Document:

<PAGE>

                                                                   Exhibit 10.01

                      Sublease Commencement Date Agreement
                      ------------------------------------

     This Sublease Commencement Date Agreement ("Agreement"), dated August 6,
2001, is entered into by and between Ariba, Inc., a Delaware corporation
("Sublandlord"), and Interwoven, Inc., a Delaware corporation ("Subtenant"),
based on the following facts and circumstances:

     A.   Sublandlord and Subtenant are parties to (i) an Amended and Restated
Sublease Agreement dated as of June 28, 2001 (the "Sublease"); and (ii) an
Amended and Restated Furniture Agreement dated as of June 28, 2001 (the
"Furniture Agreement"). Capitalized terms not defined herein shall have the
meanings given in the Sublease.

     B    Concurrently with the execution of this Agreement and effective as of
August 6, 2001, Sublandlord is delivering possession of the Premises to
Subtenant, subject to all of applicable terms and conditions of the Sublease.

     NOW, THEREFORE, for valuable consideration, the parties hereby agree as
follows:

     1.   The Sublease Commencement Date under the Sublease shall be August 6,
2001.

     2.   Pursuant to Section 2.2(a) of the Sublease, Subtenant's obligation to
pay Rent and perform its other obligations under the Sublease shall commence on
August 6, 2001. Subtenant's prepayment of the first month's Base Rent, in the
amount of $158,130.39, shall be applied through September 5, 2001, so that on
September 1, 2001, Subtenant shall pay the balance of Base Rent due for
September in the amount of $131,775.25. (Thereafter, Base Rent shall be payable
at the regularly scheduled rate.)

     3.   Pursuant to Sections 2 and 3 of the Furniture Agreement, Subtenant's
obligation to pay Furniture Rent shall commence on August 6, 2001. Subtenant's
prepayment of the first month's Furniture Rent, in the amount of $44,145.75,
shall be applied through September 5, 2001, so that on September 1, 2001,
Subtenant shall pay the balance of Furniture Rent due for September in the
amount of 36,788.25. (Thereafter, Furniture Rent shall be payable at the
regularly scheduled rate.)

     4.   All other provisions of the Sublease and Furniture Agreement shall
remain unchanged by this Agreement.

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

                                          SUBLANDLORD:

                                          Ariba, Inc.,

                                          a Delaware corporation

                                          By:   /s/ Gabriel Sandoval
                                                --------------------
                                                Gabriel Sandoval

                                          Its:  VP, General Counsel
                                                -------------------

<PAGE>

                                                  SUBTENANT:

                                                  Interwoven , Inc.,

                                                  a Delaware corporation

                                                  By:    /s/ David M. Allen
                                                         ------------------
                                                         David M. Allen

                                                  Its:   Chief Financial Officer
                                                         -----------------------

<PAGE>

     Portions of this Exhibit include information that is incorporated by
reference from Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
file with the Securities and Exchange Commission on August 14, 2001. Such
affected portions include Exhibits A through O of this Exhibit. Please refer to
the Exhibits below for each particular reference.

                                   ARIBA PLAZA
                                   -----------

                              AMENDED AND RESTATED
                                    SUBLEASE

                                     Between

                                   ARIBA, INC.
                             a Delaware corporation
                                       as
                                   SUBLANDLORD

                                       and

                                INTERWOVEN, INC.
                             a Delaware corporation
                                       as
                                    SUBTENANT

                                       for

                                    PREMISES
                                       at
                           803 and 809 Eleventh Avenue
                           Sunnyvale, California 94089

<PAGE>

                           BASIC SUBLEASE INFORMATION
                           --------------------------

1.   Sublease Date: June 28, 2001.

2.   Sublandlord: Ariba, Inc., a Delaware corporation.

3.   Subtenant: Interwoven Inc., a Delaware corporation.

4.   Master Landlord: Moffett Park Drive LLC, a California limited liability
     company.

5.   Project: Ariba Plaza, 1111 Lockheed Martin Way, Sunnyvale, California.

6.   Rentable Area of Project: Approximately 715,988 square feet.

7.   Premises: All four floors of Building One and the 3rd and 4th floors of
     Building Four.

8.   Rentable Area of the Premises (in square feet): 263,823 square feet
     (total), comprised of:

             43,020.50 square feet (1st floor of Building One; B1F1)
             43,320.50 square feet (2nd floor of Building One; B1F2)
             45,020.50 square feet (3rd floor of Building One; B1F3)
             43,720.50 square feet (4th floor of Building One; B1F4)
             45,020.50 square feet (3rd floor of Building Four; B4F3)
             43,720.50 square feet (4th floor of Building Four; B4F4)

9.   Commencement Dates:  2nd and 3rd floors of Building One:  August 1, 2001
                          1st floor of Building One: October 1, 2001
                          4th floor of Building One:  October 1, 2001
                          3rd and 4th floors of Building Four:  August 1, 2003

10.  Term: 2nd and 3rd floors of Building One: 72 months
           1st floor of Building One: 70 months
           4th floor of Building One: 70 months
           3rd and 4th floors of Building Four: 48 months

11.  Base Rent:

<TABLE>
<CAPTION>
--------------------------------- --------------- ----------- -------------- ---------------
Period                             Bldg/Floors    Square      Monthly Base    Monthly Base
                                                  Feet (SF)   Rent (Per SF)       Rent
                                                  (Total)                       (Total)
--------------------------------- --------------- ----------- -------------- ---------------
<S>                               <C>             <C>         <C>            <C>
August 1, 2001-September 30, 2001  B1: F2,3         88,341          $1.79       $158,130.39
--------------------------------- --------------- ----------- -------------- ---------------
October 1, 2001 - July 31, 2002    B1: F1,2,3,4    175,082          $1.67       $292,386.94
--------------------------------- --------------- ----------- -------------- ---------------
August 1, 2002-July 31, 2003       B1: F1,2,3,4    175,082          $3.91       $684,570.62
--------------------------------- --------------- ----------- -------------- ---------------
</TABLE>

<PAGE>

<TABLE>
------------------------------- -------------- ---------- ---------- ---------------
<S>                             <C>           <C>          <C>       <C>
August 1, 2003-July 31, 2004    B1: F1,2,3,4   263,823      $4.06     $1,071,121.38
                                B4: F3,4
------------------------------- -------------- ---------- ---------- ---------------
August 1, 2004-July 31, 2005    B1: F1,2,3,4   263,823      $4.22     $1,113,333.06
                                B4: F3,4
------------------------------- -------------- ---------- ---------- ---------------
August 1, 2005-July 31, 2006    B1: F1,2,3,4   263,823      $4.38     $1,155,544.74
                                B4: F3,4
------------------------------- -------------- ---------- ---------- ---------------
August 1, 2006-July 31, 2007    B1: F1,2,3,4   263,823      $4.56     $1,203,032.88
                                B4: F3,4
------------------------------- -------------- ---------- ---------- ---------------
</TABLE>

<TABLE>
<S>                                                   <C>
12.  Subtenant's Share: 36.85% (total), comprised of: 6.00% (1st floor of Building One)
                                                      6.05% (2nd floor of Building One)
                                                      6.29% (3rd floor of Building One)
                                                      6.11% (4th floor of Building One)
                                                      6.29% (3rd floor of Building Four)
                                                      6.11% (4th floor of Building Four)
</TABLE>

<TABLE>
<CAPTION>
         ----------------------------------- ------------- ---------------------------
         <S>                                 <C>           <C>
         Period                              Bldg/Floors    Subtenant's Share (Total)
         ----------------------------------- ------------- ---------------------------
         August 1, 2001-September 30, 2001   B1: F2,3                 12.34%
         ----------------------------------- ------------- ---------------------------
         October 1, 2001- July 31, 2003      B1: F1,2,3,4             24.46%
         ----------------------------------- ------------- ---------------------------
         August 1, 2003-July 31, 2007        B1: F1,2,3,4             36.85%
                                             B4: F3,4
         ----------------------------------- ------------- ---------------------------
</TABLE>

13.  Security Deposit: $12,100,000 (letter of credit or cash), in accordance
     with the provisions of Paragraph 4.

14.  Lobby Hours: Mondays through Fridays from 8 a.m. through 5 p.m., excluding
     Holidays, with 24 hours/day, 7 days/week access to the Premises, in
     accordance with Paragraph 7.

15.  HVAC Hours: Mondays through Fridays from 7 a.m. through 6 p.m., excluding
     Holidays, in accordance with Paragraph 7.

16.  Address for Notices:

        Master Landlord: c/o Jay Paul Company
                         350 California Street, Suite 1905
                         San Francisco, CA 94111

        Sublandlord: For Payment of Rent:
                         807 Eleventh Avenue
                         Sunnyvale, California 94089
                         Attn: Real Estate Manager

                         For Notices:
                         807 Eleventh Avenue

<PAGE>

                     Sunnyvale, California 94089
                     Attn: General Counsel
                     (650) 390-1377 Facsimile

                     807 Eleventh Avenue
                     Sunnyvale, California 94089
                     Attn: Real Estate Manager
                     (650) 390-1315 Facsimile

         Subtenant:  1195 West Fremont Avenue
                     Sunnyvale, California 94087
                     Attn: Tom Smith
                     (408) 220-7558 Facsimile

                     Silicon Valley Law Group
                     Attn:  Lucy Lofrumento, Esq.
                     152 North Third Street, Ste. 900
                     San Jose, CA  95112

17.  Brokers: Cushman & Wakefield (Sublandlord's Broker) and CB Richard Ellis
     (Subtenant's Broker).

18.  Exhibits:

         Exhibit A: Master Lease (exclusive of Exhibit I which shall be provided
         separately to the parties as described below in the note to Exhibit M)
         Exhibit B: Premises
         Exhibit C: Sublandlord's Rules and Regulations
         Exhibit D: Commencement Date Memorandum
         Exhibit E: Ravendale Lease
         Exhibit F: Letter of Credit
         Exhibit G: Consent to Sublease
         Exhibit H: Estoppel Certificate
         Exhibit I: Work Letter Agreement (including Attachment 1 (Conceptual
         Plan) and Attachment 2 (B1F1 Shell Work: Bldg 1 1st Floor Only Addendum
         5 Revised April 13, 2001 and Supplemental Instruction N) thereto)
         Exhibit J: Cafeteria Access Agreement
         Exhibit K: Fitness Center Access Agreement
         Exhibit L: Janitorial Services Description
         Exhibit M: Additional Environmental Report and Materials (For
         convenience, Exhibit M shall be provided along with Exhibit I of the
         Master Lease in a separate "environmental" binder)
         Exhibit N: Brokers' Letter
         Exhibit O: Site Signage Plan
         Exhibit P: Furniture
         Exhibit Q: Furniture UCC-1

<PAGE>

The Basic Sublease Information set forth above is made a part of the Sublease.
In the event of conflict between the Basic Sublease Information and any of the
provisions contained in the remainder of the Sublease, the provisions contained
in the remainder of the Sublease shall control.

                                TABLE OF CONTENTS
                                -----------------

Paragraph                                                                  Page
---------                                                                  ----

1.   Sublease of Premises ..............................................    59

   1.1.   Sublease .....................................................    60

   1.2.   Common Areas - Definition ....................................    60

   1.3.   Amenity  Areas ...............................................    60

   1.4.   Common Areas - Subtenant's Rights ............................    60

   1.5.   Rules and Regulations ........................................    60

   1.6.   Common Areas - Changes .......................................    61

   1.7.   Parking ......................................................    61

2.   Term ..............................................................    63

   2.1.   Term .........................................................    64

   2.2.   Delay In Possession; Fixturing Period ........................    64

   2.3.   Subtenant Compliance .........................................    65

3.   Rent. .............................................................    65

   3.1.   Base Rent ....................................................    65

   3.2.   Shared Expenses ..............................................    66

   3.3.   Abatement Reimbursement Rent .................................    70

   3.4.   Generally ....................................................    70

   3.5.   Late Payment .................................................    71

4.   Security Deposit ..................................................    71

5.   Use ...............................................................    73

   5.1.   Use ..........................................................    73

   5.2.   Hazardous Materials ..........................................    73

   5.3.   Subtenant's Compliance with Applicable Requirements ..........    75

   5.4.   Inspection; Compliance .......................................    75

6.   Delivery of Possession ............................................    75

   6.1.   Condition ....................................................    75

   6.2.   Compliance ...................................................    76

   6.3.   Acknowledgements .............................................    77

<PAGE>

<TABLE>
<S>                                                                          <C>
7.   Utilities and Services ...............................................   77

  7.1.   Standard Subtenant Utilities and Services ........................   77

  7.2.   Heating and Air-Conditioning; Lobby Access; Subtenant Access .....   77

  7.3.   Electricity and Gas ..............................................   77

  7.4.   Water; Trash Disposal ............................................   78

  7.5.   Janitorial Services ..............................................   78

  7.6.   Elevator .........................................................   78

  7.7.   Overstandard Subtenant Use .......................................   79

  7.8.   Interruption of Utilities ........................................   79

  7.9.   Utility Providers ................................................   80

  7.10.  Telecommunications ...............................................   80

  7.11.  Utility Additions ................................................   81

  7.12.  Security .........................................................   81

8.  Maintenance and Repairs; Utility Installations, Trade Fixtures and
    Alterations ...........................................................   82

  8.1.   Sublandlord's Obligations ........................................   82

  8.2.   Subtenant's Obligations ..........................................   83

  8.3.   Utility Installations; Trade Fixtures; Alterations ...............   83

  8.4.   Ownership; Removal; Surrender; and Restoration ...................   84

9.  Insurance; Waiver; Subrogation ........................................   85

  9.1.   Cost of Sublandlord's Insurance ..................................   85

  9.2.   Subtenant's Insurance ............................................   85

  9.3.   Insurance Policies ...............................................   85

  9.4.   Failure of Subtenant to Purchase and Maintain Insurance ..........   86

  9.5.   Additional Insureds and Coverage .................................   86

  9.6.   Waiver of Subrogation ............................................   86

  9.7.   No Representation of Adequate Coverage ...........................   86

10. Limitation of Liability and Indemnity .................................   87

11. Property Taxes ........................................................   88

  11.1.  Payment of Taxes .................................................   88

  11.2.  Additional Improvements ..........................................   88

  11.3.  Personal Property Taxes ..........................................   88

12. Assignment and Subletting .............................................   88

  12.1.  Generally ........................................................   88

  12.2.  Notice ...........................................................   89

  12.3.  Sublandlord's Election; Recapture ................................   89

  12.4.  Sublandlord's Discretion; Factors ................................   89
</TABLE>

<PAGE>

<TABLE>
<S>                                                                           <C>
   12.5.  Bonus Rent......................................................    91

   12.6.  Options Personal................................................    91

   12.7.  Encumbrances....................................................    91

   12.8.  Merger; Attornment..............................................    91

   12.9.  Sublandlord's Costs.............................................    92

   12.10. Affiliates......................................................    92

13.    Default; Breach; Remedies..........................................    92

   13.1.  Default; Breach.................................................    92

   13.2.  Remedies........................................................    94

   13.3.  Inducement Recapture............................................    95

   13.4.  Breach by Sublandlord...........................................    95

14.    Damage or Destruction; Condemnation................................    95

15.    Brokerage Fees.....................................................    96

16.    Estoppel Certificates..............................................    96

17.    Definition of Sublandlord..........................................    97

18.    Severability.......................................................    97

19.    Days...............................................................    97

20.    Limitation on Liability............................................    97

21.    Time of Essence....................................................    97

22.    No Prior or Other Agreements.......................................    97

23.    Notices............................................................    97

   23.1.  Notice Requirements.............................................    97

   23.2.  Date of Notice..................................................    98

   23.3.  Notices from Master Landlord....................................    98

24.    Waivers............................................................    98

25.    No Right To Holdover...............................................    98

26.    Cumulative Remedies................................................    98

27.    Covenants and Conditions; Construction of Agreement................    98

28.    Binding Effect; Choice of Law......................................    98

29.    Subordination; Attornment; Non-Disturbance.........................    98

   29.1.  Subordination...................................................    99

   29.2.  Attornment......................................................    99

   29.3.  Self-Executing..................................................    99

   29.4.  Nondisturbance Agreement........................................    99

30.    Master Lease Provisions............................................   100

   30.1.  Sublease Subordinate............................................   100
</TABLE>

<PAGE>

<TABLE>
<S>                                                                           <C>
   30.2.  Cooperation With Subtenant.....................................    101

   30.3.  Sublandlord Representations....................................    101

   30.4.  Modification...................................................    102

   30.5.  Consent To This Sublease.......................................    102

   30.6.  Defined Terms..................................................    103

   30.7.  Multiple New Master Leases.....................................    103

   30.8.  Conflict.......................................................    103

31.    Attorneys' Fees...................................................    103

32.    Sublandlord's Access to Premises..................................    103

   32.1.  Generally......................................................    103

   32.2.  Subtenant's Waiver.............................................    103

   32.3.  Method of Entry................................................    104

33.    Auctions..........................................................    104

34.    Signs.............................................................    104

35.    Termination; Merger...............................................    104

36.    Consents..........................................................    104

37.    Quiet Possession..................................................    105

38.    Options...........................................................    105

   38.1.  Definition.....................................................    105

   38.2.  Options Personal To Original Subtenant.........................    105

   38.3.  Multiple Options...............................................    105

   38.4.  Master Lease Options...........................................    105

   38.5.  Effect of Default on Options...................................    105

39.    Option to Extend Term.............................................    105

40.    Substitution of Other Premises....................................    106

41.    Reservations......................................................    107

42.    Performance Under Protest.........................................    107

43.    Authority.........................................................    107

44.    Amendments........................................................    107

45.    Exhibits..........................................................    107
</TABLE>

<PAGE>

                              AMENDED AND RESTATED
                              --------------------

                                    SUBLEASE
                                    --------

     This Amended and Restated Sublease("Sublease") is made and entered into as
of the 28th day of June, 2001 ("Effective Date"), by and between Ariba, Inc., a
Delaware corporation ("Ariba" or "Sublandlord"), and Interwoven, Inc., a
Delaware corporation ("Subtenant").

                                 R E C I T A L S

     A.    Ariba, as tenant, and Moffett Park Drive LLC, a California limited
liability company ("Master Landlord"), as landlord, previously entered into the
Technology Corners Triple Net Multiple Building Lease dated March 15, 2000. This
initial lease has been amended by a letter agreement dated September 11, 2000,
and a First Amendment to Lease dated January 12, 2001, which, together with the
initial lease, are collectively referred to herein as the "Master Lease", a copy
of which is attached hereto as Exhibit A and incorporated herein by this
reference. Under the Master Lease, Master Landlord leases to Sublandlord certain
premises located at 1111 Lockheed Martin Way in Sunnyvale, California, including
four (4) free standing, four-story office and research and development buildings
and one (1) Amenity Building (collectively, the "Buildings") and appurtenances
described in the Master Lease, the Property and all other improvements built on
the Property, including a parking structure (the "Project"). The four office and
research development buildings are commonly known as: 803 11th Avenue ("Building
One"), 807 11th Avenue ("Building Two"), 805 11th Avenue ("Building Three"), and
809 11th Avenue ("Building Four").

     B.    Subtenant and Sublandlord previously entered into a Sublease dated
June 28, 2001 (the "Original Sublease"), under which Sublandlord sublet to
Subtenant the building described in the Master Lease as Building One and the
third and fourth floors of the building described in the Master Lease as
Building Four. Sublandlord and Subtenant now desire to amend and restate the
Original Sublease.

     C.    Sublandlord wishes to sublease to Subtenant, and Subtenant desires to
sublease from Sublandlord, the building described in the Master Lease as
Building One and the third and fourth floors of the building described in the
Master Lease as Building Four together with the tenant improvements and
"Furniture" (defined below) located therein (the "Premises"), on the terms and
conditions set forth herein. Capitalized terms used herein without definition
shall have the same meaning as in the Master Lease.

     D.    As of the Effective Date, Sublandlord is one of the tenants of the
Project.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Sublandlord and Subtenant agree as follows:

                                A G R E E M E N T

1.       Sublease of Premises

<PAGE>

     1.1. Sublease. Sublandlord hereby subleases and demises to Subtenant, and
Subtenant hereby accepts from Sublandlord, on the terms and conditions
hereinafter set forth, the Premises. The Premises are depicted on Exhibit B,
which is attached hereto and incorporated herein by this reference. Sublandlord
and Subtenant conclusively agree, for purposes of this Sublease, that the six
floors comprising the Premises and the Premises as a whole each contain the
number of square feet in the Rentable Area of the Premises shown in the Basic
Sublease Information above. "Rentable Area of the Premises" as defined herein,
shall be the square foot measurement of the Premises (on a per floor basis) as
set forth in the Basic Sublease Information above.

     1.2. Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Buildings and within the exterior boundary line
of the Project, including parking areas, passenger and other loading and
unloading areas, trash areas, roadways, walkways, driveways and landscaped areas
that are provided and designated by the Sublandlord from time to time for the
general non-exclusive use of Sublandlord, Subtenant and other tenants of the
Project and their respective employees, suppliers, shippers, customers,
contractors and invitees. For Buildings occupied by multiple tenants, the Common
Areas also include the stairways, elevators, lobbies and other areas which may
be so provided and designated by Sublandlord.

     1.3. Amenity Areas. The term "Amenity Areas" is defined as those portions
of the Project consisting of the Amenity Building and the space to be occupied
by a cafeteria. The Amenity Areas may be improved with services and amenities
available for use by Sublandlord, Subtenant, other occupants of the Project,
and/or the public, at additional cost, including a fitness center and cafeteria,
if and as provided in a Cafeteria Access Agreement and Fitness Center Access
Agreement to be negotiated by the parties in good faith as soon as reasonably
practicable after the Effective Date and for a period of up to six (6) months.
Such negotiations will be based on the basic business terms set forth in
Exhibits J and K respectively, attached to this Sublease. The execution of such
Cafeteria Access Agreement and Fitness Center Access Agreement shall be
conditions precedent for improving such Amenity Areas and making them available
for use by Subtenant. Subtenant acknowledges and agrees that (i) the Cafeteria
Access Agreement and the Fitness Center Access Agreement are subject to Master
Landlord's approval (which approval shall not be unreasonably withheld or
delayed) and (ii) Subtenant shall have no right to use the Amenity Areas unless
and until they have been improved and are agreed to be made available for use by
Sublandlord. For the benefit of the Project and its tenants, Sublandlord
reserves the right in its reasonable discretion to convert portions of the
Common Areas or other portions of the Project to Amenity Areas and to relocate
the Amenity Areas within the Project as well as to convert portions of the
Amenity Areas into Common Areas or rentable areas of the Project. Any changes
made pursuant to the preceding sentence to increase the Amenity Areas or to
relocate them shall be at Sublandlord's sole cost, unless otherwise mutually
agreed by the parties, while any change in the size of the Common Areas shall be
reflected equitably in the calculation of Operating Expenses herein.

     1.4. Common Areas - Subtenant's Rights. Sublandlord grants to Subtenant,
for the benefit of Subtenant and its employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Sublease and all
extensions thereto, the right to use, in common with others entitled to such
use, the Common Areas as they exist from time to time, subject to any rights,
powers, and privileges reserved by (i) Master Landlord under the Master Lease
and (ii) Sublandlord under the terms hereof or under the terms of any rules and
regulations or restrictions governing the use of the Project.

     1.5. Rules and Regulations. Sublandlord shall have the right, from time to
time, to establish, modify, amend and enforce reasonable rules and regulations
("Sublandlord's Rules and Regulations") for the management, safety, care, and
cleanliness of the Buildings and the remainder of the Project, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Buildings and the Project and
their invitees. A copy of the current Sublandlord's Rules and Regulations are
attached to this Sublease as Exhibit C and incorporated herein by this
reference. Subtenant (and Sublandlord while Sublandlord is a tenant of the
Project) agree to abide by and conform to all such Sublandlord's Rules and
Regulations, and the Rules and Regulations adopted from time to time by Master
Landlord under the Master Lease ("Master Landlord's Rules and

<PAGE>

Regulations"), and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Sublandlord shall not be
responsible to Subtenant for the non-compliance with said rules and regulations
by tenants (other than Sublandlord while Sublandlord is a tenant of the Project)
of the Project. In the event of conflict between the provisions of this Sublease
and Sublandlord's Rules and Regulations, the provisions of this Sublease shall
prevail. In the event of conflict between Master Landlord's Rules and
Regulations and Sublandlord's Rules and Regulations, Master Landlord's Rules and
Regulations shall prevail.

     1.6. Common Areas - Changes. Sublandlord shall have the right, in
Sublandlord's sole and reasonable discretion, from time to time:

          (a) To make changes to the Common Areas and Amenity Areas (subject to
Paragraph 1.3 above), including, without limitation, changes in the location,
size, shape and number of driveways, entrances, parking spaces, parking areas,
passenger and other loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility raceways;

          (b) To close temporarily any of the Common Areas and/or Amenity Areas
for maintenance purposes so long as reasonable access to the Premises and
parking remains available;

          (c) Pursuant to rights granted under Section 17.25 of the Master Lease
and for the general benefit of the Project and its tenants, to designate other
land outside the boundaries of the Project to be a part of the Common Areas so
long as any changes made to the Project pursuant to this Subparagraph 1.6(c)
shall be at Sublandlord's sole cost, unless otherwise mutually agreed by the
parties, and any change in the size of the Common Areas shall be reflected
equitably in the calculation of Operating Expenses herein;

          (d) Pursuant to rights granted under Section 17.26 of the Master Lease
and for the general benefit of the Project and its tenants, to add additional
buildings and improvements to the Common Areas or Amenity Areas so long as any
changes made to the Project pursuant to this Subparagraph 1.6(d) shall be at
Sublandlord's sole cost, unless otherwise mutually agreed by the parties, and
any change in the size of the Common Areas shall be reflected equitably in the
calculation of Operating Expenses herein;

          (e) To use the Common Areas and Amenity Areas while engaged in making
additional improvements, repairs or alterations to the Project, or any portion
thereof; and

          (f) To do and perform such other acts or work and make such other
changes in, to or with respect to the Common Areas, Amenity Areas and Project as
Sublandlord may, in the exercise of reasonable business judgment, deem to be
appropriate so long as Subtenant's use and enjoyment of the Premises is not
materially adversely affected.

     1.7. Parking. Subtenant shall have the right, free of charge for the
Sublease Term, including any extensions thereto, to the non-exclusive use of a
pro-rata portion of the Project's parking based upon the square feet of the
Rentable Area of the Premises occupied by Subtenant hereunder, as compared to
the total Rentable Area of the Project less the Rentable Area of the Amenity
Areas to the extent that the Amenity Areas are used for common purposes and not
available for lease, on those portions of the Common Areas designated from time
to time by Sublandlord for tenant parking; provided, however, that subject to
mutual agreement between Subtenant and Sublandlord of those spaces allocated to
Subtenant and to the extent allowed by applicable governmental regulations or
agreements: (i) Sublandlord shall designate eight (8) spaces per floor for a
total of twenty-four (24) spaces in the parking structure for Subtenant's
reserved use, and (ii) Sublandlord shall designate a reasonable number of
"visitor" parking spaces in close proximity to the entrance to Building One. The
remaining spaces in the parking structure, other than twenty-four (24) spaces
designated ( to the extent allowed by applicable governmental regulations or
agreements) for Sublandlord's (or Sublandlord's designee's) reserved use (eight
(8) spaces per floor for a total of twenty-four (24) spaces), shall be made

<PAGE>

available to Sublandlord (or Sublandlord's designees) and Subtenant on a
first-come, first-served basis. All costs associated exclusively with the
parking structure shall be paid fifty percent (50%) by Subtenant. Sublandlord
reserves the right to equitably modify rights granted under this Paragraph 1.7
if obligated to do so by the Master Lease or applicable governmental
regulations, or in the event of construction, natural disaster, or other similar
reasonable circumstances; provided, however, that in no event shall the total
number of parking spaces within the Project be less than the number of spaces
required under any applicable permit, law, or governmental regulation and the
total number of parking spaces available to Subtenant be less than its pro rata
portion thereof. Subtenant shall not use more parking spaces than permitted
herein. Subtenant shall not park any vehicles larger than full-size passenger
automobiles, sport utility vehicles or pick-up trucks, herein called "Permitted
Size Vehicles." Sublandlord may regulate the loading and unloading of vehicles
by adopting and amending Rules and Regulations for the Project. No vehicles
other than Permitted Size Vehicles may be parked in the Common Area without the
prior written permission of Sublandlord. Notwithstanding, Subtenant may park
Subtenant's company truck (marked with Subtenant's logo) in a parking area on
the Project.

        (a)    Subtenant shall not permit or allow any vehicles that belong to
or are controlled by Subtenant or Subtenant's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Sublandlord for such activities.

        (b)    Subtenant shall not service or store any vehicles in the Common
Areas.

        (c)    If Subtenant permits or allows any of the prohibited activities
described in this Paragraph 1.7, then Sublandlord shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Subtenant, which
cost shall be immediately payable upon demand by Sublandlord.

    1.8.    Furniture.

        (a)    Lease of Furniture. With the exception of the first floor,
Building One shall be delivered to Subtenant with the Furniture included for
Subtenant's use during the Sublease term, in accordance with and subject to the
terms and conditions of this Paragraph 1.8 and all other applicable provisions
of this Sublease. The "Furniture" is defined as the furniture, fixtures,
equipment and other personal property described on Exhibit P attached hereto and
incorporated herein by this reference. Sublandlord shall deliver the Furniture
to Subtenant AS IS and Subtenant agrees that it takes possession of the
Furniture without relying on any representation or warranty by Sublandlord as to
the condition of the Furniture. Subtenant conclusively agrees that for purposes
of this Sublease, the total number of cubicle systems provided to Subtenant is
as described in Exhibit P hereto. Within thirty (30) days of the Sublease
Commencement Date, Subtenant shall be given an opportunity to verify inventory
as compared to Exhibit P. In the event that a discrepancy is identified in the
Furniture inventory, Subtenant shall notify Sublandlord, and the parties shall
cooperate reasonably with each other to make any appropriate corrections.
Subtenant acknowledges that neither Sublandlord nor its agents have made any
representations or warranties, express or implied, as to the suitability or
fitness of the Furniture for the conduct of Subtenant's business or for any
other purpose. In no event shall Sublandlord have any liability, nor shall
Subtenant have any remedy against Sublandlord, for any liability, claim, loss,
damage or expense caused directly or indirectly by the Furniture or any
deficiency or defect thereof or the maintenance or repair thereof.

        (b)    Ownership; Encumbrances. Sublandlord represents and warrants that
it owns all right, title and interest in and to the Furniture, free and clear of
any and all liens, pledges, hypothecation, equitable interests, rights of
possession, claims, charges, lease obligations, security interests,
encumbrances, or other rights (collectively, "Adverse Rights"), and that it has
the full and unrestricted right and power to allow Subtenant to have possession
and use of the Furniture during the term of this Sublease and all extensions
thereto. If at any time during the term of the Sublease (or any extension
thereto) it is discovered that any Adverse Rights exist, Sublandlord shall
remove the same promptly upon notice by Subtenant, at Sublandlord's sole cost
and expense. Except as otherwise expressly provided herein, Subtenant shall not
have, or at any time acquire, any right, title or interest in the Furniture
except the right to possession and use as

<PAGE>

provided for in this Sublease. Sublandlord shall have the right to place and
maintain on the exterior or interior of each item of Furniture an inscription
identifying Sublandlord's ownership of the Furniture. Subtenant shall not
remove, obscure, deface or obliterate the inscription or permit any other person
to do so. Neither Sublandlord nor Subtenant shall pledge, encumber, create a
security interest in, or permit any lien to become effective on any Furniture
throughout the term of this Sublease. Subtenant shall promptly notify
Sublandlord of any liens, charges, or other encumbrances with respect to the
Furniture of which Subtenant has knowledge. Subtenant shall promptly pay or
satisfy any obligation from which any lien or encumbrance arises caused by
Subtenant, and shall otherwise keep the Furniture and all right, title, and
interest free and clear of all liens, charges, and encumbrances caused by
Subtenant.

     (c) Subtenant's Rights. Subtenant shall be entitled to the absolute right
to the use, possession and control of the Furniture during the term of this
Sublease, provided Subtenant is not in Breach of this Sublease. Subject to the
terms of this Sublease, Subtenant shall employ and have absolute control,
supervision and responsibility over all users of the Furniture.

         (i)  Sublandlord acknowledges that should Subtenant's rights to use,
possess and/or control the Furniture pursuant to this Sublease be wrongfully
impaired or interfered with in any way (not resulting from a Default by
Subtenant), due to (i) any breach or default by Sublandlord under this Sublease
or the Master Lease, any loan agreement, or other agreements to which
Sublandlord is a party, (ii) rights or claims asserted by creditors of
Sublandlord (including, but not limited to, a seizure or attachment of, or levy
on, the Furniture), or (iii) rights or claims asserted by any party claiming by,
through or under Sublandlord, then Subtenant may incur substantial damages,
which could include, without limitation, costs of replacing the Furniture
(including installation costs), consultants' and attorneys' fees, and so forth.
Therefore, in order to protect Subtenant's rights to use, possess and control
the Furniture under this Sublease, Sublandlord hereby grants to Subtenant a
security interest in the Furniture (1) to secure the performance of
Sublandlord's obligations regarding the Furniture under this Sublease, including
without limitation the covenant of quiet possession and quiet enjoyment pursuant
to Paragraph 37 below; and (2) to provide sufficient collateral to Subtenant to
protect it against any damages it may incur in the event that its rights in and
to the Furniture pursuant to this Sublease are impaired or interfered with
during the term of this Sublease or any extension thereof as a result of any of
the circumstances described in the first sentence of this subparagraph
1.8(c)(i).

         (ii) Sublandlord shall execute and acknowledge, and deliver to
Subtenant in recordable form, for filing with the California Secretary of State
and the Santa Clara County Recorder, a UCC financing statements (as attached
hereto as Exhibit Q) or similar documents Subtenant may reasonably request in
order to perfect its security interest in the Furniture. In the event that
Subtenant's rights in and to the Furniture pursuant to this Sublease are
wrongfully impaired or interfered with during the term of this Sublease or any
extension thereof as a result of any of the circumstances described in the first
sentence of subparagraph 1.8(c)(i), Subtenant and any of its successors or
assigns shall have, and be entitled to exercise, all of the rights, remedies,
powers and privileges of a secured party under the Commercial Code of the State
of California in addition to any other rights or remedies available at law or in
equity.

     (d) Subtenant's Obligations. Subtenant shall use the Furniture in a
reasonably careful and proper manner and shall not permit any Furniture to be
used in violation of any applicable federal, state, or local statute, law,
ordinance, rule, or regulation relating to the possession, use or maintenance of
the Furniture. Subtenant shall use only authorized Herman Miller (furniture
manufacturer) service providers to reconfigure, reassemble, disassemble, repair
and maintain the Furniture. Subtenant agrees to reimburse Sublandlord for all
damage to the Furniture arising from misuse or negligent acts by Subtenant, its
employees and its agents. If any Furniture covered by this Sublease is damaged,
lost, stolen or destroyed, or if any Furniture is damaged as a result of its
use, maintenance or possession, Subtenant shall promptly notify Sublandlord of
the occurrence and shall file all necessary reports, including those required by
law and those required by insurers of the Furniture. Subtenant represents and
warrants that the Furniture will be used for business purposes consistent with
all use requirements and restrictions under the Sublease.

2.       Term.

<PAGE>

     2.1.   Term.

     The original term of this Sublease ("Original Term") shall commence on
August 1, 2001 (the "Sublease Commencement Date"), and shall end on July 31,
2007 (the "Expiration Date"), unless sooner terminated as provided in this
Sublease; provided, however, that with respect to the 1st and 4th floors of
Building One and the 3rd and 4th floors of Building Four, the term of this
Sublease shall commence in accordance with the commencement date schedule shown
in the Basic Sublease Information above. (The date of commencement of the term
with respect to any portion of the Premises shall be deemed the "Commencement
Date" for that portion.) Notwithstanding the foregoing, if Sublandlord notifies
Subtenant that any portion of the Premises will be ready for occupancy prior to
the scheduled commencement date for that portion of the Premises (or such larger
portion of the Premises as contains said portion), the parties may mutually
agree to commence the Sublease term and all obligations hereunder including the
payment of Rent for that portion of the Premises prior to such scheduled
commencement date ("Early Commencement"). In the event of Early Commencement,
the term shall commence on such agreed-upon date with respect to that portion of
the Premises, which date shall become the "Commencement Date" (or "Sublease
Commencement Date," with respect to the 2nd and 3rd floors of Building One) for
said portion. Any agreement to commence the term prior to any scheduled
commencement date shall not affect the Expiration Date stated above. Subtenant
shall be obligated to occupy each portion of the Premises no later than thirty
(30) days from the date possession of such portion is tendered. Promptly upon
the occurrence of the Commencement Date for each portion of the Premises,
respectively, Subtenant shall execute and deliver to Sublandlord a written
Commencement Date Memorandum in the form attached to this Sublease as Exhibit D
and incorporated herein by this reference. Subtenant shall have no rights in any
portion of the Premises prior to the Commencement Date for such portion, unless
expressly provided otherwise in this Sublease.

     2.2.   Delay In Possession; Fixturing Period.

          (a)   Generally. Sublandlord agrees to use all commercially reasonable
efforts to deliver possession of the Premises to Subtenant in accordance with
the Commencement Date schedule contained in the Basic Sublease Information
above. If, despite said efforts, Sublandlord is unable to deliver possession as
agreed, Sublandlord shall not be subject to any liability therefore, nor shall
such failure affect the validity of this Sublease. Subtenant shall not, however,
be obligated to pay Rent or perform its other obligations with respect to the
pertinent portion of the Premises until it receives possession of such portion.
If possession is not delivered within ninety (90) days after the applicable
Commencement Date, Subtenant may, at its option, by notice in writing within ten
(10) days after the end of such 90-day period, cancel this Sublease with respect
to that portion of the Premises. If such written notice is not received by
Sublandlord within said 10-day period, Subtenant's right to cancel shall
terminate. Nothing herein shall be construed as waiving Subtenant's right to
seek specific performance with respect to any portion of the Premises not
tendered by a Commencement Date. In the event of any delay in the commencement
of the term with respect to any portion of the Premises pursuant to this
subparagraph (a) of Paragraph 2.2, (i) the date possession of such portion of
the Premises is tendered to Subtenant shall become the "Commencement Date" (or
"Sublease Commencement Date," with respect to the 2nd and 3rd floors of Building
One) for said portion, provided that the Commencement Date shall be deemed to
have occurred one day earlier for each day for which Subtenant has caused the
delay, and (ii) Subtenant shall be entitled to one (1) day of free Base Rent for
that portion of the Premises that is subject to delay for each such day of delay
beyond the ninetieth (90th) day. Any delay in commencement as described in this
subparagraph (a) of Paragraph 2.2 shall not affect the Expiration Date stated
above or the expiration date of any extension of the term hereto.

          (b)   Fixturing Period.

          In addition to Sublandlord's agreement with respect to access set
forth in the Work Letter Agreement (Exhibit I) , Sublandlord shall permit
Subtenant to access the Premises up to thirty (30) days prior to the Sublease
Commencement Date (or Commencement Date, as the case may be) for any portion of
the Premises in order to install

<PAGE>

Subtenant's furniture (in Building One, Floor One), communications systems,
equipment and trade fixtures ("Fixturing Period"), provided that such access
shall be subject to all of the provisions of this Sublease, excluding the
payment of Rent and Sublease Expenses, but including without limitation each of
Subtenant's indemnity obligations hereunder. Early entry into the Premises shall
not advance the Expiration Date, or the expiration date of any extension of the
term hereof.

     2.3.       Subtenant Compliance. Sublandlord shall not be required to
tender possession of the Premises to Subtenant until Subtenant complies with its
obligation to provide evidence of insurance hereunder. Pending delivery of such
evidence, Subtenant shall be required to perform all of its obligations under
this Sublease from and after the applicable Commencement Date, including the
payment of Rent, notwithstanding Sublandlord's election to withhold possession
pending receipt of such evidence of insurance. Further, if Subtenant is required
to perform any other conditions prior to or concurrent with a Commencement Date,
the applicable Commencement Date shall occur but Sublandlord may elect to
withhold possession until such conditions are satisfied.

3.       Rent.

     3.1.       Base Rent. Subject to the terms of Paragraph 2.2, Subtenant
shall pay to Sublandlord base rent based on the number of square feet in the
Rentable Area of the Premises for which the term has already commenced, in
accordance with the following schedule ("Base Rent"):

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------------
     Period                                          Bldg/Floors      Square Feet     Monthly Base     Monthly Base Rent
                                                                      (SF) (Total)    Rent (Per SF)         (Total)
     ---------------------------------------------------------------------------------------------------------------------
     <S>                                             <C>              <C>             <C>              <C>
     August 1, 2001-September 30, 2001               B1: F2,3           88,341                 $1.79          $158,130.39
     ---------------------------------------------------------------------------------------------------------------------
     October 1, 2001 - July 31, 2002                 B1: F1,2,3,4      175,082                 $1.67          $292,386.94
     ---------------------------------------------------------------------------------------------------------------------
     August 1, 2002-July 31, 2003                    B1: F1,2,3,4      175,082                 $3.91          $684,570.62
     ---------------------------------------------------------------------------------------------------------------------
     August 1, 2003-July 31, 2004                    B1: F1,2,3,4      263,823                 $4.06        $1,071,121.38
                                                     B4: F3,4
     ---------------------------------------------------------------------------------------------------------------------
     August 1, 2004-July 31, 2005                    B1: F1,2,3,4      263,823                 $4.22        $1,113,333.06
                                                     B4: F3,4
     ---------------------------------------------------------------------------------------------------------------------
     August 1, 2005-July 31, 2006                    B1: F1,2,3,4      263,823                 $4.38        $1,155,544.74
                                                     B4: F3,4
     ---------------------------------------------------------------------------------------------------------------------
     August 1, 2006-July 31, 2007                    B1: F1,2,3,4      263,823                 $4.56        $1,203,032.88
                                                     B4: F3,4
     ---------------------------------------------------------------------------------------------------------------------
</TABLE>

Base Rent for any calendar month during which there is a change in the Rentable
Area of the Premises shall be prorated based on the actual number of square feet
of the Rentable Area of the Premises during each day of the month and the Base
Rent in effect on each day of the month. Base Rent is due and payable in advance
on the first day of each calendar month; provided, however, that Base Rent for
the first full calendar month of the Original Term for each of the two (2)
floors of the Building One portion of the Premises tendered as of the Sublease
Commencement Date (equal to $158,130.39), and One Million One Hundred
Twenty-three Thousand Eight Hundred Eighty-five Dollars and 98/100
($1,123,885.98) to be applied as partial payment of Base Rent toward the last
full calendar month of the Original Term for the entire Premises shall be due
and payable at the time of Subtenant's execution and delivery of this Sublease
as "Prepaid Rent" which total amount shall be applied to amounts as due under
this Sublease. Base Rent is payable without notice or demand. Base Rent for any
period during the Term which is less than one full calendar month shall be

<PAGE>

prorated based on the actual number of days in the calendar month involved.

     3.2.       Shared Expenses. In addition to Base Rent, Subtenant shall pay
to Sublandlord during the term hereof, Subtenant's Share (defined below) of all
Operating Expenses (defined below) and all Master Lease Expenses (defined
below), in accordance with the following provisions:

          (a)      "Subtenant's Share" is defined, for purposes of this
Sublease, as the percentage determined by dividing the total square feet of
Rentable Area of the Premises or the portion of the Premises with respect to
which the Commencement Date has occurred by the total square footage of the
Rentable Area of Project. The definition in the preceding sentence shall prevail
over the Subtenant's Share figures in the Basic Sublease Information in the
event of any conflict (e.g., since the figure for the entire Premises does not
equal the total of the floor-by-floor figures, due to rounding, the former shall
prevail as the figure for the entire Premises). Sublandlord and Subtenant
conclusively agree, for purposes of this Sublease, that the Project currently
contains the number of square feet in the Rentable Area of Project as shown as
an approximation in the Basic Sublease Information above. Sublandlord shall
change this figure in the event of a change in use or configuration of the
Project, and shall provide Subtenant with notice of such change (including the
date of effectiveness).

          (b)      "Operating Expenses" is defined, for purposes of this
Sublease, to include all costs incurred by Sublandlord in the exercise of its
reasonable discretion, to the extent not included in Master Lease Expenses
below, for:

                        (i)   The operation, repair, replacement and maintenance
     in neat, clean, safe, good order and condition, of the Project (except to
     the extent Master Landlord is responsible for the Outside Areas under the
     Master Lease, the costs for which are passed through to Subtenant as Master
     Lease Expenses), including but not limited to, the following:

                              (aa)  The Common Areas including their surfaces,
     coverings, decorative items, carpets, drapes and window coverings, and
     including parking areas, loading and unloading areas, trash areas,
     roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped
     areas, striping, bumpers, irrigation systems, lighting facilities, building
     exteriors and roof, fences and gates;

                              (bb)  All heating, air conditioning, plumbing,
     electrical systems, life safety equipment, telecommunication and other
     equipment used in common by, or for the benefit of, lessees or occupants of
     the Project, including elevators and escalators, tenant directories, fire
     detection systems including sprinkler systems including sprinkler system
     maintenance and repair.

                        (ii)  Trash disposal, reception (if provided by
     Sublandlord) in multi-tenant buildings, janitorial (per Sublandlord's
     written specifications for such services in Exhibit I) and general Project
     security services,;

                        (iii) Any other service or utilities to be provided by
     Sublandlord that is elsewhere in this Sublease stated to be an "Operating
     Expense";

                        (iv)  The cost of the premiums for liability and
     property insurance policies (in excess of those required by Ariba as Lessee
     under the Master Lease) to be maintained by Sublandlord under this Sublease
     and the Master Lease;

                        (v)   The amount of the real property taxes to be paid
      by Sublandlord under the Master Lease;

<PAGE>

                        (vi)   The cost of water, sewer, gas, electricity, and
other services to the Project;

                        (vii)  Costs in connection with the Moffett Park
Transportation Demand Management Plan (see Master Lease Section 5.07);

                        (viii) Labor, salaries, and applicable fringe benefits
and costs, materials, supplies and tools, used in maintaining and/or cleaning
the Project;

                        (ix)   All costs associated with general tenant services
made available to all subtenants of the Project, except as otherwise provided in
this Sublease;

                        (x)    accounting and a management fee of three percent
(3%) of actual Operating Expenses;

                        (xi)   The cost of any Capital Expenditure (defined in
Paragraph 6.2) to the Project not payable by Subtenant under the provisions of
Paragraph 6.2 below or by other subtenants of the Project, provided that such
cost shall be amortized over the useful life (as determined by Sublandlord in
its sole discretion) of each such replacement item (including interest on the
unamortized balance at the Agreed Rate as defined in Section 17.02 of the Master
Lease) over the remaining term of the Sublease, which cost would be payable in
equal monthly installments during that time period;

                        (xii)  Replacements of equipment or improvements that
have a useful life for depreciation purposes according to Federal income tax
guidelines of five (5) years or less;

                        (xiii) Replacements of equipment or improvements that
have a useful life for depreciation purposes according to Federal income tax
guidelines of more than five (5) years, as amortized over the useful life of
such replacement item (including interest on the unamortized balance at the
Agreed Rate), over the remaining term of the Sublease, which cost would be
payable in equal monthly installments during that time period.

     Notwithstanding anything to the contrary contained herein, the following
items shall be excluded from Operating Expenses:

                        (1)    Costs associated with the operation of the
business of the ownership or entity which constitutes "Sublandlord", as
distinguished from the costs of building operations for the benefit of the
Project and its tenants as a whole;

                        (2)    Depreciation;

                        (3)    Costs associated with the operation of any
cafeteria - and Sublease Expenses for the Project to be apportioned to the
square footage of the cafeteria (which costs shall be allocable to Subtenant as
described in any Cafeteria Access Agreement attached as Exhibit J hereto) and
costs associated with the operation of any fitness center and Sublease Expenses
for the Project to be apportioned to the square footage of the fitness center
(which costs shall be addressed in any Fitness Center Access Agreement attached
as Exhibit K hereto);

                        (4)    Real estate brokers' leasing commissions, and
advertising expenses incurred in connection with the original subleasing of the
Project or future subleasing of the Project;

<PAGE>

                        (5)  Legal fees and space planners' fees incurred in
     connection with the original subleasing of the Project or future subleasing
     of the Project except those attributable to subleasing by any subtenant
     (such fees to be billed directly to such subtenant);

                        (6)  Costs for which Sublandlord is reimbursed by its
     insurance carrier or any subtenant's insurance carrier;

                        (7)  Costs for all repairs, replacements, items and/or
     services for which Subtenant or any other subtenant in the Project
     reimburses Sublandlord;

                        (8)  Costs incurred by Sublandlord for services which
     Sublandlord provides selectively to one or more subtenants (other than
     Subtenant, which costs shall be billed directly to Subtenant) without
     reimbursement;

            In the calculation of any expenses hereunder, it is understood that
     no expense shall be recovered more than once. In addition, to the extent
     that Sublandlord can avoid incurring any expense described hereunder by
     enforcing available warranties or the likes, Sublandlord agrees to make
     commercially reasonable efforts to do so. Sublandlord shall use
     commercially reasonable efforts to effect an equitable proration of bills
     for services rendered to the Project. Sublandlord agrees to keep books and
     records showing the Operating Expenses in accordance with generally
     accepted accounting principles consistently maintained on a year-to-year
     basis;

                        (9)  Costs incurred by Sublandlord for Tenant
     Improvements under the Master Lease;

                        (10) Costs for any maintenance or repair of other
     premises with the Project, or any equipment contained therein, to the
     extent such cost is attributable to the causes beyond normal wear and tear;

                        (11) Sums payable as a result of Sublandlord's default
     under any of its obligations under the Master Lease or this Sublease
     (except to the extent such default is a result of Subtenant's default under
     this Sublease).

            (c)      "Master Lease Expenses" is defined, for purposes of this
Sublease, to include all amounts paid or payable by Sublandlord to Master
Landlord under the Master Lease (including without limitation all taxes,
assessments, fees and other impositions in accordance with the provisions of
Article IX, insurance premiums in accordance with the provisions of Article VII,
operating charges, maintenance, repair and replacement costs and expenses in
accordance with the provisions of Article VI and a Management Fee), excepting
therefrom Base Rent (as that term is defined in the Master Lease) and the costs
incurred by Sublandlord for the Tenant Improvements (as that term is defined in
the Master Lease).

            (d)      Payment. Subtenant's Share of Operating Expenses and Master
Lease Expenses (Operating Expenses and Master Lease Expenses being collectively
defined as "Sublease Expenses") shall be payable as of the Sublease Commencement
Date (or Commencement Date as the case may be)or Early Commencement (whichever
is earlier) (even if such expenses have been paid by Sublandlord prior to the
Sublease Commencement Date (or Commencement Date as the case may be) or Early
Commencement so long as such Sublease Expenses are reasonably allocable to
Subtenant as of such date) through the Expiration Date or the expiration of any
extension of the Sublease Term. Sublease Expenses shall be due and payable by
Subtenant so as to be received by Sublandlord within ten (10) days after a
reasonably detailed statement (containing duplicates of supporting financial
records, such as underlying bills and statements, of Sublandlord and Master
Landlord) of actual Sublease Expenses and the calculation of Subtenant's Share
of

<PAGE>

such expenses is presented to Subtenant by Sublandlord, which Sublandlord may
present at intervals no more frequently than monthly ("Monthly Expense
Statement"); provided that, with regard to Master Lease Expenses, Sublandlord
shall not be required to provide more information than has been offered to
Sublandlord. At Sublandlord's and/or Master Landlord's (pursuant to the Master
Lease) option, however, an amount may be estimated by Sublandlord from time to
time of Subtenant's Share of annual Sublease Expenses and the same shall be
payable monthly or quarterly, as Sublandlord shall designate, during each
calendar year of the Sublease term, on the same day as the Base Rent is due
hereunder. In the event that Subtenant pays Sublandlord's and/or Master
Landlord's estimate of Subtenant's Share of Sublease Expenses as aforesaid,
Sublandlord shall deliver to Subtenant within sixty (60) days after the
expiration of each calendar year a reasonably detailed statement (as described
above) showing Subtenant's Share of the actual Sublease Expenses incurred during
the preceding year ("Annual Expense Statement"); provided that, with regard to
Master Lease Expenses, Sublandlord shall not be required to provide more
information than has been offered to Sublandlord. If Subtenant's payments under
this Paragraph 3.2(d) during said preceding calendar year exceed Subtenant's
Share as indicated on said Annual Expense Statement, Subtenant shall be entitled
to credit the amount of such overpayment against Subtenant's Share of Sublease
Expenses next falling due, or if the Sublease term has expired, Sublandlord
shall deliver a cash refund to Subtenant with the Annual Expense Statement. If
Subtenant's payments under this paragraph during said preceding calendar year
were less than Subtenant's Share as indicated on said Annual Expense Statement,
Subtenant shall pay to Sublandlord the amount of the deficiency within ten (10)
days after delivery by Sublandlord to Subtenant of said Annual Expense
Statement. All determinations of Sublease Expenses shall made by Sublandlord in
accordance with sound accounting and management principles and shall be binding
on Subtenant for the purpose of initial payment; provided, however, that
Subtenant shall have the right to object in good faith to Sublandlord's
determinations of Sublease Expenses in accordance with the procedure in
Paragraph 3.2(e) and seek a credit (or refund after the term expires) of
correctly disputed amounts. Nothwithstanding the foregoing, Subtenant shall not
be required to pay Sublease Expenses on Building One, Floor One for the period
prior toJanuary 1, 2002, nor on Building One, Floor Four for the period prior to
July 1, 2002.

                  (e)  Audit. On Subtenant's written request given not more than
sixty (60) days after Subtenant's receipt of a Monthly Expense Statement or an
Annual Expense Statement, and provided that Subtenant is not then in default
under this Sublease beyond the applicable cure period provided in this Sublease
and that Subtenant has paid all amounts required to be paid under the applicable
Monthly Expense Statement or Annual Expense Statement, then Sublandlord shall
provide Subtenant with a reasonable opportunity to review the books and records
supporting such determination of Sublease Expenses in the office of Sublandlord,
or Sublandlord's agent, during business hours. Sublandlord shall provide this
opportunity to inspect within twenty (20) days of Subtenant's written request.

                  Within fifteen (15) business days following Subtenant's
inspection, Subtenant and Sublandlord shall concurrently be provided with any
audit report prepared in connection with such inspection, and Subtenant shall
advise Sublandlord if Subtenant disputes the Sublease Expenses or Subtenant's
Share of them as set forth in the applicable Monthly Expense Statement or Annual
Expense Statement. Thereafter, if Sublandlord ascertains that an error has been
made, Subtenant's sole remedy shall be for the parties to make such appropriate
payments or reimbursements, as the case may be, including interest on any such
amount at the Agreed Rate, to each other as are determined to be owing, provided
that any reimbursements payable by Sublandlord to Subtenant may, at
Sublandlord's option, instead be credited against the Base Rent next coming due
under this Sublease unless the Sublease term has expired, in which event
Sublandlord shall refund the appropriate amount to Subtenant.

                  Subtenant shall keep any information gained from its review of
Sublandlord's records confidential and shall not disclose it to any other party,
except as required by law. If requested by Sublandlord, Subtenant shall require
its employees or agents reviewing Sublandlord's records to sign a
confidentiality agreement as a condition of Sublandlord providing Subtenant the
opportunity to inspect under this Paragraph 3.2(e). Notwithstanding anything in
this Paragraph 3.2(e) to the contrary, with regard to Master Lease Expenses,
Sublandlord shall not be required to provide more information to Subtenant than
is offered to Sublandlord.

<PAGE>

        3.3.     Abatement Reimbursement Rent.

             (a)    Generally. The parties acknowledge and agree as follows: (i)
Subtenant currently leases and occupies certain premises at 385 Ravendale Drive,
Mountain View, California ("Ravendale Premises"), under that certain Lease dated
April 24, 2000, between Subtenant and Spieker Properties, L.P., a copy of which
is attached hereto as Exhibit E and incorporated herein by this reference
("Ravendale Lease"); (ii) Subtenant's space needs that are currently fulfilled
in part by the Ravendale Premises will be satisfied by the Premises under this
Sublease; (iii) in order to alleviate the burden of carrying the obligations of
both the Ravendale Lease and this Sublease, Subtenant has requested, and
Sublandlord has agreed, that Sublandlord reduce, or abate, the Base Rent that
would otherwise be payable under this Sublease by the amount of One Million
Seven Hundred Thousand Dollars ($1,700,000) ("Abatement Amount"); and (iv) in
exchange for this abatement, Subtenant has agreed to use commercially reasonable
efforts to sublease the Ravendale Premises and upon any such sublease shall pay
to Sublandlord certain amounts due from any such subtenant(s), as well as to
perform other obligations, and make certain representations and warranties,
pursuant to this Paragraph 3.3.

             (b)    Calculation of Abatement Reimbursement Rent. In addition to
Subtenant's obligation to pay Base Rent and Subtenant's Share of all Operating
Expenses and Master Lease Expenses, Subtenant agrees to pay to Sublandlord
"Abatement Reimbursement Rent," which shall be defined as follows: one hundred
percent (100%) of all Rent paid to Subtenant by any and all sublessees of
Subtenant subleasing any portion of the Ravendale Premises during the thirteen
(13) month period immediately following the Sublease Commencement Date
("Reimbursement Period"), less leasing commissions payable by Subtenant under
the Ravendale Lease for such sublet portions of the Ravendale Premises. For the
purposes of this Paragraph 3.3, the term "Rent" shall not include the proceeds
received from the sale or rental at fair market value of capital assets located
at the Ravendale Premises, or any bonus rent payable to Subtenant's landlord
under the terms of the Ravendale Lease.

             (c)    Payment. All Abatement Reimbursement Rent shall be due and
payable from Subtenant to Sublandlord ten (10) days following the date such sums
are due and paid to Subtenant (or paid to a third party, for any reason). In the
event that any Abatement Reimbursement Rent is paid or payable by Subtenant's
sublessee in a form other than cash, Subtenant shall pay to Sublandlord in cash
the fair value of such consideration. Promptly upon the effectiveness of any
subletting of the Ravendale Premises by Subtenant, Subtenant shall certify to
Sublandlord, in writing, the amount and schedule of Abatement Reimbursement Rent
payments due hereunder. Abatement Reimbursement Rent is payable without notice
or demand. Failure by Subtenant to timely and fully make payments of Abatement
Reimbursement Rent shall be treated like any other failure to timely and fully
pay Rent hereunder and shall entitle Sublandlord to all the rights and remedies
resulting from such failure.

             (d)    Representations. Subtenant represents and warrants to
Sublandlord as follows: (i) Subtenant has the right to sublet the Ravendale
Premises, subject only to those restrictions contained in Paragraph 21 of the
Ravendale Lease; (ii) Subtenant is entitled to retain one hundred percent (100%)
of all rent from any subleasing of the Ravendale Lease, subject only to those
limitations contained in Paragraph 21 of the Ravendale Lease; (iii) the document
attached as Exhibit E to this Sublease is a true and complete copy of the
Ravendale Lease and represents the entire agreement between Subtenant and
Spieker Properties, L.P., with respect to the lease of the Ravendale Premises;
(iv) Subtenant has not assigned, encumbered or otherwise transferred any
interest in the Ravendale Premises; and (v) there is no default, or any
condition which with the passage of time or the giving of notice, or both, would
constitute a default, on the part of either party to the Ravendale Lease.

        3.4.     Generally. All monetary obligations of Subtenant under this
Sublease, including Sublease Expenses, shall be deemed rent and shall be
referred to herein as "Rent". Rent is payable without any setoff, deduction,
abatement, or offset whatsoever, except as otherwise expressly provided herein.
Acceptance of a payment which is less than the amount then due shall not be a
waiver of Sublandlord's rights to the balance of such Rent, regardless of

<PAGE>

Sublandlord's endorsement of any check so stating. Rent is payable in lawful
money of the United States and shall, unless otherwise provided herein, be paid
to Sublandlord at: Ariba, Inc., 807 Eleventh Avenue, Sunnyvale, California,
94089, Attn: Real Estate Manager; or at such other place as Sublandlord may
specify from time to time by written notice to Subtenant.

     3.5. Late Payment. If Subtenant shall fail to pay any Rent so that it is
received within five (5) days (or ten (10 days in the case of Sublease Expenses
and Abatement Reimbursement Rent only) of the date when payment is due, such
unpaid amount shall bear interest from the due date to the date of payment at
the lower of the following rates: (i) the Agreed Rate and (i) the maximum rate
allowed by applicable usury law. Subtenant acknowledges that late payment of
Rent will cause Sublandlord to incur costs not contemplated by this Sublease,
the exact amounts of which are extremely difficult and impracticable to fix.
Such costs include, without limitation, processing and accounting charges, and
late charges which may be imposed on Sublandlord by the terms of the Master
Lease. Therefore, if any installment or other payment of Rent due from Subtenant
is not received by Sublandlord within five (5) days of the date when payment is
due, Subtenant shall pay to Sublandlord an additional sum of five percent (5%)
of the amount of the installment. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Sublandlord will
incur by reason of late payment by Subtenant. Acceptance of any late charge
shall not constitute a waiver of Subtenant's default with respect to the overdue
amount, or prevent Sublandlord from exercising any of the other rights and
remedies available to Sublandlord. Subtenant shall further pay to Sublandlord
the sum of One Hundred Dollars ($100) for any check from Subtenant to
Sublandlord which is returned or not honored by the bank on which it is drawn,
which sum the parties agree is a fair and reasonable estimate of the cost to
Sublandlord of handling such returned or dishonored check.

4.       Security Deposit.

     To secure the faithful performance by Subtenant of all the covenants,
conditions and agreements in this Sublease set forth and contained on the part
of Subtenant to be fulfilled, kept, observed and performed including, but not by
way of limitation, such covenants and agreements in this Sublease which become
applicable upon the termination of the same by re-entry or otherwise, Subtenant
shall deposit with Sublandlord a security deposit in the amount of Twelve
Million Four Hundred Thousand Dollars ($12,400,000) (the "Security Deposit"),
payable in stages as follows:

     a. $8,800,000 within ten (10) business days following the execution of this
        Sublease by both parties.

     b. $3,600,000 upon: 1) the Commencement Date of the Third Floor and Fourth
        Floor of Building Four, or 2) such earlier date as Subtenant gains
        access under Paragraph 2.2(b) herein (Fixturing Period) .

The Security Deposit may be in the form of cash or an irrevocable standby letter
of credit, as described below. Subtenant agrees that: (a) the Security Deposit
or any portion thereof may be applied to the curing of any Breach under this
Sublease (including, without limitation, the Work Letter Agreement, provided
that with respect to Breaches under the Work Letter Agreement the Construction
Security Deposit must first be exhausted) that may exist at the time of
application, including any Rent owing at the end of the Sublease term or to the
payment of any Abatement Reimbursement Rent that may become due pursuant to
Paragraph 13.3, without prejudice to any other remedy or remedies which
Sublandlord may have on account thereof; (b) upon such application Subtenant
shall (i) pay Sublandlord on demand the amount so applied which shall be added
to the Security Deposit so the same may be restored to its original amount, or
(ii) in the event that Subtenant elects to deposit a Letter of Credit, upon
written notice from Sublandlord to Subtenant specifying the amount drawn on the
Letter of Credit and the particular purpose for which such amount was applied,
Subtenant shall deliver within ten (10) days (at its sole cost and expense) to
Sublandlord an amendment to the Letter of Credit or a replacement Letter of
Credit in an amount equal to the then existing balance of the Letter of Credit
(prior to such draw);(c) should the Master Lease be assigned by Sublandlord, the
Security Deposit or any portion thereof not previously applied and the Prepaid
Rent or any portion thereof not previously applied shall be turned over (or
assigned) to Sublandlord's assignee, and upon assumption of Sublandlord's
obligations under this Sublease, Subtenant shall release Sublandlord from any
and all liability with respect to the Security Deposit and/or its application or
return;

<PAGE>

(d) Sublandlord or its successor shall not be obligated to hold the Security
Deposit as a separate fund, but on the contrary may commingle the same with its
other funds; (e) the sum deposited or the portion thereof not previously
applied, shall be returned to Subtenant without interest following the
expiration of the Term of this Sublease or any renewal or extension thereof,
except to the extent reasonably required to cure any Breach by Subtenant of any
of its obligations hereunder and provided that Subtenant has vacated the
Premises and surrendered possession thereof to Sublandlord at the expiration of
the Term or any extension or renewal thereof as provided herein; (f) in the
event that Sublandlord terminates this Sublease or Subtenant's right to
possession by reason of a Breach by Subtenant, Sublandlord may apply the
Security Deposit against damages suffered to the date of such termination and/or
may retain the Security Deposit to apply against such damages as may be suffered
or shall accrue thereafter by reason of Subtenant's Breach; (g) in the event any
bankruptcy, insolvency, reorganization or other creditor-debtor proceedings
shall be instituted by or against Subtenant, or its successors or assigns, the
Security Deposit shall be deemed to be applied first to the payment of any Rent
due Sublandlord for all periods prior to the institution of such proceedings,
and the balance, if any, of the Security Deposit may be retained or paid to
Sublandlord in partial liquidation of Sublandlord's damages.

         If Subtenant elects to deposit the Security Deposit by a letter of
credit, such letter of credit shall be an irrevocable, unconditional, standby
letter of credit in a form substantially similar to the form attached hereto as
Exhibit F and incorporated herein (such letter of credit, together with any
renewal or replacement letters of credit delivered or to be delivered by
Subtenant under this Paragraph, shall be referred to herein collectively as the
"Letter of Credit"). The Letter of Credit shall be issued by a national money
center bank with an office in San Francisco, California (the "Issuer"). The
final form of the Letter of Credit, the identity of the Issuer, and the form of
any replacement Letter of Credit shall be acceptable to Sublandlord in its sole
discretion. The Letter of Credit shall be for an initial term of not less than
twelve (12) months and shall be maintained in force at all times from issuance
through sixty (60) days following the expiration or earlier termination of this
Sublease. If Subtenant fails at least forty-five (45) days prior to the
expiration date of an outstanding Letter of Credit to (i) renew the Letter of
Credit or (ii) deliver to Sublandlord either a replacement Letter of Credit or
cash in the full amount of the Security Deposit required hereunder, such failure
shall be a default under this Sublease (without the requirement of notice)
entitling Sublandlord, in addition to its other remedies, to draw down all or
part of the current Letter of Credit. Sublandlord shall have the right, upon a
transfer or assignment of its rights as landlord under this Sublease, to require
Subtenant to deliver a replacement Letter of Credit designating Sublandlord's
successor as the beneficiary, at Subtenant's sole cost and expense. No draw
under the Letter of Credit shall be deemed a waiver of, or be deemed to have
cured, any Default by Subtenant under any provision of this Sublease except to
the extent directly applied to cure such Default(s).

         Each time the financial milestones described below have been met, and
provided that as of the effective date of any reduction of the Security Deposit,
Subtenant is neither (i) in Breach under this Sublease, nor (ii) in Default in
the payment of Rent or the providing of any security deposit required to be made
under this Sublease, the required Security Deposit shall be reduced by
twenty-five percent (25%) of its then existing amount, which reduction shall be
effective on the first day of any calendar quarter following receipt by
Sublandlord of a valid and complete "Security Deposit Notice" as defined below
(with respect to such reduction). Sublandlord shall provide written notice to
Subtenant as to whether there then exists any Defaults in the payment of Rent,
within five (5) business days after receiving a written request therefor from
Subtenant. If Sublandlord shall fail to provide such written notice within said
five (5) business day period, then solely for purposes of determining whether
Subtenant is entitled to a reduction of the Security Deposit under this Section
4, no Default shall be deemed to exist as of the date of Subtenant's request. If
submitted, Sublandlord's written notice regarding any Defaults shall be
conclusive for the purpose of such reduction; however, Subtenant may then bring
any disputed Default current (in which event, Subtenant shall not be precluded
from the then applicable reduction of the Security Deposit) and file request
with Sublandlord for reconciliation (using documentation as otherwise required
of Sublandlord herein) and refund.

         In order to qualify for a Security Deposit reduction as described
above, Subtenant must have achieved four (4) consecutive quarters, not including
any quarters counted toward any previous Security Deposit reduction hereunder,
in

<PAGE>

which Subtenant has positive net income (as reported in the Subtenant's
Condensed Consolidated Statement of Operations as filed on Form 10-Q), and
Subtenant's total aggregate net income over such four quarters is Five Million
Dollars ($5,000,000) or more. For purposes of this paragraph, the computation of
"net income" for each such quarter shall exclude certain non-cash expenses
including only the following: amortization of deferred stock-based compensation,
amortization of acquired intangible assets and write-offs of in-process research
and development, facilities abandonment write-downs, and acquisition related
charges, as those items are set forth on Subtenant's Condensed Consolidated
Statement of Operations.

     If Subtenant qualifies for a reduction in the Security Deposit, Subtenant
shall provide Sublandlord with written notice requesting that the Security
Deposit be reduced as provided above (the "Security Deposit Notice"), which
notice must be accompanied by evidence (which may include audited or reviewed
financial statements for the applicable time periods) demonstrating to
Sublandlord's reasonable satisfaction that Subtenant has met the required
financial milestones. If Subtenant provides Sublandlord with a valid Security
Deposit Notice, Sublandlord shall cooperate with Subtenant to promptly reduce
the total amount of the Letter of Credit, or in the event of a cash Security
Deposit, refund the applicable portion of the Security Deposit to Subtenant
within forty-five (45) days after the later to occur of (a) Sublandlord's
receipt of the Security Deposit Notice, or (b) the date upon which Subtenant is
entitled to a reduction in the Security Deposit as provided above.

     Notwithstanding anything herein to the contrary, (a) in no event will the
amount of the required Security Deposit be less than (i) $2,547,771.96 during
the Original Term, and (ii) $3,260,094.00 during the Option Period (see
Paragraph 39), and (b) in the event Sublandlord applies any portion of the
Security Deposit pursuant to the provisions of this Paragraph 4, Subtenant shall
be disqualified from reduction in the Security Deposit for a period of
twenty-four (24) months following such application.

5.       Use.

     5.1.     Use. Subtenant shall use the Premises for those uses permitted
under the Master Lease ("Agreed Use"), and for no other purpose, without the
prior written consent of Sublandlord (which consent may be withheld in
Sublandlord's reasonable discretion) and the Master Landlord (which consent may
be withheld by Master Landlord pursuant to the terms of Section 5.01 of the
Master Lease). Subtenant's use of the Premises shall be subject to all of the
terms and conditions of the Master Lease relating to use.

              Subject to Sublandlord's reasonable prior written approval as to
time and location (electronic mail shall be acceptable for such submission of
requests and approvals), and subject to each of Subtenant's indemnification
obligations hereunder, Subtenant shall be permitted to host social events during
which alcoholic beverages may be responsibly served within the Project,
including the exterior Common Areas about or around Building One.

     5.2.   Hazardous Materials.

        (a)     Reportable Uses Require Consent. The term "Hazardous Materials"
as used in this Sublease shall be defined as in subsection 17.22(a) of the
Master Lease. Subtenant shall not engage in any activity in or on the Premises
which constitutes a Reportable Use (as defined below) of any Hazardous Materials
without the express prior written consent of Sublandlord and timely compliance
at Subtenant's expense with all Applicable Requirements as defined in Paragraph
5.3. "Reportable Use" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of any Hazardous Materials that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and/or (iii) the
presence at the Premises of any Hazardous Materials with respect to which any
Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the foregoing,
subject to consent of Master Landlord and in compliance with all Applicable
Requirements Subtenant may use and/or store the following materials (to the
extent such use does not expose the

<PAGE>

Premises or neighboring property to any meaningful risk of contamination or
damage or expose Sublandlord to any liability therefore): (i) any ordinary and
customary materials reasonably required to be used in the normal course of the
Agreed Use, so long as such use is not a Reportable Use, and (ii) up to six
hundred and sixty (660) gallons of diesel fuel even though such use is a
Reportable Use so long as Subtenant makes proper report of the use of such
material In addition, Sublandlord may condition its consent to any Reportable
Use upon receiving written consent of Master Landlord and such additional
assurances as Sublandlord reasonably deems necessary to protect itself, the
public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Sublease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit.

     (b) Duty to Inform Sublandlord. If Subtenant knows, or has reasonable cause
to believe, that a Hazardous Materials have come to be located in, on, under or
about the Premises, other than as previously consented to by Sublandlord,
Subtenant shall immediately give written notice of such fact to Sublandlord, and
provide Sublandlord with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous Materials.

     (c) Subtenant Remediation. Subtenant shall not cause or permit any
Hazardous Materials to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Subtenant's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for (i) the
cleanup of any contamination in violation of Environmental Laws (as defined in
Section 17.22(a)) or of the Master Lease), and (ii) the maintenance, security
and/or monitoring of the Premises or neighboring properties, to the extent that
such contamination was caused or materially contributed to by Subtenant, or
pertaining to or involving any Hazardous Materials brought onto the Premises
during the term of this Sublease, by or for Subtenant, or any third party.

     (d) Sublandlord's Hazardous Materials Representation. Sublandlord
represents that, to the best of Sublandlord's knowledge, Exhibit I of the Master
Lease (attached hereto) and Exhibit M (attached hereto) are a complete
description of the Hazardous Materials on, around, or beneath the Property as of
the Effective Date. For the sake of convenience these exhibits shall be provided
in a separate binding from the Sublease and a list of all the materials shall be
included in Exhibit M hereto and Subtenant acknowledges that it has received
such documents. Subtenant acknowledges that in providing this representation,
Sublandlord has satisfied any obligations of disclosure pursuant to California
Health & Safety Code 25359.7.

     (e) Subtenant Indemnification. Subtenant shall indemnify, defend and hold
Sublandlord and Master Landlord, their agents, employees, Lenders (as defined
with respect to Sublandlord in Paragraph 29.1 of the Sublease and as used by
Master Landlord in the Master Lease), and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Materials brought onto the Premises during the term
(and any extension thereof) of this Sublease in violation of Environmental Laws
or Master Lease by or for Subtenant, or any third party, including but not
limited to other subtenants of the Project (other than Sublandlord while
Sublandlord is a tenant of the Project). Subtenant's obligations shall include,
but are not limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Subtenant, and the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Sublease. No termination,
cancellation or release agreement entered into by Sublandlord and Subtenant
shall release Subtenant from its obligations under this Sublease with respect to
Hazardous Materials, unless specifically so agreed by Sublandlord in writing at
the time of such agreement. Subtenant shall not be responsible or liable for,
nor have an obligation to indemnify, defend or hold harmless, pursuant to this
Subparagraph 5.2(e), Sublandlord and Master Landlord, their agents, employees,
Lenders, and ground lessor, if any, from any and all loss of rents and/or
damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees, not directly or indirectly caused by Subtenant.

<PAGE>

     5.3. Subtenant's Compliance with Applicable Requirements. Except as
otherwise expressly provided in this Sublease, Subtenant shall, at Subtenant's
sole expense, fully, diligently and in a timely manner, comply with all
applicable laws, covenants or restrictions of record, regulations, ordinances,
and building codes ("Applicable Requirements"), the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations
of Sublandlord's engineers and/or consultants which relate in any manner to the
Premises to the Agreed Use of the Premises, without regard to whether said
requirements are now in effect or become effective later. Subtenant shall,
within 10 days after receipt of Sublandlord's written request, provide
Sublandlord with copies of all permits and other documents, and other
information evidencing Subtenant's compliance with any Applicable Requirements
specified by Sublandlord, and shall immediately upon receipt, notify Sublandlord
in writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
the failure of Subtenant or the Premises to comply with any Applicable
Requirements.

     5.4. Inspection; Compliance. Subject to Subparagraph 32.2, Sublandlord and
any of Sublandlord's Lenders (as defined in Paragraph 29.1) and consultants
shall have the right to enter into Premises at any time, in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Subtenant with this
Sublease. The cost of any such inspections shall be paid by Sublandlord, unless
a violation of Applicable Requirements, or a contamination is found to exist or
be imminent, or the inspection is requested or ordered by a governmental
authority. In such case, Subtenant shall upon request reimburse Sublandlord for
the cost of such inspection, so long as such inspection is reasonably related to
the violation or contamination.

6.      Delivery of Possession.

     6.1. Condition.

         (a) Generally. Subject to Paragraph 40 and 6.2 below, the Premises
shall be in compliance with the terms of Section 5.02(a) of the Master Lease as
of the Sublease Commencement Date. Any alterations or repairs of the Premises,
during the period from the Sublease Commencement Date to any Commencement Date
for any portion of the Premises tendered by Sublandlord to Subtenant subsequent
to the Sublease Commencement Date, to maintain such compliance shall be paid for
and performed in accordance with Paragraphs 3.2 and 6.2 herein. Notwithstanding
anything to the contrary contained in this Sublease, upon Subtenant's request,
Sublandlord shall use commercially reasonable efforts to (1) enforce Master
Landlord's one year warranty as described in Section 5.04 of the Master Lease,
and (2) pursue any and all of the contractor's and manufacturer's guarantees and
warranties and causes of action ("Construction Warranties") (to the extent such
Construction Warranties are assigned to Sublandlord). Subject to Sublandlord
receiving timely notice of the need for such enforcement, Sublandlord shall
enforce the warranties described in Subparagraphs 6.1(a)(1) and 6.1(a)(2) above
for Subtenant's benefit to the extent such warranties are available with respect
to matters that affect the Premises and/or the Project and which give rise to an
obligation of Subtenant (either directly or as a result of costs passed through
from Sublandlord to Subtenant under the terms of this Sublease). In addition,
Sublandlord shall tender possession of the Premises, the configuration of which
is described below, to Subtenant broom clean and free of debris with all offices
wired with CAT 5E data lines and substantially in accordance with the terms of
the second sentence of Paragraph 5.03 of the Master Lease (except with respect
to B1F1, which shall be delivered in accordance with the Work Letter).
Sublandlord specifically disclaims any and all representations and warranties,
express or implied, oral or written, associated with the Premises, including but
not limited to those concerning habitability, safety, suitability or fitness for
Subtenant's intended purposes. Subtenant hereby accepts the Premises in the
condition existing when possession is tendered without such representations,
warranties or covenants by Sublandlord. Sublandlord has provided Subtenant and
Subtenant acknowledges receipt of Construction Drawings by Garcia Francica
identified as Delta 1-19-01 and Delta NSI 4-13-01) (including detailed
mechanical, electrical and plumbing information) for Building One.

<PAGE>

                             Premises Configuration

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Building No.     Floor No.    No. of Offices    No. of Conference Rooms      No. of IDC Rooms
-------------------------------------------------------------------------------------------------
<S>              <C>          <C>               <C>                          <C>
One              1             0                 0                           2
-------------------------------------------------------------------------------------------------
                 2            31                10                           2
-------------------------------------------------------------------------------------------------
                 3            33                13                           2
-------------------------------------------------------------------------------------------------
                 4            31                15                           2
-------------------------------------------------------------------------------------------------
Four             3            28                16                           2
-------------------------------------------------------------------------------------------------
                 4            28                15                           2
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</TABLE>

           (b)  Building One. The rights and obligations of the parties
regarding construction of the Subtenant Improvements (as defined in the Work
Letter Agreement attached hereto as Exhibit I) in and around Building One are
stated in the Work Letter Agreement and such Work Letter Agreement is
incorporated herein by this reference.

           (c)  Building Four Conduit. In addition, prior to delivery to
Subtenant of any Building Four portion of the Premises (or any substituted
premises as provided for hereunder), Sublandlord shall provide free of charge
two (2) each four-inch conduit to be used by Subtenant at its sole cost and
expense to connect Subtenant's computer facilities in Building One to those in
Building Four or such substituted premises.

     6.2.       Compliance. Sublandlord makes no representation or warranty
whatsoever with respect to compliance of the Premises with the Applicable
Requirements except as expressly provided herein. If Subtenant knows, or has
reasonable cause to believe, that any violation of an Applicable Requirement
exists, Subtenant shall immediately give written notice of such fact to
Sublandlord, and provide Sublandlord with a copy of any report, notice, claim or
other documentation which it has concerning such violation or possible violation
so that Sublandlord may enforce its rights to have such violations corrected and
paid by Master Landlord pursuant to Article V of the Master Lease. Subject to
allocation of costs as set forth below, performance of the work necessary to
bring the Premises into compliance shall be the responsibility of Subtenant if
Sublandlord so elects. Subtenant is responsible for determining whether or not
the Applicable Requirements, and especially the zoning, are appropriate for
Subtenant's intended use, and acknowledges that past uses of the Premises may no
longer be allowed. If the Applicable Requirements are hereafter changed so as to
require during the term of this Sublease the construction of an addition to or
an alteration of the Project, the remediation of any Hazardous Materials not
known as of the Sublease Commencement Date, or the reinforcement or other
physical modification of the Project ("Capital Expenditure"), then to the extent
that such work is not the responsibility of Master Landlord under the terms of
the Master Lease, Sublandlord and Subtenant shall allocate the cost of such work
as follows:

           (a)  Subject to Paragraph 6.2(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises by
Subtenant as compared with uses by tenants in general, Subtenant shall be fully
responsible for the cost thereof.

           (b)  If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Subtenant (such as, governmentally mandated
seismic modifications), then Sublandlord and Subtenant shall allocate the
obligation to pay for the portion of such costs reasonably attributable to the
Premises, amortized over the remaining term of the Master Lease (including
interest on the unamortized balance as is then reasonable in the judgment of
Sublandlord's

<PAGE>

accountants). Notwithstanding the foregoing, if such Capital Expenditure is
required during the last 2 years of this Sublease or if Sublandlord reasonably
determines that it is not economically feasible to pay its share thereof,
Sublandlord shall have the option to terminate this Sublease upon 90 days prior
written notice to Subtenant unless Subtenant notifies Sublandlord, in writing,
within 10 days after receipt of Sublandlord's termination notice that Subtenant
will pay for such Capital Expenditure. However, in such an event, Sublandlord
agrees that the Premises shall remain vacant during the remainder of the Term,
and this representation shall survive the termination of this Sublease.

          (c)    Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Subtenant as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event,
Subtenant shall be fully responsible for the cost thereof, and Subtenant shall
not have any right to terminate this Sublease.

     6.3.    Acknowledgements. Subtenant acknowledges that Subtenant has made
such investigation as it deems necessary with reference to the physical
condition of the Property and assumes all responsibility therefore as the same
relate to its occupancy of the Premises, and Sublandlord has not made any oral
or written representations or warranties with respect to said matters other than
as set forth in this Sublease.

7.     Utilities and Services.

     7.1.    Standard Subtenant Utilities and Services. Subject to applicable
government rules, regulations, and guidelines and the rules or actions of the
utility furnishing the service, Sublandlord shall provide the utilities and
services described in this Paragraph 7 on all days during the term of this
Sublease, unless otherwise stated in this Sublease. The cost of all utilities
and services described in this Paragraph 7 shall be reimbursed to Sublandlord as
Operating Expenses, except as otherwise provided.

     7.2.    Heating and Air-Conditioning; Lobby Access; Subtenant Access.
Subject to Paragraph 7.3 below, Sublandlord shall provide heating and air-
conditioning when necessary for normal comfort for normal office use in the
Premises, as reasonably determined by Sublandlord, on Mondays through Fridays
from 7 a.m. through 6 p.m. or such shorter periods as may be prescribed by any
applicable policies or regulations adopted by any utility or governmental
agency, except for the dates of observation of such locally or nationally
recognized holidays as designated by Sublandlord from time to time and currently
including New Year's Day, Martin Luther King Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, the Friday following Thanksgiving
Day, and Christmas Day ("Holidays"), such periods being defined herein as ("HVAC
Hours"). Once the Sublease term has commenced with respect to any portion of
Building One and Building Four, respectively, Sublandlord shall provide access
to the Building One and Building Four lobbies, respectively, for use by
Subtenant's invitees on Mondays through Fridays from 8 a.m. through 5 p.m.,
excluding Holidays ("Lobby Hours"). Sublandlord shall provide Subtenant access
to the Premises twenty-four (24) hours per day, seven (7) days per week.

     7.3.    Electricity and Gas. Subject to Subtenant's payment for electricity
and gas furnished to the Premises as described in Section 7.3.1, Sublandlord
shall provide gas and electricity for lighting and power in the Premises if:

          (a)    The connected electrical load for lighting does not exceed an
average of one (1) watt per square foot of the Premises during the HVAC Hours on
a monthly basis; and

          (b)    The connected electrical load (encompassing HVAC and office
"plug load" meaning the electrical receptacles/outlets where Subtenant may run
electrical office equipment and machinery) for all other power purposes does not
exceed an average of two (2) watts per square foot of the Premises during the
HVAC Hours on a monthly basis.

<PAGE>

Except as mutually agreed by the parties, electricity for Subtenant's lighting
and other power purposes shall be at approximately one-hundred and ten (110)
volts. No electrical receptacle/outlet in the Premises for the supply of power
shall require a current capacity exceeding 110 volts AC/twenty (20) amperes.
Sublandlord shall replace lamps, starters, and ballasts for Building-standard
lighting fixtures only within the Premises on Subtenant's request and at
Subtenant's expense. Subtenant shall replace lamps, starters, and ballasts for
non-Building-standard lighting fixtures within the Premises at Subtenant's
expense. Sublandlord expressly reserves the right to select the electricity and
telecommunications access providers for the Buildings and/or the Project.

          Notwithstanding anything contained in this Paragraph 7.3, Sublandlord
shall not be required to provide any electricity or gas to Building One of the
Premises. Pending appropriate Sublandlord, Master Landlord (if required) and
regulatory approvals as set forth in this Sublease, Building Four Floors Three
and Four may be separately metered for gas and electricity (for plug load and
lighting, not HVAC) prior to their respective Commencement Dates or as otherwise
agreed by Subtenant and Sublandlord. All costs associated with the installation
of such separate metering shall be borne by Subtenant.

               7.3.1  Notwithstanding anything to the contrary contained in this
Sublease, except as specifically provided below, Subtenant shall not be
allocated any costs for electricity and gas under Paragraphs 3.2(b) or 7.7
herein (with respect to extended HVAC Hours).

          With respect to Building One, Subtenant shall contract directly with
the provider for electricity and gas to Building One and shall be exclusively
responsible for the payment of all electricity and gas furnished to that
building.

          With respect to Building Four, Floors Three and Four or any portions
thereof (or substitute premises pursuant to the exercise of Sublandlord's rights
under Paragraph 40) (the "August 2003 Space"), Subtenant shall pay for
electricity and gas for the August 2003 Space based on the immediately preceding
month's electricity and gas bill for Building One, which amount shall be paid
concurrently with Sublease Expenses. Upon the applicable Commencement Date or
Early Commencement date, Subtenant shall provide a copy of the immediately
preceding month's electricity and gas bill to Sublandlord. The calculation of
Subtenant's electricity and gas costs for the August 2003 Space shall be
determined by dividing the immediately preceding month's electricity and gas
bill for Building One by the number of square feet of Rentable Area of the
Premises for that building (i.e., 175,082) and multiplying that "cost per square
foot" by the total number of square feet contained within the August 2003 Space.
After provision of the initial electricity and gas bill, a copy of each
preceding month's electricity and gas bill for Building One shall be included
with Subtenant's payment of Sublease Expenses.

     7.4.    Water; Trash Disposal. Sublandlord shall provide water from the
regular Building outlets for drinking, lavatory, and toilet purposes.
Sublandlord shall provide regular trash disposal.

     7.5.    Janitorial Services. Sublandlord shall provide janitorial services
in and about the Premises on Mondays through Fridays, except on Holidays. The
current schedule for janitorial service is attached hereto Exhibit L, which is
subject to change by Sublandlord. Sublandlord shall not be required to provide
janitorial services to above-standard improvements installed in the Premises.
Subtenant may procure additional janitorial services for the Premises solely
from Sublandlord's designated janitorial service provider at Subtenant's sole
and exclusive cost.

     7.6.    Elevator. Elevator service for the use of Subtenant, in common with
other occupants of the Buildings, 24 hours a day, 7 days a week, year-round
(except for non-operation for maintenance and safety purposes). Subtenant shall
not use the elevators to access areas of the Buildings occupied by other tenants
and Sublandlord reserves the right to take appropriate measures to restrict such
access. Subtenant shall release Sublandlord and shall indemnify, protect,
defend, and hold Sublandlord harmless from all liabilities, claims, costs,
expenses, and damages arising therefrom or in connection with Subtenant's use
and the use of its employees, contractors, suppliers, customers, and

<PAGE>

invitees, except to the extent that such liabilities, claims, costs, expenses,
and damages arise from the grossly negligent maintenance of such elevators by
Sublandlord or its agent.

     7.7.     Overstandard Subtenant Use. Subtenant shall not, without
Sublandlord's prior written consent, use heat-generating machines, machines
other than normal fractional horsepower office machines, or equipment or
lighting other than building standard lights in the Premises that may affect the
temperature otherwise maintained by the air-conditioning system or increase the
water normally furnished to the Premises by Sublandlord under this Paragraph.
Furthermore, Subtenant shall not use any machines or equipment where such use is
in violation of the Master Lease.

If such consent is given, Sublandlord shall have the right to install
supplementary air-conditioning units or other facilities in the Premises,
including supplementary or additional metering devices. On billing by
Sublandlord, Subtenant shall pay the cost for such supplementary facilities,
including the cost of (a) installation, operation, and maintenance; (b)
increased wear and tear on existing equipment; and (c) other similar charges.

If Subtenant uses water, electricity, heat, or air-conditioning in excess of
that required to be supplied by Sublandlord under this Paragraph (as a result,
for example, of extended hours of operation, heavier use of duplicating,
computer, telecommunications, or other equipment in excess of the normal use for
general office uses in the Project, or a density of workers in excess of the
normal density for general office uses in the Project) Subtenant shall pay to
Sublandlord, on billing, the cost of (a) the excess service; (b) installation,
operation, and maintenance of equipment installed to supply the excess service;
and (c) increased wear and tear on existing equipment caused by Subtenant's
excess consumption. Sublandlord may install devices to separately meter any
increased use or reasonably and equitably estimate the cost of such increased
use. On demand, Subtenant shall pay the increased cost directly to Sublandlord,
including the cost of the additional metering devices.

Subtenant's use of electricity shall never exceed the capacity of the feeders
serving the Building and Premises or the risers or wiring installation. If heat,
ventilation, or air-conditioning are used on the Premises during hours other
than those for which Sublandlord is obligated to supply such utilities under
this Paragraph, Sublandlord shall supply such utilities to Subtenant at an
hourly cost to Subtenant as Sublandlord shall from time to time establish.
Amounts payable by Subtenant to Sublandlord under this Paragraph 7.7 for use of
additional utilities shall be payable in their entirety by Subtenant upon
invoicing by Sublandlord and are excluded from Operating Expenses.

     7.8.     Interruption of Utilities. Subtenant agrees that Sublandlord shall
not be liable for damages, by abatement of Rent or otherwise, for failure to
furnish or delay in furnishing any service (including telephone and
telecommunication services) or for diminution in the quality or quantity of any
service when the failure, delay, or diminution is entirely or partially caused
by:

         (a) Breakage, repairs, replacements, or improvements;

         (b) Strike, lockout, or other labor trouble;

         (c) Inability to secure electricity, gas, water, or other fuel at the
             Building;

         (d) Accident or casualty;

         (e) Act or default of Subtenant or other parties; or

         (f) Any other cause beyond Sublandlord's reasonable control.

Such failure, delay, or diminution shall not be considered to constitute an
eviction or a disturbance of Subtenant's use and possession of the Premises or
relieve Subtenant from paying Rent or performing any of its obligations under
this

<PAGE>

Sublease.

       Sublandlord shall not be liable under any circumstances for a loss of or
injury to property, for personal injury or death, or for injury to or
interference with Subtenant's business, including loss of profits through, in
connection with, or incidental to a failure to furnish any of the utilities or
services under this Paragraph 7. Sublandlord may comply with mandatory or
voluntary controls or guidelines promulgated by any government entity relating
to the use or conservation of energy, water, gas, light, or electricity or the
reduction of automobile or other emissions without creating any liability of
Sublandlord to Subtenant under this Sublease as long as compliance with
voluntary controls or guidelines does not materially and unreasonably interfere
with Subtenant's use of the Premises.

       7.9.      Utility Providers. Except with respect to Building One,
Sublandlord may, in Sublandlord's sole and absolute discretion, at any time and
from time to time, contract, or require Subtenant to contract, for utility
services (including generation, transmission, or delivery of the utility
service) with utility service providers of Sublandlord's choosing. Subtenant
shall fully cooperate with Sublandlord and any utility service provider selected
by Sublandlord. Subtenant shall permit Sublandlord and the utility service
provider to have reasonable access to the Premises and the utility equipment
serving the Premises, including lines, feeders, risers, wiring, pipes, and
meters. Subtenant shall either pay or reimburse Sublandlord for its share of
costs associated with any change of utility service, including the cost of any
new utility equipment, within ten (10) days after Sublandlord's written demand
for payment or reimbursement. Under no circumstances shall Sublandlord be
responsible or liable for any loss, damage, or expense that Subtenant may incur
as a result of any change of utility service, including any change that makes
the utility supplied less suitable for Subtenant's needs, or for any failure,
interference, or defect in any utility service. No such change, failure,
interference, or defect shall constitute an actual or constructive eviction of
Subtenant, or entitle Subtenant to any abatement of Rent, or relieve Subtenant
from any of Subtenant's obligations under this Sublease. For purposes of
Building One, if Subtenant elects to contract for utility with a different
utility service provider, then Subtenant shall either pay directly or reimburse
Sublandlord for all costs associated with such change of utility service,
including the cost of any new utility equipment

       7.10.     Telecommunications. Neither Subtenant nor its contractors,
representatives, or service providers shall, without Sublandlord's prior written
consent (which consent shall not be unreasonably withheld), install, maintain,
operate, alter, repair, or replace any wire, cable, conduit, antenna, satellite
dish or other facility or equipment for use in connection with any telephone,
television, telecommunications, computer, Internet, or other communications or
electronic systems, services or equipment (which systems, services, and
equipment are referred to collectively as "Telecommunications Equipment") in,
on, or about the Building or the roof or exterior walls. Without limiting the
generality of the foregoing, Sublandlord shall have the right to limit the
number of carriers, vendors, or other operators providing Telecommunications
Equipment in or to the Building, as deemed reasonably necessary or appropriate
by Sublandlord for the orderly and efficient management and operation of the
Building. Any determination made by Sublandlord under this Paragraph shall be
made in accordance with Sublandlord's sole reasonable discretion, provided,
however, that with regard to any request by Subtenant to install
Telecommunications Equipment on the roof of a Building, Subtenant agrees that
Sublandlord may, without limitation, condition its consent on (i) Subtenant's
payment of rent for Subtenant's use of such roof space, in an amount determined
by Sublandlord in its sole discretion, and (ii) the installation by Subtenant,
at its sole cost and expense, of a structural platform and/or access walkway to
protect the roof from damage from the placement of and access to such
Telecommunications Equipment. Sublandlord may also require (i) that any such
work on or involving the roof (and including, without limitation, any roof
penetrations approved by Sublandlord) be performed, at Subtenant's cost, by a
contractor designated or approved by Sublandlord; (ii) Subtenant's obtaining and
paying for all costs associated with obtaining proper clearances for personnel
involved in erecting, operating, or maintaining such Telecommunications
Equipment from the Department of the Air Force or Onizuka Air Station; (iii)
Subtenant's obtaining Onizuka Air Station concurrence to erect any Radio
Frequency Emitters, antenna towers, or antenna arrays so as to avoid radio
frequency interference; (iv) Subtenant's compliance with any additional
requirement of the Department of the Air Force and/or Onizuka Air Station; and
(v) proper evidence of compliance with all requirements of the Master Lease. In
addition, if Sublandlord determines that the riser or telecommunications closet
space in the Building is inadequate to accommodate any Telecommunications
Equipment proposed by Subtenant along

<PAGE>

with the existing and/or future needs of other occupants and users of the
Building and/or the Project, Sublandlord may condition Sublandlord's approval of
Subtenant's Telecommunications Equipment on the construction of additional riser
or telecommunications closet space as designated by Sublandlord at Subtenant's
expense.

Any installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment by or for Subtenant shall be subject to all of the
requirements and provisions of this Sublease and the Master Lease, and shall not
interfere with the operation (including, without limitation, transmissions, or
reception) of any other Telecommunications Equipment located in the Building
and/or the Project. Subtenant acknowledges that there is limited space and
facilities in the Building to accommodate Telecommunications Equipment, and
agrees to reasonably cooperate with Sublandlord and with other providers and
users of Telecommunications Equipment to share the available space and
facilities and to coordinate the efficient collocation of Telecommunications
Equipment in the Building. Access to and use of space within conduit, utility
closets, risers, raceways, switching rooms, the roof, and other facilities in
the Building for the installation, maintenance, operation, alteration, repair,
or replacement of Telecommunications Equipment shall be subject to Sublandlord's
approval and to such rules and regulations as may be promulgated by Sublandlord
from time to time. Subtenant shall repair any damage caused by Subtenant's
installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment, and shall indemnify, protect, defend, and hold
Sublandlord harmless from all liabilities, claims, costs, expenses, and damages
arising therefrom or in connection therewith, including, without limitation: (i)
any claims by other tenants of the Building and/or the Project or other third
parties that Subtenant's installation, maintenance, operation, alteration,
repair, or replacement of Telecommunications Equipment has caused interference
or interruption with the operation of other Telecommunications Equipment; and
(ii) any voiding of or other effect that Subtenant's installation, maintenance,
operation, alteration, repair, or replacement of Telecommunications Equipment
may have on any warranty with respect to the roof or other portions of the
Building and/or the Project. Sublandlord shall not be liable for any damage to
or interference with Subtenant's business or any loss of income from it, or for
loss of or damage to Subtenant's Telecommunications Equipment caused by or
resulting from any damage to or interference with Subtenant's Telecommunications
Equipment, or the operation of it, including without limitation, damage, or
interference caused by or resulting from the installation, maintenance,
operation, alteration, repair, or replacement of other Telecommunications
Equipment in the Building and/or the Project, whether by or for Sublandlord,
other tenants of the Building and/or the Project, or other third parties, and
Subtenant waives all claims against Sublandlord for it, except that Sublandlord
shall indemnify, protect, defend, and hold Subtenant harmless from all
liabilities, claims, costs, expenses, and damages to the extent arising out of
or in connection with the gross negligence or willful acts of Sublandlord or its
agents, employees, or representatives. Sublandlord's approval of Subtenant's
installation of any Telecommunications Equipment shall not constitute a
representation that any such Telecommunications Equipment will function
effectively in or on the Building.

     7.11.   Utility Additions. Sublandlord reserves the right to install new or
additional utility facilities throughout the Project for the benefit of
Sublandlord or Subtenant, or any other tenant of the Project, including without
limitation such utilities as plumbing, electrical systems, security systems,
communication systems, and fire protection and detection systems.

     7.12.   Security.

          (a)   Common/Amenity Areas. Sublandlord shall provide security
services for the Common Areas and, if appropriate, the Amenity Areas, at such
levels of protection, in such a manner, and at such times as Sublandlord
determines to be appropriate in its sole discretion, the cost of which shall be
included in Operating Expenses. Such services may include: guard patrol,
stationing of a security officer in multi-tenant Building lobbies during Lobby
Hours, monitoring of the access control system, issuing and programming access
control cards, rotation and storage of closed circuit television tapes, and
coordination of responses to fire and medical emergencies.

          (b)   Premises. Sublandlord shall provide a base level of security
services as follows: (i) guard service provided by the security company selected
and hired by Sublandlord to manage Project security ("Security

<PAGE>

Company") and (ii) the security equipment serving the Premises, including the
control of access thereto, as part of the integrated Project security system
("Security System"), which system will be centrally-operated by the Security
Company and includes monitoring of the access control system, issuing and
programming access control cards, rotation and storage of closed circuit
television tapes. Such Security System shall allow for Subtenant to control
access to the Premises in its sole discretion, subject to Paragraph 32 and
Master Landlord's rights under the Master Lease. Sublandlord makes no
representation that the base level of security services specified are adequate
to protect Subtenant's property, business operations or persons in the Premises.

       Subtenant shall be required to comply with and shall cause Subtenant's
employees, agents, independent contractors, guests and invitees to comply with
all procedures and policies required by the Security Company or Sublandlord in
connection with Project security. Subtenant acknowledges that the security
protection provided to the Premises by the Security Company is by its nature a
shared service for the benefit of all Project tenants and that Premises security
may be adversely impacted as a result of simultaneous fire and medical
emergencies taking place in separate areas of the Project, and that Subtenant
shall have no claim for reduction of payments required under this Paragraph 7.12
or any other sort of claim in connection with any such circumstance.

          (c)    Additional Security Services. Subtenant shall have the right in
its sole discretion and at its sole expense to obtain additional security
services for its Premises so long as Subtenant uses Security Company for the
provision of such services.

          (d)    No Warranty; Indemnity and Release. Sublandlord makes no
warranty or representation of any kind whatsoever with regard to the Security
Company or the Security System or the services provided under this Paragraph
7.12, including without limitation their quality, adequacy, efficacy or
appropriateness. Subtenant hereby releases, indemnifies, protects, defends and
holds harmless the Sublandlord, Sublandlord's lenders, partners, members,
property management company (if other than Sublandlord), agents, directors,
officers, employees, representatives, contractors (specifically excluding
Security Company), successors and assigns and each of their respective partners,
members, directors, heirs, employees, representatives, agents, contractors,
heirs, successors and assigns, Master Landlord, any ground lessor, partners and
Lenders, from and against any and all liabilities, claims, liens, damages,
demands, penalties, costs, losses, judgments, charges and expenses (including
reasonable attorneys' and consultants' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision, of any kind arising from or in anyway related to,
directly or indirectly, involving, or in connection with the Security System as
provided to Subtenant under this Paragraph 7.12, or the security services as
provided to Subtenant by the Security Company under this Paragraph 7.12. If any
action or proceeding is brought against Sublandlord by reason of any of the
foregoing matters, Subtenant shall upon notice defend the same at Subtenant's
expense by counsel reasonably satisfactory to Sublandlord and Sublandlord shall
cooperate with Subtenant in such defense. Sublandlord need not have first paid
any such claim in order to be defended or indemnified. With respect to the
release provided in this Paragraph 7.12, Subtenant waives the benefits of Civil
Code section 1542, which provides:

       A general release does not extend to claims which the creditor does not
       know or suspect to exist in his favor at the time of executing the
       release, which if known by him must have materially affected his
       settlement with the debtor.

8.         Maintenance and Repairs; Utility Installations, Trade Fixtures and
           Alterations.

       8.1.     Sublandlord's Obligations. In accordance with the Master Lease,
Sublandlord shall keep the Project, including the Premises, Common Areas (except
to the extent Master Landlord is responsible for the Outside Areas under the
Master Lease), and equipment whether used exclusively for the Premises or in
common with other premises, in good condition and repair; provided, however,
Sublandlord shall not be obligated to paint, repair, or replace wall coverings,
or to repair or replace any improvements that are not ordinarily a part of the
Buildings or are above then Building standards. Except for costs made the sole
responsibility of Subtenant under other provisions of this Sublease,

<PAGE>

the costs pertaining to Sublandlord's obligations under this Paragraph 8.1 are
Operating Expenses. Except as otherwise specifically provided herein, there
shall be no abatement of rent or liability to Subtenant on account of any injury
or interference with Subtenant's business with respect to any improvements,
alterations or repairs made by Sublandlord to the Project or any part thereof.
Except as otherwise provided in Paragraph 13.4(b), Subtenant expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Subtenant the right to make repairs at Sublandlord's expense or to
terminate this Sublease because of Sublandlord's failure to keep the Premises in
good order, condition and repair.

     8.2.    Subtenant's Obligations. Notwithstanding the designation of the
costs of Sublandlord's obligation to keep the Premises in good condition and
repair as Operating Expenses, Subtenant shall be solely responsible for payment
of the cost therefore to Sublandlord as additional rent for that portion of the
cost of any maintenance and repair of the Premises, or any equipment (wherever
located) that serves only Subtenant or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Subtenant shall also be
solely responsible for the cost of painting, repairing or replacing wall
coverings, and to repair or replace any Premises improvements that that are not
ordinarily a part of the Building or are above then Building standards.
Sublandlord may, at its option, upon reasonable notice, elect to have Subtenant
perform any particular such maintenance or repairs the cost of which is
Subtenant's sole responsibility hereunder. Subtenant shall be responsible for
all ordinary expenses in connection with the use of the Furniture during the
term of this Sublease. Subtenant, at its sole cost and expense, shall keep the
Furniture in good condition and repair, ordinary wear and tear excepted. Rent
under this Sublease shall not be prorated or abated while any item of Furniture
is being serviced or repaired. Sublandlord shall not be under any liability or
obligation in any manner to provide service, maintenance, repairs or parts for
the Furniture. Sublandlord shall assign to Subtenant all manufacturer, dealer,
or supplier warranties applicable to the Furniture to enable Subtenant to obtain
any warranty service available for the Furniture. Sublandlord appoints Subtenant
as Sublandlord's attorney-in-fact for the purpose of enforcing any warranty. Any
enforcement by Subtenant shall be at the expense of Subtenant and shall in no
way render Sublandlord responsible to Subtenant for the performance of any of
the warranties. At the reasonable request of Sublandlord, Subtenant shall
furnish proof of Furniture maintenance to the reasonable satisfaction of
Sublandlord. Other than in conformity with the manufacturer's warranty and/or
functional improvements, Subtenant may alter or modify the Furniture only with
the prior written consent of Sublandlord. Any part installed in connection with
warranty or maintenance service or which cannot be removed without damaging the
Furniture shall become the property of Sublandlord.

     8.3.    Utility Installations; Trade Fixtures; Alterations.

         (a)   Definitions. The term "Utility Installations" refers to all floor
and window coverings, air lines, power panels, electrical distribution, security
and fire protection systems, communication systems, lighting fixtures, HVAC
equipment, plumbing, and fencing in or on the Premises. The term "Trade
Fixtures" shall mean Subtenant's machinery and equipment that can be removed
without doing material damage to the Premises. The term "Alterations" shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "Subtenant Owned Alterations and/or
Utility Installations" are defined as Alterations and/or Utility Installations
made by Subtenant that are not yet owned by Sublandlord pursuant to Paragraph
8.4(a).

         (b)   Consent. Subtenant shall not make any Alterations or Utility
Installations to the Premises without Sublandlord's prior written consent and
the prior written consent of Master Landlord if and as required under the Master
Lease. In addition, Subtenant shall provide written notice to Master Landlord
within five (5) business days after any request by Subtenant to make any
Alteration or Utility Installation to the Premises together with copies of all
notices, plans or other documents provided to Sublandlord in connection
therewith. Notwithstanding the foregoing to the contrary, Subtenant shall be
entitled to make any Alterations to the Premises that: (i) do not affect the
Building systems, exterior appearance, structural components or structural
integrity, and (ii) do not exceed fifty thousand dollars ($50,000) cumulatively
over any one (1) year period (commencing from the Effective Date), without the
prior written consent of Sublandlord and Master Landlord. Notwithstanding
anything to the contrary herein, Subtenant shall be entitled to request

<PAGE>

a final and binding decision regarding removal and restoration (as described in
Paragraph 8.4(c) below) of the Premises with respect to any Alteration by
Sublandlord at the time Sublandlord consents to such Alteration, which
determination shall be delivered within five (5) business days following such
request and delivery by Subtenant to Sublandlord of a copy of all plans and
specifications for the proposed Alteration. Sublandlord will forward similar
requests to Master Landlord at the request of Subtenant, but such determinations
as to Restoration by Master Landlord shall be in Master Landlord's sole
discretion. Sublandlord may, as a precondition to granting such approval,
require Subtenant to utilize a contractor and architect chosen and/or approved
by Sublandlord and to follow requirements set by the Department of the Air Force
and/or Onizuka Air Station. Any Alterations or Utility Installations that
Subtenant shall desire to make and which require the consent of the Sublandlord
shall be presented to Sublandlord in written form with detailed plans. Consent
shall be deemed conditioned upon Subtenant's: (i) acquiring all applicable
governmental permits, (ii) furnishing Sublandlord with copies of both the
permits and the plans and specifications prior to commencement of the work,
(iii) compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner, and (iv) acceptance of
responsibility for and payment of all costs and expenses associated with any
approved Alterations or Utility Installations. Any Alterations or Utility
Installations shall be performed in a workmanlike manner with good and
sufficient materials. Subtenant shall promptly upon completion furnish
Sublandlord with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Sublandlord may condition its consent
upon Subtenant providing a lien and completion bond and/or upon Subtenant's
posting an additional Security Deposit with Sublandlord for such Alteration or
Utility Installation.

          (c)   Indemnification. Subtenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for
Subtenant at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialman's lien against the Premises or any interest
therein. Subtenant shall give Sublandlord not less than 10 days notice prior to
the commencement of any work in, on or about the Premises, and Sublandlord shall
have the right to post notices of non-responsibility. If Subtenant shall contest
the validity of any such lien, claim or demand, then Subtenant shall, at its
sole expense defend and protect itself, Sublandlord and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof. If Sublandlord shall require, Subtenant
shall furnish a surety bond in an amount equal to 150% of the amount of such
contested lien, claim or demand, indemnifying Sublandlord against liability for
the same. If Sublandlord elects to participate in any such action, Subtenant
shall pay Sublandlord's attorneys' fees and costs.

     8.4.     Ownership; Removal; Surrender; and Restoration.

          (a)   Ownership. Subject to Sublandlord's right to require removal or
elect ownership as hereinafter provided, all Alterations and Utility
Installations made by Subtenant shall be the property of Subtenant, but
considered a part of the Premises. Sublandlord may, at any time, elect in
writing to be the owner of all or any specified part of the Subtenant Owned
Alterations and Utility Installations. Unless otherwise instructed per Paragraph
8.4(b) hereof, all Subtenant Owned Alterations and Utility Installations shall,
at the expiration or termination of this Sublease, become the property of
Sublandlord and be surrendered by Subtenant with the Premises.

          (b)   Removal. By delivery to Subtenant of written notice from
Sublandlord not earlier than 90 and not later than 30 days prior to the end of
the term of this Sublease, Sublandlord may require that any or all Subtenant
Owned Alterations or Utility Installations be removed by the expiration or
termination of this Sublease.

          (c)   Surrender; Restoration. Subject to Paragraph 14, Subtenant shall
surrender the Premises by the Expiration Date or any earlier termination date or
any later expiration date for any extension to the term hereof, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice to the extent such
obligation to maintain is the responsibility of Subtenant under Paragraph 8.2
herein. Subtenant shall repair any damage occasioned by the installation,
maintenance or removal of Trade Fixtures, Subtenant owned Alterations and/or
Utility Installations,

<PAGE>

furnishings, and equipment as well as the removal of any storage tank installed
by or for Subtenant. Subtenant shall also comply with the requirements of
Subparagraph 5.2(c) herein. Trade Fixtures shall remain the property of
Subtenant and shall be removed by Subtenant. The failure by Subtenant to timely
vacate the Premises pursuant to this Paragraph 8.4(c) without the express
written consent of Sublandlord shall constitute a holdover under the provisions
of Paragraph 25 below. Without limitation of the foregoing, subject to the
provisions of Paragraph 1.8 and the security interests contemplated therein,
upon the expiration or earlier termination of this Sublease, Subtenant shall at
once surrender and deliver up to Sublandlord the Furniture with the Premises. At
the time of such return to Sublandlord, the Furniture shall be in good condition
and repair, ordinary wear and tear excepted.

9.       Insurance; Waiver; Subrogration.

     9.1.  Cost of Sublandlord's Insurance. The cost of the premiums for the
insurance policies required to be carried by Sublandlord pursuant Article VII of
the Master Lease shall be an Operating Expense.

     9.2.  Subtenant's Insurance. Subtenant shall maintain in full force and
effect at all times during the term of this Sublease, at Subtenant's sole cost
and expense, for the protection of Subtenant and Sublandlord, as their interests
may appear, policies of insurance issued by a carrier or carriers reasonably
acceptable to Sublandlord and its lender which afford the following coverages:
(i) worker's compensation and employer's liability, as required by law; (ii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for host liquor liability, bodily injury and property
damage (including but not limited to personal property, whether leased or owned,
Trade Fixtures, Subtenant Owned Alterations and Utility Installations) occurring
in, on or about the Premises arising out of Subtenant's and Subtenant's
employees, directors, officers, agents, partners, members, lenders, suppliers,
shippers, contractors, customers, invitees, successors and assigns' use or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations and products liability. Such insurance shall have a combined single
limit of not less than One Million Dollars ($1,000,000) per occurrence with a
Two Million Dollar ($2,000,000) aggregate limit and excess/umbrella insurance in
the amount of Eight Million Dollars ($8,000,000). If Subtenant has other
locations which it owns or leases, the policy shall include an aggregate limit
per location endorsement; (iii) comprehensive automobile liability insurance
with a combined single limit of at least $1,000,000 per occurrence for claims
arising out of any company-owned automobiles or other automobile used in the
conduct of company business; (iv) "all risk" or "special form or equivalent"
property insurance, including without limitation, sprinkler leakage, covering
damage to or loss of any of Subtenant's Property located in, on or about the
Premises, and in addition, coverage for business interruption of Subtenant,
together with, if the property of any of Subtenant's invitees, vendors or
customers is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
such parties and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this clause (iv); and (v) such other insurance or
higher limits of liability as is then customarily required for similar types of
buildings within the general vicinity of the Project or as may be reasonably
required by any of Sublandlord's lenders. Notwithstanding the foregoing,
Subtenant shall not be required to obtain insurance coverage for sprinkler
leakage or business interruption to Subtenant's business but Subtenant shall
assume all the risk associated with such lack of coverage. Subtenant shall also
maintain, at its own expense, property damage insurance relating to the
Furniture, insuring against such risks as are customarily insured against on the
type of furniture leased hereunder by businesses in which Subtenant is engaged
in such amount, in such form, and with insurers satisfactory to Sublandlord;
provided, however, that the amount of insurance against damage or loss shall not
be less than the full replacement value of the Furniture. The furniture property
damage policy for the Furniture shall name Sublandlord and Subtenant as loss
payees as their interests may appear.

     9.3.  Insurance Policies. Insurance required to be maintained by Subtenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts

<PAGE>

under any of the insurance policies required hereunder shall not exceed Five
Thousand Dollars ($5,000). Prior to occupancy and as a condition precedent of
Delivery of Possession, Subtenant shall deliver to Sublandlord certificates of
insurance for all insurance required to be maintained by Subtenant hereunder at
the time of execution of this Sublease by Subtenant. Subtenant shall, prior to
expiration of each policy, furnish Sublandlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to reduction in coverage except
after thirty (30) days prior written notice to the parties named as additional
insureds as required in this Sublease (except for cancellation for nonpayment of
premium, in which event cancellation shall not take effect until at least ten
(10) days' notice has been given to Sublandlord). Subtenant shall have the right
to provide insurance coverage which it is obligated to carry pursuant to the
terms of this Sublease under a blanket insurance policy, provided such blanket
policy expressly affords coverage for the Premises and for Sublandlord as
required by this Sublease.

     9.4.  Failure of Subtenant to Purchase and Maintain Insurance. If Subtenant
fails to obtain and maintain the insurance required herein throughout the term
of this Sublease, Sublandlord may, but without obligation to do so, purchase the
necessary insurance and pay the premiums therefore. If Sublandlord so elects to
purchase such insurance, Subtenant shall promptly pay to Sublandlord as Rent,
the amount so paid by Sublandlord, upon Sublandlord's demand therefore. In
addition, Sublandlord may recover from Subtenant and Subtenant agrees to pay, as
Rent, any and all losses, damages, expenses and costs which Sublandlord may
sustain or incur by reason of Subtenant's failure to obtain and maintain such
insurance.

     9.5.  Additional Insureds and Coverage. Each of Sublandlord and Master
Landlord, and at Sublandlord's request from time to time, Sublandlord's property
management company or agent(s) and Sublandlord's lender(s) having a lien against
the Premises or any other portion of the Project shall be named as additional
insureds or loss payees (as applicable) under all of the policies required in
Paragraph 9.2(ii)-(v) and with respect to the Subtenant Alterations.
Additionally, all of such policies shall provide for severability of interest.
All insurance to be maintained by Subtenant shall, except for workers'
compensation and employer's liability insurance, be primary, without right of
contribution from insurance maintained by Sublandlord. Any umbrella/excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Subtenant shall not limit
Subtenant's liability under this Sublease. It is the parties' intention that the
insurance to be procured and maintained by Subtenant as required herein shall
provide coverage for any and all damage or injury arising from or related to
Subtenant's operations of its business and/or Subtenant's or Subtenant's
employees, directors, officers, agents, partners, members, lenders, suppliers,
shippers, contractors, customers, invitees, successors and assigns' use of the
Premises and any of the areas within the Project. Notwithstanding anything to
the contrary contained herein, to the extent Sublandlord's cost of maintaining
insurance with respect to any Buildings within the Project is increased as a
result of Subtenant's acts, omissions, Alterations, improvements, use or
occupancy of the Premises, Subtenant shall pay one hundred percent (100%) of,
and for, each such increase as Rent.

     9.6.  Waiver of Subrogation. Notwithstanding anything to the contrary in
this Sublease, Sublandlord and Subtenant hereby mutually waive their respective
rights of recovery against each other for any loss of, or damage to, either
parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect by this Sublease or the Master Lease
at the time of such loss or damage. Each party shall obtain any special
endorsements, if required by its insurer, whereby the insurer waives its rights
of subrogation against the other party. This provision is intended to waive
fully, and for the benefit of the parties hereto, any rights and/or claims which
might give rise to a right of subrogation in favor of any insurance carrier.

     9.7.  No Representation of Adequate Coverage. Sublandlord makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Subtenant's property, business operations or
obligations under this Sublease.

<PAGE>

     9.8.     Furniture Casualty Loss. Without limitation of the foregoing
provisions of this Article 9, until the Furniture is returned to and received by
Sublandlord as provided in this Sublease, Subtenant shall bear the entire risk
of theft or destruction of, or damage to, the Furniture including, without
limitation, any condemnation, seizure, or requisition of title or use
("Furniture Casualty Loss"). No Furniture Casualty Loss shall relieve Subtenant
from its obligations to pay Rent hereunder. So long as Subtenant is not then in
Breach hereunder, the proceeds of any insurance payable with respect to the
Furniture shall be applied towards repair or replacement of the Furniture. If a
Breach does exist hereunder, Sublandlord shall have the option to apply the
proceeds of any insurance payable with respect to the Furniture either towards
repair or replacement of the Furniture or towards Subtenant's obligations
hereunder. Subtenant hereby appoints Sublandlord as Subtenant's attorney-in-fact
to make claim for, receive payment of, and execute and endorse all documents,
checks or drafts issued with respect to any Furniture Casualty Loss under any
insurance policy covering the Furniture.

10.   Limitation of Liability and Indemnity.

        (a)   Except to the extent of damage resulting from the gross negligence
or willful misconduct of only Sublandlord or its Indemnitees (defined below) or,
Sublandlord's material default of the provisions of this Sublease beyond any
applicable cure period, Subtenant agrees to protect, defend (with counsel
reasonably acceptable to Sublandlord) and hold Sublandlord and Sublandlord's
lenders, partners, members, property management company, agents, directors,
officers, employees, representatives, contractors (except as provided in
Subparagraph 7.12(d) herein), successors and assigns and each of their
respective partners, members, directors, heirs, employees, representatives,
agents, contractors, heirs, successors and assigns (collectively, the
"Indemnitees") harmless and indemnify the Indemnitees from and against all
liabilities, damages, demands, penalties, costs, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) (collectively, "Claims") arising from or in any
way related to, directly or indirectly, (i) Subtenant's and Subtenant's
employees, agents, invitees, guests, representatives and contractors
(collectively, "Subtenant's Representatives") use of the Premises, Security
System, and other portions of the Project, (ii) the conduct of Subtenant's
business at the Premises (iii) any activity, work or thing done, permitted or
suffered by Subtenant in or about the Premises, (iv the Premises, Security
System, the Alterations or with the Subtenant's property (whether leased or
owned or held in bailment) therein, including, but not limited to, any liability
for injury to person or property of Subtenant, Subtenant's employees, directors,
officers, agents, partners, members, lenders, suppliers, shippers, contractors,
customers, invitees, successors and assigns' or third party persons, and/or (v)
Subtenant's failure to perform any covenant or obligation of Subtenant under
this Sublease. Subtenant agrees that the obligations of Subtenant herein shall
survive the expiration or earlier termination of this Sublease.

        (b)   Except to the extent of damage resulting from the gross negligence
or willful misconduct of only Sublandlord or its Indemnitees or, Sublandlord's
material default of the provisions of this Sublease beyond any applicable cure
periods, Subtenant agrees that neither Sublandlord nor any of the Indemnitees
shall at any time or to any extent whatsoever be liable, responsible or in any
way accountable for any loss, liability, injury, death or damage to persons or
property which at any time may be suffered or sustained by Subtenant or by any
person(s) whomsoever who may at any time be using, occupying or visiting the
Premises, Security System or any other portion of the Project, including, but
not limited to, any acts, errors or omissions of any other tenants or occupants
of the Project. Subtenant shall not, in any event or circumstance, be permitted
to offset or otherwise credit against any payments of Rent required herein for
matters for which Sublandlord may be liable hereunder. Sublandlord and its
authorized representatives shall not be liable for any interference with light
or air.

        (c)   Sublandlord agrees that, to the extent Subtenant suffers damages
or incurs liabilities arising out of Sublandlord's role as an occupant of the
Project, as opposed to Sublandlord's roles as Sublandlord hereunder or as tenant
under the Master Lease, the waiver of liability granted under the first sentence
of Section 10(b) above shall not apply. Further, Subtenant and Sublandlord agree
that neither party shall be liable for any indirect, consequential, incidental
or special damages suffered or incurred by the other party or such party's
lenders, partners, members, property

<PAGE>

management company, agents, directors, officers, employees, representatives,
contractors, successors and assigns, provided however, that nothing in this
sentence shall be construed to limit the remedies and damages that are otherwise
available to Sublandlord pursuant to Sections 13.2(a) or 13.2(b) of this
Sublease. The provisions of this Subparagraph 10(c) shall supercede any
conflicting provisions of this Sublease.

11.      Property Taxes

     11.1.  Payment of Taxes. Sublandlord shall pay the "real property taxes"
described in Article IX of the Master Lease, as well as any other taxes for
which Sublandlord is responsible pursuant to Master Lease Section 9.01, and any
such amounts shall be included in the calculation of Operating Expenses or
Master Lease Expenses under Paragraph 3.2.

     11.2.  Additional Improvements. Notwithstanding Paragraph 11.1 hereof,
Subtenant shall, however, pay to Sublandlord the entirety of any increase in
real property taxes if assessed solely by reason of Alterations, Trade Fixtures
or Utility Installations placed upon the Premises by Subtenant or at Subtenant's
request.

     11.3.  Personal Property Taxes. Subtenant shall pay prior to delinquency
all taxes assessed against and levied upon Subtenant Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all personal
property of Subtenant contained in the Premises. When possible, Subtenant shall
cause its Subtenant Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of the Project. If any of Subtenant's said
property shall be assessed with the real property of the Project, Subtenant
shall pay Sublandlord the taxes attributable to Subtenant's property within 10
days after receipt of a written statement setting forth the taxes applicable to
Subtenant's property.

12.      Assignment and Subletting. Except as expressly permitted in Paragraph
12.10 below, Subtenant shall not, either voluntarily or involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Sublease or in the Premises (including without
limitation the Furniture) or permit the Premises (including without limitation
the Furniture) to be used and occupied by anyone other than Subtenant or
Subtenant's employees without (i) obtaining the prior written consent of
Sublandlord, which consent shall not be unreasonably withheld, conditioned or
delayed, subject to the provisions of this Paragraph 12, and (ii) full
compliance with all applicable Master Lease restrictions. In the event of any
such attempted assignment, subletting, mortgage or other encumbrance without
such consent or without compliance with all applicable Master Lease
restrictions, Sublandlord may, at its option, void such attempted assignment,
subletting, mortgage or other encumbrance.

     12.1.  Generally. No assignment, subletting, mortgage or other encumbrance
of Subtenant's interest in this Sublease shall relieve Subtenant of its
obligation to pay the rent and to perform all of the other obligations to be
performed by Subtenant hereunder. In this connection, any such assignment,
sublease or encumbrance shall expressly provide that it is subject to the terms
and provisions of this Sublease. Moreover, any subletting by Subtenant of any
portion of the Premises shall be at a market rental rate and upon market terms
and, if Sublandlord so requests, shall require that the assignee or sublessee
remit directly to Sublandlord, on a monthly basis, all rent due to Subtenant by
said assignee or sublessee. For this purpose, "market" shall mean a rental rate
and terms comparable to the rental rate and terms then being offered by other
landlords leasing comparable space in comparable commercial office buildings
that are located within a three (3) mile radius of the Premises. The acceptance
of rent by Sublandlord from any other person shall not be deemed to be a waiver
by Sublandlord of any provision of this Sublease or to be a consent to any
subletting, assignment, mortgage or other encumbrance. Consent to one sublease,
assignment, mortgage or other encumbrance shall not be deemed to constitute
consent to any subsequent attempted subletting, assignment, mortgage or other
encumbrance. If Subtenant is a corporation which is not required under the
Securities Exchange Act of 1934 to file periodic informational reports with the
Securities and Exchange Commission, or is an unincorporated association or
partnership, the transfer, assignment or hypothecation of any stock or interest
in such corporation, association or partnership in the aggregate of fifty
percent (50%) shall be deemed an assignment within the meaning of this Paragraph
12.

<PAGE>

     12.2.      Notice. If Subtenant desires at any time to assign this Sublease
or to sublet the Premises or any portion thereof for the Term, it shall first
notify Sublandlord of its desire to do so at least thirty (30) days but not more
than ninety (90) days prior to the date Subtenant desires the assignment or
sublease to be effective. At that time, Subtenant shall submit in writing to
Sublandlord (i) the name of the proposed subtenant or assignee; (ii) the nature
of the proposed subtenant's or assignee's business to be carried on in the
Premises together with a detailed description of the proposed subtenant's or
assignee's business experience and duration of the current enterprise; (iii)
whether the number of square feet in the Rentable Area of the Premises per
person which are proposed by the subtenant or assignee to occupy the Premises
would be less than one hundred and seventy-five (175) square feet and in
compliance with fire and safety regulations; (iv) the terms and provisions of
the proposed sublease or assignments and the proposed effective date thereof;
and (v) such financial information as Sublandlord may request concerning the
proposed subtenant or assignee (which information shall be requested within
fifteen (15) days following receipt of Subtenant's notice). The submission
pursuant to clause (iv) shall include a copy of any agreement, escrow
instructions or other document which contains or memorializes the terms and
provisions of the transaction for which Sublandlord's consent is required.
Similarly, if Subtenant desires to mortgage or encumber its interest in this
Sublease, Subtenant shall first supply to Sublandlord in writing such
information as to such transaction as may be requested by Sublandlord.

        12.3.   Sublandlord's Election; Recapture. At any time within thirty
(30) days after Sublandlord's receipt of the last of the information specified
in Paragraph 12.2, above, Sublandlord may by written notice to Subtenant elect
(i) to disapprove of such assignment or sublease; or (ii) to approve Subtenant's
sublease or assignment of the portion of the Premises so proposed to be
subleased or assigned by Subtenant, as the case may be; or (iii) in the event of
a proposed subletting, collectively with all other subleases of Subtenant then
in effect, of more than sixty percent (60%) of the Premises, to terminate this
Sublease as to the portion (including all) of the Premises so proposed to be
subleased or assigned and recapture such space effective as of the date
specified as the proposed commencement date in Subtenant's notice with a
proportionate abatement in the Rent payable hereunder, provided, however, that
Sublandlord must provide Subtenant with written notice of its intent to
recapture hereunder within ten (10) days of written notice from Subtenant
indicating its desire to sublet, assign or transfer such portion of the
Premises, otherwise Sublandlord's right to recapture for such particular
transfer shall be deemed waived. Subtenant shall, at Subtenant's own cost and
expense, discharge in full any commissions which may be due and owing as the
result of any proposed assignment or subletting, whether or not the Premises are
recaptured pursuant hereto and rented by Sublandlord to the proposed subtenant
or assignee or any other tenant. If Sublandlord does not disapprove the proposed
subletting or assignment in writing and does not exercise any option set forth
in this Paragraph 12.3 within said thirty (30) day period, Subtenant may within
ninety (90) days after the expiration of said thirty (30) day period enter into
a valid assignment or sublease of the Premises or portion thereof, upon the
terms and conditions set forth in the information furnished by Subtenant to
Sublandlord pursuant to Paragraph 12.2 above. It is provided, however, that any
material change in such terms shall be subject to Sublandlord's consent and
rights of termination and recapture as provided in this Paragraph.

        12.4.   Sublandlord's Discretion; Factors. Sublandlord shall have the
right to approve or disapprove any proposed assignee or subtenant. In exercising
such right of approval or disapproval, Sublandlord shall be entitled to take
into account any fact or factor which Sublandlord reasonably deems relevant to
such decision, including but not limited to the following, all of which are
agreed by Subtenant to be reasonable factors for Sublandlord's consideration:

           (a)  The financial strength of the proposed assignee or subtenant,
including, but not limited to, the adequacy of its working capital to pay all
expenses anticipated in connection with any proposed remodeling of the Premises.
Sublandlord may also consider the business experience of the proposed subtenant
or assignee and the longevity of the current enterprise.

           (b)  The proposed use of the Premises by such proposed assignee or
subtenant and the compatibility of such proposed use within the quality and
nature of the other uses in the Building. The foregoing may include an analysis
by Sublandlord of the number and persons per square foot (as described above)
proposed by the

<PAGE>

subtenant or assignee to occupy the Premises, it being understood and agreed
that Sublandlord may disapprove a subtenant or assignee which represents an
unreasonable increase in population levels.

        (c)     Any violation which the proposed use by such proposed assignee
or subtenant would cause any other rights granted by Sublandlord to other
tenants of the building.

        (d)     Any adverse impact, including a greater intensity of use of the
parking, building mechanical, electrical or plumbing facilities or any other
services or facilities of the building, which may result from the occupancy of
the Premises by the proposed subtenant or assignee.

        (e)     Whether there exists any default by Subtenant pursuant to this
Sublease or any non-payment or non-performance by Subtenant under this Sublease
which, with the passage of time and/or the giving of notice, would constitute a
default under this Sublease.

        (f)     The business reputation, character, history and nature of the
business of the proposed assignee or subtenant objections to which shall be
provided by Sublandlord in writing.

        (g)     Whether the proposed assignee or subtenant is an existing tenant
of the building, it being understood and agreed that Sublandlord will disapprove
a subletting or assignment to such an existing tenant if Sublandlord can
reasonably provide such tenant's additional space requirements.

        (h)     Whether the proposed assignee or subtenant is a person with whom
Sublandlord is actively negotiating for space in the Project or with whom
Sublandlord has negotiated during the six (6) month period ending with the date
Sublandlord receives notice of such proposed assignment or subletting, it being
understood and agreed that Sublandlord may disapprove a subletting or assignment
to such potential direct tenant so long as Sublandlord was (at the time of
Sublandlord's negotiations) and remains able to accommodate the space needs of
such proposed assignee or subtenant.

        (i)     Whether the proposed assignee or subtenant is a governmental
entity or agency, it being understood and agreed that Sublandlord may disapprove
the proposed subletting or assignment as being inconsistent with the character
of the building, particularly if such proposed assignee or subtenant intends to
have its premises open to members of the public.

        (j)     Any possibility that such assignment or subletting could trigger
the Master Landlord's rights of recapture under Paragraph 11.06 of the Master
Lease, except assignment or subletting specifically excluded from recapture
pursuant to Master Landlord's consent or separate agreement between Master
Landlord and Subtenant.

        (k)     Whether the proposed sublease is for less than an entire floor
of a Building or includes a portion of the Premises that is less than an entire
floor of a Building, it being understood and agreed that Sublandlord's
disapproval of such a subletting shall be deemed to be reasonable if Subtenant
does not agree to pay all costs and expenses associated with demising and
restoring such space.

     Moreover, Sublandlord shall be entitled to be reasonably satisfied that
each and every covenant, condition or obligation imposed upon Subtenant by this
Sublease and each and every right, remedy or benefit afforded Sublandlord by
this Sublease is not impaired or diminished by such assignment or subletting.
Sublandlord and Subtenant acknowledge that the express standards and provisions
set forth in this Sublease dealing with assignment and subletting, including
those set forth in this Paragraph 12.4, have been freely negotiated and are
reasonable at the date hereof taking into account Subtenant's proposed use of
the Premises and the nature and quality of the building. No withholding of
consent by Sublandlord for any reason deemed sufficient by Sublandlord shall
give rise to any claim by Subtenant or any

<PAGE>

proposed assignee or subtenant or entitle Subtenant to terminate this Sublease,
to recover contract damages or to any abatement of rent. In this connection,
Subtenant hereby expressly waives its rights under California Civil Code Section
1995.310 with respect to the enumerated discretion factors. Moreover, approval
of any assignment of Subtenant's interest shall, whether or not expressly so
stated, be conditioned upon such assignee assuming in writing all obligations of
Subtenant hereunder.

     12.5. Bonus Rent. As a condition to Sublandlord's consent to an assignment
or subletting, Sublandlord shall be entitled to receive, in the case of a
subletting, one hundred percent (100%) of all rent (however denominated and
paid) payable by the subtenant to Subtenant less reasonable leasing commissions
in excess of that payable by Subtenant to Sublandlord pursuant to the other
provisions of this Sublease and, in the case of an assignment, one hundred
percent (100%) of all consideration given, directly or indirectly, by the
assignee to Subtenant, in connection with such assignment; provided, however,
that in making such calculation in the case of a subletting of less than the
entire Premises, rent payable by Subtenant to Sublandlord pursuant to the other
provisions of this Sublease shall be adjusted downward, pro-rata, to apply only
to the portion of the Premises being sublet. For the purposes of this Paragraph
12.5, the term "rent" shall mean all consideration paid or given, directly or
indirectly, for the use of the Premises or any portion thereof. The term
"consideration" shall mean and include money, services, property or any other
thing of value such as payment of costs, cancellation of indebtedness,
discounts, rebates, free or abated rent, bonuses, and similar inducements. The
terms "sublet" and "sublease" and their variants shall include a sublease as to
which Subtenant is sublessor and any sub-sublease or other sub-subtenancy,
irrespective of the number of tenancies and tenancy levels between the ultimate
occupant and Sublandlord, as to which Subtenant receives any consideration, as
defined in this Paragraph, and Subtenant shall require on any sublease which it
executes that Subtenant receive the entire profit from all sub-subtenancies,
irrespective of the number of levels thereof. Any rent or other consideration
which is to be passed through to Sublandlord by Subtenant pursuant to this
Paragraph shall be paid to Sublandlord promptly upon receipt by Subtenant and
shall be paid in cash, irrespective of the form in which received by Subtenant
from any subtenant or assignee. In the event that any rent or other
consideration received by Subtenant from a subtenant or assignee is in a form
other than cash, Subtenant shall pay to Sublandlord in cash the fair value of
such consideration.

     12.6. Options Personal. All Options (as defined in Paragraph 38 below) to
extend, renew or expand and all reserved, reduced cost or free parking rights,
in each case if any, contained in this Sublease are personal to Subtenant
(and/or Subtenant's Affiliates as defined in Paragraph 12.10 below). Consent by
Sublandlord to any assignment or subletting shall not include consent to the
assignment or transfer of any such rights or options with respect to the
Premises. All such options, rights, privileges and extra services shall
terminate upon such subletting or assignment unless Sublandlord specifically
grants the same in writing to such assignee or subtenant.

     12.7. Encumbrances. Sublandlord has advised Subtenant that Sublandlord's
normal policy is not to allow any encumbrance or hypothecation of the
subtenant's interest pursuant to subleases of space in the Building(s) in which
the Premises are located. Subtenant understands and acknowledges that, should
Subtenant propose to encumber or hypothecate its interest in this Sublease,
Sublandlord may refuse to consent thereto for any reason deemed sufficient by
Sublandlord, and may condition such consent upon such conditions as Sublandlord,
in its sole judgment, deems reasonable. In no event may Subtenant encumber or
hypothecate its interest in this Sublease until and unless Subtenant shall first
have received the written consent of Sublandlord. In the event that Sublandlord
consents to any proposed encumbrance or hypothecation by Subtenant, the person
or entity receiving a lien upon or security interest in Subtenant's interest in
this Sublease shall not be entitled to transfer such interest except in
compliance with the provisions of this Paragraph 12.

     12.8. Merger; Attornment. The voluntary or other surrender of this Sublease
by Subtenant or a mutual cancellation hereof shall not work a merger, and shall,
at the option of Sublandlord, terminate all or any existing subleases or
subtenancies or shall operate as an assignment to Sublandlord of such subleases
or subtenancies. Any sub-sublease of the Premises shall be subject and
subordinate to the provisions of this Sublease, shall not extend beyond the

<PAGE>

term of this Sublease, and shall provide that the sub-sublessee shall attorn to
Sublandlord, at Sublandlord's sole option, in the event of the termination of
this Sublease.

     12.9.     Sublandlord's Costs. Subtenant shall reimburse Sublandlord, on
demand, for all costs and expenses incurred by Sublandlord in connection with
any proposed assignment or subleasing by Subtenant, including reasonable
attorneys' fees. Subtenant shall also pay to Sublandlord, its administrative
fee, as established by Sublandlord from time to time, in connection with
Sublandlord's review and consideration of any such request for Sublandlord's
consent.

     12.10.    Affiliates. Notwithstanding anything to the contrary contained
in this Paragraph 12, but subject to all Master Lease restrictions and
requirements including Master Landlord's consent, Subtenant may assign this
Sublease, without receipt of Sublandlord's consent, to an "Affiliate" of
Subtenant. "Affiliate" shall be defined to be any entity which controls, is
controlled by, or is under common control with Subtenant or which acquires all
or substantially all of Subtenant's stock or assets or which results from the
merger or consolidation of Subtenant with another entity, so long as such
transaction was not entered into as a subterfuge to avoid the obligations and
restrictions of this Sublease and provided that the purported assignee is not a
"competitor" of Sublandlord. In connection with any assignment of the type
described in this Paragraph 12.10:

     (a)  The assignee shall, within ten (10) days after receipt of written
request from Sublandlord, execute and deliver to Sublandlord a written
assignment of the obligations of Subtenant pursuant to this Sublease accruing
from and after the effective date of the assignment and in form and substance
reasonably satisfactory to Sublandlord.

     (b)  No such assignment shall release Subtenant from any of the obligations
of the subtenant hereunder, whether accruing prior to or subsequent to the
effective date of such transaction.

     (c)  No such assignment shall be accompanied by a change in use from that
permitted pursuant to Paragraph 5 of this Sublease.

     (d)  Within ten (10) days after the effective date of such assignment,
Subtenant shall notify Sublandlord in writing of such occurrence, the effective
date thereof, the name of the assignee, any addition or change in the addresses
for notice pursuant to this Sublease and the facts which bring such transaction
within the scope of this Paragraph 12.10.

     (e)  Subtenant agrees to reimburse Sublandlord for Sublandlord's reasonable
costs and attorneys' fees incurred in connection with the review, processing and
documentation of any such transaction. For purposes of the foregoing definition
of Affiliate, an entity is a "competitor" of Sublandlord if the entity owns,
operates, maintains, or controls participates significantly (in the reasonable
opinion of Sublandlord) in the ownership, management, control, operation, or
profits of any business substantially similar to the business of Sublandlord.
For purposes of the foregoing definitions of "Affiliate" and "competitor",
"control" means the direct or indirect ownership of more than fifty percent
(50%) of the voting securities of an entity or possession of the right to vote
more than fifty percent (50%) of the voting interest in the ordinary direction
of the entity's affairs

13.     Default; Breach; Remedies.

     13.1.     Default; Breach. A "Default" is defined as a failure by the
Subtenant to comply with or perform any of the terms, covenants, conditions or
rules and regulations under this Sublease. A "Breach" is defined as the
occurrence of one or more of the following Defaults, and the failure of
Subtenant to cure such Default within any applicable grace period, unless
Sublandlord is legally prevented from issuing a notice of Default, in which
event no grace period shall apply:

<PAGE>

          (a)  The abandonment of the Premises or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 9 of this Sublease or
Article VII of the Master Lease is jeopardized as a result thereof, or without
providing reasonable assurances to minimize potential vandalism.

          (b)  The failure of Subtenant to make any payment of Rent (including
Abatement Reimbursement Rent) or any Security Deposit required to be made by
Subtenant hereunder, whether to Sublandlord or to a third party, when due, to
provide reasonable evidence of insurance or surety bond, or to fulfill any
obligation under this Sublease which endangers or threatens life or property,
where such failure continues for a period of five (5) business days following
written notice to Subtenant.

          (c)  The failure by Subtenant to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the rescission of an
unauthorized assignment or subletting, (iii) an Estoppel Certificate, (iv) a
requested subordination, (v) evidence concerning any guaranty (if any is
provided herein), (vii) any document requested under Paragraph 7.11 (utility
additions) and/or Paragraph 41 (easements), or (viii) any other documentation or
information which Sublandlord may reasonably require of Subtenant under the
terms of this Sublease, where any such failure continues for a period of 10 days
following written notice to Subtenant.

          (d)  A Default by Subtenant as to the terms, covenants, conditions or
provisions of this Sublease, or of the rules and regulations adopted under
Paragraph 1.5 hereof, other than those described in subparagraphs 13.1 (a), (b)
or (c), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Subtenant's Default is
such that more than 30 days are reasonably required for its cure, then it shall
not be deemed to be a Breach if Subtenant commences such cure within said 30 day
period and thereafter diligently prosecutes such cure to completion.

          (e)  The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "Debtor" as defined in 11 U.S.C. (S) 101 or any successor statute
thereto (unless, in the case of a petition filed against Subtenant, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Subtenant's assets located at the
Premises or of Subtenant's interest in this Sublease, where possession is not
restored to Subtenant within 30 days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Subtenant's assets located at the
Premises or of Subtenant's interest in this Sublease, where such seizure is not
discharged within 30 days; provided, however, in the event that any provision of
this subparagraph (e) is contrary to any applicable law, such provision shall be
of no force or effect, and not affect the validity of the remaining provisions.

          (f)  The discovery that any financial statement of Subtenant or of any
guarantor given to Sublandlord was materially false.

          (g)  If the performance of Subtenant's obligations under this Sublease
is guaranteed: (i) the death of a guarantor, (ii) the termination of a
guarantor's liability with respect to this Sublease other than in accordance
with the terms of such guaranty, (iii) a guarantor's becoming insolvent or the
subject of a bankruptcy filing, (iv) a guarantor's refusal to honor the
guaranty, or (v) a guarantor's breach of its guaranty obligation on an
anticipatory basis, and Subtenant's failure, within 60 days following written
notice of any such event, to provide written alternative assurance or security,
which, when coupled with the then existing resources of Subtenant, equals or
exceeds the combined financial resources of Subtenant and the guarantors that
existed at the time of execution of this Sublease.

          (h)  The failure to comply with Subtenant's obligations under the
written Consent to Sublease under which Master Landlord consents to this
Sublease, including the obligations under Paragraph 12 thereof, where any such
failure continues for ten (10) days following written notice by Master Landlord
to Subtenant specifying such failure.

<PAGE>

     13.2.   Remedies. If Subtenant fails to perform any of its affirmative
duties or obligations, within 10 days after written notice (or in case of an
emergency, without notice), Sublandlord may, at its option, perform such duty or
obligation on Subtenant's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses, permits
or approvals. The costs and expenses of any such performance by Sublandlord
shall be due and payable by Subtenant upon receipt of invoice therefore. If any
check given to Sublandlord by Subtenant shall not be honored by the bank upon
which it is drawn, Sublandlord, at its option, may require all future payments
to be made by Subtenant to be by cashier's check. In the event of a Breach,
Sublandlord may, with or without further notice or demand, and without limiting
Sublandlord in the exercise of any right or remedy which Sublandlord may have by
reason of such Breach:

          (a)  Terminate Subtenant's right to possession of the Premises by any
lawful means, in which case this Sublease shall terminate and Subtenant shall
immediately surrender possession to Sublandlord. In such event Sublandlord shall
be entitled to recover from Subtenant: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Subtenant proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Subtenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate
Sublandlord for all the detriment proximately caused by the Subtenant's failure
to perform its obligations under this Sublease or which in the ordinary course
of things would be likely to result therefrom, including but not limited to the
cost of recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Sublandlord in connection
with this Sublease applicable to the unexpired term of this Sublease. The worth
at the time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of the District within which the
Premises are located at the time of award plus one percent. Efforts by
Sublandlord to mitigate damages caused by Subtenant's Breach of this Sublease
shall not waive Sublandlord's right to recover damages under Paragraph 12. If
termination of this Sublease is obtained through the provisional remedy of
unlawful detainer, Sublandlord shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or
Sublandlord may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Subtenant under the unlawful detainer statute shall also constitute the
notice required by Paragraph 13.1. In such case, the applicable grace period
required by Paragraph 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Subtenant to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful detainer
and a Breach of this Sublease entitling Sublandlord to the remedies provided for
in this Sublease and/or by said statute.

          (b)  Continue the Sublease and Subtenant's right to possession and
recover the Rent as it becomes due, in which event Subtenant may sublet or
assign, subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Sublandlord's
interests, shall not constitute a termination of the Subtenant's right to
possession.

          (c)  Pursue any other remedy now or hereafter available under the laws
or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Sublease and/or the termination of Subtenant's
right to possession shall not relieve Subtenant from liability under any
indemnity provisions of this Sublease as to matters occurring or accruing during
the term hereof or by reason of Subtenant's occupancy of the Premises.

     With respect to the Furniture, Subtenant and Sublandlord agree that the
provisions of Section 10508 through 10522 of the California Commercial Code
shall not be used to interpret any of the rights and remedies of Subtenant under
this Sublease, it being the intent of the parties that Subtenant's rights and
remedies upon a breach or default by Sublandlord shall be based on the express
terms and conditions of this Sublease, as

<PAGE>

interpreted by applicable contract law without reference to the above-referenced
sections of the Commercial Code. To the extent permitted by applicable law,
Subtenant hereby waives any rights now or hereafter conferred by statute or
otherwise which may require Sublandlord to sell, lease, or otherwise use any
Furniture in mitigation of any damages resulting from an event of Default or
Breach by Subtenant as set forth in this Sublease. Any action by Subtenant
against Sublandlord for any breach or default by Sublandlord under this Sublease
shall be commenced within one year after any such cause of action accrues,
unless Subtenant is legally prevented from commencing an action, in which event
the one year period shall be extended by the period of time that Subtenant is
unable to commence an action.

     13.3.   Inducement Recapture. Any agreement for free or abated rent or
other charges (to the extent not repaid by Subtenant to Sublandlord), or for the
giving or paying by Sublandlord to or for Subtenant of any cash or other bonus,
inducement or consideration for Subtenant's entering into this Sublease, all of
which concessions are hereinafter referred to as "Inducement Provisions", shall
be deemed conditioned upon Subtenant's full and faithful performance of all of
the terms, covenants and conditions of this Sublease. Upon Breach of this
Sublease by Subtenant which results in the termination of this Sublease, any
such Inducement Provision shall automatically be deemed deleted from this
Sublease and of no further force or effect, and any rent, other charge, bonus,
inducement or consideration theretofore abated, given or paid by Sublandlord
under such an Inducement Provision less any Abatement Reimbursement Rent paid
pursuant to Paragraph 3.3 shall be immediately due and payable by Subtenant to
Sublandlord. The acceptance by Sublandlord of rent or the cure of the Breach
which initiated the operation of this paragraph shall not be deemed a waiver by
Sublandlord of the provisions of this paragraph with respect to any future
Breach unless specifically so stated in writing by Sublandlord at the time of
such acceptance.

     13.4.   Breach by Sublandlord.

          (a)  Notice of Breach. Sublandlord shall not be deemed in breach of
this Sublease unless Sublandlord fails within a reasonable time to perform an
obligation required to be performed by Sublandlord. For purposes of this
Paragraph, a reasonable time shall in no event be more than 30 days after
receipt by Sublandlord, and any Lender whose name and address shall have been
furnished Subtenant in writing for such purpose, of written notice specifying
wherein such obligation of Sublandlord has not been performed; provided,
however, that if the nature of Sublandlord's obligation is such that more than
30 days are reasonably required for its performance, then Sublandlord shall not
be in breach if performance is commenced within such 30 day period and
thereafter diligently pursued to completion. Notwithstanding the foregoing, in
the event of an emergency (as reasonably determined by Subtenant's director of
facilities) and where Sublandlord has not commenced repairs within a reasonable
time, then Subtenant shall have the right to call the service provider
designated by Sublandlord. Sublandlord shall provide a list of such designated
service providers to Subtenant in advance of the Sublease Commencement Date.
Subtenant shall provide to Master Landlord a copy of any notice of default given
to Sublandlord at the time it is served.

          (b)  Performance by Subtenant on Behalf of Sublandlord. In the event
that neither Sublandlord nor Lender cures said breach within 30 days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Subtenant may elect to cure said breach at
Subtenant's expense and offset from Rent an amount equal to the greater of one
month's Base Rent or the Security Deposit, and to pay an excess of such expense
under protest, reserving Subtenant's right to reimbursement from Sublandlord.
Subtenant shall document the cost of said cure and supply said documentation to
Sublandlord.

14.  Damage or Destruction; Condemnation. Notwithstanding anything in this
Sublease to the contrary, in the event of a fire or other casualty affecting the
Project or the Premises, or of a taking of all or a part of the Project or
Premises under the power of eminent domain, Sublandlord shall not be required to
obtain the consent of Subtenant in order to exercise any right which may have
the effect of terminating the Master Lease. In the event Sublandlord is
entitled, under the Master Lease, to a rent abatement as a result of a fire or
other casualty or as a result of a taking under

<PAGE>

the power of eminent domain, then Subtenant shall be entitled to Subtenant's
Abatement Share (defined below) of such rent abatement unless the effect on the
Premises of such fire or other casualty or such taking shall be substantially
disproportionate to the amount of the abatement, in which event the parties
shall equitably adjust the abatement as between themselves, based on the
relative impact of the fire or other casualty, or the taking, as the case may
be. "Subtenant's Abatement Share" is defined, for purposes of this Sublease, as
the percentage determined by dividing the portion of the square footage in the
Rentable Area of the Premises with respect to which possession has been tendered
to Subtenant by the total Rentable Area of the Buildings under the Master Lease
(as defined in the Commencement Date letters thereof). If the Master Lease
imposes on Sublandlord the obligation to repair or restore leasehold
improvements or alterations, Subtenant shall be responsible for repair or
restoration of leasehold improvements or alterations made by Subtenant.
Subtenant shall make any insurance proceeds resulting from the loss which
Sublandlord is obligated to repair or restore available to Sublandlord and shall
permit Sublandlord to enter the Premises to perform the same, subject to such
conditions as Subtenant may reasonably impose.

15.  Brokerage Fees. Each party warrants to the other that it has had no
dealings with any broker or agent in connection with this Sublease other than
Cushman and Wakefield ("CW") as broker for Sublandlord and CB Richard Ellis
("CB") as broker for Subtenant. Sublandlord shall pay CW a commission pursuant
to a separate written Exclusive Listing Agreement dated March 22, 2001, which
commission is to be shared with CB pursuant to an agreement between CW and CB, a
copy of such agreement is attached hereto as Exhibit N. No other commissions
shall be payable in connection with this transaction. Each party covenants to
hold harmless and indemnify the other party from and against any and all costs
(including reasonable attorneys' fees), expense or liability for any
compensation, commissions and charges claimed by any other broker or other agent
with respect to this Sublease or the negotiation thereof on behalf of such
indemnifying party.

16.  Estoppel Certificates.

          (a)   Each Party (as "Responding Party") shall within ten (10) days
after written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
substantially similar to the form of estoppel certificate attached hereto as
Exhibit H and incorporated herein by this reference ("Estoppel Certificate"),
plus such additional information, confirmation and/or statements as may be
reasonably requested by the Requesting Party.

          (b)   If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such ten (10) day period, the Requesting Party may
execute an Estoppel Certificate stating that: (i) the Sublease is in full force
and effect without modification except as may be represented in good faith,
using reasonable business judgment, by the Requesting Party, (ii) there are no
uncured defaults in the Requesting Party's performance, and (iii) if Sublandlord
is the Requesting Party, not more than one (1) month's rent has been paid in
advance. Prospective purchasers and encumbrances may rely upon the Requesting
Party's Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate.

          (c)   If Sublandlord acquires an ownership interest in the Premises
and desires to finance, refinance, or sell the Premises, or any part thereof, or
if Sublandlord desires to assign, pledge, or hypothecate Sublandlord's leasehold
interest pursuant to the Master Lease, then in the event that Subtenant is no
longer a publicly traded company, Subtenant shall deliver to any potential
lender, purchaser, recipient of such pledge or hypothecation, or assignee
designated by Sublandlord such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Subtenant's
financial statements for the past three (3) years. All such financial statements
shall be received by Sublandlord and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.

<PAGE>

          (d)  In addition to the foregoing, the provisions of subparagraphs
16(a), (b) and (c) shall be obligations owed to Master Landlord with each
reference to Sublandlord being deemed a reference to Master Landlord.

17.   Definition of Sublandlord. The term "Sublandlord" as used herein shall
mean the holder at the time in question of Lessee's (as defined in the Master
Lease) interest in the Master Lease. In the event of a transfer of Sublandlord's
title or interest in the Master Lease, Sublandlord shall deliver to the
transferee or assignee (in cash or by credit) any unused Security Deposit and
Construction Security Deposit (as defined in Paragraph 4(h) of the Work Letter)
held by Sublandlord. Upon such transfer or assignment and delivery of the
Security Deposit and the Construction Security Deposit (if applicable), as
aforesaid, the prior Sublandlord shall be relieved of all liability with respect
to the obligations and/or covenants under this Sublease thereafter to be
performed by the Sublandlord. Subject to the foregoing, the obligations and/or
covenants in this Sublease to be performed by the Sublandlord shall be binding
only upon the Sublandlord as hereinabove defined. Notwithstanding the above, and
subject to the provisions of Paragraph 20 below, the original Sublandlord under
this Sublease, and all subsequent holders of the Sublandlord's interest in this
Sublease shall remain liable and responsible with regard to the potential duties
and liabilities of Sublandlord pertaining to Hazardous Materials as outlined in
Paragraph 5.2 above.

18.   Severability. The invalidity of any provision of this Sublease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

19.   Days. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Sublease shall mean and refer to calendar days.

20.   Limitation on Liability. Subject to the provisions of Paragraph 17 above
and only if Sublandlord acquires an ownership interest in the Premises, the
obligations of Sublandlord under this Sublease shall not constitute personal
obligations of Sublandlord, or its employees, directors, officers, shareholders,
or its successors and assigns or their respective heirs, and Subtenant shall
look to Sublandlord's interest in the Premises, and to no other assets of
Sublandlord, for the satisfaction of any liability of Sublandlord with respect
to this Sublease, and shall not seek recourse against the individual employees,
directors, officers, shareholders, successors and assigns of Sublandlord, or any
of their personal assets or those of their heirs for such satisfaction. In the
event that Sublandlord has only a leasehold interest in the Premises, the
obligations of Sublandlord under this Sublease shall not constitute personal
obligations of Sublandlord's employees, directors, officers, shareholders, or
Sublandlord's successors and assigns or their respective heirs, and Subtenant
shall look to Sublandlord for the satisfaction of any liability of Sublandlord
with respect to this Sublease, and shall not seek recourse against the
individual employees, directors, officers, shareholders, successors and assigns
of Sublandlord, or any of their personal assets or those of their heirs for such
satisfaction.

21.   Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Sublease.

22.   No Prior or Other Agreements. This Sublease is a complete integration and
contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall
be effective.

23.   Notices.

     23.1.   Notice Requirements. Except as otherwise provided herein, all
notices required or permitted by this Sublease or applicable law shall be in
writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail or
other nationally-recognized overnight courier, with postage prepaid and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted in the Basic Sublease Information above shall be that
Party's address for delivery or mailing of

<PAGE>

notices. Either Party may by written notice to the other specify a different
address for notice. A copy of all notices to Sublandlord shall be concurrently
transmitted to such party or parties at such addresses as Sublandlord may from
time to time hereafter designate in writing.

     23.2.  Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Postal Service or courier. If notice is received
after 5:00 p.m. Pacific Time on a business day or on a Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.

     23.3   Notices from Master Landlord.

     Each party shall provide to the other party a copy of any notice or demand
received from or delivered to Master Landlord as soon as practicable thereafter,
but preferably within seventy-two (72) hours of receiving, and concurrently upon
delivering, such notice or demand. Notwithstanding the foregoing, Sublandlord
shall only be required to provide copies of any notices or demand affecting the
Premises or those affecting the interests of all subtenants in the Project.

24.  Waivers. No term, covenant or condition hereof shall be deemed waived,
except by written consent of the party against whom the waiver is claimed, and
any waiver of a breach of any term, covenant or condition hereof shall not be
deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent breach of the same or of any other term, covenant or condition
hereof. Sublandlord's consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Sublandlord's consent to, or approval of,
any subsequent or similar act by Subtenant, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Sublease requiring such
consent. The acceptance of Rent by Sublandlord shall not be a waiver of any
Default or Breach by Subtenant. Any payment by Subtenant may be accepted by
Sublandlord on account of moneys or damages due Sublandlord, notwithstanding any
qualifying statements or conditions made by Subtenant in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Sublandlord at or before
the time of deposit of such payment.

25.  No Right To Holdover. Subtenant has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this
Sublease. In the event that Subtenant holds over, then the Base Rent shall be
increased to one hundred and fifty percent (150%) of the Base Rent applicable
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Sublandlord to any holding over by Subtenant.

26.  Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

27.  Covenants and Conditions; Construction of Agreement. All provisions of this
Sublease to be observed or performed by Subtenant are both covenants and
conditions. In construing this Sublease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this
Sublease. Whenever required by the context, the singular shall include the
plural and vice versa. This Sublease shall not be construed as if prepared by
one of the Parties, but rather according to its fair meaning as a whole, as if
both Parties had prepared it.

28.  Binding Effect; Choice of Law. This Sublease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State of California. Any litigation between the Parties
hereto concerning this Sublease shall be initiated in the county in which the
Premises are located.

29.  Subordination; Attornment; Non-Disturbance.

<PAGE>

     29.1.   Subordination. This Sublease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed upon the Project or any portion thereof, to any and all
advances made on the security thereof, and to all renewals, modifications, and
extensions thereof. Subtenant agrees that the holders of any such Security
Devices (in this Sublease together referred to as "Lender") shall have no
liability or obligation to perform any of the obligations of Sublandlord under
this Sublease. Any Lender may elect to have this Sublease and/or any Option
granted hereby superior to the lien of its Security Device by giving written
notice thereof to Subtenant, whereupon this Sublease and such Options shall be
deemed prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.

     29.2.   Attornment. In the event that Sublandlord transfers its leasehold
interest in the Premises, or such interest is acquired by another upon the
foreclosure or termination of a Security Device to which this Sublease is
subordinated (i) Subtenant shall attorn to such transferee, and upon request,
enter into a new lease, containing all of the terms and provisions of this
Sublease, with such new owner for the remainder of the term hereof, or, at the
election of such transferee, this Sublease shall automatically become a new
sublease between Subtenant and such transferee, upon all of the terms and
conditions hereof, for the remainder of the term hereof, and (ii) Sublandlord
shall thereafter be relieved of any further obligations hereunder and such
transferee shall assume all of Sublandlord's obligations hereunder, except that
such transferee shall not: (a) be liable for any act or omission of any prior
Sublandlord or with respect to events occurring prior to transfer; (b) be
subject to any offsets or defenses which Subtenant might have against any prior
Sublandlord, (c) be bound by prepayment of more than one month's rent, or (d) be
liable for the return of any security deposit paid to any prior Sublandlord.

     29.3.   Self-Executing. The agreements contained in this Paragraph 29 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Sublandlord, Master Landlord, or a Lender in
connection with a sale, financing or refinancing of the Premises or the Project
(as the case may be), Subtenant,Sublandlord, and/or Master Landlord shall
execute such further writings as may be reasonably required to separately
document any subordination, attornment and/or Non-Disturbance Agreement provided
for herein.

     29.4    Nondisturbance Agreement.

          (a)  Upon the execution of this Sublease, Sublandlord shall use
diligent efforts to obtain an agreement ("SNDA") reasonably satisfactory to
Subtenant in recordable form, whereby any existing lenders shall agree that
notwithstanding any foreclosure under a Security Device and subsequent or
previous termination of the Master Lease, Subtenant, upon paying the rents and
fulfilling the other obligations required of Subtenant under this Sublease,
shall not be disturbed in its occupation of the Sublease Premises, and such
Lenders shall continue to recognize Subtenant's tenancy pursuant to the terms
and conditions of this Sublease, subject to and in accordance with the
provisions of the Recognition Agreement referenced in Section 30.1 below, and
subject to customary terms and conditions contained in such subordination,
non-disturbance and attornment agreements. Notwithstanding the fact that this
Sublease shall become binding upon Sublandlord and Subtenant when fully executed
by them, the parties acknowledge and agree that this Sublease is expressly
conditioned upon obtaining an SNDA as described above. If such SNDA is not so
obtained within forty-five (45) days following the Effective Date of this
Sublease, then either party may terminate this Sublease upon written notice to
the other party, and in such event, Sublandlord shall promptly return to
Subtenant any prepaid Rent and Security Deposit (less any amounts to which
Sublandlord is entitled under this Sublease) paid or delivered by Subtenant to
Sublandlord pursuant to this Sublease, and neither party shall have any
liability to the other party thereafter accruing.

          (b)  Upon any subsequent financing or refinancing of the Project (so
that a new Security Device is hereafter placed upon or against all or any
portion of the Project), Sublandlord shall use diligent efforts to obtain an
SNDA with respect to such new Security Device, substantially in accordance with
the provisions of Section 29.4(a). The subordination provisions of Section 29.1
shall not be binding or enforceable with respect to such new Security Device
unless and until such SNDA is obtained for the protection of Sublandlord and
Subtenant.

<PAGE>

30.    Master Lease Provisions

     30.1.   Sublease Subordinate. This Sublease and all the rights of parties
hereunder are subject and subordinate to the Master Lease. In the event the
Master Lease is terminated for any reason, then, on the date of such
termination, this Sublease automatically shall terminate and be of no further
force or effect, and the parties hereto shall be relieved of any liability
thereafter accruing, except for liabilities of that parties that by the terms of
this Sublease shall survive expiration or earlier termination. Notwithstanding
the foregoing, in the event of the rejection by Master Landlord of the Master
Lease which is approved, consented to or authorized by a bankruptcy court in a
bankruptcy proceeding, then so long as Sublandlord has not elected (under
Section 365(h)(1)(A) of the Bankruptcy Code or successor statute) to treat such
rejection as a termination of the Master Lease and remains in possession of the
Premises, Sublandlord agrees to recognize the estate of Subtenant under this
Sublease and this Sublease shall continue, except to the extent restricted by
court order or other legal restraint. Each party agrees that it will not, by its
act or omission to act, cause a default under the Master Lease which would lead
to the termination of the Master Lease by Master Landlord. In furtherance of the
foregoing, the parties hereby confirm, each to the other, that as time is of the
essence it is not practical in this Sublease agreement to enumerate all of the
rights and obligations of the various parties under the Master Lease and
specifically to allocate those rights and obligations in this Sublease
agreement. Accordingly, in order to afford to Subtenant the benefits of this
Sublease and of those provisions of the Master Lease which by their nature are
intended to benefit the party in possession of the Premises, and in order to
protect Sublandlord against a default by Subtenant which might cause a default
or event of default by Sublandlord under the Master Lease:

          (a)  Except as otherwise expressly provided herein, Sublandlord shall
perform its covenants and obligations under the Master Lease which do not
require for their performance possession of the Premises and which are not
otherwise to be performed hereunder by Subtenant on behalf of Sublandlord. For
example, Sublandlord shall at all times keep in full force and effect all
insurance required of Sublandlord as tenant under the Master Lease.

          (b)  Except as otherwise expressly provided herein, from and after the
Sublease Commencement Date (or Commencement Date or Early Commencement or
Fixturing Period access date as the case may be), Subtenant shall perform all
affirmative covenants and shall refrain from performing any act which is
prohibited by the negative covenants of the Master Lease, where the obligation
to perform or refrain from performing is by its nature imposed upon the party in
possession of the Premises. If practicable, and where given appropriate advance
notice by Sublandlord, Subtenant shall perform affirmative covenants which are
also covenants of Sublandlord under the Master Lease at least five (5) days
prior to the date when Sublandlord's performance is required under the Master
Lease. If Subtenant fails to comply with any of the obligations of the preceding
sentence, and does not cure within the applicable cure period, then Sublandlord
shall have the right to enter the Premises to cure any default by Subtenant
under this Paragraph.

          In particular, and without limiting the foregoing, Subtenant shall
fulfill, at Subtenant's sole cost and expense (including reimbursement of costs
included as Operating Expenses), all obligations imposed on occupants of the
Project in connection with the Moffett Park Transportation Demand Management
Plan described in Section 5.07 of the Master Lease and made part of the Master
Lease as Exhibit M, including any amendments or revisions thereto (the "Plan").
Subtenant acknowledges that the Plan applies to the occupants of the Project as
a group rather than individually and Subtenant agrees to reasonably cooperate
and coordinate efforts with Sublandlord and other Project occupants in order to
effectively and efficiently carry out the Plan. Sublandlord agrees to coordinate
Plan compliance efforts on behalf of the Project, either itself or through its
designee, and Subtenant shall cooperate with same. For purposes of this
Paragraph 30.1, Sublandlord or its designee shall have the have the right, in
its sole reasonable discretion, to determine what constitutes "obligations
imposed on occupants of the Project in connection with the Plan" as that phrase
applies to Subtenant; provided, that, greater Plan requirements may not be
imposed on Subtenant than on other Project occupants (including Sublandlord)
under like circumstances, and provided that Subtenant shall be reasonably
notified of obligations not included in the Master Lease or this Sublease.

<PAGE>

          (c)  Sublandlord hereby grants to Subtenant the right to receive all
of the services with respect to the Premises which are to be provided by Master
Landlord under the Master Lease. Sublandlord shall have no responsibility for or
be liable to Subtenant for any default, failure or delay on the part of Master
Landlord in the performance or observance by Master Landlord of any of its
obligations under the Master Lease, nor shall such default by Master Landlord
affect this Sublease or waive or defer the performance of any of Subtenant's
obligations hereunder except to the extent that such default by Master Landlord
excuses performance by Sublandlord, under the Master Lease. In the event of
Master Landlord's failure to perform its obligations under the Master Lease that
inure to the benefit of Subtenant hereunder, Sublandlord shall, after written
request from Subtenant, take such steps as Sublandlord determines to be
commercially reasonable to secure Master Landlord's performance of such
obligations, provided (i) Subtenant pays, on demand, all costs and expenses of
Sublandlord associated therewith, (ii) Subtenant provides security reasonably
satisfactory to Sublandlord to pay such costs and expenses and (iii) Subtenant
is not in default under this Sublease.

     Subtenant acknowledges that it has been provided with a copy of the Master
Lease and that it has reviewed and analyzed all of its provisions, including the
Exhibits thereto, and that Subtenant is familiar with all of said provisions.
Notwithstanding anything in this Sublease to the contrary, (i) obligations of
either party under this Sublease shall not include acts for which Master
Landlord is responsible under the Master Lease and (ii) Subtenant's rights under
this Sublease shall not include any rights (vis a vis the Master Landlord) not
granted to Sublandlord as "Lessee" under the Master Lease nor any rights that
are in violation of the provisions of the Master Lease, except as specifically
granted by Master Landlord. Subtenant agrees to promptly notify Sublandlord of
any default of Master Landlord under the Master Lease of which Subtenant becomes
aware.

     If the termination of the Master Lease (and the resulting termination of
this Sublease) occurs, Sublandlord shall have no liability therefor to Subtenant
unless such termination results from Sublandlord's breach of the Master Lease or
this Sublease. Sublandlord agrees to request from Master Landlord, at the time
Sublandlord requests Master Landlord's consent to this Sublease (see Paragraph
30.5), Master Landlord's agreement ("Recognition Agreement"), on commercially
reasonable terms and conditions, not to disturb Subtenant's occupancy of the
Premises in the event of Sublandlord's default and a resulting termination of
the Master Lease.

     Notwithstanding anything to the contrary in this Sublease, Sublandlord
shall not be required to fulfill any obligation if unable to perform through no
fault of Sublandlord. Subtenant agrees that it will not take or permit any
action or fail to perform or observe any obligation, which causes an event of
default under the Master Lease and/or causes the Master Lease to be terminated
or forfeited, and Subtenant shall indemnify, defend, protect and hold harmless
Sublandlord from and against any and all claims, demands, suits, costs,
expenses, damages and liabilities, including reasonable attorneys' fees, arising
by reason of any act or omission on the part of the indemnifying party which is
in breach of this Paragraph.

     30.2.   Cooperation With Subtenant. Sublandlord agrees to use commercially
reasonable efforts to cooperate with Subtenant in (1) obtaining for Subtenant
Master Landlord's consent to any action for which the Master Lease requires
Master Landlord's consent, and (2) delivering any notice to Master Landlord as
required by any provision of the Master Lease, including, without limitation,
forwarding (as soon as practicable after Sublandlord's receipt) any request made
by Subtenant to Master Landlord for consent or approval, and providing Master
Landlord with all information required (or that Master Landlord may reasonably
request) regarding any such request. The fact that Master Landlord has consented
to an action of Subtenant shall not in any way limit or restrict any right of
Sublandlord to withhold Sublandlord's consent to such action. Sublandlord shall
have no liability to Subtenant by reason of Master Landlord's refusal to consent
to any action of Subtenant.

     30.3.   Sublandlord Representations. Sublandlord hereby represents and
warrants that, at the time of Sublandlord's execution of this Sublease, (i) the
document attached as Exhibit A to this Sublease is a complete copy of the Master
Lease and that the Master Lease and the Additional Agreements represent the
entire agreement between Sublandlord and Master Landlord with respect to the
lease of the Premises, (ii) the Master Lease is in full force and

<PAGE>

effect, and (ii) except as provided in the Additional Agreements, Sublandlord
has not assigned, encumbered or otherwise transferred any interest in the
Premises. The "Additional Agreements" shall mean the following agreements, all
of which Subtenant acknowledges having received copies of and reviewed:
Subordination, Acknowledgment of Lease Assignment, Nondisturbance and Attornment
Agreement and Estoppel Certificate (Lease to Deed of Trust) between KeyBank
National Association and Ariba, Inc., dated June 28, 2000; Letter from Jay Paul
Company regarding Tenant Improvements dated September 11, 2000; Subordination,
Acknowledgment of Lease Assignment, Nondisturbance and Attornment Agreement and
Estoppel Certificate among Ariba, Inc., Bank of America and Moffett Park Drive
LLC dated October 25, 2000; First Amendment to Lease between Moffett Park Drive
LLC, as Lessor, and Ariba, Inc., as Lessee, dated January 12, 2001; Tri-Party
Agreement among Moffett Park Drive LLC, Ariba, Inc. and KeyBank National
Association, dated February 14, 2001; and five (5) executed Memoranda of
Commencement of Lease Term dated March __, 2001, March __, 2001, March 30, 2001,
April 24, 2001, and April 24, 2001, respectively (Master Lease Exhibits E-1,
E-2, E-3, E-4 and E-5).

     30.4.   Modification. Subject to Paragraph 30.7, Sublandlord shall neither
amend nor modify the Master Lease in such a way that will materially adversely
affect Subtenant's interest in this Sublease or increase Subtenant's
obligations, costs, or expenses, without the prior written consent of Subtenant,
which consent shall not be unreasonably withheld, conditioned or deferred.

     30.5.   Consent To This Sublease. Subtenant acknowledges that, under the
terms of the Master Lease, this Sublease requires the prior written consent of
the Master Landlord, and that this Sublease shall not be effective until such
written consent is given. In accordance with this Master Lease requirement,
Subtenant shall have no right to use or occupy the Premises prior to such time
as Master Landlord provides its consent to this Sublease. Sublandlord agrees to
use reasonable efforts to obtain Master Landlord's consent and Subtenant agrees
to provide any information regarding Subtenant which Master Landlord may
reasonably request. This Sublease shall become binding upon Sublandlord and
Subtenant only when fully executed by Sublandlord and Subtenant. Sublandlord and
Subtenant acknowledge and agree that this Sublease is expressly conditioned upon
obtaining the Master Landlord's consent following such full execution in the
form substantially identical to Exhibit G attached hereto, or other form
mutually agreeable to the parties in their sole discretion. If Master Landlord
has not provided the Sublease Consent within forty-five (45) days after the
Effective Date of the Sublease, then both Sublandlord and Subtenant shall have
the right, by written notice to the other party, to terminate this Sublease. For
purposes of this Subparagraph 30.5, (i) Subtenant may require that Master
Landlord agree to a Recognition Agreement and it shall be deemed reasonable of
Subtenant to reject Master Landlord's consent to this Sublease if Master
Landlord refuses such an agreement and (ii) Sublandlord and Subtenant may each
require that Master Landlord expressly consent to the Option contained in this
Sublease at Paragraph 39 and it shall be deemed reasonable of either Sublandlord
or Subtenant to reject Master Landlord's consent to this Sublease if Master
Landlord refuses such consent. The aforementioned 45-day time period shall not
be extended by reason of Master Landlord's refusal to either condition of the
previous sentence.

     Subtenant agrees to comply with the terms of the written Consent to
Sublease under which Master Landlord consents to this Sublease, including
Paragraph 12 thereof.

     Sublandlord shall provide written notice to Master Landlord within five (5)
business days after the occurrence of any of the following: (a) the exercise of
the extension option under this Sublease; (b) the occurrence of any holding over
by Subtenant after the expiration or prior termination of this Sublease; (c) the
termination of this Sublease. Sublandlord shall also provide to Master Landlord
a copy of any default notice given to Subtenant at the time it is served.

     Subtenant shall provide written notice to Master Landlord within five (5)
business days after the occurrence of any of the following: (a) the exercise of
the extension option under this Sublease; or (b) any request by Subtenant to
make alterations or additions or to make other improvements to the Premises
together with copies of all notices, plans or other documents provided to
Sublandlord or its representatives in connection therewith. Subtenant shall also
provide to Master Landlord a copy of any default notice given to Sublandlord at
the time it is served

<PAGE>

     30.6.   Defined Terms. Terms used in this Sublease as defined terms and not
otherwise defined herein shall have the same meanings as in the Master Lease.

     30.7.   Multiple New Master Leases. Master Landlord has expressed to
Sublandlord an interest in having the land underneath the Buildings divided into
four or more legal parcels, with the result that each Building be located on a
separate legal parcel. Sublandlord shall have the right, in its sole discretion,
to agree to an amendment of the Master Lease , and Subtenant agrees to
concurrently enter into a new sublease or subleases on substantially the same
terms as this Sublease in which Subtenant agrees to accept reasonable property
restrictions placed in connection with the reparcelization The procedure for
entering into such new sublease agreements shall be as follows: Sublandlord
shall give Sublessee notice of the amendment of the Master Lease, and,
thereafter, Sublandlord and Sublessee shall use reasonable good faith efforts to
agree upon, execute and deliver a new sublease agreement or agreements, which
sublease agreement(s) shall be, cumulatively, substantially similar to this
Sublease. Sublandlord shall be entitled to retain any benefit conferred on or
granted to Sublandlord by virtue of the foregoing activities; Sublandlord and
Subtenant shall each bear their own costs in connection with the same.

     30.8.   Conflict. In the event of a conflict between the provisions of this
Sublease and the provisions of the Master Lease, as between Sublandlord and
Subtenant the provisions of this Sublease shall control.

31.   Attorneys' Fees. If either Party brings an action or proceeding involving
the Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall include, without limitation, a Party who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. In addition, Sublandlord shall be entitled to attorneys'
fees, costs and expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.

32.   Sublandlord's Access to Premises.

     32.1.   Generally. Sublandlord and Sublandlord's agents shall have the
right to enter the Premises at any time, in the case of an emergency, and
otherwise upon reasonable notice by telephone or electronic mail to Subtenant's
designated contact or substitute for the purpose of inspecting the Premises;
showing the Premises to prospective purchasers, lenders, or prospective tenants
and realtors (prospective tenants and realtors during the last year of the
Sublease term or any extensions thereto); making such alterations, repairs,
improvements or additions to the Premises as Sublandlord may deem necessary or
desirable or that Subtenant fails to perform; to access security and HVAC
controls and network connections for HVAC and security, as well as fiber ties
that may be located in IDC rooms on the Premises; and such other purposes as
Sublandlord may deem necessary or desirable, including but not limited to proper
functioning of Building climate control and Project security systems.
Sublandlord may at any time place on the Premises any ordinary "For Sale" signs
and Sublandlord may during the last 6 months of the term hereof place on the
Premises any ordinary "For Lease" signs. Subtenant may at any time place on the
Premises any ordinary "For Lease" sign. Notwithstanding any other provision of
this Paragraph 32, Sublandlord may enter the Premises at any time to take
possession due to any Breach of this Sublease.

     32.2.   Subtenant's Waiver. Sublandlord may enter the Premises without the
abatement of Rent and may take steps to accomplish the stated purposes.
Subtenant waives any claims for damages caused by Sublandlord's entry, including
damage claims for: (i) injuries; (ii) inconvenience to or interference with
Subtenant's business; (iii) lost profits; (iv) loss of occupancy or quiet
enjoyment of the Premises. During such entry Sublandlord shall accord

<PAGE>

reasonable care to Subtenant's property and comply with Subtenant's reasonable
security measures which have been made known to Sublandlord.

     32.3.      Method of Entry. For entry as permitted by this Paragraph 32,
Sublandlord shall at all times have a key or, if applicable, a card key with
which to unlock all the doors in the Premises. In an emergency situation,
Sublandlord shall have the right to use any means that Sublandlord considers
proper to open the doors in and to the Premises. Any such entry into the
Premises by Sublandlord shall not be considered a forcible or unlawful entry
into, or a detainer of, the Premises or an actual or constructive eviction of
Subtenant from any portion of the Premises.

33.  Auctions. Subtenant shall not conduct, nor permit to be conducted, any
auction upon the Premises without Sublandlord's prior written consent.
Sublandlord shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.

34.  Signs. Except as provided in this Paragraph 34, Subtenant shall not place
any sign upon the Project without Sublandlord's prior written consent. All signs
must comply with all Applicable Requirements. Subtenant shall be permitted, at
Subtenant's sole cost and expense, to install signage on the face of
Project-standard monuments in the Project as well as directory signage in the
lobby of each Building it occupies. In addition, Subtenant shall be allotted
exterior building signage to the maximum size permitted by the City of Sunnyvale
requirements for exterior building signage at the Project so long as such
signage is no larger than that of Sublandlord, and Subtenant shall be permitted
to place such exterior building signage on Building One so as to be visible from
the freeway. Only Subtenant shall be allowed to put exterior building signage on
Building One. Sublandlord shall approve exterior building signage which
substantially complies with the Site Signage Plan (as it specifically applies to
Building One), attached hereto as Exhibit O (the parties acknowledge that the
Site Signage Plan attached hereto shall be submitted to the City of Sunnyvale by
Ariba, Inc. In the event that such plan is not approved by the City of
Sunnyvale, the parties shall cooperate with each other to submit a revised plan
to the City of Sunnyvale consistent with the intent of this Paragraph 34.
Subtenant shall not be entitled to use other Project signage areas without
paying for such use at the rate applicable from time to time as set by
Sublandlord. All signs are subject to Master Landlord's prior written consent as
provided in the Master Lease and all other applicable restrictions and
requirements contained therein.

35.  Termination; Merger. Unless specifically stated otherwise in writing by
Sublandlord, the voluntary or other surrender of this Sublease by Subtenant, the
mutual termination or cancellation hereof, or a termination hereof by
Sublandlord for Breach by Subtenant, shall automatically terminate any
sub-sublease or lesser estate in the Premises; provided, however, that
Sublandlord may elect to continue any one or all existing subtenancies.
Sublandlord's failure within 10 days following Sublandlord's actual knowledge of
any such event to elect to the contrary by written notice to the holder of any
such lesser interest, shall constitute Sublandlord's election to have such event
constitute the termination of such interest.

36.  Consents. Except as otherwise provided herein, wherever in this Sublease
the consent of a Party is required to an act by or for the other Party, such
consent shall not be unreasonably withheld or delayed. Sublandlord's actual
reasonable costs and expenses (including but not limited to architects',
attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Subtenant for any Sublandlord
consent, including but not limited to consents to an assignment, a subletting or
the presence or use of any Hazardous Materials, shall be paid by Subtenant upon
receipt of an invoice and supporting documentation therefore. Sublandlord's
consent to any act, assignment or subletting shall not constitute an
acknowledgment that no Default or Breach by Subtenant of this Sublease exists,
nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Sublandlord
at the time of such consent. The failure to specify herein any particular
condition to Sublandlord's consent shall not preclude the imposition by
Sublandlord at the time of consent of such further or other conditions as are
then reasonable with reference to the particular matter for which consent is
being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons

<PAGE>

for such determination, the determining party shall furnish its reasons in
writing and in reasonable detail within 10 business days following such request.

37.  Quiet Possession. Subject to payment by Subtenant of the Rent and
performance of all of the covenants, conditions and provisions on Subtenant's
part to be observed and performed under this Sublease, Subtenant shall have
quiet possession and quiet enjoyment of the Premises during the term hereof.

38.  Options. If Subtenant is granted an option, as defined below, then the
following provisions shall apply.

     38.1. Definition. "Option" shall mean: (a) the right to extend the term of
or renew this Sublease or to extend or renew any lease or sublease that
Subtenant has on other property of Sublandlord (b) the right of first refusal or
first offer to lease or sublease either the Premises or other property of
Sublandlord; (c) the right to purchase or the right of first refusal to purchase
the Premises or other property of Sublandlord.

     38.2. Options Personal To Original Subtenant. Any Option granted to
Subtenant in this Sublease is personal to the original Subtenant, and cannot be
assigned, except to an Affiliate as defined herein, or exercised by anyone other
than Subtenant or said Affiliate and only while the original Subtenant or said
Affiliate is in possession of the Premises (including properly approved
subleasing or assignment pursuant to Paragraph 12) unless otherwise agreed to by
Sublandlord in writing and, if requested by Sublandlord, with Subtenant
certifying that Subtenant has no intention of assigning or subletting for a
period of one (1) year.

     38.3. Multiple Options. In the event that Subtenant has any multiple
Options to extend or renew this Sublease, a later Option cannot be exercised
unless the prior Options have been validly exercised.

     38.4. Master Lease Options. "Master Lease Option" shall mean: (a) the right
to extend the term of or renew the Master Lease or to extend or renew any lease
or sublease that Sublandlord has on other property of Master Landlord, (b) the
right of first refusal or first offer to lease or sublease either the Premises
or other property of Master Landlord; (c) the right to purchase or the right of
first refusal to purchase the Premises or other property of Master Landlord.
Subtenant shall have no right whatsoever in any Master Lease Option and
Sublandlord shall have the sole and absolute discretion regarding its exercise
of its Master Lease Options.

     38.5. Effect of Default on Options.

        (a) Subtenant shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Subtenant), (iii) during the
time Subtenant is in Breach of this Sublease, or (iv) in the event that
Subtenant has been given 3 or more notices of separate Default, whether or not
the Defaults are cured, during the 12 month period immediately preceding the
exercise of the Option.

        (b) The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Subtenant's inability to exercise an Option
because of the provisions of Paragraph 38.5(a) above.

        (c) An Option shall terminate and be of no further force or effect,
notwithstanding Subtenant's due and timely exercise of the Option, if, after
such exercise and prior to the commencement of the extended term, (i) Subtenant
fails to pay Rent for a period of 30 days after such Rent becomes due (without
any necessity of Sublandlord to give notice thereof), (ii) Sublandlord gives to
Subtenant 3 or more notices of separate Default during any 12 month period,
whether or not the Defaults are cured, or (iii) Subtenant commits a Breach of
this Sublease.

39.  Option to Extend Term. Subject to Master Landlord's binding consent thereto
and subparagraph (c) of this Paragraph 39, Sublandlord hereby grants to
Subtenant the following Option to extend the term of this Sublease:

<PAGE>

        (a) Subtenant shall have the Option to extend the term of this Sublease
for an additional sixty-four (64) months and twenty-four (24) days starting
immediately upon expiration of the Original Term ("Option Term"). The Option
Term shall be under all of the covenants, terms and conditions of the Sublease,
except that the following provisions will not be part of this Sublease for the
Option Term: (i) the amount of Base Rent to be paid by Subtenant during the
Option Term, which shall be established as set forth below, and (ii) the Option
to extend provided for in this Paragraph. If Subtenant elects to exercise the
Option, Subtenant shall give concurrent written notice to Sublandlord and Master
Landlord of such election ("Option Notice") not more than two hundred ten (210)
days nor less than one hundred eighty (180) days before the end of the Original
Term, time being of the essence. No later than one (1) month prior to the
commencement of the Option Term, the Security Deposit shall be increased to the
minimum amount allowable during the Option Term as set forth in Paragraph 4.

        (b) If Subtenant exercises the Option, Base Rent for the Option Term
shall be as follows:

            ----------------------------------------------------------------
                    Period         $/month/SF        SF         $/month
            ----------------------------------------------------------------
              8/1/07 to 7/31/08       $4.86        263,823     $1,282,180
            ----------------------------------------------------------------
              8/1/08 to 7/31/09       $5.04        263,823     $1,329,668
            ----------------------------------------------------------------
              8/1/09 to 7/31/10       $5.24        263,823     $1,382,433
            ----------------------------------------------------------------
              8/1/10 to 7/31/11       $5.44        263,823     $1,435,197
            ----------------------------------------------------------------
              8/1/11 to 7/31/12       $5.64        263,823     $1,487,962
            ----------------------------------------------------------------
              8/1/12 to 12/24/12      $5.86        263,823     $1,546,003
            ----------------------------------------------------------------

        (c) Notwithstanding anything to the contrary in this Sublease, except
with respect to Building One, in the event Subtenant exercises the Option,
Sublandlord shall have the right to relocate Subtenant for the Option Term to
other space comparable to the Premises in the Project (e.g. one floor above the
other) (such relocated portion of the Premises shall with the Building One
premises constitute the Premises for the purpose of this Sublease), and the
parties shall enter into a new sublease (or lease, if applicable) or an
amendment to this Sublease, whichever is deemed appropriate by Sublandlord, for
the Option Term, on terms that are materially similar to the terms of this
Sublease, as reasonably determined by Sublandlord. If Sublandlord decides to
relocate Subtenant, Sublandlord shall:

            (i)   Give Subtenant notice within sixty (60) days of Sublandlord's
     receipt of the Option Notice;

            (ii)  Pay all reasonable costs associated with such relocation;

            (iii) Provide Subtenant at Sublandlord's expense with tenant
     improvements at least equal in quality to those in the Premises; and

            (iv)  Move Subtenant's effects at Sublandlord's expense to the new
     space at a time and in a manner reasonably selected to reduce inconvenience
     to Subtenant.

The parties shall execute an amendment to this Sublease or a new sublease (or
lease, if applicable) stating the relocation of the Premises and such other
changed terms as are reasonably determined by Sublandlord to be necessary or
appropriate.

40.     Substitution of Other Premises. Sublandlord shall have the right to
relocate Subtenant from any portion of the Premises not part of a Building
fully-occupied by Subtenant (e.g. Building One after Subtenant has reached the
Commencement Date on each of the four (4) floors therein) to other space in the
Project comparable to such portion of

<PAGE>

the Premises (e.g. one floor above the other; comparably furnished) (such
substituted portion of the Premises shall with the remaining original premises
constitute the Premises for the purpose of this Sublease), and the parties shall
enter into a new sublease (or lease, if applicable) or an amendment to this
Sublease, whichever is deemed appropriate by Sublandlord on terms that are
materially similar to the terms of this Sublease, as reasonably determined by
Sublandlord. If Sublandlord decides to relocate Subtenant, Sublandlord shall:

          (a) Give Subtenant prior notice;

          (b) Pay all reasonable costs associated with such relocation;

          (c) Provide Subtenant at Sublandlord's expense with tenant
improvements at least equal in quality to those in the portion of the Premises
from which Subtenant is relocated; and

          (d) Move Subtenant's effects at Sublandlord's expense to the new space
at a time and in a manner that will inconvenience Subtenant as little as
possible.

The parties shall execute an amendment to this Sublease stating the relocation
of the portion of the Premises and such other changed terms as are reasonably
determined by Sublandlord to be necessary or appropriate.

41.    Reservations. Sublandlord reserves the right: (i) to grant, without the
consent or joinder of Subtenant, such easements, rights and dedications that
Sublandlord deems necessary, (ii) to cause the recordation of parcel maps and
restrictions, and (iii) to create and/or install new utility raceways, so long
as such easements, rights, dedications, maps, restrictions, and utility raceways
do not unreasonably interfere with the use of the Premises by Subtenant.
Subtenant agrees to sign any documents reasonably requested by Sublandlord or
Master Landlord to effectuate such rights.

42.    Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.

43.    Authority. Each individual executing this Sublease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Sublease on its behalf. Each party shall, within 30 days after
request, deliver to the other party satisfactory evidence of such authority.

44.    Amendments. This Sublease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Subtenant's obligations, costs, or expenses hereunder,
Subtenant agrees to make such reasonable non-monetary modifications to this
Sublease as may be reasonably required by a Lender in connection with the
obtaining of normal financing or refinancing of the Premises.

45.    Exhibits.  Attached hereto are the following Exhibits which constitute a
part of this Sublease:

                  (a) Exhibit A - Master Lease (exclusive of Exhibit I which
     shall be provided separately to the parties as described below in the note
     to Exhibit M)

                  (b) Exhibit B - Premises

                  (c) Exhibit C - Sublandlord's Rules and Regulations

<PAGE>

        (d)  Exhibit D - Commencement Date Memorandum

        (e)  Exhibit E - Ravendale Lease

        (f)  Exhibit F - Letter of Credit

        (g)  Exhibit G - Consent to Sublease

        (h)  Exhibit H - Estoppel Certificate

        (i)  Exhibit I - Work Letter Agreement (including Attachment 1
(Conceptual Plan) and Attachment 2 (B1F1 Shell Work: Bldg 1 1/st/ Floor Only
Addendum 5 Revised April 13, 2001 and Supplemental Instruction N) thereto)

        (j)  Exhibit J - Cafeteria Access Agreement

        (k)  Exhibit K - Fitness Center Access Agreement

        (l)  Exhibit L - Janitorial Services Description

        (m)  Exhibit M - Additional Environmental Report and Materials (For
convenience, Exhibit M shall be provided along with Exhibit I of the Master
Lease in a separate "environmental" binder)

        (n)  Exhibit N - Brokers' Letter

        (o)  Exhibit O - Site Signage Plan

        (p)  Exhibit P:  Furniture

        (q)  Exhibit Q:  Furniture UCC-1

<PAGE>

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

                                SUBLANDLORD:

                                Ariba, Inc.,
                                a Delaware corporation

                                By:    /s/ Gabriel Sandoval
                                       --------------------

                                       Gabriel Sandoval

                                Its:   VP, General Counsel
                                       -------------------

                                SUBTENANT:

                                Interwoven , Inc.,
                                a Delaware corporation

                                By:    /s/ David M. Allen
                                       ------------------

                                       David M. Allen

                                Its:   Chief Executive Officer
                                       -----------------------

<PAGE>

                                BROKER EXECUTION
                                ----------------

         By signing below, the indicated real estate broker or agent is not
being made a party hereto but is signifying its agreement with the provisions
hereof concerning brokerage.

SUBLANDLORD'S BROKER:                            ADDRESS:

Cushman & Wakefield of California, Inc.          2055 Gateway Place, Suite 550
                                                 San Jose, California 95110
By:   /s/ Hernan Santos
      -----------------
      Hernan Santos

Its:  Director
      --------

SUBTENANT'S BROKER:                              ADDRESS:

CB Richard Ellis                                 1195 W. Fremont Avenue
                                                 Sunnyvale, California  94087
By:   /s/ Scott Mathisen
      ------------------
      Scott G. Mathisen

Its:  Senior Vice President

<PAGE>

                                    EXHIBIT A
                                    ---------

                                  MASTER LEASE

     Exhibit A to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit A of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001). In
addition to the information incorporated by reference under this Exhibit A, the
following exhibits supplement this Exhibit A, and are filed herewith:

     Exhibit E-4:   Memorandum of Commencement of Lease Term
     Exhibit N:     Letter regarding Tenant Improvements

<PAGE>

                                   EXHIBIT E-4
                                       TO
                             MOFFETT PARK DRIVE, LLC
                                      LEASE
                                       TO
                                   ARIBA, INC.
                                  FOR PREMISES
                                       at
                            1111 Lockheed Martin Way
                              Sunnyvale, California

                                   MEMORANDUM
                                       OF
                           COMMENCEMENT OF LEASE TERM
                           --------------------------

         Pursuant to Article III, Section 3.01, paragraph (a) of the
above-referenced Lease, the parties to said Lease agree to the following:

     1.     The Commencement Date of the Lease is January 25, 2001 and the Lease
            Term commenced on said date. The Expiration Date for the initial
            Lease Term is January 24, 2013.
     2.     The date for commencement of the rent for Building One is April 12,
            200l; Attached hereto as a part thereof is a true and correct
            partial schedule of Base Rent.
            -------
     3.     The total Rentable Area of Building 1 is one hundred seventy-five
            thousand eighty-two (175,082) rentable square feet.

     Each person executing this Memorandum certifies that he or she is
authorized to do so on behalf of and as the act of the entity indicated.
Executed as of April 24, 2001, at Sunnyvale (Santa Clara County), California.

MOFFETT PARK DRIVE, LLC                       ARIBA, INC.
A California limited liability corporation    a Delaware corporation
(Successor in interest as Lessor)

 By: /s/ Jay Paul                             By: /s/ Michael L. Fanche
    --------------------------------------       -------------------------------
         Jay Paul                                     Michael Fanche
 Its:    Manager                                       (Type or print name)

                                              Its: VP and Corporate Controller
                                                  ------------------------------

                                              By:_______________________________

                                                 _______________________________
                                                        (Type or print name)

                                              Its:______________________________

<PAGE>

                                JAY PAUL COMPANY
                       350 California Street, Suite 1905
                        San Francisco, California 94104
                                 (415) 263-7400

                               September 11, 200O

Via Fax to (650) 930-6300
-------------------------

Mike Hrastinski
Ariba, Inc.
1565 Charleston Road
Mountain View, CA 94040

      Re:   Moffeti Park Drive, LLC/Ariba/Tenant Improvements

Dear Mr. Hrastinski:

      This is to memorialize certain agreements and acknowledgments concerning
the Ariba Tenant Improvements as follows:

      1. On August 3, 2000 Moffett Park Drive, LLC (Moffett Park) advanced the
         plan check fees by direct payment to the City of Sunnyvale in the sum
         of $59,713.52;

      2. On August 3, 2000 Ariba paid to Moffett Park the total of (1) the
         current amount invoiced by DES for Tenant Improvement design services
         in the sum of $707,897.42, and (2) the advanced Tenant Improvement plan
         check fee of $59,713.52;

      3. Moffett Park agrees that Ariba's deposit of the Tenant Improvement
         Letter of Credit in the sum of $14,300,000.00 may be delayed at Ariba's
         option until no later than October 9, 2000;

      4. The Budget for 14 of the 16 floorplates of the 4 office/R&D buildings
         was delivered to Ariba on September 6, 2000 and requires approval by
         Ariba (subject to any revisions consented to by Moffett Park) on or
         before September 20, i.e., within 10 business days after delivery.
         Ariba acknowledges its obligation under Lease Section 2.04(g) to
         deposit 25%

<PAGE>

     of that Budget with Moffett Park's construction lender no later than
     October 4, 2000.

 5.  The parties agree that the Budget will be amended to include the costs of
     Tenant Improvements for the remaining two floorplates for the office/R&D
     Buildings and for the Amenity Building, once Working Drawings for same are
     approved pursuant to Lease Section 2.04(d). Ariba will approve the
     amendment to the Budget (or modify the same with Lessor's consent) within
     ten business days after delivery of same ("Approval Date") and Lessor shall
     then enter into an amendment to the guaranteed maximum price contract with
     the General Contractor for the construction of the Tenant Improvements
     described in said Working Drawings consistent with the approved amendment
     to the Budget. Within ten (10) business days after the Approval Date, Ariba
     will make an additional cash deposit with Moffett Park's construction
     lender in an amount equal to twenty-five percent (25%) of the approved
     Budget amendment amount with Lessor's construction lender to be held as
     provided in Section 2.04(g). The parties further acknowledge that there may
     be two such amendments, one for the two remaining office/R&D floorplates
     and one for the Amenity Building, and these terms shall apply to each
     amendment.

 6.  Ariba has reviewed and approved the attached proposed contract with DES
     dated as of June 20, 2000, and the associated DES scope of services and
     design fees for architectural and MEP engineering services, including the
     amount of $2,218,378.00 for basic services. Ariba hereby acknowledges that
     these fees comply with the requirement of Lease Section 2.04(d), i.e., that
     they "not vary materially from the range of fees charged for similar work
     for similar tenant improvements under similar time constraints by
     architects of similar ability, experience and expertise in the Silicon
     Valley community." Lessor has or will execute said contract with DES in
     reliance on the foregoing.

     Please let me know at once if you feel I have misstated any of our
 agreements and acknowledgments in any way.

<PAGE>

     I want to express my appreciation for the cooperative manner in which we
arrived at those agreements and acknowledgments.

                                          MOFFETT PARK DRIVE, LLC
                                          a California limited liability company

                                          By: GATEWAY LAND COMPANY, INC.

                                          By: /s/ Tim Hennessey
                                             -----------------------------------
                                                  Tim Hennessey
                                          Its:    Vice President

Agreed to:

ARIBA, INC.

By:  /s/ Mike Hrastinski
    --------------------------
         Mike Hrastinski

Its: Senior VP/CIO
     -------------------------

<PAGE>

                            FIRST AMENDMENT TO LEASE
                                    between
                             MOFFETT PARK DRIVE LLC,
                     a California limited liability company
                                       as
                                     Lessor
                                      and
                                  ARIBA, INC.,
                             a Delaware corporation
                                       as
                                     Lessee

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

                                January 12, 200l

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

     This First Amendment to Lease is made and entered into and is dated for
reference purposes as of the date set forth above as a first amendment to that
certain written Triple Net Multiple Building Lease ("Lease") between Moffett
Park Drive LLC, a California limited liability company ("Lessor") and Ariba,
Inc. a Delaware corporation ("Lessee"), dated March 15, 2000 and concerning that
real property situated in the City of Sunnyvale, County of Santa Clara, State of
California and commonly known as 111 Lockheed Martin Way, Sunnyvale, California,
on which is being constructed four free standing, four story office and research
and development buildings and one ancillary building and is as follows:

                                 R E C I T A L S
                                 ---------------

       1. Section 2.03(g) of the Lease sets forth certain requirements with
respect to the form of a standby letter of credit to be provided by Lessee to
secure, among other things, full and timely payments of amounts due under the
construction contract for Tenant Improvements ("Tenant Improvement Letter
of Credit").

                                       1

<PAGE>

         2.  Section 4.06 of the Lease sets forth certain requirements with
respect to the form of a standby letter of credit to be provided by Lessee to
serve as a Security Deposit ("Security Deposit Letter of Credit").

         3.  The parties wish to utilize, for both of the above-described
Letters of Credit, a form different from that described in the aforesaid Lease
Sections.

                                   AGREEMENT
                                   ---------

         1.  Recitals. The aforesaid recitals are true and correct.
             --------

         2.  Amendment of Section 2.03(g). Section 2.03(g) is hereby amended to
             -----------------------------
provide that the form of letter of credit attached hereto may be provided by
Lessee in lieu of the form of letter of credit originally described in said
Section.

         3.  Amendment of Section 4.06. Section 4.06 is hereby amended to
             -------------------------
provide that the form of letter of credit attached hereto may be provided by
Lessee in lieu of the form of letter of credit originally described in said
Section.

         4.  Tenant Improvement Letter of Credit  The form of letter of credit
             -----------------------------------
attached hereto as Exhibit A shall be deemed to satisfy the requirements of
Section 2.03(g) as to the form of the Tenant Improvement Letter of Credit
required thereunder to be provided by Lessee.

         5.  Security Deposit Letter of Credit. The form of letter of credit
             ---------------------------------
attached hereto as Exhibit B shall be deemed to satisfy the requirements of
Section 4.06 as to the form of the Security Deposit Letter of Credit required
thereunder to be provided by Lessee.

         Except as hereby amended, and as so amended, the Lease is hereby
confirmed and ratified as being in full force and effect.

                                       2

<PAGE>

                                    EXHIBIT B
                                    ---------

                                    PREMISES

     Exhibit B to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit B of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT C
                                    ---------

                       SUBLANDLORD'S RULES AND REGULATIONS

     Exhibit C to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit C of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT D
                                    ---------

                          COMMENCEMENT DATE MEMORANDUM

     Exhibit D to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit D of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT E
                                    ---------

                                 RAVENDALE LEASE

     Exhibit E to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit E of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT F
                                    ---------

                                LETTER OF CREDIT

     Exhibit F to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit F of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT G
                                    ---------

                               CONSENT TO SUBLEASE

     Exhibit G to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit G of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT H
                                    ---------

                              ESTOPPEL CERTIFICATE

     Exhibit H to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit H of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT I
                                    ---------

                              WORK LETTER AGREEMENT

     Exhibit I to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit I of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT J
                                    ---------

                           CAFETERIA ACCESS AGREEMENT

     Exhibit J to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit J of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT K
                                    ---------

                         FITNESS CENTER ACCESS AGREEMENT

     Exhibit K to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit K of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT L
                                    ---------

                         JANITORIAL SERVICES DESCRIPTION

     Exhibit L to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit L of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT M
                                    ---------

                  ADDITIONAL ENVIRONMENTAL REPORT AND MATERIALS

     Exhibit M to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit M of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT N
                                    ---------

                                 BROKERS' LETTER

     Exhibit N to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit N of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT O
                                    ---------

                                SITE SIGNAGE PLAN

     Exhibit O to the Amended and Restated Sublease between Ariba, Inc. and
Interwoven, Inc., dated as of June 28, 2001 (incorporated by reference from
Exhibit O of Exhibit 10.01 to the Registrant's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on August 14, 2001).

<PAGE>

                                    EXHIBIT P
                                    ---------

                             BUILDING ONE FURNITURE

<PAGE>

            [INSERT BUILDING 1 2/nd/ FLOOR FURNITURE DIRECTORY HERE]

                    FURNITURE DIRECTORY - BLDG. 1 2/ND/ FLOOR

(Table lists various furniture items for Building 1, Floor 2 including the code,
item, manufacturer, room # and quantity code for each furniture item.)

<PAGE>

             [INSERT BUILDING 1 3rd FLOOR FURNITURE DIRECTORY HERE]

                     FURNITURE DIRECTORY - BLDG. 1 3rd FLOOR

(Table lists various furniture items for Building 1, Floor 3 including the code,
item, manufacturer, room # and quantity code for each furniture item.)

<PAGE>

             [INSERT BUILDING 1 4th FLOOR FURNITURE DIRECTORY HERE]

                     FURNITURE DIRECTORY - BLDG. 1 4th FLOOR

(Table lists various furniture items for Building 1, Floor 4 including the code,
item, manufacturer, room # and quantity code for each furniture item.)

<PAGE>

                                    EXHIBIT Q
                                    ---------

                                 FURNITURE UCC-1

<PAGE>

UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
---------------------------------------------------------
A. NAME & PHONE OF CONTACT AT FILER [optional]

---------------------------------------------------------
B. SEND ACKNOWLEDGMENT TO: (Name and Address)

        Lucy A. Lofrumento, Esquire
        c/o Silicon Valley Law Group
        152 N. Third Street, Suite 900
        San Jose, California 95112

<TABLE>
<CAPTION>
                                                                                THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
------------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (1a or 1b)- do not abbreviate or combine names
                                                ---
<S>                                                                   <C>                              <C>                  <C>
   ---------------------------------------------------------------------------------------------------------------------------------
    1a. ORGANIZATION'S NAME

                            Arlba, Inc.
OR ---------------------------------------------------------------------------------------------------------------------------------
    1b. INDIVIDUAL'S LAST NAME                                        FIRST NAME                       MIDDLE NAME           SUFFIX

------------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS                                                   CITY                             STATE   POSTAL CODE   COUNTRY

     807 11th Avenue                                                  Sunnyvale                          CA           94089     US
------------------------------------------------------------------------------------------------------------------------------------
1d. TAX ID #, SSN OR EIN ADD'L INFO RE    1e. TYPE OF ORGANIZATION    1f. JURISDICTION OF ORGANIZATION 1g. ORGANIZATIONAL ID
     ###-##-####         ORGANIZATION                                                                      #, if any            [_]
                         DEBTOR            Corporation                Delaware                                                  NONE
====================================================================================================================================
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (2a or 2b)- do not abbreviate or combine names
                                                           ---
   ---------------------------------------------------------------------------------------------------------------------------------
    2a. ORGANIZATION'S NAME

OR ---------------------------------------------------------------------------------------------------------------------------------
    2b. INDIVIDUAL'S LAST NAME                                        FIRST NAME                       MIDDLE NAME           SUFFIX

------------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS                                                   CITY                             STATE   POSTAL CODE   COUNTRY

------------------------------------------------------------------------------------------------------------------------------------
2d. TAX ID #, SSN OR EIN ADD'L INFO RE    2e. TYPE OF ORGANIZATION    2f. JURISDICTION OF ORGANIZATION 2g. ORGANIZATIONAL ID
                         ORGANIZATION                                                                      #, if any            [_]
                         DEBTOR                                                                                                 NONE
====================================================================================================================================
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P)- Insert only one secured party name (3a or 3b)
                                                                                 ---
   ---------------------------------------------------------------------------------------------------------------------------------
    3a. ORGANIZATION'S NAME

                             Interwoven, Inc.
OR ---------------------------------------------------------------------------------------------------------------------------------
    3b. INDIVIDUAL'S LAST NAME                                        FIRST NAME                       MIDDLE NAME           SUFFIX

------------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS                                                   CITY                             STATE   POSTAL CODE   COUNTRY

     1195 West Fremont Avenue                                         Sunnyvale                           CA           94087     US
====================================================================================================================================
</TABLE>

4. This FINANCING STATEMENT covers the following collateral:

Personal property in the form of the Furniture, as defined in the Amended and
Restated Sublease dated June 28, 2001, located on the second, third and fourth
floors of Building One located at 1111 Lockheed Martin Way, Sunnyvale,
California 94089, also described as Parcel 1, so designated and delineated on
the Parcel Map recorded June 1, 2001 in Book 740 of Maps, pages 7 and 8, Santa
Clara County Records.

                       See signature page attached hereto
<TABLE>
<S>  <C>              <C>         <C>      <C>                <C>                    <C>
=======================================================================================================
5. ALTERNATIVE DESIGNATION (if applicable) [X] LESSEE/LESSOR [_] CONSIGNEE/CONSIGNOR [_] BAILEE/BAILOR
    [_] SELLER/BUYER [_] AG, LIEN [_] NON-UCC FILING
=======================================================================================================
6. [x] This FINANCING STATEMENT is to be filed (for record) (or recorded) in the REAL
       ESTATE RECORDS. Attach Addendum                                   [if applicable]
=======================================================================================================
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s)
   (ADDITIONAL, FEE)        [optional]  [_] All Debtors [_] Debtor 1 [_] Debtor 2
=======================================================================================================
8. OPTIONAL FILER REFERENCE DATA

-------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                   Signature Page to UCC Financing Statement
                       naming Ariba, Inc., as Debtor, and
                       Interwoven, Inc., as Secured Party

ARIBA, INC., a Delaware corporation

By:   Gabriel Sandoval
      ----------------------
Name: GABRIEL SANDOVAL
      ----------------------
      VP, GENERAL COUNSEL

Its:  ______________________

STATE OF CALIFORNIA    )
COUNTY OF SANTA CLARA  )

     On August 6, 2001, before me, Shelley L Lopez, a notary public, personally
appeared Gabriel Sandoval, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

Shelley L Lopez
------------------------
Notary Public

[STAMP]

<PAGE>

                              AMENDED AND RESTATED
                              --------------------

                           FURNITURE RENTAL AGREEMENT
                           --------------------------

     This AMENDED AND RESTATED FURNITURE RENTAL AGREEMENT (the "Agreement") is
made and entered into this 28th day of June, 2001, by and between Ariba, Inc., a
Delaware corporation ("Ariba") and Interwoven, Inc., a Delaware corporation
("Interwoven" or "Renter"), with reference to the following facts:

                                    RECITALS

     A. Ariba, as sublessor, and Interwoven, as sublessee, are parties to that
certain Amended and Restated Sublease dated June 28, 2001, (the "Sublease")
under which Ariba subleases to Interwoven approximately two hundred sixty-three
thousand eight hundred and twenty-three (263,823) square feet of rentable space
located at the Project in Building One and Building Four (as defined in the
Sublease) at 1111 Lockheed Martin Way, Sunnyvale, California 94089 and referred
to in the Sublease as the "Premises".

     B. Interwoven and Ariba previously entered into a Furniture Rental
Agreement dated June 28, 2001. In connection with the amendment and restatement
of the Sublease, the parties now wish to amend and restate the Furniture Rental
Agreement as provided herein.

     C. Interwoven now desires to lease from Ariba and Ariba desires to lease to
Interwoven, its personal property in the form of the furniture located on two
(2) of the six (6) floors the Premises (namely the third and fourth floors of
Building Four, containing approximately eighty-eight thousand seven hundred and
forty-one (88,741) square feet) and more particularly described on Exhibit A
                                                                   ---------
attached hereto and incorporated herein (the "Furniture").

                                    AGREEMENT

        NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows.

     1. Rental of Furniture. Ariba hereby leases to Interwoven, and Interwoven
hereby leases from Ariba, the Furniture on the terms and conditions contained
herein.

     2. Term. The term of this Agreement (the "Term") shall commence on the
Sublease Commencement Date. Subject to any earlier termination in accordance
with Section 17 of this Agreement, this Agreement shall terminate on the
Expiration Date (i.e., July 31, 2007) or any earlier termination of the
Sublease; provided, however, that if the

<PAGE>

Sublease term is extended pursuant to Section 39 of the Sublease, then the Term
of this Agreement shall be extended for the same period of time.

     3.   Furniture Rent.

In consideration for the rental of the Furniture, Interwoven shall pay to Ariba
the following monthly amounts (the "Furniture Rent") during the Term of this
Agreement:

                                                         Furniture
                        Lease Term                         Rent
                        -----------------------------------------------
                          08/01/2001   To 09/30/2001         44,145.75
                          10/01/2001   To 07/31/2002         42,119.52
                          08/01/2002   To 07/31/2003         44,784.76
                          08/01/2003   To 07/31/2004         48,178.05
                          08/01/2004   To 07/31/2005         50,316.23
                          08/01/2005   To 07/31/2006         52,645.47
                          08/01/2006   To 07/31/2007         55,173.41

                                                         Furniture
                        Option Period                      Rent
                        -----------------------------------------------
                          08/01/2007   To 07/31/2008         44,295.28
                          08/01/2008   To 07/31/2009         44,445.58
                          08/01/2009   To 07/31/2010         44,445.98
                          08/01/2010   To 07/31/2011         44,445.38
                          08/01/2011   To 07/31/2012         44,505.78
                          08/01/2012   To 07/31/2013         44,445.72

Notwithstanding the foregoing, if Ariba sublets all or any portion of floors
three and four of Building Four prior to the Commencement Date (as defined in
Section 2.1 of the Sublease) applicable to those floors, Interwoven shall not be
obligated to pay Furniture Rent on the Furniture located in the sublet area to
the extent that such sublessee(s) are obligated to pay furniture rents on said
Furniture under a furniture rental agreement substantially similar to this
Agreement. Nothing herein shall be construed to require Ariba to reduce
Interwoven's Furniture Rent in the event that such sublessee(s)' furniture rent
rates are higher than Interwoven's Furniture Rent. Ariba shall use commercially
reasonable and good faith efforts to rent the Furniture on said floors to
sublessees and to rent it at the highest rental rates to such sublessee(s).
Furniture Rent shall be payable concurrently with Rent for the Premises in
monthly installments in advance on the first day of each calendar month of the
Term at the address set forth for Ariba in Section 20.1. Notwithstanding the
foregoing, Furniture Rent for the first full calendar month of the Term is due
at the time of payment of the First Month's Prepaid Rent under the Sublease.
Furniture Rent for any partial month during the Term shall be prorated based on
the actual number of days in such partial calendar month. Interwoven's covenant
to pay Furniture Rent shall be independent of every other covenant in this
Agreement. If Furniture Rent is not paid when due, Interwoven shall pay,
relative to the delinquent payment, an amount equal to the sum which would be
payable by Interwoven to Ariba for a default of Rent under the Sublease.

     4.   Security Deposit. Within five (5) business days following the
execution of this Agreement, Interwoven shall deliver to Ariba cash, or an
irrevocable

<PAGE>

standby letter of credit in the form attached hereto as Exhibit B, in the amount
                                                        ---------
of Two Hundred Thousand Dollars ($200,000) as a security deposit to secure the
prompt and complete performance by Interwoven of all of the obligations and
terms of this Agreement to be performed by Interwoven, and not as prepayment of
Furniture Rent (the "Security Deposit"). The letter of credit shall be for an
initial term of not less than twelve (12) months and shall be maintained in
force at all times from issuance through sixty (60) days after the later of the
expiration of the Term hereof or the date on which Interwoven returns possession
of the Furniture to Ariba. If Interwoven fails at least forty-five (45) days
prior to the expiration date of an outstanding letter of credit to (i) renew the
letter of credit or (ii) deliver to Ariba either a replacement letter of credit
or cash in the full amount of the Security Deposit required hereunder, such
failure shall be a default under this Agreement (without the requirement of
notice) entitling Ariba, in addition to its other remedies, to draw down all or
part of the current letter of credit. Ariba shall have the right, upon a
transfer or assignment of its rights as lessee under this Agreement, to require
Interwoven to deliver a replacement letter of credit designating Ariba's
successor as the beneficiary, at Interwoven's sole cost and expense. No draw
under the letter of credit shall be deemed a waiver of, or be deemed to have
cured, any Event of Default by Interwoven under any provision of this Agreement
except to the extent directly applied to cure such Event(s) of Default. Upon the
occurrence of an Event of Default by Interwoven under the terms of this
Agreement, Ariba may deduct and apply the above Security Deposit, as is
reasonably necessary, towards the following: (i) to remedy any default by
Interwoven in the payment of Furniture Rent under this Agreement; (ii) to clean,
restore and repair the Furniture following its surrender to Ariba, if not
surrendered in the condition required pursuant to this Agreement, and (iii) to
remedy any other default of Interwoven hereunder. Ariba shall limit the amounts
deducted from the Security Deposit to the amounts it reasonably deems necessary
to cure defaults hereunder by Interwoven. In the event any portion of the
Security Deposit is drawn upon by Ariba, Interwoven shall, within five (5) days
after demand by Ariba, deposit cash with Ariba in an amount that, when added to
the amount of Security Deposit remaining, shall equal the original amount of the
Security Deposit. Ariba shall not be deemed a trustee of the Security Deposit.
Ariba may use the Security Deposit in Ariba's ordinary business and shall not be
required to segregate it from Ariba's general accounts. Interwoven shall not be
entitled to any interest on the Security Deposit. The Security Deposit, less any
portion thereof which Ariba is entitled to retain, shall be returned to
Interwoven (or at Ariba's option to the last assignee, if any, of Interwoven's
interest hereunder) within sixty (60) days after the later of the expiration of
the Term hereof or the date on which Interwoven returns possession of the
Furniture to Ariba.

     5.  "AS IS" Condition; No Warranties; No Liability. Ariba shall deliver the
Furniture to Interwoven AS IS and Interwoven agrees that it takes possession of
the Furniture without relying on any representation or warranty by Ariba as to
the condition of the Furniture. Interwoven conclusively agrees that for purposes
of this Furniture Agreement, the total number of cubicle systems provided to
Interwoven is as described in Exhibit A hereto. Within thirty (30) days of the
Sublease Commencement Date, Interwoven shall be given an opportunity to verify
inventory as compared to Exhibit A. Interwoven shall notify Ariba if it finds
any errors in Exhibit A, and the parties shall

<PAGE>

cooperate reasonably with each other to make any appropriate corrections.
Interwoven acknowledges that neither Ariba nor its agents have made any
representations or warranties, express or implied, as to the suitability or
fitness of the Furniture for the conduct of Interwoven's business or for any
other purpose. In no event shall Ariba have any liability, nor shall Interwoven
have any remedy against Ariba, for any liability, claim, loss, damage or expense
caused directly or indirectly by the Furniture or any deficiency or defect
thereof or the maintenance or repair thereof.

     6. No Ownership; Right of Inspection. This Agreement constitutes a lease or
bailment of the Furniture described herein and not a sale. Except as provided in
Section 7.1, Interwoven shall not have, or at any time acquire, any right, title
or interest in the Furniture except the right to possession and use as provided
for in this Agreement. Ariba shall at all times be the sole owner of the
Furniture. Ariba shall have the right to place and maintain on the exterior or
interior of each item of Furniture an inscription identifying Ariba's ownership
of the Furniture. Interwoven shall not remove, obscure, deface or obliterate the
inscription or permit any other person to do so. Interwoven hereby grants Ariba
the right to enter the Premises at all reasonable times, but no less than once
every six (6) months for the purpose of inspecting, maintaining, and/or making
repairs, replacements, alterations, or additions to the Furniture or for the
purposes of posting notices of non-responsibility for alterations, additions, or
repairs, or for the purpose of showing the Furniture to prospective purchasers
or lessees without any liability to Interwoven for any loss of occupation or
quiet enjoyment of the Furniture or Premises. This Section in no way affects the
maintenance obligations of the parties hereto. Ariba represents and warrants
that it owns all right, title and interest in and to the Furniture, free and
clear of any and all liens, pledges, hypothecation, equitable interests, rights
of possession, claims, charges, lease obligations, security interests,
encumbrances, or other rights (collectively, "Adverse Rights"), and that it has
the full and unrestricted right and power to lease the Furniture as provided in
this Agreement. If at any time during the Term it is discovered that any Adverse
Rights exist, except as specifically permitted by this Agreement, Ariba shall
remove the same promptly upon notice by Interwoven, at Ariba's sole cost and
expense.

<PAGE>

     7.   Interwoven's Rights and Obligations.

          7.1  Interwoven's Rights. Interwoven shall be entitled to the absolute
               right to the use, possession and control of the Furniture during
               the Term of this Agreement, provided Interwoven is not in default
               of any provision of this Agreement or the Sublease (beyond
               applicable notice and cure periods). Interwoven shall employ and
               have absolute control, supervision and responsibility over all
               users of the Furniture.

               (a)  Ariba acknowledges that should Interwoven's rights pursuant
to this Agreement be wrongfully impaired or interfered with in any way (not
resulting from a default by Interwoven), due to (i) any breach or default by
Ariba under this Agreement, any loan agreement, or other agreements to which
Ariba is a party, (ii) rights or claims asserted by creditors of Ariba
(including without limitation a seizure or attachment of, or levy on, the
Furniture), or (iii) rights or claims asserted by any party claiming by, through
or under Ariba, then Interwoven may incur substantial damages, which could
include, without limitation, costs of replacing the Furniture (including
installation costs), consultants' and attorneys' fees, and so forth. Therefore,
in order to protect Interwoven's rights under this Agreement, Ariba hereby
grants to Interwoven a security interest in the Furniture (1) to secure the
performance of Ariba's obligations under this Agreement, including without
limitation the covenant of quiet enjoyment pursuant to Section 10 below; and (2)
to provide sufficient collateral to Interwoven to protect it against any losses
it may incur in the event that its rights in and to the Furniture pursuant to
this Agreement are impaired or interfered with during the Term of this Agreement
as a result of any of the circumstances described in the first sentence of this
subparagraph 7.1(a).

               (b)  Ariba shall execute and acknowledge,  and deliver to
Interwoven in recordable form, for filing with the California Secretary of State
and the Santa Clara County Recorder, any UCC financing statements or similar
documents Interwoven may reasonably request in order to perfect its security
interest in the Furniture. In the event that Interwoven's rights in and to the
Furniture pursuant to this Agreement are impaired or interfered with during the
Term of this Agreement as a result of any of the circumstances described in the
first sentence of subparagraph 7.1(a) (unless arising out of an Event of Default
by Interwoven), Interwoven and any of its successors or assigns shall have, and
be entitled to exercise, all of the rights, remedies, powers and privileges of a
secured party under the Commercial Code of the State of California.

               (c)  The parties acknowledge that a fundamental  premise
underlying this Agreement, and a material part of the consideration to be
received by Ariba hereunder, is Interwoven's cooperation with Ariba's efforts to
obtain third party financing using the Furniture, and/or the amounts to be
received by Ariba hereunder, as collateral. Interwoven agrees to cooperate with
Ariba in connection with such financing, and agrees to not unreasonably delay,
condition or withhold its consent to any changes to

<PAGE>

this Agreement required in order to obtain such financing, so long as
Interwoven's material rights hereunder to the use of the Furniture are not
materially and adversely affected. Without limitation of the generality of the
foregoing, Interwoven agrees that it shall subordinate its rights under this
Agreement, its security interest in the Furniture, and the lien thereof to any
rights, security interest, and related lien that Ariba may hereafter grant to
any third party as collateral in a financing transaction during the Term of this
Agreement, provided such third party shall have executed, in form and substance
acceptable to Interwoven (based on commercially reasonable standards), a
subordination, non-disturbance and attornment agreement protecting Interwoven's
rights hereunder to the use, possession and control of the Furniture during the
Term of this Agreement, subject to Interwoven's payment of the Furniture Rent as
required herein and the other terms and conditions of this Agreement. Interwoven
shall not assert against any such third party any set off, defense, or
counterclaim that Interwoven may have against Ariba or any other person.

        7.2    Interwoven's Obligations. Interwoven shall use the Furniture in a
reasonably careful and proper manner and shall not permit any Furniture to be
used in violation of any applicable federal, state, or local statute, law,
ordinance, rule, or regulation relating to the possession, use or maintenance of
the Furniture. Interwoven shall use only authorized Herman Miller (furniture
manufacturer) service providers to reconfigure, reassemble, disassemble, repair
and maintain Furniture. Interwoven agrees to reimburse Ariba for all damage to
the Furniture arising from misuse or negligent acts by Interwoven, its employees
and its agents. If any Furniture covered by this Agreement is damaged, lost,
stolen or destroyed, or if any Furniture is damaged as a result of its use,
maintenance or possession, Interwoven shall promptly notify Ariba of the
occurrence and shall file all necessary reports, including those required by law
and those required by insurers of the Furniture. Interwoven represents and
warrants that the Furniture will be used for business purposes consistent with
all use requirements and restrictions under the Sublease.

        8.     Ordinary Expenses; Maintenance. Interwoven shall be responsible
for all ordinary expenses in connection with the use of the Furniture during the
term of this Agreement. Interwoven, at its sole cost and expense, shall keep the
Furniture in good condition and repair, ordinary wear and tear excepted.
Furniture Rent shall not be prorated or abated while any item of Furniture is
being serviced or repaired. Ariba shall not be under any liability or obligation
in any manner to provide service, maintenance, repairs or parts for the
Furniture. At the reasonable request of Ariba, Interwoven shall furnish all
proof of maintenance.

        9.     Alteration; Modifications; Parts. Other than in conformity with
the manufacturer's warranty and/or functional improvements, Interwoven may alter
or modify the Furniture only with the prior written consent of Ariba. Any part
installed in connection with warranty or maintenance service or which cannot be
removed without damaging the Furniture shall become the property of Ariba.

<PAGE>

         10.   Quiet Enjoyment. Ariba represents that it has full power and
authority to enter into and perform this Agreement. So long as no Event of
Default by Interwoven has occurred in the performance of Interwoven's covenants
and agreements in this Agreement, Interwoven's quiet and peaceable enjoyment of
the Furniture shall not be disturbed or interfered with by Ariba, or by any
person claiming by, through, or under Ariba.

         11.   Assignment.

               11.1 Assignment by Interwoven. Interwoven shall not, without the
prior written consent of Ariba, (a) assign, transfer, pledge, or otherwise
dispose of this Agreement or any interest therein or (b) sublease or lend any
Furniture or permit it to be used by anyone other than Interwoven and its
employees. Provided that Interwoven is not then in Breach of the Sublease (as
defined in Section 13.1 thereof) and no Event of Default by Interwoven is then
occurring under this Agreement, Interwoven may assign this Agreement in
connection with an assignment and/or sublease permitted under the Sublease. No
permitted assignment or subletting shall relieve Interwoven from Interwoven's
obligations and agreements hereunder and Interwoven shall continue to be liable
as a principal and not as a guarantor or surety to the same extent as though no
assignment or subletting had been made.

               11.2 Assignment by Ariba. Ariba may assign its interest or grant
a security interest in this Agreement and the Furniture individually or
together, in whole or in part, subject to the provisions of Section 7.1. If
Interwoven is given written notice of any such assignment, it shall immediately
make all payments of Furniture Rent and other amounts due under this Agreement
directly to such assignee. Each such assignee shall have all of the rights and
obligations of Ariba under this Agreement.

         12.   Casualty Insurance; Loss or Damage. Interwoven shall maintain, at
its own expense, property damage insurance relating to the Furniture, insuring
against such risks as are customarily insured against on the type of furniture
leased hereunder by businesses in which Interwoven is engaged in such amount, in
such form, and with insurers satisfactory to Ariba; provided, however, that the
amount of insurance against damage or loss shall not be less than the full
replacement value of the Furniture. The property damage policy shall name Ariba,
Interwoven and any third party lender designated by Ariba as loss payees, as
their interests may appear, and shall contain a clause requiring the insurer to
give Ariba at least thirty (30) days' prior written notice of any alteration in
the terms or cancellation of the policy. Interwoven shall furnish to Ariba an
insurance certificate (and, if requested by Ariba, a copy of the applicable
policy) or other evidence reasonably satisfactory to Ariba that the required
insurance is in effect; provided, however, that Ariba shall have no duty to
ascertain the existence of or to examine the insurance policy to advise
Interwoven if the insurance coverage does not comply with the requirements of
this Section. If Interwoven fails to insure the Furniture as required, Ariba
shall have the right but not the obligation to obtain such insurance, and the
cost of such insurance shall be for the account of Interwoven due as part of the
next due Furniture Rent. Interwoven consents to Ariba's release, upon its
failure to obtain

<PAGE>

appropriate insurance coverage, of any and all information necessary to obtain
insurance with respect to the Furniture or Ariba's interest therein.

         Without limitation of the foregoing provisions of this Paragraph 12,
until the Furniture is returned to and received by Ariba as provided in
Paragraph 15, Interwoven shall bear the entire risk of theft or destruction of,
or damage to, the Furniture including, without limitation, any condemnation,
seizure, or requisition of title or use ("Casualty Loss"). When any Casualty
Loss occurs, Interwoven shall promptly notify Ariba. No Casualty Loss shall
relieve Interwoven from its obligations to pay Furniture Rent hereunder. So long
as an Event of Default does not then exist hereunder, the proceeds of any
insurance payable with respect to the Furniture shall be applied towards repair
or replacement of the Furniture. If an Event of Default does exist hereunder,
Ariba shall have the option to apply the proceeds of any insurance payable with
respect to the Furniture either towards repair or replacement of the Furniture
or towards Interwoven's obligations hereunder. Interwoven hereby appoints Ariba
as Interwoven's attorney-in-fact to make claim for, receive payment of, and
execute and endorse all documents, checks or drafts issued with respect to any
Casualty Loss under any insurance policy covering the Furniture.

         13.   Encumbrances or Liens; Notice. Interwoven shall not pledge,
encumber, create a security interest in, or permit any lien to become effective
on, Interwoven's rights or interests in and to any of the Furniture throughout
the Term of this Agreement. Interwoven shall promptly notify Ariba of any liens,
charges, or other encumbrances with respect to the Furniture of which Interwoven
has knowledge. Interwoven shall promptly pay or satisfy any obligation from
which any lien or encumbrance arises caused by Interwoven, and shall otherwise
keep the Furniture and all right, title, and interest free and clear of all
liens, charges, and encumbrances caused by Interwoven. The provisions of this
Section shall not apply to the security interests and liens contemplated by
Section 7.1 above.

         14.   Indemnification. Interwoven shall indemnify Ariba and its
successors and assigns against, and hold Ariba and its successors and assigns
harmless from, any and all claims, actions, damages, obligations, liabilities,
reasonable legal fees and all costs and expenses arising out of this Agreement
including, without limitation, the loss of or damage to the Furniture for any
cause, the delivery, lease, possession, maintenance, repair, condition, use or
surrender of the Furniture, or arising by operation of law, except that
Interwoven shall not be liable for any claims, actions, damages, obligations,
and costs and expenses arising out of or resulting from the negligence or
willful misconduct of Ariba or its successors or assigns, or Ariba's material
default of the provisions of this Agreement.

         15.   Surrender. Subject to the provisions of Section 7.1 above and the
security interests contemplated therein, upon the termination of this Agreement,
whether caused by the expiration or termination of the Sublease or this
Agreement, Interwoven shall at once surrender and deliver up the Furniture to
Ariba, except for Furniture that has suffered a Casualty Loss (as defined in
Section 12) and is not required to be repaired

<PAGE>

pursuant to Section 12. At the time of such return to Ariba, the Furniture shall
be in good condition and repair, ordinary wear and tear excepted. If Interwoven
fails to surrender the Furniture when required, the terms and conditions of this
Agreement shall continue to be applicable and for each day that Interwoven shall
fail to surrender any item of Furniture, Interwoven shall pay an amount equal to
one hundred fifty percent (150%) of the Furniture Rent applicable to such item
of Furniture, determined on an equitable basis, until the Furniture is
surrendered as required pursuant to this Agreement.

       16.    Defaults by Interwoven.

              16.1 Events of Default by Interwoven. Interwoven agrees that any
one or more of the following events shall be considered Events of Default by
Interwoven under this Agreement:

       (a)    Interwoven shall default in any payment of Furniture Rent
required to be made by Interwoven hereunder when due as herein provided and such
default shall continue for five (5) days after notice thereof in writing to
Interwoven, unless Ariba is legally prevented from issuing such a notice, in
which event no grace period shall apply;

              (b) Interwoven shall default in securing insurance or in providing
evidence of insurance as set forth in Section 12 of this Agreement and such
default shall continue for five (5) days after notice thereof in writing to
Interwoven, unless Ariba is legally prevented from issuing such a notice, in
which event no grace period shall apply; or

              (c) Interwoven shall default in any of the other covenants and
agreements herein contained to be kept, observed and performed by Interwoven,
and such default shall continue for thirty (30) days after notice thereof in
writing to Interwoven or such additional period as may be reasonably required to
cure such default, unless Ariba is legally prevented from issuing such a notice,
in which event no grace period shall apply.

       16.2   Remedies of Ariba. Upon the occurrence of any one or more Events
of Default by Interwoven, Ariba shall have the right, in its sole discretion, to
exercise any one or more of the following remedies:

                  (a) Terminate this Agreement;

                  (b) In compliance with applicable law take possession of any
or all items of Furniture, wherever located, without demand, notice, court
order, or other process of law, and without liability for entry to the Premises,
for damage to Interwoven's property, or otherwise except for liability or
damages caused by Ariba's gross negligence or willful misconduct;

                  (c) Demand that Interwoven immediately surrender any or all
Furniture to Ariba in accordance with Section 15 and, for each day that
Interwoven shall fail to surrender any item of Furniture, Ariba may demand an
amount equal to one

<PAGE>

hundred fifty percent (150%) of the Furniture Rent payable for such item of
Furniture, determined on an equitable basis, until the Furniture is surrendered
as required pursuant to this Agreement.;

                 (e)  Lease, sell, or otherwise dispose of the Furniture in a
commercially reasonable manner, with or without notice and on public or private
bid;

                 (f)  Exercise any other right or remedy to recover damages or
enforce the terms of this Agreement.

Ariba may pursue any other rights or remedies available at law or in equity,
including, without limitation, rights or remedies seeking damages, specific
performance, and injunctive relief. Any failure of Ariba to require strict
performance by Interwoven, or any waiver by Ariba of any provision hereunder or
in the Sublease, shall not be construed as a consent or waiver of any other
breach of the same or any other provision. Any amendment or waiver of any
provision hereof or consent to any departure by Interwoven herefrom or therefrom
shall be in writing and signed by Ariba. No right or remedy is exclusive of any
other provided herein or permitted by law or equity. All such rights and
remedies shall be cumulative and may be enforced concurrently or individually
from time to time.

     17.   Defaults by Ariba.

           17.1  Events of Default by Ariba. Ariba agrees that any one or more
of the following events shall be considered Events of Default by Ariba under
this Agreement:

           (a)   Ariba shall default under this Agreement by allowing
Interwoven's rights pursuant to this Agreement to be wrongfully impaired or
interfered with in any way (not resulting from an Event of Default by
Interwoven), and such default shall continue for ten (10) days after notice
thereof in writing to Ariba, unless Interwoven is legally prevented from issuing
such a notice, in which event no grace period shall apply; or

           (b)   Ariba shall default in any of the other covenants and
agreements herein contained to be kept, observed and performed by Ariba, and
such default shall continue for thirty (30) days after notice thereof in writing
to Ariba or such additional period as may be reasonably required to cure such
default, unless Interwoven is legally prevented from issuing such a notice, in
which event no grace period shall apply.

           17.2  Remedies of Interwoven. Upon the occurrence of any one or
more Events of Default by Ariba, Interwoven shall have the right, in its sole
discretion, to exercise any one or more of the following remedies:

                 (a)  Terminate this Agreement;

<PAGE>

                (b) Recover from Ariba the amount of damages proximately caused
by such Event of Default;

                (c) Exercise the powers and privileges as a secured party
pursuant to Section 7.1(b) above; and

                (d) Exercise any other right or remedy to recover damages or
enforce the terms of this Agreement.

Interwoven may pursue any other rights or remedies available at law or in
equity, including, without limitation, rights or remedies seeking damages,
specific performance, and injunctive relief. Any failure of Interwoven to
require strict performance by Ariba, or any waiver by Interwoven of any
provision hereunder, shall not be construed as a consent or waiver of any other
breach of the same or any other provision. Any amendment or waiver of any
provision hereof or consent to any departure by Ariba herefrom or therefrom
shall be in writing and signed by Interwoven. No right or remedy is exclusive of
any other provided herein or permitted by law or equity. All such rights and
remedies shall be cumulative and may be enforced concurrently or individually
from time to time.

         18. Warranty Assignment. Ariba hereby assigns to Interwoven all
manufacturer, dealer, or supplier warranties applicable to the Furniture to
enable Interwoven to obtain any warranty service available for the Furniture.
Ariba appoints Interwoven as Ariba's attorney-in-fact for the purpose of
enforcing any warranty. Any enforcement by Interwoven shall be at the expense of
Interwoven and shall in no way render Ariba responsible to Interwoven for the
performance of any of the warranties.

         19. Waivers. Interwoven and Ariba agree that the provisions of Section
10508 through 10522 of the California Commercial Code shall not be used to
interpret any of the rights and remedies of Interwoven under this Agreement, it
being the intent of the parties that Interwoven's rights and remedies upon an
Event of Default by Ariba shall be based on the express terms and conditions of
this Agreement, as interpreted by applicable contract law without reference to
the above-referenced sections of the Commercial Code. To the extent permitted by
applicable law, Interwoven hereby waives any rights now or hereafter conferred
by statute or otherwise which may require Ariba to sell, lease, or otherwise use
any Furniture in mitigation of any damages resulting from an Event of Default by
Interwoven as set forth in Section 16. Any action by Interwoven against Ariba
for any Event of Default by Ariba under this Agreement shall be commenced within
one year after any such cause of action accrues, unless Interwoven is legally
prevented from commencing an action, in which event the one year period shall be
extended by the period of time that Interwoven is unable to commence an action.

<PAGE>

     20.  Miscellaneous.

          20.1 Notices and Consents. Except as otherwise provided herein, all
notices required or permitted by this Agreement or applicable law shall be in
writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail or
other nationally-recognized overnight courier, with postage prepaid and shall be
deemed sufficiently given if served in a manner specified in this Paragraph
20.1. The addresses set forth below for each party shall be that party's address
for delivery or mailing of notices. Either party may by written notice to the
other specify a different address for notice. Any notice sent by registered or
certified mail, return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card, or if no delivery date is shown, the
postmark thereon. If sent by regular mail the notice shall be deemed given
forty-eight (48) hours after the same is addressed as required herein and mailed
with postage prepaid. Notices delivered by United States Express Mail or
overnight courier that guarantee next day delivery shall be deemed given
twenty-four (24) hours after delivery of the same to the Postal Service or
courier. If notice is received after 5:00 p.m. Pacific Time on a business day or
on a Saturday, Sunday or legal holiday, it shall be deemed received on the next
business day.

         If to Ariba:                         Ariba, Inc.
                                              807 11/th/ Avenue
                                              Sunnyvale, CA 94089
                                              Attn:  Real Estate Manager
                                              Fax: (650) 390-1315

                  With a copy to:             Ariba, Inc.
                                              807 11/th/ Avenue
                                              Sunnyvale, CA 94089
                                              Attn: General Counsel

                                              Fax: (650) 390-1377

         If to Interwoven:                    Interwoven, Inc.
                                              1195 West Fremont Avenue
                                              Sunnyvale, CA 94087
                                              Attn:  Tom Smith
                                              Fax:   (408) 220-7558

                  With a copy to:             Silicon Valley Law Group
                                              Attn: Lucy Lofrumento, Esq.
                                              152 North Third Street, Ste. 900
                                              San Jose, CA 95112

          20.2 Incorporation of Prior Agreements. This Agreement is a complete
integration and incorporates all agreements of Ariba and Interwoven with respect
to the rental of the Furniture, and completely integrates and supersedes all
prior

<PAGE>

agreements and understandings of the parties, whether oral or written,
pertaining to the subject matter hereof.

          20.3 Modifications. This Agreement may be modified or amended only by
an instrument in writing executed by Ariba and Interwoven, stating that such
instrument is an amendment to this Agreement.

          20.4 Severability. This Agreement shall be governed by and construed
in accordance with the laws of the State of California. If any term or provision
of this Agreement is found by a court of competent jurisdiction to be void or
unenforceable, such term or provision shall be deemed severed from the remainder
of the terms and provisions of this Agreement, and said remainder shall remain
in full force and effect, according to its terms and provisions, to the extent
permitted by law.

          20.5 Attorneys' Fees. In the event of any action at law or in equity
(including but not limited to specific performance) between Ariba and Interwoven
arising out of this Agreement or to enforce any of the provisions or rights
hereunder, the unsuccessful party to such litigation covenants and agrees to pay
to the successful party all costs, including investigation costs and similar
expenses and including attorneys' fees, incurred therein by such successful
party, and if such successful party shall recover judgment in any such action or
proceeding, such costs, expenses and attorneys' fees shall be included in and as
part of such judgment. If either party to this Agreement becomes a party to any
litigation concerning this Agreement or the Furniture by reason of any act or
omission of the other party or its authorized representatives, and not by any
act or omission of the party that becomes a party to that litigation or any act
or omission of its authorized representatives, the party whose act or omission
causes the other party to become involved in the litigation shall be liable to
that party for reasonable attorneys' fees and court costs incurred by it in the
litigation.

          20.6 Successors and Assigns. The terms, covenants and conditions
contained in this Agreement shall be binding upon and inure to the benefit of
the heirs, successors, executors, administrators and assigns of the parties to
this Agreement.

          20.7 Further Assurances. Each party, upon the request of the other
party, will execute, acknowledge, record, or file, as the case may be, such
further documents and do such further acts as may be reasonably necessary,
desirable or proper to carry out more effectively the purposes of this
Agreement.

          20.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original but all of which shall
constitute but one and the same instrument.

          20.9 Limitation on Damages. Interwoven and Ariba agree that neither
party shall be liable for any indirect, consequential, incidental or special
damages suffered or incurred by the other party or such party's lenders,
partners, members, property management company, agents, directors, officers,
employees, representatives, contractors, successors and assigns. The provisions
of this Subparagraph 20.9 shall supercede any conflicting provisions of this
Agreement.

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

ARIBA:

ARIBA, INC., a Delaware corporation

By:   /s/ Gabriel Sandoval
      ----------------------------------

Name: Gabriel Sandoval
      ----------------------------------

Its:  VP, General Counsel
      ----------------------------------

Interwoven:

INTERWOVEN INC., a Delaware corporation

By:   /s/ David M. Allen
      ----------------------------------

Name: David M. Allen
      ----------------------------------

Its:  Chief Executive Officer
      ----------------------------------

<PAGE>

                                    EXHBIT A

                            DESCRIPTION OF FURNITURE

<PAGE>

               [INSERT FURNITURE DIRECTORY BLDG. 4, FLOOR 3 HERE]

                      FURNITURE DIRECTORY BLDG. 4, FLOOR 3

(Table shows a list of furniture for Building 4, Floor 3 including the code,
item description, manufacturer, room number and quantity of each furniture
item.)

<PAGE>

               [INSERT FURNITURE DIRECTORY BLDG. 4, FLOOR 4 HERE]

                      FURNITURE DIRECTORY BLDG. 4, FLOOR 4

(Table shows a list of furniture for Building 4, Floor 4 including the code,
item description, manufacturer, room number and quantity of each furniture
item.)

<PAGE>

                                    EXHIBIT B

                            FORM OF LETTER OF CREDIT

                             WELLS FARGO BANK, N.A.
                  TRADE SERVICES DIVISION, NORTHERN CALIFORNIA
                          525 MARKET STREET, 25TH FLOOR
                         SAN FRANCISCO, CALIFORNIA 94105
                  Contact Phone: 1-800-798-2815 (Option No. 1)

                          IRREVOCABLE LETTER OF CREDIT

Ariba, Inc.                                        Letter of Credit No._________
807 Eleventh Avenue                                Date: August __, 2001
Sunnyvale, CA 94089
Attention: Treasury

Ladies and Gentlemen:

     At the request and for the account of Interwoven, Inc. (the "Applicant"),
whose address is 1195 West Fremont Avenue, Sunnyvale, CA 94087, we hereby
establish our Irrevocable Letter of Credit in favor of Ariba, Inc. in the amount
of Two Hundred Thousand (US$200,000.00), available with us at our
above-specified office by payment of Beneficiary's draft(s) drawn on us at
sight, in the form of Exhibit A (which forms an integral part of this
Irrevocable Letter of Credit) attached hereto, with the instructions in brackets
therein complied with. "Beneficiary" as used in this Irrevocable Letter of
Credit shall mean Ariba, Inc., or any person who becomes a beneficiary hereof
pursuant to a transfer accomplished under the transfer provisions of this
Irrevocable Letter of Credit.

     Each draft must be accompanied by (1) the original of this Letter of Credit
for our endorsement on this Letter of Credit of any payment we make on such
draft, and (2) a signed and dated statement worded as quoted in either I or II
below:

     I.

     "I am an authorized officer or authorized representative of the Beneficiary
     of Wells Fargo Bank, N. A. Letter of Credit No. _________ ("Beneficiary").
     Interwoven, Inc., as the lessee, and Ariba, Inc., as the lessor, entered
     into that certain Amended and Restated Furniture Rental Agreement dated
     June 28, 2001 (the "Agreement") with respect to certain personal property
     located at 809 Eleventh Avenue in the City of Sunnyvale, California that is
     more particularly described in the Agreement, as such Agreement may have
     been amended, restated or replaced from time to time. I hereby certify
     that: (i) Interwoven, Inc. has failed to timely perform or observe an
     obligation under the Agreement, and (ii)

<PAGE>

     Beneficiary is now entitled to draw on Wells Fargo Bank, N. A. Letter of
     Credit No. _________."

                                       or
                                       --

II.

     "I am an authorized officer or authorized representative of the Beneficiary
     of Wells Fargo Bank, N. A. Letter of Credit No. _________ ("Beneficiary").
     I hereby certify that (i) less than forty-five (45) days remains prior to
     the expiration of Wells Fargo Bank, N.A. Letter of Credit No. ____________
     (the "Letter of Credit"), and (ii) Interwoven, Inc. has not provided
     Beneficiary with a substitute letter of credit or cash as permitted for a
     replacement of the Letter of Credit as provided for in that certain Amended
     and Restated Furniture Rental Agreement dated June 28, 2001 (the
     "Agreement") with respect to certain personal property located at 809
     Eleventh Avenue in the City of Sunnyvale, California that is more
     particularly described in the Agreement, as such Agreement may have been
     amended, restated or replaced from time to time, and (iii) Beneficiary is
     now entitled to draw on Wells Fargo Bank, N. A. Letter of Credit No.
     _________."

                    We agree that we will not inquire as to the accuracy of any
statement worded as quoted above presented to us under this Letter of Credit. We
also agree that, with respect to our obligation to pay a drawing which conforms
to the requirements of this Letter of Credit, such obligation will not, except
to the extent that any such obligation may be altered by any law or regulation
or court order, be affected by any dispute between the Applicant and the
Beneficiary regarding the content or accuracy of any statement presented with
such drawing.

     Partial and multiple drawings are permitted under this Letter of Credit.

     Each draft must be marked "Drawn under Wells Fargo Bank, N. A. Letter of
Credit No. ______."

     Except as stated in this Letter of Credit, our undertaking in this Letter
of Credit is not subject to any condition or qualification. Our obligation under
this Letter of Credit will be our individual obligation in no way contingent
upon reimbursement with respect thereto.

     If any instructions accompanying a drawing under this Letter of Credit
request that payment is to be made by transfer to an account with us or at
another bank, we and/or such other bank may rely on an account number specified
in such instructions even if the number identifies a person or entity different
from the intended payee.

     This Letter of Credit is transferable one or more times, but in each
instance to a single transferee and only in the full amount available to be
drawn under the Letter of Credit at the time of such transfer. Any such transfer
may be effected only through ourselves and only upon presentation to us at our
above-specified office of a duly executed instrument of transfer in the format
attached hereto as Exhibit B (which forms an integral part of this Irrevocable
Letter of Credit), together with the original of this Letter of Credit. Any
transfer of this Letter of Credit may not change the place of expiration of this
Letter of Credit from our above-specified office. Each transfer shall be

<PAGE>

evidenced by our endorsement on the reverse of the original of this Letter of
Credit, and we shall deliver the original of this Letter of Credit so endorsed
to the transferee. All charges in connection with any transfer shall be for the
account of Interwoven, Inc.

     This Letter of Credit expires at our above office on August 1 , 2002, but
shall automatically be extended, without written amendment, to August 1 in each
succeeding calendar year from August 1, 2003 to August 1, 2012, and then to, but
not beyond February 23, 2013, unless we have sent written notice to Beneficiary
at the address above (or at such other address specified in a duly executed
instrument of transfer) by registered mail or express courier that we elect not
to extend this Letter of Credit beyond the date specified in such notice (the
"Expiration Date"), which Expiration Date will be August 1, 2002 or any
subsequent August 1 occurring before February 23, 2013 and will be at least
forty-five calendar days after the date we send Beneficiary such notice.

     This Letter of Credit is subject to the Uniform Customs and Practice For
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and engages us in accordance therewith.

                                              Very truly yours

                                              WELLS FARGO BANK, N. A.

                                              BY:  _____________________________
                                                      (AUTHORIZED SIGNATURE)

<PAGE>

                                                       Exhibit A
                                                       Wells Fargo Bank, N.A.
                                                       Letter of Credit No.
===============================================================================

SAN FRANCISCO, CALIFORNIA   [insert date]
                             ----------------------------------

AT SIGHT PAY TO THE ORDER OF [insert Beneficiary name] US$ [insert amount in
                              -----------------------       ----------------
numbers]
-------
                   [insert amount in words]                    U.S. DOLLARS
--------------------------------------------------------------
DRAWN UNDER WELLS FARGO BANK, N. A. LETTER OF CREDIT NO. ___________

       THIS SIGHT DRAFT IS ACCOMPANIED BY THE ORIGINAL LETTER OF CREDIT AND
       WRITTEN CERTIFICATION OF AN AUTHORIZED OFFICER OR AUTHORIZED
       REPRESENTATIVE OF BENEFICIARY AS REQUIRED BY THE LETTER OF CREDIT.

TO:    WELLS FARGO BANK, N. A.                      [insert Beneficiary name]
                                                   ---------------------------

 ADDRESS:   TRADE SERVICES DIVISION, N. CALIFORNIA
         525 MARKET STREET, 25TH FLOOR
         SAN FRANCISCO, CA 94105                    [insert Beneficiary name]
                                                   ---------------------------
                                                      AUTHORIZED SIGNATURE

===============================================================================

[insert Beneficiary name and insert signature on the back of the draft as an
endorsement]

<PAGE>

                                                                Exhibit B
                                                          Wells Fargo Bank, N.A.
                                                          Letter of Credit No.
===============================================================================

                                                           Date: _____________

Wells Fargo Bank, N.A.
Trade Services Division, Northern California
525 Market Street, 25th Floor
San Francisco, California 94105

Subject: Your Letter of Credit No. _________

Ladies and Gentlemen:

     For value received, we hereby irrevocably assign and transfer all our
rights under the above-captioned Letter of Credit, as heretofore and hereafter
amended, extended or increased, to the party set forth below ("Transferee"):

                 _____________________________
                 [insert name of transferee]

                 _____________________________

                 _____________________________
                [insert address]

     By this transfer, all of our rights in the Letter of Credit are transferred
to the Transferee, and the Transferee shall have sole rights as Beneficiary
under the Letter of Credit, including sole rights relating to any amendments,
whether increases or extensions or other amendments, and whether now existing or
hereafter made. You are hereby irrevocably instructed to advise future
amendment(s) of the Letter of Credit to the Transferee without our consent or
notice to us.

     Enclosed are the original Letter of Credit and the original of all
amendments to this date. Please notify the Transferee of this transfer and of
the terms and conditions of the Letter of Credit as transferred. This transfer
will not become effective until the Transferee is so notified.

                                                   Very truly yours,

                                                   [insert name of transferor]

                                                   By:__________________________
                                                   Name:________________________
                                                   Title:_______________________
Signature of Transferor Authenticated
[insert name of bank]
By: ______________________________
 Name: __________________________
 Title: _______________________

================================================================================<PAGE>

                                                                    Exhibit 10.3

                           RITA MEDICAL SYSTEMS, INC.

                                 2000 STOCK PLAN

          1.   Purposes of the Plan. The purposes of this 2000 Stock Plan are to
               --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.

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

               (a)  "Administrator" means the Board or any of its Committees
                     -------------
appointed pursuant to Section 4 of the Plan.

               (b)  "Applicable Laws" means the legal requirements relating to
                     ---------------
the administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any stock exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

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

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

               (e)  "Committee" means one or more committees or subcommittees
                     ---------
appointed by the Board of Directors to administer the plan in accordance with
Section 4 below.

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

               (g)  "Company" means RITA Medical Systems, Inc., a Delaware
                     -------
corporation.

               (h)  "Consultant" means any person, including an advisor, who is
                     ----------
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any Director of the Company whether
compensated for such services or not.

               (i)  "Continuous Service Status" means the absence of any
                     -------------------------
interruption or termination of service as an Employee or Consultant. Continuous
Service Status shall not be considered interrupted in the case of: (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by the
Administrator, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by
contract or

<PAGE>

statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Subsidiaries or their respective successors. For
purposes of this Plan, a change in status from an Employee to a Consultant or
from a Consultant to an Employee will not constitute an interruption of
Continuous Service Status.

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

               (k)  "Employee" means any person employed by the Company or any
                     --------
Parent or Subsidiary of the Company, with the status of employment determined
based upon such minimum number of hours or periods worked as shall be determined
by the Administrator in its discretion, subject to any requirements of the Code
or the Applicable Laws. The payment by the Company of a director's fee to a
Director shall not be sufficient to constitute "employment" of such Director by
the Company.

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

               (m)  "Fair Market Value" means, as of any date, the Fair Market
                     -----------------
Value of the Common Stock as determined by the Administrator in good faith on
such basis as it deems appropriate and applied consistently with respect to
Participants. Whenever possible, the determination of Fair Market Value shall be
based upon the closing price for the Shares as reported in the Wall Street
                                                               -----------
Journal for the applicable date.
-------

               (n)  "Incentive Stock Option" means an Option intended to qualify
                     ----------------------
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written Option Agreement.

               (o)  "Listed Security" means any security of the Company that is
                     ---------------
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.

               (p)  "Named Executive" means any individual who, on the last day
                     ---------------
of the Company's fiscal year, is the chief executive officer of the Company (or
is acting in such capacity) or among the four most highly compensated officers
of the Company (other than the chief executive officer). Such officer status
shall be determined pursuant to the executive compensation disclosure rules
under the Exchange Act.

               (q)  "Nonstatutory Stock Option" means an Option not intended to
                     -------------------------
qualify as an Incentive Stock Option, as designated in the applicable written
Option Agreement.

               (r)  "Officer" means a person who is an officer of the Company
                     -------
within the meaning of Section 16(a) of the Exchange Act and the rules and
regulations promulgated thereunder.

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

                                      -2-

<PAGE>

               (t)  "Option Agreement" means a written agreement between an
                     ----------------
Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.

               (u)  "Optioned Stock" means the Common Stock subject to an Option
                     --------------
or a Stock Purchase Right.

               (v)  "Optionee" means an Employee or Consultant who receives an
                     --------
Option.

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

the Code, or any successor provision.

               (x)  "Participant" means any holder of one or more Options or
                     -----------
Stock Purchase Rights, or the Shares issuable or issued upon exercise of such
awards, under the Plan.

               (y)  "Plan" means this 2000 Stock Plan.
                     ----

               (z)  "Reporting Person" means an Officer, Director, or greater
                     ----------------
than 10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

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

               (bb) "Restricted Stock Purchase Agreement" means a written
                     -----------------------------------
agreement between a holder of a Stock Purchase Right and the Company reflecting
the terms of a Stock Purchase Right granted under the Plan and includes any
documents attached to such agreement.

               (cc) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
                     ----------
Act, as the same may be amended from time to time, or any successor provision.

               (dd) "Share" means a share of the Common Stock, as adjusted in
                     -----
accordance with Section 13 of the Plan.

               (ee) "Stock Exchange" means any stock exchange or consolidated
                     --------------
stock price reporting system on which prices for the Common Stock are quoted at
any given time.

               (ff) "Stock Purchase Right" means the right to purchase Common
                     --------------------
Stock pursuant to Section 11 below.

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

               (hh) "Ten Percent Holder" means a person who owns stock
                     ------------------
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary.

                                      -3-

<PAGE>

          3.  Stock Subject to the Plan. Subject to the provisions of Section 12
              -------------------------
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 2,500,000 shares of Common Stock, plus an automatic
annual increase on the first day of each of the Company's fiscal years beginning
in 2001 and ending in 2010 equal to the lesser of (i) 1,000,000 Shares, (ii)
seven percent (7%) of the Shares outstanding on the last day of the immediately
preceding fiscal year, or (iii) such lesser number of shares as is determined by
the Board of Directors. The Shares may be authorized, but unissued, or
reacquired Common Stock.

          If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares that were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. In addition, any Shares of Common Stock which are
retained by the Company upon exercise of an Option or Stock Purchase Right in
order to satisfy the exercise or purchase price for such Option or Stock
Purchase Right or any withholding taxes due with respect to such exercise shall
be treated as not issued and shall continue to be available under the Plan.
Shares repurchased by the Company pursuant to any repurchase right which the
Company may have shall not be available for future grant under the Plan.

          4.  Administration of the Plan.
              --------------------------

              (a)  General. The Plan shall be administered by the Board or a
                   -------
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to grant Options and Stock Purchase Rights under
the Plan.

              (b)  Administration With Respect to Reporting Persons. With
                   ------------------------------------------------
respect to Options and Stock Purchase Rights granted to Reporting Persons and
Named Executives, the Plan may (but need not) be administered so as to permit
such Options and Stock Purchase Rights to qualify for the exemption set forth in
Rule 16b-3 and to qualify as performance-based compensation under Section 162(m)
of the Code.

              (c)  Committee Composition. If a Committee has been appointed
                   ---------------------
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of
a Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws and, in the case of a Committee administering
the Plan pursuant to Section 4(b) above, to the extent permitted or required by
Rule 16b-3 and Section 162(m) of the Code.

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

                                      -4-

<PAGE>

                    (i)    to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(m) of the Plan;

                    (ii)   to select the Consultants and Employees to whom
Options and Stock Purchase Rights or any combination thereof may from time to
time be granted hereunder;

                    (iii)  to determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof are granted hereunder; (iv) to
determine the number of shares of Common Stock to be covered by each such award
granted hereunder;

                    (iv)   to determine the number of shares of Common Stock to
be covered by each such award granted thereunder;

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

                    (vi)   to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder;

                    (vii)  to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;

                    (viii) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights; and

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

                    (x)    in order to fulfill the purposes of the Plan and
without amending the Plan, to modify grants of Options or Stock Purchase Rights
to participants who are foreign nationals or employed outside of the United
States in order to recognize differences in local law, tax policies or customs.

               (e)  Effect of Administrator's  Decision. All decisions,
                    -----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options or Stock Purchase Rights.

         5.    Eligibility.
               -----------

               (a)  Recipients of Grants. Nonstatutory Stock Options and Stock
                    --------------------
Purchase Rights may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant who has been
granted an Option or Stock Purchase Right may, if he or she is otherwise
eligible, be granted additional Options or Stock Purchase Rights.

               (b)  Type of Option. Each Option shall be designated in the
                    --------------
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.

                                      -5-

<PAGE>

               (c)  $100,000 Limitation. Notwithstanding any designation under
                    -------------------
Section 5(b), to the extent that the aggregate Fair Market Value of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section
5(b), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.

               (d)  Employment Relationship. The Plan shall not confer upon the
                    -----------------------
holder of any Option or Stock Purchase Right any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with such holder's right or the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.

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

          7.   Term of Option. The term of each Option shall be the term stated
               --------------
in the Option Agreement; provided, however, that the term shall be no more than
ten years from the date of grant thereof or such shorter term as may be provided
in the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, is a
Ten Percent Holder, the term of the Option shall be five years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.

          8.   Limitation on Grants to Employees. Subject to adjustment as
               ---------------------------------
provided in Section 13 below, the maximum number of Shares which may be subject
to Options granted to any one Employee under this Plan for any fiscal year of
the Company shall be 1,000,000 Shares, provided that this Section 8 shall apply
only after such time, if any, as the Common Stock becomes a Listed Security.

          9.   Option Exercise Price and Consideration.
               ---------------------------------------

               (a)  The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable agreement, but shall be subject to the
following:

                    (i)  In the case of an Incentive Stock Option that is:

                         (A)  granted to an Employee who, at the time of the
grant of such Incentive Stock Option, is a Ten Percent Holder, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.

                                      -6-

<PAGE>

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

                       (ii)   In the case of a Nonstatutory Stock Option that
is:

                              (A) granted prior to the date, if any, on which
the Common Stock becomes a Listed Security, to a person who, at the time of the
grant of such Option, is a Ten Percent Holder, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of the
grant.

                              (B) granted, prior to the date, if any on which
the Common Stock becomes a Listed Security, to any other person, the per share
Exercise Price shall be no less than 85% of the Fair Market Value on the date of
grant, if required by the Applicable Laws and, if not so required, shall be such
price as it determined by the Administrator; or

                              (C) granted on or after the date, if any, on which
the Common Stock becomes a Listed Security to any person, the per Share exercise
price shall be such price as determined by the Administrator; provided, however,
that if the person is, at the time of grant of such option, a Named Executive of
the Company, the per share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant if such Option is intended to
qualify as performance-based compensation under Section 162(m) of the Code; or

                       (iii)  Notwithstanding  the  foregoing,  Options may be
granted with a per Share exercise price other than as required above pursuant to
a merger or other corporate transaction.

                  (b)  The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note (subject to the provisions of Section 153 of the
Delaware General Corporation Law), (4) cancellation of indebtedness, (5) other
Shares that (x) in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date of surrender or
such other period as may be required to avoid a charge to the Company's
earnings, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (6) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) any combination of the foregoing methods of
payment, or (8) such other consideration and method of payment for the issuance
of Shares to the extent permitted under the Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

                                      -7-

<PAGE>

          10.  Exercise of Option.
               ------------------

               (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
                    -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan; provided, however, that if required by the Applicable Laws, any
Option granted prior to the date, if any, upon which the Common Stock becomes a
Listed Security shall become exercisable at the rate of at least 20% per year
over five years from the date the Option is granted. In the event that any of
the Shares issued upon exercise of an Option (which exercise occurs prior to the
date, if any, upon which the Common Stock becomes a Listed Security) should be
subject to a right of repurchase in the Company's favor, such repurchase right
shall, if required by the Applicable Laws, lapse at the rate of at least 20% per
year over five years from the date the Option is granted. Notwithstanding the
above, in the case of an Option granted to an officer (including but not limited
to Officers), Director or Consultant of the Company or any Parent or Subsidiary
of the Company, the Option may become fully exercisable, and a repurchase right,
if any, in favor of the Company shall lapse, at any time or during any period
established by the Administrator. The Administrator shall have the discretion to
determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such leave.

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

          An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.

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

               (b)  Termination of Employment or Consulting Relationship.
                    ----------------------------------------------------
Subject to Section 10(c) below, in the event of termination of an Optionee's
Continuous Service Status, such Optionee may, but only within three months (or
such other period of time not less than 30 days as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three months)
after

                                      -8-

<PAGE>

the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his or her Option to the extent that the Optionee was entitled to exercise it at
the date of such termination. To the extent that the Optionee was not entitled
to exercise the Option at the date of such termination, or if the Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate. No termination shall be deemed to occur and
this Section 10(b) shall not apply if (i) the Optionee is a Consultant who
becomes an Employee, or (ii) the Optionee is an Employee who becomes a
Consultant.

               (c)  Disability of Optionee.
                    ----------------------

                    (i)  Notwithstanding Section 10(b) above, in the event of
termination of an Optionee's Continuous Service Status as a result of his or her
total and permanent disability (within the meaning of Section 22(e)(3) of the
Code), such Optionee may, but only within six months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

                    (ii) In the event of termination of an Optionee's Continuous
Service Status as a result of a disability which does not fall within the
meaning of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), such Optionee may, but only within six months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. However, to
the extent that such Optionee fails to exercise an Option which is an Incentive
Stock Option ("ISO") (within the meaning of Section 422 of the Code) within
three months of the date of such termination, the Option will not qualify for
ISO treatment under the Code. To the extent that the Optionee was not entitled
to exercise the Option at the date of termination, or if the Optionee does not
exercise such Option to the extent so entitled within six months from the date
of termination, the Option shall terminate.

               (d)  Death of Optionee. In the event of the death of an Optionee
                    -----------------
during the period of Continuous Service Status since the date of grant of the
Option, or within 30 days following termination of the Optionee's Continuous
Service Status, the Option may be exercised, at any time within twelve months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), by such
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of death or, if earlier, the date of termination of the
Optionee's Continuous Status as an Employee or Consultant. To the extent that
the Optionee was not entitled to exercise the Option at the date of death or
termination, as the case may be, or if the Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

                                      -9-

<PAGE>

               (e)  Extension of Exercise Period. The Administrator shall have
                    ----------------------------
full power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Service
Status from the periods set forth in Sections 10(b), 10(c) and 10(d) above or in
the Option Agreement to such greater time as the Board shall deem appropriate,
provided that in no event shall such Option be exercisable later than the date
of expiration of the term of such Option as set forth in the Option Agreement.

               (f)  Rule 16b-3. Options granted to Reporting Persons shall
                    ----------
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.

          11.  Stock Purchase Rights.
               ---------------------

               (a)  Rights to Purchase. Stock Purchase Rights may be issued
                    ------------------
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled
to purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed 30 days from the date upon
which the Administrator made the determination to grant the Stock Purchase
Right. If required by the Applicable Laws, the purchase price of Shares subject
to Stock Purchase Rights shall not be less than 85% of the Fair Market Value of
the Shares as of the date of the offer, or, in the case of a Ten Percent Holder,
the price shall not be less than 100% of the Fair Market Value of the Shares as
of the date of the offer. If the Applicable Laws do not impose restrictions on
the purchase price, the purchase price of Shares subject to Stock Purchase
Rights shall be as determined by the Administrator. The offer to purchase Shares
subject to Stock Purchase Rights shall be accepted by execution of a Restricted
Stock Purchase Agreement in the form determined by the Administrator.

               (b)  Repurchase Option. Unless the Administrator determines
                    -----------------
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine; provided, however, that with respect to an Optionee
who is not an officer, director or Consultant of the Company or of any Parent or
Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year if
required by the Applicable Laws.

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

                                      -10-

<PAGE>

               (d)  Rights as a Stockholder. Once the Stock Purchase Right is
                    -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 12
of the Plan.

          12.  Taxes.
               -----

               (a)  As a condition of the exercise of an Option or Stock
Purchase Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of Option and the
issuance of Shares. The Company shall not be required to issue any Shares under
the Plan until such obligations are satisfied.

               (b)  In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option.

               (c)  This Section 12(c) shall apply only after the date, if any,
upon which the Common Stock becomes a Listed Security. In the case of
Participant other than an Employee (or in the case of an Employee where the next
payroll payment is not sufficient to satisfy such tax obligations, with respect
to any remaining tax obligations), in the absence of any other arrangement and
to the extent permitted under the Applicable Laws, the Participant shall be
deemed to have elected to have the Company withhold from the Shares to be issued
upon exercise of the Option or Stock Purchase Right that number of Shares having
a Fair Market Value determined as of the applicable Tax Date (as defined below)
equal to the minimum statutory amounts required to be withheld. For purposes of
this Section 12, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
under the Applicable Laws (the "Tax Date").
                                --------

               (d)  If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right by surrendering to the Company Shares that (i)
in the case of Shares previously acquired from the Company, have been owned by
the Participant for more than six (6) months on the date of surrender, and (ii)
have a Fair Market Value determined as of the applicable Tax Date equal to the
minimum statutory amounts required to be withheld.

               (e)  Any election or deemed election by a Participant to have
Shares withheld to satisfy tax withholding obligations under Section 12(c) or
(d) above shall be irrevocable as to the particular Shares as to which the
election is made and shall be subject to the consent or disapproval of the
Administrator. Any election by a Participant under Section 12(d) above must be
made on or prior to the applicable Tax Date.

                                      -11-

<PAGE>

               (f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option is exercised but such
Participant shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the applicable Tax Date.

          13.  Adjustments Upon Changes in Capitalization, Merger or Certain
               -------------------------------------------------------------
Other Transactions.
-------------------

               (a)  Changes in Capitalization. Subject to any required action by
                    -------------------------
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, the number of shares of Common
Stock that have been authorized for issuance under the Plan but as to which no
Options or Stock Purchase Rights have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, and the number of shares set forth in Sections 3(a)(i) and 8
above, as well as the price per share of Common Stock covered by each such
outstanding Option or Stock Purchase Right, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase
or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

               (b)  Dissolution or Liquidation. In the event of the proposed
                    --------------------------
dissolution or liquidation of the Company, the Board shall notify the
Participant at least 15 days prior to such proposed action. To the extent it has
not been previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

               (c)  Merger or Sale of Assets. In the event of a proposed sale of
                    ------------------------
all or substantially all of the Company's assets or a merger of the Company with
or into another corporation where the successor corporation issues its
securities to the Company's stockholders, each outstanding Option or Stock
Purchase Right shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the successor corporation does not agree to assume
the Option or Stock Purchase Right or to substitute an equivalent option or
right, in which case such Option or Stock Purchase Right shall terminate as of
the date of closing of the merger or sale of assets. For purposes of this
Section 13(c), an Option or a Stock Purchase Right shall be considered assumed,
without limitation, if, at the time of issuance of the stock or other
consideration upon such merger or sale of assets, each holder of an Option or a
Stock Purchase Right would be entitled to receive upon exercise of the Option or
Stock Purchase Right the same number and kind of shares

                                      -12-

<PAGE>

of stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of such transaction if the
holder had been, immediately prior to such transaction, the holder of the number
of Shares of Common Stock covered by the Option or the Stock Purchase Right at
such time (after giving effect to any adjustments in the number of Shares
covered by the Option or Stock Purchase Right as provided for in this Section
13).

               (d)  Certain Distributions. In the event of any distribution to
                    ---------------------
the Company's stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without receipt
of consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

          14.  Non-Transferability of Options and Stock Purchase Rights.
               --------------------------------------------------------

               (a)  General. Except as set forth in this Section 14, Options and
                    -------
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent or distribution. The designation of a beneficiary by a Participant will
not constitute a transfer. An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of an Option or Stock Purchase Right, only by
such holder or a transferee permitted by this Section 14.

               (b)  Limited Transferability Rights. Notwithstanding anything
                    ------------------------------
else in this Section 14, prior to the date, if any, on which the Common Stock
becomes a Listed Security, the Administrator may in its discretion grant
Nonstatutory Stock Options that may be transferred by instrument to an inter
vivos or testamentary trust in which the Options are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift to "Immediate
Family" (as defined below), on such terms and conditions as the Administrator
deems appropriate. Following the date, if any, on which the Common Stock becomes
a Listed Security, the Administrator may in its discretion grant transferable
Nonstatutory Stock Options pursuant to Option Agreements specifying the manner
in which such Nonstatutory Stock Options are transferable. "Immediate Family"
                                                            ----------------
means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships.

         15.   Time of Granting Options and Stock Purchase Rights. The date of
               --------------------------------------------------
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board; provided,
however, that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.

                                      -13-

<PAGE>

          16.  Amendment and Termination of the Plan.
               -------------------------------------

               (a)  Authority to Amend or Terminate. The Board may at any time
                    -------------------------------
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with the Applicable
Laws, the Company shall obtain stockholder approval of any Plan amendment in
such a manner and to such a degree as required.

               (b)  Effect of Amendment or Termination. No amendment or
                    ----------------------------------
termination of the Plan shall adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

          17.  Conditions Upon Issuance of Shares. Shares shall not be issued
               ----------------------------------
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange.

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

          18.  Reservation of Shares. The Company, during the term of this Plan,
               ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

          19.  Agreements. Options and Stock Purchase Rights shall be evidenced
               ----------
by written Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall approve from time to
time.

          20.  Stockholder Approval. Continuance of the Plan shall be subject to
               --------------------
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under the Applicable Laws. All Options and Stock
Purchase Rights issued under the Plan shall become void in the event such
approval is not obtained.

                                      -14-

<PAGE>

          21.  Information and Documents to Participants and Purchasers. Prior
               --------------------------------------------------------
to the date, if any, on which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Participant and to each individual who acquired Shares
Pursuant to the Plan, during the period such Participant or purchaser has one or
more Options or Stock Purchase Rights outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information. In addition, at the time of issuance of
any securities under the Plan, the Company shall provide to the Participant or
the Purchaser a copy of the Plan and any agreement(s) pursuant to which
securities granted under the Plan are issued.

                                      -15-

<PAGE>

                           RITA MEDICAL SYSTEMS, INC.

                                 2000 STOCK PLAN

                             STOCK OPTION AGREEMENT
                             ----------------------

          You have been granted an option to purchase Common Stock of RITA
Medical Systems, Inc., (the "Company") as indicated on the Certificate of Stock
                             -------
Option Grant on the AST Stockplan website (the "Certificate"). Please review
this Notice and the attached Stock Option Agreement before executing your grant
at the AST Stockplan website at www.aststockplan.com.

          Vesting/Exercise Schedule:    So long as your employment or consulting
                                        relationship with the Company continues,
                                        the Shares underlying this Option shall
                                        vest and become exercisable in
                                        accordance with the vesting schedule
                                        indicated on the Certificate.

          Termination Period:           Option may be exercised for three (3)
                                        months after termination of employment
                                        or consulting relationship except as set
                                        out in Section 5 of the Stock Option
                                        Agreement (but in no event later than
                                        the Expiration Date). Optionee is
                                        responsible for keeping track of these
                                        exercise periods following termination
                                        for any reason of his or her service
                                        relationship with the Company. The
                                        Company will not provide further notice
                                        of such periods.

          1.   Grant of Option. RITA Medical Systems, Inc., a Delaware
               ---------------
corporation (the "Company"), hereby grants to the ("Optionee"), an option (the
                  -------                           --------
"Option") to purchase the total number of shares of Common Stock (the "Shares")
 ------                                                                ------
set forth in the Certificate of Stock Option Grant available from the AST
Stockplan website (the "Certificate"), at the exercise price per Share set forth
                        -----------
in the Certificate (the "Exercise Price") subject to the terms, definitions and
                         --------------
provisions of the RITA Medical Systems, Inc. 2000 Stock Plan (the "Plan")
                                                                   ----
adopted by the Company, which is incorporated in this Agreement by reference.
Unless otherwise defined in this Agreement, the terms used in this Agreement
shall have the meanings defined in the Plan. This Stock Option Agreement shall
be deemed executed by the Company and Optionee upon execution by such parties of
the Certificate.

          2.   Designation of Option. This Option is intended to be an Incentive
               ---------------------
Stock Option as defined in Section 422 of the Code only to the extent so
designated in the Certificate, and to

                                      -16-

<PAGE>

the extent it is not so designated or to the extent the Option does not qualify
as an Incentive Stock Option, it is intended to be a Nonstatutory Stock Option.

         Notwithstanding the above, if designated as an Incentive Stock Option,
in the event that the Shares subject to this Option (and all other Incentive
Stock Options granted to Optionee by the Company or any Parent or Subsidiary,
including under other plans of the Company) that first become exercisable in any
calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5(c) of the Plan.

          3.   Exercise of Option. This Option shall be exercisable during its
               ------------------
term in accordance with the Vesting/Exercise Schedule set out in the Certificate
and with the provisions of Section 10 of the Plan as follows:

               (a)  Right to Exercise.
                    -----------------

                    (i)   This Option may not be exercised for a fraction of a
share.

                    (ii)  In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 5 below, subject to the limitations contained in this Section 3.

                    (iii) In no event may this Option be exercised after the
Expiration Date of the Option as set forth in the Certificate.

               (b)  Method of Exercise.
                    ------------------

                    (i)   This Option shall be exercisable by delivering to the
Company a Stock Option Cash Exercise Letter of Authorization which is a written
notice of exercise (in the form available from the AST Stockplan website) which
shall state Optionee's election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the holder's investment intent with respect to such Shares
as may be required by the Company pursuant to the provisions of the Plan. The
Cash Letter of Authorization shall be signed by Optionee and shall be delivered
to the Company by such means as are determined by the Plan Administrator in its
discretion to constitute adequate delivery. The Cash Letter of Authorization
shall be accompanied by payment of the Exercise Price. This Option shall be
deemed to be exercised upon receipt by the Company of the Cash Letter of
Authorization accompanied by the Exercise Price.

                    (ii)  As a condition to the exercise of this Option and as
further set forth in Section 12 of the Plan, Optionee agrees to make adequate
provision for federal, state or other tax withholding obligations, if any, which
arise upon the vesting or exercise of the Option, or disposition of Shares,
whether by withholding, direct payment to the Company, or otherwise.

                                      -17-

<PAGE>

                    (iii) The Company is not obligated, and will have no
liability for failure, to issue or deliver any Shares upon exercise of the
Option unless such issuance or delivery would comply with the Applicable Laws,
with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised until such time as the Plan has been
approved by the stockholders of the Company, or if the issuance of such Shares
upon such exercise or the method of payment of consideration for such shares
would constitute a violation of any applicable federal or state securities or
other law or regulation, including any rule under Part 221 of Title 12 of the
Code of Federal Regulations as promulgated by the Federal Reserve Board. As a
condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by the
Applicable Laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

          4.   Method of Payment. Payment of the Exercise Price shall be by any
               -----------------
of the following, or a combination of the following, at the election of
Optionee:

               (a)  cash or check; or

               (b)  following the date, if any, upon which the Common Stock is
a Listed Security, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the exercise
price.

          5.   Termination of Relationship. Following the date of termination of
               ---------------------------
Optionee's Continuous Service Status for any reason (the "Termination Date"),
                                                          ----------------
Optionee may exercise the Option only as set forth in the Certificate and this
Section 5. To the extent that Optionee is not entitled to exercise this Option
as of the Termination Date, or if Optionee does not exercise this Option within
the Termination Period set forth in the Certificate or the termination periods
set forth below, the Option shall terminate in its entirety. In no event, may
any Option be exercised after the Expiration Date of the Option as set forth in
the Notice.

               (a)  Termination. In the event of termination of Optionee's
                    -----------
Continuous Service Status other than as a result of Optionee's disability or
death, Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
                  ----------------
Termination Period set forth in the Certificate.

               (b)  Other Terminations. In connection with any termination other
                    ------------------
than a termination covered by Section 5(a), Optionee may exercise the Option
only as described below:

                    (i)  Termination upon Disability of Optionee. In the event
                         ---------------------------------------
of termination of Optionee's Continuous Service Status as a result of Optionee's
disability, Optionee may, but only within six months from the Termination Date,
exercise this Option to the extent Optionee was entitled to exercise it as of
such Termination Date.

                                      -18-

<PAGE>

                    (ii) Death of Optionee. In the event of the death of
                         -----------------
Optionee (a) during the term of this Option and while an Employee or Consultant
of the Company and having been in Continuous Service Status since the date of
grant of the Option, or (b) within thirty (30) days after Optionee's Termination
Date, the Option may be exercised at any time within twelve months following the
date of death by Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent Optionee
was entitled to exercise the Option as of the Termination Date.

          6.   Non-Transferability of Option. This Option may not be transferred
               -----------------------------
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by him or her. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.

          7.   Tax Consequences. Below is a brief summary as of the date of this
               ----------------
Option of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS
SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

               (a)  Incentive Stock Option.
                    ----------------------

                    (i)  Tax Treatment upon Exercise and Sale of Shares. If this
                         ----------------------------------------------
Option qualifies as an Incentive Stock Option, there will be no regular federal
income tax liability upon the exercise of the Option, although the excess, if
any, of the fair market value of the Shares on the date of exercise over the
Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax
in the year of exercise. If Shares issued upon exercise of an Incentive Stock
Option are held for at least one year after exercise and are disposed of at
least two years after the Option grant date, any gain realized on disposition of
the Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares issued upon exercise of an Incentive Stock Option are
disposed of within such one-year period or within two years after the Option
grant date, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the fair market
value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.

                    (ii) Notice of Disqualifying Dispositions. With respect to
                         ------------------------------------
any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells
or otherwise disposes of such Shares on or before the later of (i) the date two
years after the Option grant date, or (ii) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that he or she may be subject to
income tax withholding by the Company on the compensation income recognized by
Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.

               (b)  Nonstatutory Stock Option. If this Option does not qualify
                    -------------------------
as an Incentive Stock Option, there may be a regular federal (and state) income
tax liability upon the

                                      -19-

<PAGE>

exercise of the Option. Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price. If Optionee is an Employee, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise. If Shares issued upon exercise of a Nonstatutory Stock
Option are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal income tax
purposes.

          8.   Effect of Agreement. Optionee acknowledges receipt of a copy of
               -------------------
the Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan. Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a
conflict between the terms and provisions of the Plan and the terms and
provisions of the Certificate, the Notice and this Agreement, the Plan terms and
provisions shall prevail. The Option, including the Plan, constitutes the entire
agreement between Optionee and the Company on the subject matter hereof and
supersedes all proposals, written or oral, and all other communications between
the parties relating to such subject matter.

         By your electronic signature and the electronic signature of the
Company, you and the Company agree that this option is granted under and
governed by the terms and conditions of the RITA Medical Systems, Inc. 2000
Stock Plan which is attached and made a part of this document.

         In addition, you agree and acknowledge that your rights to any Shares
underlying the Option will be earned only as you provide services to the Company
over time, that the grant of the Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in the Certificate or the attached documents confers upon you any right
to continue your employment or consulting relationship with the Company for any
period of time, nor does it interfere in any way with your right or the
Company's right to terminate that relationship at any time, for any reason, with
or without cause.

                                              RITA Medical Systems, Inc.
                                      -20-

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