty (30) days prior to the
expiration of the term or any renewal term that Landlord is negotiating or has
executed a lease with a third party for the Demised Premises or any portion
thereof, Tenant shall be entitled to occupy the Demised Premises for a period of
sixty (60) days following expiration of the term or any renewal term on the same
terms and conditions as such term or renewal term (including Base Rental and
additional rental). Should Tenant continue to occupy the Demised Premises
following such sixty (60) day period, Tenant shall be deemed to be occupying the
Demised Premises without claim or right and Tenant shall pay Landlord as a full
measure of all loss or liability resulting from delay by Tenant in so
surrendering the Demised Premises as above provided a charge for each day of
occupancy an amount equal to 200% of the Base Rent and Additional Rent (on a per
diem basis) then reserved hereunder.

          31. Surrender.
              ---------

          A. Upon any termination or expiration of this Lease, Tenant shall
surrender the Demised Premises in the same condition as existed at the
Commencement Date, except for normal wear and tear and damage caused by the fire
or other casualty; provided, however, that nothing in this Paragraph 31 is
intended to change or diminish Tenant's obligations under any other part of this
Lease. Tenant shall remove the Alterations it is required to remove pursuant to
the terms of Paragraph 8 hereof. Any damage to the Demised Premises resulting
from the removal of such Alterations shall be repaired by Tenant at Tenant's
expense. If the Demised Premises be not surrendered as above set forth, Tenant
shall indemnify, defend and hold Landlord harmless against loss or liability
resulting from the delay by Tenant in so surrendering the Demised Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay.

          All property of Tenant not removed on or before the last day of the
term of this Lease (subject to Tenant's right to occupy the Demised Premises
following expiration of the term of this Lease as set forth in Paragraph 30
hereof) or within fifteen (15) days thereafter shall be deemed abandoned. Tenant
hereby appoints Landlord its agent to remove all property of Tenant from the
Demised Premises upon termination of this Lease and to cause its transportation
and storage for Tenant's benefit, all at the sole cost and risk of Tenant and
Landlord shall not be liable for damage, theft, and misappropriation or loss
thereof and Landlord shall not be liable in any manner in respect thereto.
Tenant shall pay all costs and expenses of such removal, transportation and
storage. Tenant shall reimburse Landlord upon demand for any expenses incurred
by Landlord with respect to removal or storage of abandoned property and with
respect to restoring said Demised Premises to good order, condition and repair.

          32. Liens. Landlord shall deliver the Demised Premises to Tenant free
              -----
of all mechanic's and materialmen's liens or bond over all such mechanic's and
materialmen's liens. Tenant has no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind the interest of Landlord or Tenant in the Demised Premises, or to
charge the rentals payable hereunder for any claim in favor of any

                                       32

<PAGE>

person dealing with Tenant, including those who furnish materials or perform
labor for any construction or repairs, and Tenant covenants and agrees that it
shall not mortgage, encumber or pledge this Lease or any interest therein. The
preceding sentence shall not be construed as prohibiting Tenant from making
Alterations as provided in Paragraph 8 above or from permitting any other
mechanics or materialmen's lienable work to be performed as long as such work is
not prohibited by this Lease. Tenant agrees to indemnify and hold Landlord
harmless from any lien filed against the Demised Premises on account of work
performed by or on behalf of Tenant and from any and all losses, costs, damages,
expenses, liabilities, suits, penalties, claims and damages (including
reasonable attorney fees) arising from or relating to such lien. After Tenant's
receipt of notice or actual knowledge of the placing of any lien or encumbrance
against the Demised Premises, Tenant shall immediately give Landlord written
notice thereof. Tenant shall within ten (10) days therefrom remove such lien by
payment or bond.

          If Tenant shall fail to discharge such mechanic's lien within such
period, then, in addition to any other right or remedy of Landlord, Landlord
may, but shall not be obligated to, discharge the same by paying to the claimant
the amount claimed to be due by procuring the discharge of such lien as to the
Demised Premises by deposit in the court having jurisdiction of such lien, a
cash sum sufficient to secure the discharge of the same, or by the deposit of a
bond or other security with such court sufficient in form, content and amount to
procure the discharge of such lien, or in such other manner as is now or may in
the future be provided by present or future law for the discharge of such lien
as a lien against the Demised Premises. Any amount paid by Landlord, or the
value of any deposit so made by Landlord, together with all costs, fees and
expenses in connection therewith (including reasonable attorneys' fees of
Landlord), together with interest thereon at the rate set forth in Paragraph 33
hereof, shall be repaid by Tenant to Landlord on demand by Landlord and if
unpaid may be treated as Additional Rent.

          All materialmen, contractors, artisans, mechanics, laborers and any
other person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Demised Premises, or any
portion thereof, are hereby charged with notice that they must look exclusively
to Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Demised Premises, or any
portion thereof.

          33. Interest; Late Charge. Base Rent payable pursuant to Paragraph 3
              ---------------------
hereof by Tenant to Landlord under this Lease, if not paid when due, and any
other charges payable by Tenant hereunder not paid when due, including any
charges, expenses, liabilities or fees in connection with a default by Tenant,
shall accrue interest at the rate of prime (as announced from time to time by
the First National Bank of Chicago) plus one percent (1%) per annum from the due
date until paid, said interest to be in addition to Base Rent and other charges
under this Lease and to be paid to Landlord by Tenant upon demand. In addition,
if any installment of Base Rent and other charges payable pursuant to this Lease
by Tenant to Landlord is not paid within five (5) days after receipt by Tenant
of a written notice thereof from Landlord, Tenant shall pay Landlord a late
charge in an amount equal to two percent (2%) of the amount then due to defray
the increased cost of collecting late payments.

                                       33

<PAGE>

          34. Inspections. Landlord, its agents or employees may, after
              -----------
providing Tenant with at least twenty-four (24) hours prior notice except in an
emergency situation, enter the Demised Premises during reasonable business hours
when accompanied by an authorized employee or agent of Tenant except in an
emergency situation, to (a) exhibit the Demised Premises to prospective
purchasers or lenders; (b) inspect the Demised Premises to see that Tenant is
complying with its obligations hereunder; and (c) exhibit the Demised Premises
during the last six (6) months of the term to prospective tenants; provided that
Landlord shall comply at all times with Tenant's reasonable security
requirements.

          35. Transfer of Landlord's Interest. Tenant acknowledges that Landlord
              -------------------------------
has the right to transfer its interest in the Demised Premises and in this Lease
at any time after the date which is eighteen (18) months after the Commencement
Date and subject to the provisions of Paragraph 52 hereof, and Tenant agrees
that in the event of any such transfer Landlord shall automatically be released
from all liability under this Lease except for any liabilities accruing prior to
the date of transfer for which Tenant has identified in an estoppel certificate
or by written notice to Landlord, and Tenant agrees to look solely to such
transferee for the performance of Landlord's obligations hereunder; provided,
however, any such transferee shall be deemed to have assumed the obligations of
Landlord hereunder subject to the conditions and limitations herein contained.
Tenant agrees to look solely to Landlord's interest in the Demised Premises for
the recovery of any judgment from Landlord, it being agreed that Landlord, or if
Landlord is a partnership, its partners whether general or limited, or if
Landlord is a corporation, its directors, officers or shareholders, or if
Landlord is a limited liability company, its members or managers, shall never be
personally liable for such judgment. Without limiting the generality of the
foregoing, Tenant agrees that Landlord may transfer its interest in this Lease
to any entity controlled by, controlling or under common control with Landlord,
that acquires the Demised Premises and from and after such transfer Landlord
shall be released from liability, as aforesaid.

          36. Indemnity.
              ---------

              (a) To the fullest extent allowed by law, Tenant shall at all
times indemnify, defend and hold Landlord harmless against and from any and all
claims by or on behalf of any person or persons, firm or firms, corporation or
corporations, arising from the conduct or management, or from any work or things
whatsoever done in or about the Demised Premises, and will further indemnify,
defend and hold Landlord harmless against and from any and all claims arising
during the term of this Lease, or arising from any breach or default on the part
of Tenant in the performance of any covenant or agreement on the part of Tenant
to be performed, pursuant to the terms of this Lease, or arising from, any act
or negligence of Tenant, its agents, servants, employees or licensees, or
arising from any accident, injury or damage whatsoever caused to any person,
firm or corporation occurring during the term of this Lease, in or about the
Demised Premises or upon the sidewalk and the land adjacent thereto, and from
and against all costs, attorneys' fees, expenses and liabilities incurred in or
about any such claim or action or proceeding brought thereon; and in case any
action or proceeding be brought against Landlord by reason of any such claim,
Tenant, upon notice from Landlord, covenants to defend such action or proceeding
by counsel reasonably satisfactory to Landlord. Tenant's obligations under this
Paragraph 36 shall be insured by contractual liability endorsement on Tenant's
policies of insurance required under the

                                       34

<PAGE>

provisions of Paragraph 17 hereof.

              (b) Landlord shall protect, indemnify and hold Tenant harmless
from and against any and all loss, claims, liability or costs (including court
costs and attorneys' fees) incurred by reason of: (a) any damage to any property
or any injury (including but not limited to death) to any person occurring in,
or on or about the Demised Premises or the Building to the extent that such
injury or damage shall be proximately caused by the Landlord's affirmative acts
of negligence or willful misconduct of Landlord or its agents, servants or
employees; provided, however, that such indemnification shall be limited to the
extent of the sum of: (i) amounts of insurance proceeds recovered by Landlord
under insurance policies carried by Landlord for such injury or damage, after
deductibles, or insurance proceeds that would have been received in the event
Landlord had not elected to self-insure, and (ii) the deductible amounts for
such claims under such insurance policies. The provisions of this Article shall
survive the termination of this Lease with respect to any claims or liability
occurring prior to such termination.

              (c) Notwithstanding the foregoing indemnification obligations,
Landlord and Tenant both hereby release the other and the other's officers,
directors, partners, employees and agents from any claim which the indemnified
party might have to the extent that the cost of any such claim is reimbursed by
insurance proceeds recovered by the releasing party, and both Landlord and
Tenant shall confirm that their insurance providers shall similarly waive all
such claims.

          37. Modification of Lease. The terms, covenants and conditions of this
              ---------------------
Lease may not be changed orally but only by an instrument in writing signed by
the party against whom enforcement of the change is sought. The failure of
either party hereto to insist in any one or more cases upon the strict
performance of any term, covenant or condition of this Lease to be performed or
observed by the other party hereto shall not constitute a waiver of
relinquishment for the future of any such term, covenant or condition.

          38. Memorandum of Lease. Neither party shall record this Lease or any
              -------------------
of the exhibits and/or riders attached hereto, but shall enter into a "short
form" or Memorandum of Lease in recordable form attached hereto as Exhibit F and
made a part hereof, which shall set forth the parties, the legal description of
the land, a description of the Demised Premises, the Commencement Date and
Expiration Date of the term of the Lease, and any options to renew, options to
purchase or rights of first refusal granted hereunder.

          39. Paragraph Captions. Paragraph captions herein are for Landlord's
              ------------------
and Tenant's convenience only, and neither limit nor amplify the provisions of
this Lease.

          40. Entire Agreement. This Lease represents the entire agreement
              ----------------
between Landlord and Tenant and supersedes all prior agreements, both written
and oral. The terms, covenants and conditions of this Lease shall be binding
upon and shall inure to the benefit of Landlord and Tenant and their respective
executors, administrators, heirs, distributees, legal representatives,
successors and assigns.

          41. Choice of Law and Interpretation. This Lease shall be governed by
              --------------------------------
the internal

                                       35

<PAGE>

law of the State in which the Demised Premises is situated, without considering
such state's choice of law rules. Should any provision of this Lease require
judicial interpretation, it is agreed that the court interpreting or construing
the same shall not apply a presumption that the terms of any such provision
shall be more strictly construed against one party or the other by reason of the
rule of construction that a document is to be construed most strictly against
the party who itself or through its agent prepared the same, it being agreed
that the agents of all parties hereto have participated in the preparation of
this Lease.

          42. Prevailing Party. If either party hereto files a lawsuit against
              ----------------
the other party relating to performance or non-performance under this Lease, and
the court has entered a judgment in favor of one party on one or more counts and
no judgment in favor of the other party on any counts, then the non-prevailing
party shall pay the prevailing party's reasonable attorneys' fees and costs in
connection with the lawsuit.

          43. Exhibits. Attached hereto and made a part hereof are the
              --------
following:

          Exhibit A         -        Legal Description
          Exhibit B         -        Site Plan
          Exhibit C         -        Plans
          Exhibit C-1       -        Construction Schedule
          Exhibit D         -        Schedule of Rents
          Exhibit E         -        Lease Term Agreement
          Exhibit F         -        Memorandum of Lease
          Exhibit G         -        Landlord's Development Costs
          Exhibit H         -        Permitted Exceptions
          Exhibit I         -        Escrow Agreement

          44. Guarantee. All obligations on the part of Tenant to be paid,
              ---------
performed and complied with are unconditionally guaranteed by First Data
Corporation (the "Guarantor") according to the provisions of the Guarantee
executed by Guarantor in a form prepared by Landlord.

          45. Independent Covenants. It is the express intent of Landlord and
              ---------------------
Tenant that (a) the obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and that the Base Rent and
Additional Rent, and all other charges and sums payable by Tenant hereunder,
shall commence at the times provided herein and shall continue to be payable in
all events; (b) all costs or expenses of whatsoever character or kind, general
or special, ordinary or extraordinary, foreseen or unforeseen, and of every kind
and nature whatsoever that may be necessary or required in and about the Demised
Premises, or any portion thereof, and Tenant's possession or authorized use
thereof during the term of this Lease, shall be paid by Tenant and all
provisions of this Lease are to be interpreted and construed in light of the
intention expressed in this Paragraph 45; (c) the Base Rent specified in
Paragraph 3 shall be absolutely net to Landlord so that this Lease shall yield
net to Landlord the Base Rent specified in Paragraph 3 in each year during the
term of this Lease (unless extended or renewed at a different Base Rent); (d)
all Impositions, insurance premiums, utility expenses, repair and maintenance
expenses, and all other costs, fees, interest, charges, expenses, reimbursements
and obligations of every kind and nature whatsoever relating to the Demised
Premises, or any portion

                                       36

<PAGE>

thereof, which may arise or become due during the term of this Lease, or any
extension or renewal thereof, shall be paid or discharged by Tenant as
Additional Rent.

          46. Entry by Landlord. Subject to the provisions of Section 34 hereof,
              -----------------
Tenant agrees to permit Landlord or Landlord's mortgagee and authorized
representatives of Landlord or Landlord's mortgagee to enter upon the Demised
Premises at all reasonable times during ordinary business hours for the purpose
of inspecting the same and making any necessary repairs to comply with any laws,
ordinances, rules, regulations or requirements of any public body, or the Board
of Fire Underwriters, or any similar body; provided that Landlord shall comply
at all times with Tenant's reasonable security requirements. Nothing herein
contained shall imply any duty upon the part of Landlord to do any such work
which, under any provision of this Lease, Tenant may be required to perform and
the performance thereof by Landlord shall not constitute a waiver of Tenant's
default in failing to perform the same. Landlord may, during the progress of any
work, keep and store upon the Demised Premises all necessary materials, tools
and equipment. Landlord shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business or other damage to Tenant by reason of
making repairs or the performance of any work in or about the Demised Premises,
or on account of bringing material, supplies and equipment into, upon or through
the Demised Premises during the course thereof, and the obligations of Tenant
under this Lease shall not be thereby affected in any manner whatsoever;
provided, however, Landlord shall use all reasonable efforts to conduct any
entry into the Demised Premises so as to interfere with the business of Tenant
as little as reasonably practical under the circumstances.

          47. [Deleted by intent of parties.]
               ----------------------------

          48. Survival of Obligations. Except as otherwise provided herein to
              -----------------------
the contrary, all obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof for a period of one (1)
year.

          49. Lease Subject to Landlord's Acquisition of Demised Premises.
              -----------------------------------------------------------
Anything herein to the contrary notwithstanding, it is agreed and acknowledged
by the parties hereto that as of the date hereof, Landlord does not own the
Demised Premises. Therefore, anything herein to the contrary notwithstanding,
the rights, duties and obligations of Landlord and Tenant hereunder are
expressly subject to and contingent upon acquisition by Landlord of the Demised
Premises by December 31, 1997 ("Contingency Date"), upon terms and conditions
acceptable to Landlord, in its sole and absolute discretion, including, without
limitation, procuring project financing on terms and conditions acceptable to
Landlord. In the event Landlord has not acquired the Demised Premises by the
Contingency Date on terms and conditions acceptable to Landlord, as aforesaid,
Landlord shall notify Tenant, and either party may terminate this Lease at
anytime thereafter (but prior to the date Landlord acquires the Demised
Premises) by delivering written notice of such termination to the other party,
whereupon the parties shall be released and discharged from any and all
obligations and liabilities not theretofore accrued under this Lease; provided,
however, in the event the Lease is so terminated, Tenant shall pay to Landlord,
within ten (10) days from the date Landlord has submitted a written statement to
Tenant requesting such payment, all amounts incurred by Landlord in connection
with the proposed acquisition and development of the Land, including, without
limitation, any earnest money deposit, any costs for

                                       37

<PAGE>

required off-site improvements, including sewer and road improvements, all
architectural, engineering, environmental, land planning and other consulting
fees, all title and survey expenses, all costs associated with the proposed
subdivision of the Land, any and all fees and expenses associated with procuring
construction and/or other financing for the project, any other costs or expenses
that would not have been incurred by Landlord had Landlord not been involved in
the acquisition and proposed development of the Land and all attorneys, few
associated with any of the foregoing. Landlord agrees to use all reasonable
efforts to acquire the Demised Premises on terms and conditions acceptable to
Landlord, as aforesaid.

          50. Americans With Disabilities Act.
              -------------------------------

          A. In the event that any alteration or repair to the Demised Premises
is undertaken by Tenant with or without Landlord's consent, or is undertaken by
Landlord at Tenants request during the term of this Lease (including any renewal
or extension thereof), such alteration or repair (i) shall be designed and
constructed in full compliance with the Americans With Disabilities Act, as
amended from time to time, (the "Act") if such alteration or repair is
undertaken by Tenant, and (ii) shall be designed by Tenant in full compliance
with the Act if such alteration or repair is undertaken by Landlord at Tenant's
request, and the cost of any such design, alteration or repair to the Demised
Premises shall be borne by Tenant, including without limitation (a) the cost of
any such design, alteration, or repair required as a result of (i) Tenant or an
assignee or subtenant being deemed a "Public Accommodation" or the Demised
Premises being deemed a "Place of Public Accommodation" or (ii) such alteration
or repair being deemed to affect an "Area of Primary Function" (as such terms
are defined in the Act); and (b) the cost of the installation or implementation
of any "Auxiliary Aid" required under the Act as a result of the operation of
any business within the Demised Premises. In addition, Tenant shall be
responsible for all costs and expenses incurred or to be incurred in order to
cause the Demised Premises and the operation of any business within the Demised
Premises to comply with the Act, and, if Tenant fails to keep and maintain the
Demised Premises in compliance with the Act, Landlord shall have the right but
not the obligation, at Tenant's sole cost and expense, to enter the Demised
Premises and cause the Demised Premises to be put into compliance with the Act;
and Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all costs, claim and liabilities, including without limitation,
attorneys' fees arising from or related to Tenant's failure to maintain and keep
the Demised Premises in compliance with the Act.

          B. In connection with its construction of the Landlord's Improvements
pursuant to Paragraph 4 hereof, Landlord represents and warrants that the
Landlord's Improvements to be constructed in accordance with the Plans will
comply in all material respects with all applicable laws, including without
limitation, the Act, and Landlord covenants that the Demised Premises delivered
to Tenant as of the Construction Completion Date shall comply in all material
respects with all applicable laws, including without limitation, the Act.
Landlord shall indemnify, defend and hold Tenant harmless from all damages,
costs, losses, expenses (including but not limited to reasonable attorneys'
fees) arising from any breach by Landlord of the preceding covenant; provided
however the foregoing indemnification shall terminate upon the expiration of one
(1) year from the Construction Completion Date. Notwithstanding the foregoing,
in no event shall Tenant have the right to terminate this Lease or have any
right of set-off arising out of any breach or claimed breach by Landlord in its
obligations hereunder, it being expressly acknowledged and agreed that the Base
Rent and Additional Rent, and all other charges and

                                       38

<PAGE>

sums payable by Tenant hereunder, shall commence at the times provided herein
and shall continue to be payable as provided herein.

          51. Reports by Tenant. Upon request by Landlord at any time after 135
              -----------------
days after the end of the applicable fiscal year of Tenant, Tenant shall deliver
to Landlord (within 15 days after receipt of written request) a copy of the
audited financial statement of any guarantor of Tenant's obligations under this
Lease. If such audited statements are not available, Tenant may provide such
statements certified by such guarantor's chief financial officer as being true
and correct, in accordance with generally accepted principals of accounting
consistently applied over the applicable periods. Said financial statements
shall only be required in connection with a proposed sale or mortgaging of the
Demised Premises and shall be held in confidence by Landlord and any such
proposed purchaser or lender or their respective successors or assigns.
Notwithstanding the foregoing, Tenant shall cause First Data Corporation to
submit annual audited financial statements to Landlord and Landlord's mortgagee
in the manner set forth herein if First Data Corporation ceases to be a publicly
traded company.

          52. Option to Purchase. Subject to the provisions hereinafter set
              ------------------
forth, and provided that Tenant is not then in default hereunder, Landlord
hereby grants to Tenant the option to purchase the Demised Premises upon the
following terms and conditions:

          A. Landlord shall notify Tenant thirty (30) days prior to the date
that it intends to make the Demised Premises available for sale to third
parties. Included with such notice shall be the proposed purchase price for the
Demised Premises, as well as any other relevant economic terms being offered by
Landlord. In no event shall Landlord have the right to convey the Demised
Premises or otherwise make the Demised Premises available for sale to third
parties until eighteen (18) months after the Commencement Date.

          B. If, at anytime after notice is delivered to Tenant as set forth
above, Landlord enters into a serious negotiation with a prospective purchaser
to purchase the Demised Premises, then Landlord shall notify Tenant in writing
of (i) the fact of such negotiation, (ii) the purchase price agreed to between
Landlord and such prospective purchaser, and (iii) the other relevant
agreed-upon economic terms upon which such purchaser would acquire the Demised
Premises, and Tenant must within ten (10) business days thereafter, by written
notice to Landlord, elect to exercise the option to purchase the Demised
Premises upon all of the same terms and conditions as are contained in
Landlord's notice to Tenant in which event the parties shall enter into a
definitive agreement incorporating said terms and conditions. If Tenant does not
elect to purchase, Landlord shall have the right to sell to a third party on the
same terms and conditions provided to Tenant or shall submit any modified terms
to Tenant in accordance with the above. In no event shall Tenant be afforded
more than three (3) opportunities to exercise its option hereunder, in
connection with more than three (3) different offers from three (3) different
third parties.

          C. If Tenant exercises its option to purchase hereunder, the closing
of such purchase shall occur on the date set forth in the definitive agreement
entered into between Landlord and Tenant. At the closing, Tenant shall pay the
purchase price via cash or wire transfer of immediately available funds to
Landlord, and Landlord shall deliver to Tenant a general warranty deed (or
equivalent) to the Demised Premises conveying good and marketable fee

                                       39

<PAGE>

simple title in Tenant to the Demised Premises, subject to no liens,
encumbrances or other exceptions to title other than the Permitted Exceptions
and taxes for the current year, and any exceptions to title that have been
caused by Tenant or that Tenant has accepted in writing (other than any
mortgages or other liens, which must be discharged by Landlord at or prior to
such closing). On the closing date, Landlord and Tenant shall also execute and
deliver such other documents and instruments as are customary in similar
transactions and/or reasonably necessary to implement the terms and conditions
of this Lease, and to allow Tenant to obtain an extended coverage ALTA owner's
title policy insuring Tenant's fee simple ownership of the Demised Premises in
accordance with the above.

          D. Landlord covenants and agrees that if any exceptions to title other
than the Permitted Exceptions shall be revealed by the deed or title policy,
Landlord will at its sole cost and expense clear the title of such exceptions as
soon as reasonably practical but, in any event, within six (6) months after the
intended closing date (unless Tenant shall in writing extend such period), and
the actual closing (including the payment of the purchase price) of such
purchase of the Demised Premises shall be delayed until the title thereto has
been cleared. Until such time as Tenant's purchase of the Demised Premises is
closed as hereinabove provided, Tenant shall continue to occupy and possess the
Demised Premises under the terms and conditions of this Lease. If for any reason
such purchase is not closed, this Lease shall continue in full force and effect
as if Tenant had not exercised the aforesaid option to purchase, and Tenant
shall be entitled to retroactively exercise any option for any Extension Term to
the extent the normal option election date occurred after Tenant exercised its
option to purchase the Demised Premises.

          E. Upon Tenant's notice to Landlord of the exercise of Tenant's option
to purchase, Landlord shall provide Tenant with copies of all surveys, title
insurance policies, title instruments and other such documents in Landlord's
possession pertaining to the Demised Premises. Tenant shall pay for the cost of
the title insurance policy, the cost to prepare any survey required by Tenant
and the cost of any escrow closing services, and any cost or expense in
connection with any endorsements to the title policy requested by Tenant.
Landlord shall be responsible for the cost of compliance with any subdivision,
lot split or similar regulations which are applicable to or in connection with
the conveyance of the Demised Premises to Tenant. All rents shall be pro-rated
between the parties as of the date of closing. Tenant shall pay the cost of any
documentary stamp taxes required for recording the deed, as well as any transfer
taxes. Any other matters at closing not specifically provided for herein shall
be handled and the cost hereof charged to one or the other or both of the
parties as shall be the ordinary custom and practice for the handling of such
matters or the apportioning of the cost hereof then prevalent in the City of
Sunnyvale, Santa Clara County, California.

          F. The option hereunder may only be exercised by Tenant or a
subsidiary, affiliate or related entity of Tenant. If neither Tenant or a
subsidiary, affiliate or related entity is then occupying all or a portion of
the Demised Premises, Tenant shall have no rights hereunder.

          53. No Third Party Beneficiaries. The obligations of Tenant set forth
              ----------------------------
hereunder (including, without limitation, the obligations set forth in Sections
5A, 7A, 11B and 50), are covenants from Tenant to Landlord only and do not
create any third party beneficiaries of such obligations.

                                       40

<PAGE>

          54. Counterparts. This Lease may be executed in counterparts, each of
              ------------
which shall be deemed an original but all of which together shall constitute but
one and the same instrument.

          55. Consents and Approvals. Landlord and Tenant agree that any
              ----------------------
consents or approvals to be provided by either party will not be unreasonably
withheld or delayed unless specifically provided otherwise herein.

          56. Limitation on Damages. In no event shall Landlord or Tenant be
              ---------------------
liable under any theory of tort, contract, strict liability or other legal or
equitable theory for any punitive, special, incidental, indirect or
consequential damages, each of which is hereby excluded by agreement of the
parties regardless of whether or not any party has been advised of the
possibility of such damages.

          57. Tenant's Property. All fixtures, equipment, improvements and
              -----------------
appurtenances attached to, or built into, the Demised Premises that are
installed by Tenant at Tenant's expense shall be Tenant's property until the
termination of this Lease. All of the foregoing items installed at Tenant's
expense as well as all paneling, partitions and business and trade fixtures and
communication and office equipment which are installed in the Demised Premises
by Tenant, and all furniture, furnishing and other articles of movable personal
property owned by Tenant and located in the Demised Premises or the Building
(all of which are hereinafter referred to as "Tenant's Property") shall belong
to Tenant, may be removed by Tenant at any time during the term hereof, and may
be removed by Tenant at the end of the term hereof or within fifteen (15) days
thereafter, whether as a result of the normal expiration of the term of this
Lease or of the early termination of this Lease pursuant to the terms hereof (as
a result of Tenant's default hereunder or otherwise). Tenant shall repair any
damage resulting from the removal of Tenant's Property and leave the Demised
Premises in a commercially reasonable condition. Any items of Tenant's Property
not so removed shall, if not required to be removed by Tenant pursuant to
Paragraph 8 hereof, is deemed abandoned and retained by Landlord as its property
thereafter.

          Landlord waives any landlord or other lien it may have on Tenant's
Property and shall not seek to enforce same, whether upon Tenant's default or
otherwise.

                                       41

<PAGE>

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

                                    LANDLORD:

                                    SUNNYVALE PARTNERS LIMITED
                                    PARTNERSHIP, an Illinois limited partnership

                                    By: Ridge Sunnyvale, Inc.

                                    Its:  General Partner

                                    By: /s/
                                        -----------------------------------

                                    Its: President
                                         ----------------------------------

                                    TENANT:

                                    FIRST DATA MERCHANT SERVICES
                                    CORPORATION, a Florida corporation

                                    By:/s/ David Schlapbach
                                       ------------------------------------

                                     Its: Assistant Secretary
                                          ---------------------------------

                                       42

<PAGE>

thence, South 9(0) 06' 48" East, 167.07 feet; thence along a tangent curve to
the right with a radius of 40.00 feet, through an angle of 99(0) 50' 37", an arc
length of 69.70 feet to a line parallel with and distant 60.00 feet. Northerly,
at right angles, from the centerline of Fremont Avenue (60.00 feet wide); thence
along last said parallel line, North 89(0) 16' 11" West, 115.00 feet; thence
South 76(0) 50' 32" West, 124.99 feet; thence South 0(0) 43' 49" West 30.00 feet
to said centerline; thence along last said line South 89(0) 16' 11" East 278.80
feet to the point of commencement.

                                       45

<PAGE>
                                   EXHIBIT B
                                   ---------
                                  THE PREMISES

<PAGE>

                                    [GRAPHIC]

                             Exhibit B Page 1 of 2

<PAGE>

                                   [GRAPHIC]

                             Exhibit B page 2 of 2

<PAGE>

                                   EXHIBIT C
                                   ---------

                              EXCLUDED PROVISIONS

1,2,3,4,6,7(B),8,9,15,16(E),17(E),22,23,44 and 52 of the Main Lease. Also,
Exhibits B,C,D,E,F,G and I of the Main Lease.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]