Document:

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                                                                 Exhibit 10.15

                                  OFFICE LEASE
                            BASIC LEASE INFORMATION

LEASE DATE:                February 19, 2001
TENANT:                    POLYCOM, INC.,
                           a Delaware corporation

TENANT'S ADDRESS:          1565 Barber Lane
                           Milpitas, California 95035
                           Attention: Mr. Michael Korey, Chief Financial Officer
                           Frederick Gonzalez, Esq., General Counsel

LANDLORD:                  WJT, LLC,
                           a California limited liability company

LANDLORD'S ADDRESS:        6601 Owens Drive, Suite 100
                           Pleasanton, CA 94588

                           Payments to:   Charter Properties
                                          c/o James Tong
                                          6601 Owens Drive, Suite 100
                                          Pleasanton, CA 94588

PROPERTY:                  That certain real property commonly known as 4750
                           Willow Road, located in Pleasanton, California, and
                           as more particularly described in Exhibit A,
                           attached.

PREMISES:                  That certain building (the "Building") to be
                           constructed by Landlord on the Property.

PREMISES RENTABLE AREA:    Approximately fifty thousand three hundred
                           seventy five (50,375) net rentable
                           square feet.

PERMITTED USE:             General office, administration and sales.

TERM COMMENCEMENT DATE:    The date on which the Premises are Substantially
                           Complete (as defined in the Work Letter attached
                           hereto), subject to the terms of Section 3.A. below.

LEASE TERM:                Ten (10) years.

BASE RENT:                 Lease Year            Monthly Base Rent
                           ----------            -----------------

                                1                $151,125 per month.
                                2                $157,170 per month.
                                3                $163,457 per month.
                                4                $169,995 per month.
                                5                $176,795 per month.
                                6                $183,867 per mouth.

                                7                $191,221 per month
                                8                $198,870 per month.
                                9                $206,825 per month.
                                10               $215,098 per month.

SECURITY DEPOSIT:          One Million Dollars ($ 1,000,000.00)

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TENANT'S PROPORTIONATE
SHARE:                     One hundred percent (100%)

BROKER:                       Gabriel E. Arechaederra
                              Colliers International
                              5050 Hopyard Rd., Suite 180
                              Pleasanton, CA 94588

The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective inforrnation above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.

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                                TABLE OF CONTENTS

   1. PREMISES................................................................1
   2. POSSESSION AND LEASE COMMENCEMENT.......................................1
   3. TERM....................................................................1
   4. USE.....................................................................3
   5. RULES AND REGULATIONS...................................................6
   6. RENT....................................................................6
   7. BASIC OPERATING COST....................................................7
   8. INSURANCE AND INDEMNIFICATION..........................................11
   9. WAIVER OF SUBROGATION..................................................14
   10. LANDLORD'S REPAIRS AND SERVICES.......................................14
   11, TENANT'S REPAIRS......................................................14
   12. ALTERATIONS...........................................................15
   13. SIGNS.................................................................16
   14. INSPECTION/ POSTING NOTICES...........................................16
   15. SUBORDINATION.........................................................17
   16. FINANCIAL STATEMENTS..................................................18
   17. ESTOPPEL CERTIFICATE..................................................18
   18. SECURITY DEPOSIT......................................................18
   19. TENANT'S REMEDIES.....................................................19
   20. ASSIGNMENT AND SUBLETTING.............................................19
   21. AUTHORITY OF PARTIES..................................................21
   22, CONDEMNATION..........................................................21
   23. CASUALTY DAMAGE.......................................................21
   24. HOLDING OVER..........................................................22
   25. DEFAULT...............................................................23
   26. LIENS.................................................................25
   27. TRANSFERS BY LANDLORD.................................................25
   28. RIGHT OF LANDLORD TO PERFORM AND TENANT'S COVENANTS...................26
   29. WAIVER................................................................26
   30. NOTICES...............................................................26
   31. ATTORNEYS' FEES.......................................................27
   32. SUCCESSORS AND ASSIGNS................................................27
   33. FORCE MAJEURE.........................................................27
   34. BROKERAGE COMMISSION..................................................27
   35. MISCELLANEOUS.........................................................27
   SIGNATURES................................................................31
   LEASE RIDER...............................................................32

Exhibits:

Exhibit A    -    Legal Description
Exhibit B    -    Work Letter
Exhibit C    -    Memorandum of Term Commencement Date
Exhibit D    -    Rules and Regulations
Exhibit D-1  -    Elevator Use

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                                      LEASE

                    THIS LEASE is made as of the date set.forth in the Basic
                    Lease Information by and between WJT, LLC, a California
                    limited liability company (hereinafter called "Landlord"),
                    and POLYCOM, INC., a Delaware corporation (hereinafter
                    called "Tenant").

PREMISES                 1          Landlord leases to Tenant and Tenant
                                    leases from Landlord, upon the terms and
                                    conditions hereinafter set forth,
                                    those premises (the "Premises") outlined and
                                    crosshatched on Exhibit A attached hereto
                                    and made a part hereof and described in the
                                    Basic Lease Information. The Premises are
                                    also referred to herein as the building (the
                                    "Building"), commonly known as 4750 Willow
                                    Road in Pleasanton, California.

POSSESSION               2.         CONSTRUCTION OF IMPROVEMENTS. The Premises
AND LEASE                           shall be constructed substantially in
COMMENCE-                           accordance with plans and specifications
MENT                                (the "Plans and Specifications") and the
                                    Work Letter attached hereto as Exhibit B and
                                    made a part hereof. Tenant shall prepare
                                    said Plans and Specifications which shall be
                                    approved by Landlord and Tenant prior to
                                    commencement of construction in accordance
                                    with the Work Letter. The term commencement
                                    date ("Term Commencement Date") shall be the
                                    later of (i) October 15, 2001 (the
                                    "Estimated Commencement Date"), or (h)
                                    Substantial Completion of the Tenant
                                    Improvements, as such date may be adjusted
                                    for either or both Landlord Delays or Tenant
                                    Delays (as such terms are defined in the
                                    Work Letter). If, for any reason, Landlord
                                    cannot deliver possession of the Premises to
                                    Tenant on the Estimated Commencement Date,
                                    Landlord shall not be subject to any
                                    liability therefor, nor shall Landlord be in
                                    default hereunder. Notwithstanding the
                                    foregoing, if the Premises are not
                                    Substantially Complete by July 1, 2002, then
                                    Tenant, as Tenant's sole and exclusive
                                    remedy, may terminate this Lease upon
                                    written notice thereof to Landlord received
                                    prior to July 30, 2002 (or any earlier date
                                    on which the Premises are Substantially
                                    Complete). If Tenant shall have failed to
                                    deliver such termination notice prior to
                                    July 30, 2002, then Tenant shall be deemed
                                    to have waived Tenant's right to terminate
                                    this Lease pursuant to this Section 21. If
                                    Tenant shall properly terminate this Lease
                                    pursuant to this Section 2, then the Base
                                    Rent and Security Deposit prepaid to
                                    Landlord shall be promptly returned to
                                    Tenant. Tenant further acknowledges that no
                                    representations as to the condition or
                                    repair of the Premises nor promises to
                                    alter, remodel or improve the Premises have
                                    been made by Landlord unless such are
                                    expressly set forth in this Lease.

TERM                          3.    A. COMMENCEMENT DATE. The Term of this Lease
                                    shall commence on the Term Commencement Date
                                    and continue in full force and effect for
                                    One Hundred Twenty (120) months thereafter
                                    or until this Lease is terminated as
                                    otherwise provided herein. Notwithstanding
                                    the foregoing, if the date on which the
                                    Premises are Substantially Complete (as such
                                    date may be adjusted for Tenant Delays) is
                                    between November 24, 2001 and December 31,
                                    2001 (the "Rent Abatement Period"), and,
                                    notwithstanding the fact that the Premises
                                    are Substantially Complete, Tenant does not
                                    occupy the Premises during such. Rent
                                    Abatement Period, then the Base Rent and
                                    Additional Rent due hereunder shall instead
                                    commence to be due and owing as of January
                                    1, 2002, which date shall be deemed the Term
                                    Commencement Date for the purposes of this
                                    Lease. If the Premises are Substantially
                                    Completed during the Rent Abatement Period
                                    and Tenant takes possession of any portion
                                    thereof, then the date of such possession
                                    shall be the Term

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                                    Commencement Date, and Tenant's
                                    obligations hereunder to pay Base Rent
                                    and Additional Rent shall commence on
                                    such date. In any event Tenant's
                                    obligations hereunder other than the
                                    obligation to pay Base Rent and
                                    Additional Rent (including, but not
                                    limited to the insurance, indemnification
                                    and maintenance and repair obligations
                                    described herein) shall commence on the
                                    date that the Premises are Substantially
                                    Complete, regardless of whether such date
                                    is within the Rent Abatement Period or
                                    not The Base Rent shall be subject to
                                    yearly increases pursuant to Paragraph
                                    6.C. hereof. If the Term Commencement
                                    Date is a date other than the first day
                                    of the calendar month, the Term shall be
                                    the number of months of the Term in
                                    addition to the remainder of the calendar
                                    month following the Term Commencement
                                    Date. A Memorandum of Term Commencement
                                    Date in the form set forth in Exhibit C
                                    hereto shall be executed by both parties
                                    as soon as practicable after the Term
                                    commences. Notwithstanding anything to
                                    the contrary in this Lease, Landlord
                                    warrants and represents that, as of the
                                    Term Commencement Date, to the best of
                                    Landlord's knowledge, the Building Shell
                                    (as defined in the Work Letter) will
                                    comply with all applicable provisions of
                                    the law commonly known as Title III of
                                    the Americans With Disabilities Act, as
                                    promulgated as of the Term Commencement
                                    Date. Landlord shall, promptly after
                                    receipt of notice from Tenant, remedy any
                                    non-compliance with such warranty at
                                    Landlord's sole cost and expense.

                                    B. RENEWAL OPTIONS. As long as there does
                                    not exist an uncured event of default, as
                                    defined in Paragraph 25 hereof, on the part
                                    of Tenant at the time this renewal is
                                    exercised or the time the Renewal Term
                                    begins, Landlord hereby grants to Tenant a
                                    renewal option for a. FIVE (5) YEAR term
                                    ("Renewal Term"). During the Renewal Term,
                                    all covenants and conditions applicable to
                                    the immediately preceding Term, as
                                    applicable, shall apply, except that the
                                    Base Rent shall be One Hundred Percent
                                    (100%) of the Fair Market Rent of the
                                    Premises, as determined pursuant to
                                    Paragraph 3.C. hereof. Tenant shall deliver
                                    to Landlord a written notice of Tenant's
                                    exercise of the Renewal Option no later than
                                    Two Hundred Seventy (270) days but no
                                    greater than Three Hundred Sixty (360) days
                                    prior to the expiration of the initial Lease
                                    Term (the "Exercise Notice"). The Base Rent
                                    during the Renewal Term shall be subject to
                                    yearly increases pursuant to Paragraph 6.C.
                                    hereof.

                                    C. FAIR MARKET RENT. As used in this Lease,
                                    "Fair Market Rent" shall be deemed to mean
                                    the base amount of rental that would
                                    typically be paid by a tenant under a net
                                    lease (exclusive of all other sums payable
                                    by tenant under a net lease such as taxes,
                                    insurance premiums, common area maintenance
                                    charges, utilities, repair and restoration
                                    costs, and similar charges) for premises of
                                    a similar type, design, and quality in the
                                    same geographic area in which the Premises
                                    are situated under market leasing conditions
                                    existing at that time and taking into
                                    account the presence, if any, of other
                                    escalation provisions provided in this
                                    Lease. If Landlord and Tenant cannot agree
                                    on the Fair Market Rent within thirty (30)
                                    days after Landlord's receipt of the
                                    Exercise Notice, the Base Rent payable
                                    during the Renewal Term shall be
                                    conclusively determined as follows:

                                           (i) Within ten (10) days after the
                                    expiration of the thirty (30) day period,
                                    each party, at its cost and by giving notice
                                    to the other party, shall appoint a real
                                    estate appraiser with at least five (5)
                                    years full time commercial appraisal
                                    experience in the geographic area in which
                                    the Premises are located, to appraise and
                                    determine the then Fair Market Rent as

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                                    described herein.

                                          (ii) If one party does not appoint an
                                    appraiser within the time period set forth
                                    in Paragraph 3.C(i), the appraiser appointed
                                    by the other party shall be the sole
                                    appraiser and shall determine the Fair
                                    Market Rent.

                                         (iii) If neither party appoints an
                                    appraiser within the time period set forth
                                    in, Paragraph 3.C.(i), the Base Rent during
                                    the Renewal Term shall be increased four
                                    percent (4%) over the Base Rent payable in
                                    the last full month immediately preceding
                                    Landlord's receipt of the Exercise Notice.

                                          (iv) If the two (2) appraisers are so
                                    appointed by the parties, they shall meet
                                    promptly and attempt to appraise and
                                    determine the Fair Market Rent. If they are
                                    unable to agree within ten (10) days after
                                    the second appraiser has been appointed,
                                    they shall attempt to select a third
                                    appraiser who meets the qualifications
                                    stated in Paragraph 3.C.(i) within ten (10)
                                    days after the last day the two appraisers
                                    are given to determine the Fair Market Rent.
                                    If they are unable to agree on a third
                                    appraiser, either of the parties to this
                                    Lease, by giving ten (10) days' notice to
                                    the other party, can apply to the presiding
                                    judge of the Superior Court for the county
                                    in which the Premises are located for the
                                    selection of a third appraiser who meets the
                                    qualifications stated in Paragraph 3.C.(i).
                                    Each of the parties shall bear one-half
                                    (1/2) of the cost of appointing the third
                                    appraiser and of the third appraiser's fees.
                                    The third appraiser, however selected, shall
                                    be a person who has not previously acted in
                                    any capacity for either party.

                                           (v) Within ten (10) days after the
                                    selection of the third appraiser, a majority
                                    of the appraisers shall appraise and
                                    detemine the Fair Market Rent. If a
                                    majority of the appraisers are unable to so
                                    set the Fair Market Rent within the required
                                    period of time, the appraisals of the three
                                    Appraisers shall be added together and their
                                    total divided by three, The resulting
                                    quotient shall be the Fair Market Rent.

                                          (vi) If, however, the low appraisal
                                    or the high appraisal are more than ten
                                    percent (10%) lower or higher than the
                                    middle appraisal, the low appraisal or the
                                    high appraisal shall be disregarded, If only
                                    one appraisal is disregarded, the remaining
                                    two appraisals shall be added together and
                                    their total divided by two. The resulting
                                    quotient shall be the Fair Market Rent. If
                                    two appraisals are disregarded, the
                                    remaining appraisal shall be the Fair Market
                                    Rent.

USE                         4.      A. GENERAL. Tenant shall use the Premises
                                    for the Permitted Use and for no other use
                                    or purpose. Tenant and Tenant's employees,
                                    agents, customers, visitors, invitees,
                                    licensees, contracters, assignees and
                                    subtenants (collectively, "Tenant's
                                    Parties"). shall have the right to use the
                                    common corridors and hallways, stairwells,
                                    elevators, restrooms and other public or
                                    common areas; provided, however, that the
                                    manner in which the public and common areas
                                    are maintained and operated shall be at the
                                    sole discretion of Landlord and the use
                                    thereof shall be subject to such reasonable
                                    rules, regulations and restrictions as
                                    Landlord may make from time to time.
                                    Landlord reserves the right to make
                                    alterations or additions to or to change the
                                    location of elements of the Building and the
                                    common areas thereof in Landlord's sole
                                    discretion, provided Tenant's use and
                                    enjoyment of the Premises are not materially
                                    diminished.

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                                    B. LIMITATIONS. Tenant shall not use the
                                    Premises, or permit the Premises to be used,
                                    in any manner which: (a) causes or is likely
                                    to cause damage to the Building or Premises;
                                    (b) violates a requirement or condition of
                                    any fire and extended insurance policy
                                    covering the Building and/or Premises, or
                                    increases the cost of such policy; (c)
                                    violates any Regulation (as defined in
                                    Section 4.C. below); (d) constitutes or is
                                    reasonably likely to constitute a nuisance,
                                    annoyance or inconvenience to other tenants
                                    or occupants of the Building or its
                                    equipment, facilities or systems; (e)
                                    interferes with, or is reasonably likely to
                                    interfere with, the transmission or
                                    reception of microwave, television, radio,
                                    telephone or other communication signals by
                                    antennae or other facilities located in the
                                    Building; or (f) violates the Rules and
                                    Regulations described in Exhibit D attached
                                    hereto. Tenant shall not use the Premises
                                    so as to create unreasonable noise,
                                    vibration, or heat in or around the Building
                                    or Premises, or otherwise disturb any other
                                    tenants or occupants of the Building or
                                    third parties ("Objectionable Conditions").
                                    If Landlord determines that Tenant's use of
                                    the Premises (including any electrical
                                    generating equipment or condensers installed
                                    on the roof of the Building) creates
                                    unreasonable noise, vibration or heat in or
                                    around the Building or otherwise disturbs
                                    any tenant of the Building or any third
                                    party, Tenant shall, within five (5) days of
                                    receipt of written notice from Landlord,
                                    take all action necessary to correct any
                                    such objectionable condition, including,
                                    without limitation, installation of
                                    additional insulation and soundproofing
                                    materials and construction of platforms,
                                    vibration eliminators and other devices
                                    sufficient to eliminate, heat, noise and/or
                                    vibration. If such an Objectionable
                                    Condition exists, Landlord may employ, at
                                    Tenant's expense, a consulting engineer to
                                    advise Landlord on the means of eliminating
                                    the objectionable noise, vibration, heat or
                                    other condition. If Tenant fails to
                                    eliminate the objectionable condition within
                                    the five (5) day period Tenant shall
                                    immediately discontinue use of the equipment
                                    or machinery creating the subject condition.
                                    Tenant's failure to eliminate the
                                    objectionable condition within the five (5)
                                    day period or to discontinue operation of
                                    the offending equipment or machinery at the
                                    expiration of the five (5) day period if the
                                    objectionable condition, is not eliminated
                                    shall constitute an Event of Default
                                    hereunder. The provisions of Section
                                    25.A.(3) granting Tenant thirty (30) days
                                    after receipt of notice of default to cure a
                                    non-monetary default shall not be applicable
                                    to a default under this section. Storage
                                    outside the Premises of materials, vehicles
                                    or any other items is prohibited. Tenant
                                    shall not use or allow the Premises to be
                                    used for any improper, immoral, unlawful or
                                    objectionable purpose, nor shall Tenant
                                    cause or maintain or permit any nuisance in,
                                    on or about the Premises. Tenant shall not
                                    commit or suffer the commission of any waste
                                    in, on or about the Premises. Tenant shall
                                    not allow any sale by auction upon the
                                    Premises, or place any loads upon the
                                    floors which exceed 20 pounds per square
                                    foot of partition load or 80 pounds
                                    per square foot of live load, or place any
                                    loads upon walls or ceilings which endanger
                                    the structure, or place any harmful liquids
                                    in the drainage system of the Building. No
                                    waste, materials or refuse shall be dumped
                                    upon or permitted to remain outside the
                                    Premises. Landlord shall not be responsible
                                    to Tenant for the non-compliance by any
                                    other tenant or occupant of the Building
                                    with any of the above referenced rules or
                                    any other terms or provisions of such
                                    tenant's or occupant's lease or other
                                    contract.

                                    C. COMPLIANCE WITH REGULATIONS. Except as
                                    otherwise warranted by Landlord in Section
                                    3A of this Lease, by entering the Premises,
                                    Tenant accepts the Premises in the condition
                                    existing as of the date of such entry,
                                    subject to all existing or future applicable
                                    municipal, state and federal and

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                                    other governmental statutes, regulations,
                                    laws and ordinances, including zoning
                                    ordinances and regulations governing and
                                    relating to the. use, occupancy and
                                    possession of the Premises and the use,
                                    storage, generation and disposal of
                                    Hazardous materials (hereinafter defined)
                                    in, on and under the Premises (collectively
                                    "Regulations"); provided, however, that
                                    Landlord shall repair all latent defects in
                                    workmanship and materials of the Premises,
                                    excluding any latent defects arising from
                                    or in any way related to the improvements
                                    constructed by Tenant hereunder, provided
                                    Tenant shall give Landlord written notice of
                                    any such latent defects within twelve (12)
                                    months after the Term Commencement Date.
                                    For purposes of this paragraph, the term
                                    "latent defects" shall mean defects which
                                    were not readily apparent on the Term
                                    Commencement Date. Tenant shall, at Tenant's
                                    sole expense, strictly comply with all
                                    Regulations now in force or which may
                                    hereafter be in force relating to its
                                    particular use of the Premises and the use
                                    of the Premises by Tenant and/or the use,
                                    storage, generation Hazardous Materials in,
                                    on and under the Premises by Tenant. Tenant
                                    shall at its sole cost and expense obtain
                                    any and all licenses or permits necessary
                                    for Tenant's particular use of the Premises.
                                    Tenant shall indemnify, defend, protect and
                                    hold Landlord harmless from and against any
                                    loss, cost, expense, damage, reasonable
                                    attorneys' fees or liability arising out of
                                    the failure of Tenant to comply with any
                                    applicable Regulation or comply with the
                                    requirements as set forth herein. The
                                    judgment of any court of competent
                                    jurisdiction or the admission of Tenant in
                                    any judicial action, regardless of whether
                                    Landlord is a party thereto, that Tenant has
                                    violated any of the Regulations shall be
                                    conclusive of that fact as between Landlord
                                    and Tenant. Notwithstanding anything to the
                                    contrary in this Lease, Tenant shall not be
                                    required to perform any alteration,
                                    modification or improvement to the Premises
                                    which is required by any Regulations, except
                                    to the extent that the compliance is
                                    necessitated due to (a) Tenant's particular
                                    use of the Premises, or (b) alterations,
                                    modifications or improvements to the
                                    Premises voluntarily made by Tenant. Any
                                    other alteration, modification or
                                    improvement to the Premises which is
                                    required by any Regulations shall be
                                    performed by Landlord, and shall be
                                    reimbursed Landlord by Tenant as a Basic
                                    Operating Building Cost, subject to the
                                    terms of Section 7.A.(2) of this Lease.

                                    D. HAZARDOUS WASTES. Tenant shall not
                                    cause, or allow any of tenant's Parties
                                    to cause, any Hazardous Materials to be
                                    used, generated, stored or disposed of on
                                    or about the Premises or the Building.
                                    Notwithstanding the foregoing, normal
                                    quantities of those Hazardous Materials
                                    customarily used in the conduct of
                                    general administrative and executive
                                    office activities (e.g., copier fluids
                                    and cleaning supplies) may be used and
                                    stored at the Premises without Landlord's
                                    prior written consent, but only in
                                    compliance. with all applicable
                                    Regulations. Notwithstanding the
                                    obligation of Tenant to indemnify
                                    Landlord pursuant to this Lease, Tenant
                                    shall, at its sole cost and expense,
                                    promptly take all actions required by any
                                    federal, state or local governmental
                                    agency or political subdivision, or
                                    necessary for Landlord to make full
                                    economic use of the Premises or any
                                    portion of the Building which
                                    requirements or necessity arises from
                                    Tenant's release or emission of Hazardous
                                    Materials upon, about, above or beneath
                                    the Premises or any portion of the
                                    Building. Such actions shall include, but
                                    shall not be limited to, the
                                    investigation of the environmental
                                    condition of the Premises or any portion
                                    of the Building; the preparation of any
                                    feasibility studies or reports and the
                                    performance of any cleanup, remedial,
                                    removal or restoration work. Tenant shall
                                    take all actions necessary to restore the
                                    Premises or any portion of the Building
                                    to the condition existing prior to the
                                    introduction of Tenant's Hazardous
                                    Materials, notwithstanding any less

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                                    stringent standards or remediation allowable
                                    under applicable Regulations, Tenant shall
                                    nevertheless obtain Landlord's written
                                    approval prior to undertaking any actions
                                    required by this Section, which approval
                                    shall not be unreasonably withheld so long
                                    as such actions would not potentially have a
                                    material adverse long term or short-term
                                    effect on the Premises or any portion of the
                                    Building. As used in this Lease, "Hazardous
                                    Materials" shall include, but not be limited
                                    to, hazardous, toxic and radioactive
                                    materials and those substances defined as
                                    "hazardous substances," "hazardous
                                    materials," "hazardous. wastes," "toxic
                                    substances," or other similar designations
                                    'in any federal, state, or local law,
                                    regulation, or ordinance. Landlord shall
                                    have the right at all reasonable times to
                                    inspect the Premises and to conduct tests
                                    and investigations to determine whether
                                    Tenant is in compliance with the foregoing
                                    provisions, and if Tenant is not in
                                    compliance with the foregoing provisions,
                                    the costs of all such inspections, tests and
                                    investigations to be borne by Tenant. Tenant
                                    shall indemnify, defend, protect and hold
                                    Landlord harmless from and against all
                                    liabilities, losses, costs and expenses,
                                    demands, causes of action, claims or
                                    judgments directly or indirectly arising out
                                    of the use, generation, storage or disposal
                                    of Hazardous Materials by Tenant or any of
                                    Tenant's Parties, which indemnity shall
                                    include, without limitation, the cost of any
                                    required or necessary repair, cleanup or
                                    detoxification, and the preparation of any
                                    closure or other required plans, whether
                                    such action is required or necessary prior
                                    to or following the termination of this
                                    Lease. Neither the written consent by
                                    Landlord to the use, generation, storage or
                                    disposal of Hazardous Materials nor the
                                    strict compliance by Tenant with all laws
                                    pertaining to Hazardous Materials shall
                                    excuse Tenant from Tenant's obligation or
                                    indemnification pursuant to this Paragraph
                                    4.D. Tenant's obligations pursuant to the
                                    foregoing indemnity shall survive the
                                    termination of this Lease.

RULES AND                   5.      Tenant shall faithfully observe and
                                    comply with the rules and regulations set
REGULATIONS                         forth in exhibits D and D-1, as modified by
                                    Landlord in Landlord's reasonable discretion
                                    from time to time in writing, for the
                                    purpose of maintaining the proper care,
                                    cleanliness, safety, traffic flow and
                                    general order of the Premises or Building.
                                    Tenant shall cause Tenant's Parties to
                                    comply with such rules and regulations.
                                    Landlord shall not be responsible to Tenant
                                    for the noncompliance by any other tenant or
                                    occupant of the Building with any of the
                                    rules and regulations or any other terms or
                                    provisions of such tenant's or occupant's
                                    lease or other contract

RENT                        6.      A. BASE RENT. Beginning with the Term
                                    Commencement Date (subject to the terms of
                                    Section 3.A. above), Tenant shall pay to
                                    Landlord, without demand throughout the
                                    Term, Base Rent as specified in the Basic
                                    Lease Information, payable in monthly
                                    installments in advance on or before the
                                    first day of each calendar month, in lawful
                                    money of the United States, without
                                    deduction, abatement or setoff whatsoever
                                    (except as provided by the terms of this
                                    Lease), at the address specified in the
                                    Basic Lease information or to such other
                                    place as Landlord may from time to time
                                    designate in writing. Base Rent for the
                                    first full month of the Term shall be paid
                                    by Tenant upon Tenant's execution of this
                                    Lease. If the obligation for payment of Base
                                    Rent commences on other than the first day
                                    of a month, then Base Rent shall be prorated
                                    and the prorated installment shall be paid
                                    on the first day of the calendar month next
                                    succeeding the Term Commencement Date.

                                    B. ADDITIONAL RENT. All monies other than
                                    Base Rent required to be paid by Tenant
                                    hereunder, including, but not limited to,
                                    the interest and late

                                       6

<PAGE>

                                    charge described in Paragraph 25.D., any
                                    monies spent by Landlord pursuant to,
                                    Paragraph 28, and Tenant's Basic Operating
                                    Building Cost as specified in Paragraph 7 of
                                    this Lease, shall be considered additional
                                    rent ("Additional Rent"). "Rent" shall mean
                                    Base Rent and Additional Rent.

                                    C. ANNUAL INCREASES. On each anniversary of
                                    the Term Commencement Date, the Base Rent
                                    shall be increased, by an amount equal to
                                    four percent (4%) of the Base Rent in effect
                                    immediately prior to the most recent
                                    anniversary of the Term Commencement Date
                                    (without regard to any temporary abatement
                                    of rental then or previously in effect
                                    pursuant to the provisions of this Lease),
                                    as more particularly shown to the Basic
                                    Lease Information.

 BASIC                     7.       BASIC OPERATING COST. In addition to the
 OPERATING                          Base Rent required to be paid hereunder,
 COST                               Tenant shall pay, as Additional Rent
                                    Tenant's Proportionate, Share of the Basic
                                    Operating Building Costs during any Expense
                                    Year, in the manner set forth below (such
                                    amount hereinafter referred to as "Tenant's
                                    Proportionate Share of Basic Operating
                                    Building Cost").

                                    A. BASIC OPERATING BUILDING COST. Basic
                                    Operating Building Cost shall mean,
                                    except as otherwise provided for herein,
                                    all expenses and costs which Landlord
                                    shall pay or become obligated to pay,
                                    because of or in connection with the
                                    management, maintenance, preservation and
                                    operation of the Building and its
                                    supporting facilities (determined in
                                    accordance with generally accepted
                                    accounting principles, consistently
                                    applied) including, but not limited to,
                                    the following:

                                    (1) TAXES. All property taxes, possessory
                                    interest taxes, service payments in lieu of
                                    such taxes or fees, annual or periodic
                                    Property-specific license or use fees,
                                    excises, transit charges, housing fund
                                    assessments, sewer rents, open space
                                    charges, assessments, levies, fees or
                                    charges, general and special, ordinary and
                                    extraordinary, unforeseen as well as
                                    foreseen, of any kind (including fees
                                    "in-lieu" of any such tax or assessment)
                                    which are assessed, levied, charged,
                                    confirmed, or imposed by any public
                                    authority upon the Building, its operations
                                    or the Rent (or any portion or component
                                    thereof) (all of the foregoing being
                                    hereinafter collectively referred to as real
                                    property taxes"), or any tax imposed in
                                    substitution, partially or totally, of any
                                    tax previously included within the
                                    definition of real property taxes, or any
                                    additional tax the nature of which was
                                    previously included within the definition of
                                    real property taxes, except (a) inheritance
                                    or estate taxes imposed upon or assessed
                                    against the Building, or any part thereof or
                                    interest therein, and (b) taxes computed
                                    upon the basis of net income of Landlord or
                                    the owner of any interest therein, except as
                                    otherwise provided in the following
                                    sentence. Basic Operating Building Cost
                                    shall also include any taxes, assessments,
                                    or any other fees imposed by any public
                                    authority upon or measured by the monthly
                                    rental or other charges payable hereunder,
                                    including, without limitation, any gross
                                    income or receipt tax or excise tax levied
                                    by the local governmental authority in which
                                    the Building is located, the federal
                                    government; or any other governmental, body
                                    with respect to receipt of such rental, or
                                    upon, with respect to, or by reason of the
                                    development, possession, leasing operation,
                                    management; maintenance, alteration, repair,
                                    use or occupancy by Tenant of the Premises
                                    or any portion thereof, or upon this
                                    transaction or any document to which Tenant
                                    is a party creating or transferring an
                                    interest or an estate in the Premises. Real
                                    property taxes shall include all reasonable
                                    fees and costs, including reasonable
                                    attorneys' fees, appraisals and consultants'
                                    fees, incurred by

                                        7

<PAGE>

                                    Landlord in seeking to obtain a reduction
                                    of, or a limit on the increase in, any real
                                    property taxes, regardless of whether any
                                    reduction or limitation is obtained. In
                                    the event that it shall not be lawful for
                                    Tenant to reimburse Landlord for all or any
                                    part of any increase in any items specified
                                    in this Paragraph 7.A.(I), the monthly
                                    rental payable to Landlord under this Lease
                                    shall be revised to net to Landlord the same
                                    net rental after imposition of any such
                                    increased taxes as would have been payable
                                    to Landlord prior to the payment of any such
                                    taxes. Notwithstanding the foregoing to the
                                    contrary, if any general, special or other
                                    assessment is levied or assessed against the
                                    Building which may be paid either in a lump
                                    sum or in installments, then, if Landlord
                                    elects to' pay the same in a lump sum, real
                                    property taxes chargeable to Tenant under
                                    this Lease shall be calculated based upon
                                    the amount which would have been payable had
                                    Landlord elected to pay the same in
                                    installments.

                                    (2) INSURANCE. All insurance premiums and
                                    costs, including but not limited to, any
                                    deductible costs, premiums and cost of
                                    insurance, incurred by Landlord, as more
                                    fully set forth in Paragraph 8.A. herein.

                                    (3) OTHER OPERATING EXPENSES. Any and all
                                    actual costs and expenses (except as
                                    otherwise provided herein) paid or incurred
                                    by Landlord in connection with the
                                    operation, maintenance, management and
                                    repair of the Building. By way of
                                    illustration but not limitation, such
                                    expenses shall include (without duplication)
                                    the following: (i) the cost of heating,
                                    ventilation and air conditioning,
                                    mechanical, sanitary and storm drainage, the
                                    cost of any generally applicable
                                    environmental surcharges imposed by any
                                    governmental entity (as opposed to
                                    Property-specific environmental surcharges,
                                    which shall not be a Basic Operating
                                    Building Cost), escalator and elevator
                                    systems, all other utilities and the cost of
                                    supplies and equipment and maintenance and
                                    service contracts in connection therewith;
                                    (ii) the cost of repairs, general
                                    maintenance and replacing components of
                                    equipment or machinery (subject to Section
                                    vii below), including, without limitation,
                                    heating, refrigeration, ventilation,
                                    electrical, plumbing, janitorial, window
                                    cleaning, garbage and refuse removal,
                                    mechanical, elevator, escalator, sprinklers,
                                    fire/life safety and energy management
                                    systems, including service contracts,
                                    maintenance contracts, supplies and parts;
                                    (iii) wages, salaries and other labor costs,
                                    including uniforms, taxes, insurance,
                                    retirement, medical and other employee
                                    benefits; (iv) fees, charges and other costs
                                    including management fees, consulting fees,
                                    legal fees and accounting fees paid in
                                    connection with the Building and the costs
                                    of supplying, replacing and cleaning
                                    employee uniforms; (v) the cost of licenses,
                                    permits and inspections and the cost of
                                    contesting the validity or applicability of
                                    any governmental enactments which may affect
                                    any expenses set forth herein; (vi) the
                                    cost of any capital improvements made to
                                    the Building after completion of its
                                    construction intended as a labor saving
                                    device or to effect other economies in the
                                    operation or maintenance of the Building, or
                                    made to the Building after the date of this
                                    Lease that are required under any
                                    governmental law or regulation that was not
                                    applicable to the Building at the time that
                                    permits for the construction thereof were
                                    obtained, such costs to be amortized over
                                    such reasonable period as Landlord shall
                                    determine, together with interest on the
                                    unamortized balance at the "prime rite"
                                    charged at the time such improvements or
                                    capital assets are constructed or acquired
                                    by Wells Fargo Bank N.A. (San Francisco)
                                    plus two (2) percentage points but in no
                                    event more than the maximum rate permitted
                                    by law; (vii) the costs of policing,
                                    security and supervision of the Building;
                                    (viii) the cost of the rental of any
                                    machinery or equipment and the cost of
                                    supplies used exclusively in

                                       8
<PAGE>

                                    the maintenance and operation of the
                                    Building; (ix) audit fees and the cost of
                                    accounting services incurred in the
                                    preparation of statements referred to in
                                    this Lease and financial statements used in
                                    the computation of the rents and charges
                                    payable by tenants of the Building; (x)
                                    legal fees and expenses, including, but not
                                    limited to, such expenses that relate to
                                    seeking or obtaining reductions in or
                                    refunds of real property taxes, or
                                    components thereof; (xi) a fee for the
                                    management and administration of the
                                    Building appropriate to the first class
                                    nature of the Building not to exceed two and
                                    one half percent (2.50%) of Base Rent. For
                                    purposes of this Lease, such expenses shall
                                    not include interest expense (except as
                                    provided in clause (vi) above), leasing
                                    commissions, depreciation on the
                                    improvements contained in the Building or
                                    the cost of capital expenditures not
                                    included within clause (vi) above; (xii)
                                    cost of maintaining, replacing and servicing
                                    exterior landscaping. Notwithstanding the
                                    foregoing to the contrary, such expenses
                                    shall not include the cost of any initial
                                    Tenant Improvements prior to the Term
                                    Commencement Date, any costs or expenses
                                    (including, without limitation, legal fees
                                    and expenses) incurred in connection with
                                    enforcing the terms of any other tenant
                                    leases, or costs or expenses incurred in the
                                    form of tenant improvement allowances made
                                    in connection with the leasing of the
                                    Building. The computation of such expenses
                                    shall be made in accordance with generally
                                    accepted accounting principles.
                                    Notwithstanding anything to the contrary in
                                    this Lease, "Basic Operating Building Cost"
                                    shall not include and Tenant shall in no
                                    event have any obligation to perform or to
                                    pay directly, or to reimburse Landlord for,
                                    all or any portion of the following repairs,
                                    improvements, replacements, premiums,
                                    claims, losses, fees and expenses
                                    (collectively, "Costs"):

                                    B. EXCLUSIONS FROM BASIC OPERATING BUILDING
                                    COSTS. Notwithstanding anything to the
                                    contrary in this Lease, "Basic Operating
                                    Building Costs" shall not include and Tenant
                                    shall in no event have any obligation to
                                    perform or to pay directly, or to reimburse
                                    Landlord for, all or any portion of the
                                    following repairs, improvements,
                                    replacements, premiums, claims, losses, fees
                                    and expenses (collectively, "Costs"): (a)
                                    Costs of repairing damage to the Premises
                                    caused by casualty, provided that nothing
                                    herein shall be deemed to restrict
                                    Landlord's ability to recover expenses
                                    directly from Tenant pursuant to the terms
                                    of Paragraph 23 hereof; or (b) Costs to
                                    correct any construction defect in the
                                    Premises 'or the Property.

                                    C. GENERAL. In the event that the Building
                                    is not fully occupied during any fiscal year
                                    of the Term as determined by Landlord, an
                                    adjustment shall be made in computing the
                                    Basic Operating Building Cost for such year
                                    so that Tenant pays an equitable portion of
                                    all variable items of Basic Operating
                                    Building Cost, as reasonably determined by
                                    Landlord, so that the total Basic Operating
                                    Cost equals the total amount which would
                                    have been paid or incurred by Landlord had
                                    the Building been one hundred percent (100%)
                                    occupied for the entire calendar year;
                                    provided, however, that in no event shall
                                    Landlord be entitled to collect in excess of
                                    one hundred percent (100%) of the total
                                    Basic Operating Cost from all of the tenants
                                    in the Building including Tenant.

                                    Basic Operating Cost shall not include
                                    specific costs incurred for the account of,
                                    separately billed to or Paid by specific
                                    tenants, Notwithstanding anything herein to
                                    the contrary, in any instance wherein
                                    Landlord, in Landlord's reasonable
                                    discretion, deems Tenant to be responsible
                                    for any amounts greater than Tenant's
                                    Building Cost, Landlord shall have the right
                                    to allocate

                                       9

<PAGE>

                                    costs in a manner Landlord deems reasonably
                                    appropriate.

                                    D. PAYMENT OF ESTIMATED BASIC OPERATING
                                    COSTS. "Estimated Basic Operating Building
                                    Cost" for any particular Expense Year shall
                                    mean Landlord's estimate of the amount of
                                    the Basic Operating Building Cost for such
                                    Expense Year, made prior to commencement of
                                    such Expense Year as hereinafter provided.
                                    "Expense Year" shall be each twelve (12)
                                    consecutive month period commencing January
                                    Ist of each year during the Term, provided
                                    that "Landlord, upon notice to Tenant may
                                    change the Expense Year from time to time to
                                    any other twelve (12) consecutive month
                                    period, and, in the event of any such
                                    change, Tenants Basic Operating Building
                                    Cost shall be equitably adjusted for the
                                    Expense Year involved in any such change.
                                    During the last month of each Expense Year
                                    during the Term, or as soon thereafter as
                                    practicable, Landlord shall give Tenant
                                    written notice of Estimated Basic Operating
                                    Building Cost for the ensuing Expense Year.
                                    Tenant shall pay Tenant's Estimated Basic
                                    Operating Building Cost (computed in the
                                    same manner as Tenant's Basic Operating
                                    Building Cost) with installments of Base
                                    Rent for the Expense Year to which the
                                    Estimated Basic Operating Building Cost and
                                    Estimated Basic Operating Office Cost
                                    applies in equal monthly installments on the
                                    first day of each calendar month during such
                                    year, in advance. If any time during the
                                    course of any Expense Year, Landlord
                                    determines that Basic Operating Building
                                    Cost is projected to vary from the then
                                    Estimated Basic Operating Building Cost by
                                    more than ten percent (10%), Landlord may,
                                    by written notice to Tenant, revise the
                                    Estimated Basic Operating Building Cost for
                                    the balance of such fiscal year, and Tenants
                                    monthly installments for the remainder of
                                    such year shall be adjusted so that by the
                                    end of such Expense Year Tenant has paid to
                                    Landlord Tenant's the revised Estimated
                                    Basic Operating Building Cost for such year.

                                    E. COMPUTATION OF BASIC OPERATING BUILDING
                                    COST. "Basic Operating Building Cost
                                    Adjustment" shall mean the difference
                                    between (i) Estimated Basic Operating
                                    Building Cost and (ii) Basic Operating
                                    Building Cost for any Expense Year,
                                    determined as hereinafter provided. Within
                                    one hundred twenty (120) days after the end
                                    of each fiscal year, as determined by
                                    Landlord, or as soon thereafter as
                                    practicable, Landlord shall deliver to
                                    Tenant a statement of Basic Operating
                                    Building Cost for the Expense Year just
                                    ended, accompanied by a computation of Basic
                                    Operating Building Cost If such statement
                                    shows that Tenant's payments based upon
                                    Estimated Basic Operating Building Cost is
                                    less than Ten ants Basic Operating Building
                                    Cost then Tenant shall pay to Landlord the
                                    difference within twenty (20) days after
                                    receipt of such statement. If such statement
                                    shows that Tenants payments of Estimated
                                    Basic Operating Building Cost exceed
                                    Tenant's Basic Operating Building Cost then
                                    (provided that Tenant is not in default
                                    under this Lease), such excess shall be
                                    credited against the Rent next coming due
                                    hereunder. If this Lease has been
                                    terminated or the Term hereof has expired
                                    prior to the date of such statement then the
                                    Basic Operating Building Cost Adjustment
                                    shall be paid by the appropriate party
                                    within twenty (20) days after the date of
                                    delivery of the statement. Should this Lease
                                    commence or terminate at any time other than
                                    the first day of the fiscal year, Tenants
                                    the Basic Operating Building Cost Adjustment
                                    shall be prorated by reference to the exact
                                    number of calendar days during such Expense
                                    Year that this Lease is in effect.

                                    F. Tenant Audit. In the event that Tenant
                                    shall dispute the amount set forth in any
                                    statement provided by Landlord under
                                    Paragraph 7.C. or 7.D

                                       10

<PAGE>

                                    above and provided that Tenant is not in
                                    default (as provided for in Paragraph 25.A.
                                    below hereunder), Tenant shall have the
                                    right not later than thirty (30) days
                                    following the receipt of such statement and
                                    upon the condition that Tenant shall first
                                    deposit with Landlord the fall amount in
                                    dispute, to cause Landlord's books and
                                    records with respect to Basic Operating
                                    Building Cost and/or Basic Operating Office
                                    Cost for such fiscal year to be audited by
                                    certified public accountants selected by
                                    Tenant and subject to Landlord's reasonable
                                    right of approval. The Basic Operating
                                    Building Cost Adjustment and/or Basic
                                    Operating Office Cost Adjustment shall be
                                    appropriately adjusted on the basis of such
                                    audit. If such audit discloses liability for
                                    a refund in excess of five percent (5%) of
                                    Tenant's Proportionate Share of Basic
                                    Operating Building Cost previously reported;
                                    the cost of such audit shall be borne by
                                    Landlord; otherwise the cost of such audit
                                    shall be paid by Tenant. If Tenant shall not
                                    request an audit in accordance with the
                                    provisions of this Paragraph 7.E. within
                                    thirty (30) days after receipt of Landlord's
                                    statement provided pursuant to Paragraph 7.C
                                    or 7.D., such statement shall be final and
                                    binding for all purposes hereof The right of
                                    Tenant under this Paragraph 7.E. may only be
                                    exercised once for any Landlord statement;
                                    and if Tenant fails to meet any of the above
                                    conditions as a prerequisite to the exercise
                                    of such right, the right of Tenant under
                                    this Paragraph 7.E. for a particular
                                    Landlord's statement shall be deemed waived.

INSURANCE                           8. LANDLORD'S INSURANCE. Landlord agrees to
AND INDEMNI-                        maintain. insurance insuring the Building
FICATION                            against fire, lightning, vandalism and
                                    malicious mischief (including "All
                                    Risk" form coverage, boiler, sprinkler,
                                    earthquake, and, if required by law or any
                                    lender with a lien on the Property flood
                                    insurance), in so called "All Risk" form
                                    coverage, in an amount not less than one
                                    hundred percent (100%) of the replacement
                                    cost thereof, with deductibles and the form
                                    and endorsements of such coverage as
                                    selected by Landlord, in its reasonable
                                    discretion. Such insurance may also include,
                                    at Landlord's option, insurance against loss
                                    of Base Rent and Additional Rent, in an
                                    amount equal to the amount of Base Rent and
                                    Additional Rent payable by Tenant for a
                                    period of at least twelve (12) months
                                    commencing on the date of loss. Such
                                    insurance shall be for the sole benefit of
                                    Landlord and under Landlord's sole control.
                                    Landlord shall not be obligated to insure
                                    any furniture, equipment machinery, goods or
                                    supplies which Tenant may keep or maintain
                                    in the Premises, or any leasehold
                                    improvements, additions or alterations
                                    within the Premises made after the
                                    Commencement Date. Landlord shall also carry
                                    such other insurance as Landlord may
                                    reasonably deem prudent or advisable,
                                    including, without limitation, rent
                                    abatement insurance in an amount equal to up
                                    to twelve (12) months' rent due hereunder
                                    and liability insurance in such amounts and
                                    on such terms as Landlord shall reasonably
                                    determine (based on the amounts of liability
                                    insurance carried by other prudent landlords
                                    of similar buildings in the vicinity of the
                                    Building) or as shall be required by any
                                    lender with a lien on the Property. Tenant
                                    shall neither use the Premises nor permit
                                    the Premises to be used or acts to be done
                                    therein which will (a) increase the premium
                                    of any insurance described above; (b)
                                    directly cause a cancellation of or be in
                                    conflict with any such insurance policies;
                                    (c) directly result in a refusal by
                                    insurance companies of good standing to
                                    insure the Building in amounts reasonably
                                    satisfactory to Landlord; (d) subject
                                    Landlord to any liability unsatisfactory to
                                    Landlord. Tenant shall, at Tenant's expense,
                                    comply as to the Premises with all insurance
                                    company requirements pertaining to the use
                                    of the Premises. If Tenant's conduct or use
                                    of the Premises causes any increase in the
                                    premium for such insurance policies, and
                                    such conduct is otherwise permitted by
                                    Landlord, then Tenant shall reimburse
                                    Landlord for any such increase. Tenant, at

                                       11

<PAGE>

                                    Tenant's expense, shall comply with all
                                    rules, orders, regulations or requirements
                                    of the American Insurance Association
                                    (formerly the National Board of Fire
                                    Underwriters) and with any similar body.

                                    A. Tenant's Insurance.

                                    (1) PROPERTY INSURANCE. Tenant shall procure
                                    at Tenant's sole cost and expense and keep
                                    in effect from the date of this Lease and at
                                    all times until the end of the Term,
                                    insurance on all personal property,
                                    furniture and fixtures of Tenant and all
                                    improvements made by or for Tenant to, the
                                    Premises after the Term Commencement Date,
                                    insuring such property for the full
                                    replacement value of such property. The
                                    proceeds of such insurance shall be used for
                                    the repair or replacement of the property so
                                    insured, except that if not so applied or if
                                    this Lease is terminated following a
                                    casualty, the proceeds applicable to the
                                    leasehold improvements shall be paid to
                                    Landlord and the proceeds applicable to
                                    Tenant's personal property shall be paid to
                                    Tenant.

                                    (2) LIABILITY INSURANCE. Tenant shall
                                    procure at Tenant's sole cost and expense
                                    and keep in effect from the date of this
                                    Lease and at all times until the end of the
                                    Term either Comprehensive General Liability
                                    insurance or Commercial General Liability
                                    insurance applying to the use and occupancy
                                    of the Premises and the Building, and any
                                    part of either, and any areas adjacent
                                    thereto, and the business operated by
                                    Tenant, or by any other' occupant on the
                                    Premises. Such insurance shall include Broad
                                    Form Contractual Liability insurance
                                    coverage insuring all of Tenant's indemnity
                                    obligations under this Lease. Such coverage
                                    shall have a minimum combined single limit
                                    of liability of at least Two Million Dollars
                                    ($2,000,000.00), and a general aggregate
                                    limit of Three Million Dollars
                                    ($3,000,000.00) under an umbrella policy of
                                    an aggregate limit of Ten Million Dollars ($
                                    10,000,000.00). All such policies shall be
                                    written to apply to all bodily injury,
                                    property damage, personal injury and other
                                    covered loss occurring during the policy
                                    term, shall be endorsed to add Landlord and
                                    its agents, beneficiaries, partners,
                                    employees, and any deed of trust holder or
                                    mortgagee of Landlord or any ground lessor
                                    as an additional insured, and to provide
                                    that such coverage shall be primary and that
                                    any insurance maintained by Landlord shall
                                    be excess insurance only. Such coverage
                                    shall also contain endorsements: (i)
                                    deleting any employee exclusion on personal
                                    injury coverage; (ii) including employees as
                                    additional insureds; and (iii) providing for
                                    coverage of employer's automobile
                                    non-ownership liability. All such insurance
                                    shall provide for severability of interests;
                                    shall provide that an act or omission of
                                    one of the named insureds shall not reduce
                                    or avoid coverage to the other named
                                    insureds; and shall afford coverage for all
                                    claims based on acts, omissions injury and
                                    damage, which claims occurred or arose (or
                                    the onset of which occurred or arose) in
                                    whole or in part during the policy period
                                    and shall be written as primary policies,
                                    not excess or contributing with or secondary
                                    to any other insurance as may be available
                                    to the additional insureds. Said coverage
                                    shall be written on an "occurrence" basis,
                                    if available. If a "claims made" policy is
                                    ever used, the policy must be endorsed so
                                    that Landlord is given the right to purchase
                                    "tail" coverage should Tenant for any reason
                                    not do so or if the policy is to be canceled
                                    for nonpayment of premium.

                                    (3) GENERAL INSURANCE REQUIREMENTS. All
                                    coverages described in this Paragraph 8.B.
                                    shall be endorsed to provide Landlord with
                                    thirty (30) days' notice of cancellation,
                                    material change in terms or reduction,
                                    except for

                                       12

<PAGE>

                                    cancellation due to non-payment of premium
                                    in which case only ten (10) days notice of
                                    cancellation shall be required. If at any
                                    time during the Term the amount or coverage
                                    of insurance which Tenant is required to
                                    carry under this Paragraph 8.B. is, in
                                    Landlord's reasonable judgment, materially
                                    less than the amount or type of insurance
                                    coverage typically carried by owners or
                                    tenants of properties located in the general
                                    area in which the Premises are located which
                                    are similar to and operated for similar
                                    purposes as the Premises, Landlord shall
                                    have the right to require Tenant to
                                    reasonably increase the amount or change the
                                    types of insurance coverage required under
                                    the Paragraph 8.B. All insurance policies
                                    required to be carried under this Lease
                                    shall be written by companies or rated B+
                                    VII or better in "Best's Insurance Guide"
                                    and authorized to do business in California.
                                    In any event deductible amounts shall not
                                    exceed Two Thousand Dollars ($2,000.00).
                                    Tenant shall deliver to Landlord prior to
                                    the Term Commencement Date, a certificate of
                                    Tenant's insurance policies or, upon
                                    Landlord's written request therefor,
                                    certified copies of Tenant insurance
                                    policies, showing that all premiums have
                                    been paid for the full policy period; and in
                                    the event Tenant shall fail to procure such
                                    insurance, or to deliver such policies or
                                    certificates Landlord may, at Landlord's
                                    option and in addition to Landlord's other
                                    remedies in the event of a default by Tenant
                                    hereunder, procure the same for the account
                                    of Tenant, and the reasonable cost thereof
                                    shall be paid to Landlord as Additional
                                    Rent.

                                    B. INDEMNIFICATION. Landlord shall not be
                                    liable to Tenant for any loss or damage to
                                    person or property caused by theft, fire,
                                    acts of God, acts of a public enemy, riot,
                                    strike, insurrection, war, court order,
                                    requisition or order of governmental body or
                                    authority or for any damage or inconvenience
                                    which may arise through repair or alteration
                                    of any part of the Building or failure to
                                    make any such repair, except to the extent
                                    arising from either: (i) the gross
                                    negligence or willful misconduct of
                                    Landlord, or (ii) the failure of Landlord to
                                    perform its repair obligations pursuant to
                                    Paragraph 10 of this Lease. Tenant shall
                                    indemnify, defend by counsel reasonably
                                    acceptable to Landlord and Tenant, protect
                                    and hold Landlord harmless from and against
                                    any and all liabilities, losses, costs,
                                    damages, injuries or expenses, including
                                    reasonable attorneys' fees and court costs,
                                    arising out of or related to: (1) claims of
                                    injury to or death of persons or damage to
                                    property occurring or resulting directly or
                                    indirectly from the use or occupancy of the
                                    Premises, or from activities of Tenant,
                                    Tenant's Parties in or about the Premises or
                                    Building; (2) claims for work or labor
                                    performed, or for materials or supplies
                                    Furnished to or at the request of Tenant in
                                    connection with performance of any work done
                                    for the account of Tenant within the
                                    Premises or Building; and (3) claims arising
                                    from any breach or default on the part of
                                    the Tenant in the performance of any
                                    covenant contained in this Lease. The
                                    foregoing indemnity shall not be applicable
                                    to claims arising from the active negligence
                                    or willful misconduct of Landlord. The
                                    provisions of this paragraph shall survive
                                    the expiration or termination of this Lease
                                    with respect to any claims or liability
                                    occurring prior to such expiration or
                                    termination. Landlord shall indemnify,
                                    defend by counsel reasonably acceptable to
                                    Tenant and protect and hold Tenant harmless
                                    from and against any and all claims,
                                    liabilities, losses, posts, hens, damages,
                                    injuries and expenses, including reasonable
                                    attorneys' and consultants' fees and court
                                    costs, demands, causes of action, and
                                    judgments, directly or indirectly arising
                                    out of or related to the gross negligence or
                                    willful misconduct of Landlord or its
                                    agents, employees, contractors or
                                    representatives.

WAIVER OF                  9.       Notwithstanding anything to the contrary
                                    herein, the parties hereto release

                                       13

<PAGE>

SUBROGATION                         each other and their respective agents,
                                    employees, successors, assignees and
                                    subtenants from all liability for injury to
                                    any person or damage to any property that
                                    is caused by or results from a risk which
                                    is actually insured against, which is
                                    required to be insured against under the
                                    Lease, or which would normally be covered by
                                    all risk property insurance, without regard
                                    to the negligence or willful misconduct of
                                    the entity so released. All of Landlord's
                                    and Tenant's repair and indemnity
                                    obligations under the Lease shall be subject
                                    to the waiver contained in this paragraph.

LANDLORD'S                 10.      Subject to reimbursement pursuant to
REPAIRS AND                         Paragraph 7 of the Lease, except as
SERVICES                            otherwise specified herein, Landlord shall
                                    repair and maintain: (i) the structural
                                    portions of the Building, including, without
                                    limitation, the exterior walls,
                                    underflooring, and the roof, (ii) the
                                    electrical, plumbing, HVAC and other
                                    systems for the Building, (iii) the
                                    structural portions of the roof and roof
                                    membrane and (iv) outdoor common areas of
                                    the Property, including but not limited to
                                    the parking areas, Subject to Paragraph 9
                                    hereof, if any maintenance or repair becomes
                                    necessary in whole or in part due to the
                                    act, neglect, fault or omission of any duty
                                    by Tenant, its employees, agents, customers
                                    or invitees, or due to damage caused by a
                                    breaking and entering into the Premises,
                                    Tenant shall pay to Landlord that portion of
                                    the cost of such maintenance or repair which
                                    is allocable, to such act, neglect, fault or
                                    omission. Landlord shall not be liable for
                                    and Tenant shall not be entitled to any
                                    reduction of the Base Rent or Additional
                                    Rent by reason of Landlord's failure to make
                                    any repair or to perform any maintenance
                                    required on the part of Landlord hereunder,
                                    unless due to Landlord's gross negligence or
                                    willful misconduct. Tenant shall immediately
                                    give Landlord written notice of any defect
                                    or need for repairs for which Landlord is
                                    responsible under this Paragraph 10, after
                                    which notice Landlord shall have a
                                    reasonable opportunity to repair same.
                                    Tenant hereby waives and releases its right
                                    to make repairs at Landlord's expense under
                                    Sections 1941 and 1942 of the California
                                    Civil Code or under any similar law,
                                    statute, or ordinance now or hereafter in
                                    effect.

TENANT'S                   11.      Except for those items specifically provided
REPAIRS                             for by Landlord pursuant to Paragraph 10
                                    above, Tenant is obligated to, at Tenant's
                                    expense, maintain all parts of the Premises
                                    in a good, clean and secure condition and
                                    repair. Tenant shall promptly notify
                                    Landlord of all necessary repairs and
                                    replacements. Tenant agrees to surrender the
                                    Premises upon the expiration or sooner
                                    termination of this Lease in the same
                                    condition as when received, reasonable wear
                                    and tear and damage by fire, earthquake,
                                    acts of God, and the elements excepted.
                                    Notwithstanding anything herein to the
                                    contrary, in no event shall. Tenant be
                                    required to surrender to Landlord at the
                                    expiration of earlier termination of the
                                    Lease Term any "cabinets" of Tenant marked
                                    as such on the Approved Final Plans (as
                                    defined in the Work Letter, which cabinets
                                    must be removed from the Premises at such
                                    time.) Landlord has no obligation to alter,
                                    add to, improve, repair, remodel or paint
                                    the Premises except as specified herein.
                                    Tenant shall pay or cause to be paid, prior
                                    to delinquency, any and all taxes and
                                    assessments levied upon all trade fixtures,
                                    inventories and other personal property
                                    placed in and upon the Premises by Tenant.
                                    Notwithstanding anything to the contrary in
                                    this Lease, Landlord shall perform and
                                    construct, and Tenant shall have no
                                    responsibility to perform or construct, any
                                    repair, maintenance or improvements
                                    necessitated by the negligent acts or
                                    negligent omissions of Landlord or any other
                                    occupant of the Project, or their
                                    respective agents, employees, contractors or
                                    representatives.

                                       14

<PAGE>

ALTERATIONS 12.                     Tenant shall not make, or allow to be made,
                                    any alterations, improvements or physical
                                    additions (collectively "Alterations") in
                                    about or to the Premises without obtaining
                                    the prior written consent of Landlord, which
                                    consent shall not be unreasonably withheld
                                    or delayed with respect to proposed
                                    Alterations which: (a) do not affect the
                                    Building's structure and comply with all
                                    applicable laws, ordinances, rules and
                                    regulations; (b) are in Landlord's
                                    reasonable opinion compatible with the
                                    Building and its mechanical, plumbing,
                                    electrical, heating/ventilation/air
                                    conditioning systems, and life safety
                                    systems; and (e) will not interfere with the
                                    use and occupancy of any other portion of
                                    the Building by any other tenant or its
                                    invitees; Specifically, but without limiting
                                    the generality of the foregoing, Landlord
                                    shall have the right of written consent for
                                    all plans and specifications for the
                                    proposed Alterations, construction means and
                                    methods, all appropriate permits and
                                    licenses, any contractor or subcontractor to
                                    be employed on the work of Alterations, and
                                    the time for performance of such work.
                                    Tenant shall also supply to Landlord any
                                    documents and information reasonably
                                    requested by Landlord in connection with
                                    Landlord's consideration of a request for
                                    approval hereunder. Landlord's consent shall
                                    be conditioned upon receipt of performance
                                    bonds or other bonds from contractors or
                                    subcontractors performing the Alterations,
                                    if Landlord so requires. Tenant shall
                                    reimburse Landlord for all costs which
                                    Landlord may incur in connection with
                                    granting approval to Tenant for any such
                                    Alterations, including any costs or expenses
                                    which Landlord may incur in electing to have
                                    outside, architects and engineers review
                                    said plans and specifications. All
                                    Alterations shall be performed at Tenants
                                    sole cost and expense (including reasonable
                                    costs for Landlord's supervision, but not
                                    including costs, if any, for Landlord's
                                    supervision, if any, in connection with
                                    Tenant's installation of additional
                                    telephone and electrical circuits within the
                                    demised Premises). All Alterations shall
                                    remain the property of Tenant until
                                    termination of this Lease, at which time
                                    they shall be and become the property of
                                    Landlord if Landlord so elects; provided,
                                    however, that Landlord may, at Landlord's
                                    option, require that Tenant at Tenant's
                                    expense, remove any or all Alterations made
                                    by Tenant and restore the Premises by the
                                    termination of this Lease, whether by lapse
                                    of time, or otherwise, to their condition
                                    existing prior to the construction of any
                                    such Alterations. All such removals and
                                    restoration shall be accomplished in a good
                                    and workmanlike manner so as not to cause
                                    any damage to the Premises whatsoever. If
                                    Tenant fails to so remove such Alterations
                                    or Tenant's trade fixtures or furniture,
                                    Landlord may keep and use them or remove any
                                    of them and cause them to be stored or sold
                                    in accordance with applicable law, at
                                    Tenant's sole expense. In addition to and
                                    wholly apart from Tenant's obligation to pay
                                    Tenant's Proportionate Share of Basic
                                    Operating Building Cost, Tenant shall be
                                    responsible for and shall pay prior to
                                    delinquency any taxes or governmental
                                    service fees, possessory interest taxes,
                                    fees or charges in lieu of any such taxes,
                                    capital levies, or other charges imposed
                                    upon, levied with respect to or assessed
                                    against it & personal property, on the value
                                    of the Alterations, and on Tenant's interest
                                    pursuant to this Lease. To the extent that
                                    any such taxes are not separately assessed
                                    or billed to Tenant, Tenant shall pay the
                                    amount thereof as invoiced to Tenant by
                                    Landlord. Notwithstanding the foregoing, (a)
                                    upon Tenant's written request therefor at
                                    such time, Landlord shall advise Tenant in
                                    writing at the time Landlord approves of any
                                    Alteration whether such Alteration must be
                                    removed upon the termination of the Lease,
                                    (b) Tenant may construct nonstructural
                                    Alterations in the Premises which do not
                                    affect the Building roof, foundation or
                                    structural elements and which are not
                                    visible from outside the Building without
                                    Landlord's prior approval; but subject to
                                    the other terms and

                                       15

<PAGE>

                                    conditions of the Lease, if the cost of any
                                    such Alteration does not exceed Ten Thousand
                                    Dollars ($10,000.00) individually and, when
                                    taken with all other such alterations not
                                    requiring Landlord's consent, does not cost
                                    more than Fifty Thousand Dollars ($50,000),
                                    and (c) all trade fixtures and personal
                                    property installed in the premises at
                                    Tenant's expense shall at all times remain
                                    Tenant's property and may be removed by
                                    Tenant at any time provided that, Tenant
                                    repairs any damage to the Premises caused by
                                    such removal.

SIGNS                      13.      All signs, notices and graphics of every
                                    kind or character, visible in or from public
                                    view or corridors, the common areas or the
                                    exterior of the Premises, shall be subject
                                    to Landlord's prior written approval. Tenant
                                    shall not place or maintain any banners
                                    whatsoever or any window decor in or on any
                                    exterior window or window fronting upon any
                                    common areas or service areas without
                                    Landlord's prior written approval. If Tenant
                                    leases an entire floor of the Building, such
                                    signs may be installed in the elevator lobby
                                    of the floor on which the Premises are
                                    located, subject to Landlord's prior written
                                    approval. Any signs, notices, logos,
                                    pictures, names or advertisements which are
                                    installed that have not been individually
                                    approved by Landlord may be removed without
                                    notice by Landlord at the sole expense of
                                    Tenant. Any installation of signs or
                                    graphics on or about the Premises shall be
                                    subject to any applicable governmental laws,
                                    ordinances, regulations and to any other
                                    requirements imposed by Landlord. Tenant
                                    shall remove all such signs and graphics
                                    prior to the termination of this Lease. Such
                                    installations and removals shall be made in
                                    such manner as to avoid injury or defacement
                                    of the Premises, or Building and any other
                                    improvements contained therein, and Tenant
                                    shall repair any injury or defacement,
                                    including without limitation, discoloration
                                    caused by such installation or removal.

INSPECTION/                14.      After reasonable notice, except in
POSTING                             emergencies where no such notice shall be
NOTICES                             required, Landlord, and Landlord's agents
                                    and representatives, shall have the right to
                                    enter the Premises to inspect the same, to
                                    clean, to perform such work as may be
                                    permitted or required hereunder, to make
                                    repairs or alterations to the Premises or
                                    Building or to other tenant spaces therein,
                                    to deal with emergencies, to post such
                                    notices as may be permitted or required by
                                    law to prevent the perfection of liens
                                    against Landlord's interest in the Building
                                    or to exhibit the Premises to prospective
                                    tenants, purchasers, encumbrances or others,
                                    or for any other purpose as Landlord may
                                    deem necessary. or desirable; provided,
                                    however, that Landlord shall use reasonable
                                    efforts not to interfere with Tenant's
                                    business operations. Tenant shall not be
                                    entitled to any abatement of Rent by reason
                                    of the exercise of any such right of entry.
                                    At any time within six (6) months prior to
                                    the end of the Term, Landlord shall have the
                                    right to erect on the Premises and/or
                                    Building a suitable sign indicating that the
                                    Premises are available for lease. Tenant
                                    shall give written notice to Landlord at
                                    least thirty (30) days prior to vacating
                                    the Premises and shall meet with Landlord
                                    for a joint inspection of the Premises at
                                    the time of vacating. Except in cases of
                                    emergency, Landlord's entry upon the
                                    Premises shall at all times be subject to
                                    Tenant's reasonable security and operating
                                    requirements.

SUBORDINATION              15       A. SUBORDINATION. Without the necessity of
                                    any additional document being executed by
                                    Tenant for the purpose of effecting a
                                    subordination, the Lease shall be subject
                                    and subordinate at all times to: (a) all
                                    ground leases or underlying leases which may
                                    now exist or hereafter be executed affecting
                                    the Premises and/or the land upon which the
                                    Premises and Building are situated, or both;
                                    and (b) any mortgage or deed of trust which
                                    may now exist

                                       16

<PAGE>

                                    or be placed, upon the Building, land,
                                    ground leases or underlying leases, or
                                    Landlord's interest or estate in any of said
                                    items which is specified as security.
                                    Notwithstanding the foregoing, Landlord
                                    shall have the right to subordinate, or
                                    cause to be subordinated any such ground
                                    leases or underlying leases or any such
                                    liens to this Lease. In the event that any
                                    ground lease or underlying lease terminates
                                    for any reason or any mortgage or deed of
                                    trust is foreclosed or a conveyance in lieu
                                    of foreclosure is made for any reason,
                                    Tenant shall, notwithstanding any
                                    subordination, attorn to and become the
                                    Tenant of the successor in interest to
                                    Landlord. Within ten (10) days after request
                                    by Landlord, Tenant shall, execute and
                                    deliver any additional documents evidencing
                                    Tenants attornment or the subordination of
                                    this Lease with respect to any such ground
                                    leases or underlying leases or any such
                                    mortgage or deed of trust in a form
                                    reasonably acceptable to Tenant. Such
                                    instruments may contain, among other things,
                                    provisions to the effect that such lessor,
                                    mortgagee or beneficiary (hereafter, for the
                                    purposes of this Section 15.A, a "Successor
                                    Landlord") shall (i) not be liable for any
                                    act or omission of Landlord or its
                                    predecessors, if any, prior to the date of
                                    such Successor Landlord's succession to
                                    Landlord's interest under this Lease except
                                    for continuing maintenance; (ii) not be
                                    subject to any offsets or defenses which
                                    Tenant may have been able to assert against
                                    Landlord or its predecessors, if any, prior
                                    to the date of such Successor Landlord's
                                    succession to Landlord's interest, under
                                    this Lease; (iii) not be liable for the
                                    return of any security deposit under the
                                    Lease unless the same shall have actually
                                    been deposited with such Successor Landlord;
                                    and (iv) be entitled to receive notice of
                                    any Landlord default under this Lease plus a
                                    reasonable opportunity to cure such default
                                    prior to Tenant having any right or ability
                                    to terminate this Lease as a result of such
                                    Landlord default. Notwithstanding the
                                    foregoing, the subordination of Tenant's
                                    rights and interests under this Lease to any
                                    mortgage or deed of trust shall be
                                    contingent upon Tenant's having received
                                    from any such ground lessor, mortgagee or
                                    beneficiary of any deed of trust a written
                                    recognition agreement in form reasonably
                                    satisfactory to Tenant providing that
                                    Tenant's rights and interest shall not be
                                    disturbed in the event of any foreclosure of
                                    any such lease, mortgage or deed of trust
                                    and confirming that Tenant shall receive
                                    all of the rights and services provided for
                                    under this Lease. Landlord's failure to
                                    obtain such an agreement shall not be a
                                    default by Landlord pursuant to the terms of
                                    this Lease. Further, Tenant shall have no
                                    obligation to attorn to any
                                    successor in interest or ground lessor, nor
                                    to execute any instruments evidencing
                                    attornment, unless the successor in interest
                                    or ground lessor assumes Landlord's
                                    obligations under this Lease in writing.

                                    B. ATTORNMENT AND NON-DISTURBANCE. Tenant
                                    shall attorn to and recognize as Tenant's
                                    landlord under this lease any superior
                                    lessor, superior mortgagee or other
                                    purchaser or person taking title to the
                                    Building by reason of the termination of any
                                    superior lease or the foreclosure of any
                                    superior mortgage or deed of trust and
                                    Tenant shall, upon demand, execute any
                                    documents reasonably requested by any such
                                    person to evidence the attornment described
                                    in this Section 15.B. Notwithstanding
                                    anything in this Section 15, Tenant's
                                    occupancy of the Premises during the term of
                                    this Lease shall not be disturbed so long as
                                    there is no uncured event of default by
                                    Tenant hereunder.

                                    C. MORTGAGE PROTECTION. Tenant agrees to
                                    give any holder of any mortgage and any
                                    ground lessor, by registered or certified
                                    mail, a copy of any notice of default served
                                    upon the Landlord by Tenant provided that

                                       17

<PAGE>

                                    prior to such notice Tenant has been
                                    notified in writing of the address of such
                                    mortgage holder or ground lessor (hereafter
                                    the "Notified Party"). Tenant further agrees
                                    that if Landlord shall have failed to cure
                                    such default within twenty (20) days after
                                    such notice to Landlord (or if such default
                                    cannot be cured or corrected within that
                                    time, then such additional time as may be
                                    necessary if Landlord has commenced within
                                    such twenty (20) days and is diligently
                                    pursuing the remedies or steps necessary to
                                    cure or correct such default), then the
                                    Notified Party shall have an additional
                                    thirty (30) days within which to cure or
                                    correct such default (or if such default
                                    cannot be cured or corrected within that
                                    time, then such additional time as may be
                                    necessary if the Notified Party has
                                    commenced within such thirty (30) days and
                                    is diligently pursuing the remedies or steps
                                    necessary to cure or correct such default).
                                    Until the time allowed, as aforesaid, for
                                    the Notified Party to cure such default has
                                    expired without cure, Tenant shall have no
                                    right to, and shall not terminate this Lease
                                    on account of Landlord's default.

FINANCIAL                  16.      At the request of Landlord, but not more
STATEMENTS                          than twice per annum, Tenant shall provide
                                    to Landlord Tenant's current publicly
                                    available financial statement or such other
                                    publicly available information discussing
                                    financial worth of Tenant as may be
                                    reasonably requested by Landlord, which
                                    Landlord shall use solely for purposes of
                                    this Lease and in connection with the
                                    ownership, management and disposition of the
                                    Building and keep confidential, provided
                                    that Landlord may disclose such statements
                                    to Landlord's lenders, potential purchasers
                                    of the Building and any professionals hired
                                    or engaged by Landlord in connection
                                    therewith.

ESTOPPEL                   17.      Tenant agrees from time to time, within ten
CERTIFICATE                         (10) business days after request of
                                    Landlord, to deliver to Landlord, or
                                    Landlord's designee, an estoppel certificate
                                    stating that this Lease is in full force and
                                    effect, the date to which Rent has been
                                    paid, the unexpired portion of this Lease,
                                    and such other matters pertaining to this
                                    Lease as may be reasonably requested by
                                    Landlord. Failure by Tenant to execute and
                                    deliver such certificate shall constitute an
                                    acceptance of the Premises and
                                    acknowledgment by Tenant that the statements
                                    included are true and correct without
                                    exception. Landlord and Tenant intend that
                                    any statement delivered pursuant to this
                                    paragraph may be relied upon by any
                                    mortgagee, beneficiary, purchaser or
                                    prospective purchaser of the Building or any
                                    interest therein.

SECURITY                   18.      Tenant agrees to deposit with Landlord upon
DEPOSIT                             execution of this Lease a Security Deposit
                                    as stated in the Basic Lease Information,
                                    which sum shall be held by Landlord,
                                    without obligation for interest as
                                    security for the performance of Tenant's
                                    covenants and obligations under this
                                    Lease. the Security Deposit is not an
                                    advance rental deposit or a measure of
                                    damages incurred by Landlord in case of
                                    Tenant's default. Landlord may, from time
                                    to time, without prejudice to any other
                                    remedy provided herein or provided by
                                    law, use such fund to the extent
                                    necessary to make good any arrears of
                                    Rent or other payments due to Landlord
                                    hereunder, and any other damage, injury,
                                    expense or liability caused by such event
                                    of default, and Tenant shall pay' to
                                    Landlord, on demand, the amount so
                                    applied in order to restore the Security
                                    Deposit to its original amount. Although
                                    the Security Deposit shall be deemed the
                                    property of Landlord, any remaining
                                    balance of such deposit shall be returned
                                    by Landlord to Tenant at such time after
                                    termination of this Lease that all of
                                    Tenant's obligations under this Lease
                                    have been fulfilled. Landlord may use and
                                    commingle the Security Deposit with other
                                    funds of

                                       18

<PAGE>

                                    Landlord.

TENANT'S                   19.      The liability of Landlord to Tenant for any
REMEDIES                            default by Landlord under the terms of this
                                    Lease are not personal obligations of the
                                    individual or other partners, directors,
                                    officers and shareholders of Landlord, and
                                    Tenant agrees to look solely to Landlord's
                                    interest in the Building for the recovery of
                                    any amount from Landlord, and shall not look
                                    to other assets of Landlord nor seek
                                    recourse against the assets of the
                                    individual or other partners, directors,
                                    officers and shareholders of Landlord.

ASSIGNMENT                 20.      A. General. Tenant shall not assign or
AND                                 sublet the Premises or any part thereof
SUBLETTING                          without Landlord's prior written approval
                                    except as provided herein. If Tenant desires
                                    to assign this Lease or, sublet any or all
                                    of the Premises, Tenant shall provide
                                    Landlord written notice thirty (30) calendar
                                    days prior to the anticipated effective date
                                    of the assignment or sublease. Landlord
                                    shall then have a period of ten (10)
                                    business days following receipt of such
                                    notice to either: (1) terminate this Lease
                                    as to the space so affected as of the date
                                    so requested by Tenant, subject to the
                                    limitations of Section 20.C. below; or (2)
                                    to permit Tenant to assign this Lease or
                                    sublet such space, subject, however, to
                                    Landlord's prior written approval of the
                                    proposed assignee or subtenant and any
                                    assignment or sublease documents. If
                                    Landlord should fail to notify Tenant in
                                    writing of such election within thirty (30)
                                    days following receipt of such notice,
                                    Landlord shall be deemed to have refused
                                    Landlord's consent to the assignment or
                                    subletting in question. If Landlord does not
                                    exercise the option provided in subsection
                                    (c) below, Landlord's consent to a proposed
                                    assignment or sublet shall not be
                                    unreasonably withheld or delayed. Without
                                    limiting the other instances in which it may
                                    be reasonable for Landlord to withhold
                                    Landlord's consent to an assignment or
                                    subletting, Landlord and Tenant acknowledge
                                    that it shall be reasonable for Landlord to
                                    withhold Landlord's consent in the following
                                    instances: The use of the Premises by such
                                    proposed assignee or subtenant would not be
                                    a permitted use; the proposed assignee or
                                    subtenant is not of sound financial
                                    condition; the proposed assignee or
                                    subtenant is a governmental agency; the
                                    proposed assignee or subtenant does not have
                                    a good reputation as a tenant of property;
                                    the proposed assignee or subtenant is a
                                    person with whom Landlord is negotiating to
                                    lease space in the Building; the assignment
                                    or subletting would entail any alterations
                                    which would lessen the value of the
                                    leasehold improvements in the Premises; or
                                    if Tenant is in default of any obligation of
                                    Tenant under this Lease, or Tenant has
                                    defaulted under this Lease on two (2) or
                                    more occasions during any twelve (12) months
                                    preceding the date that Tenant shall request
                                    consent. Tenant shall pay promptly upon
                                    billing any and all reasonable attorneys'
                                    fees and other costs reasonably incurred by
                                    Landlord for the review or preparation of
                                    any documents in connection with a proposed
                                    assignment or sublease not to exceed Two
                                    Thousand Dollars ($2,000.00). Failure by
                                    Landlord to approve a proposed assignee or
                                    subtenant shall not cause a termination of
                                    this Lease. Upon termination under this
                                    Paragraph 20.A. Landlord may lease the
                                    Premises to any party including parties with
                                    whom Tenant has negotiated an assignment or
                                    sublease, without incurring any liability to
                                    Tenant.

                                    B. Bonus Rent. Any Rent or other
                                    consideration realized by Tenant under
                                    any such sublease or assignment in excess
                                    of the Rent payable hereunder, or in the
                                    event such sublease is for a portion of
                                    the Premises: in excess of the Rent that
                                    is fairly allocable to such portion, as
                                    determined by Landlord, after deduction
                                    of a reasonable brokerage commission
                                    actually paid by Tenant and deduction of
                                    reasonable tenant improvement allowance,

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<PAGE>

                                    reasonable attorneys' and leasing
                                    commissions incurred by Tenant, shall be
                                    divided and paid, seventy-five percent (75%)
                                    to Landlord, twenty-five percent (25%) to
                                    Tenant after first subtracting fair market
                                    brokerage commissions. In any subletting or
                                    assignment undertaken by Tenant Tenant shall
                                    diligently seek to obtain the maximum rental
                                    amount available in the marketplace for such
                                    subletting or assignment.

                                    C. RECAPTURE. If Tenant proposes to assign
                                    this Lease or sublet more than fifty percent
                                    (50%) of the rentable square footage of the
                                    Premises, Landlord shall have the right, in
                                    its sole and absolute discretion, to
                                    terminate this Lease (as to such space) on
                                    written notice to Tenant within ten (10)
                                    business days after receipt of Tenant's
                                    notice. If Landlord elects to terminate the
                                    Lease as set forth in Tenant's notice, and
                                    Landlord shall have the right (but no
                                    obligation) to enter into a direct lease
                                    with the proposed assignee or subtenant.
                                    Tenant may withdraw its request for
                                    Landlord's consent at any time prior to, but
                                    not after, Landlord delivers a written
                                    notice of termination.

                                    D. CORPORATION. Notwithstanding anything to
                                    the contrary in this Lease, Tenant may,
                                    without Landlord's prior written consent and
                                    without being subject to Paragraph 20A., B.
                                    or C. of this Lease, sublet any of the
                                    Premises or assign this Lease to (a) a
                                    subsidiary, affiliate, division. or
                                    corporation controlling, controlled by, or
                                    under common control with Tenant, (b) a
                                    successor corporation related to Tenant by
                                    merger, consolidation, nonbankruptcy
                                    reorganization, or government action, or (c)
                                    a purchaser of substantially all of Tenant's
                                    assets located in the Premises, provided
                                    that any party described in (a), (b) or (c)
                                    above has a net worth at least equal to the
                                    greater of the net worth of Tenant as of the
                                    date of this Lease or the date of such
                                    transfer. In addition, no issuance, sale or
                                    transfer of Tenant's capital stock which
                                    does not result in a change in the voting
                                    control of Tenant shall be deemed an
                                    assignment subletting or any other transfer
                                    of this Lease or the Premises.

                                    E. PARTNERSHIP. If Tenant is a partnership,
                                    joint venture or other incorporated business
                                    form, a transfer of the interest of persons,
                                    firms or entities responsible for managerial
                                    control of Tenant by sale, assignment
                                    bequest, inheritance, operation of law or
                                    other disposition, so as to result in a
                                    change in the present control of said entity
                                    and/or a change in the identity of the
                                    persons responsible for the general credit
                                    obligations of said entity shall constitute
                                    an assignment for all purposes of this
                                    Lease.

                                    F. Liability. No Assignment or subletting by
                                    Tenant shall relieve Tenant of any
                                    obligation under this Lease. Any assignment
                                    or subletting which conflicts with the
                                    provisions hereof shall be void.

AUTHORITY OF               21.      Landlord represents and warrants that it has
PARTIES                             full right and authority to enter into this
                                    Lease and to perform all of landlord's
                                    obligations hereunder. Tenant represents and
                                    warrants that it has full right and
                                    authority to enter into this Lease and to
                                    perform all of Tenant's obligations
                                    hereunder.

CONDEMNA-                  22.      A. CONDEMNATION RESULTING IN TERMINATION. If
TION                                the whole or any substantial part of the
                                    Building should be taken or condemned for
                                    any public use under governmental law,
                                    ordinance or regulation, or by right of
                                    eminent domain, or by private purchase in
                                    lieu thereof, and the taking would prevent
                                    or materially interfere with the Permitted
                                    Use of the Premises, this Lease

                                       20

<PAGE>

                                    shall terminate and the Rent shall be abated
                                    during the unexpired portion of this Lease,
                                    effective when the physical taking of said
                                    Premises shall have occurred.

                                    B. CONDEMNATION NOT RESULTING IN
                                    TERMINATION. If a portion of the Building
                                    should be taken or condemned for any public
                                    use under any governmental law, ordinance,
                                    or regulation, or by right of eminent
                                    domain, or by private purchase in lieu
                                    thereof, and this Lease is not terminated as
                                    provided in Paragraph 23 A. above, this
                                    Lease shall not terminate, but the Rent
                                    payable hereunder during the unexpired
                                    portion of the Lease shall be reduced,
                                    beginning on the date when the physical
                                    taking shall have occurred, to such amount
                                    as may be fair and reasonable under all of
                                    the.circumstances.

                                    C. AWARD. Landlord shall be entitled to any
                                    and all payment, income, rent, award, or
                                    any interest therein whatsoever which may be
                                    paid or made in connection with such taking
                                    or conveyance and Tenant shall have no
                                    claim against Landlord or otherwise for the
                                    value of any unexpired portion of this
                                    Lease. Notwithstanding the foregoing, any
                                    compensation specifically awarded Tenant for
                                    loss of business, Tenant's personal
                                    property, moving costs or loss of goodwill,
                                    shall be and remain the property of Tenant.

CASUALTY                   23.      A. General. If the Premises or Building
DAMAGE                              should be damaged or destroyed by fire or
                                    other casualty, Tenant shall give
                                    immediate written notice thereof to
                                    Landlord. Within fifteen (15) days after
                                    Landlord's receipt of such notice, Landlord
                                    shall notify Tenant whether such repairs can
                                    reasonably be made within one hundred eighty
                                    (180) days from the date of such notice.
                                    Landlord's determination shall be binding on
                                    Tenant.

                                    B. LESS THAN 180 DAYS. If the Premises or
                                    Building should be damaged by fire or other
                                    casualty but only to such extent that
                                    rebuilding or repairs can in Landlord's
                                    estimation be reasonably completed within
                                    one hundred eighty (180) days after the date
                                    of such damage, this Lease shall not
                                    terminate, and provided that insurance
                                    proceeds are available to fully repair the
                                    damage, Landlord shall proceed to rebuild
                                    and repair the Premises and/or the Building
                                    and the Tenant Improvements to its/their
                                    condition existing immediately prior to the
                                    damage (to the extent allowed by then
                                    applicable law), except that Landlord shall
                                    not be required to rebuild, repair or
                                    replace any part of the partitions,
                                    fixtures, Alterations, additions and
                                    leasehold improvements which may have been
                                    placed in, on or about the Premises by
                                    Tenant. If the Premises are untenantable in
                                    whole or in part following such damage, or
                                    if such damage prevents or materially
                                    interferes with the Permitted Use of the
                                    Premises by Tenant, the Rent payable
                                    hereunder during the period in which they
                                    are untenantable or during which the
                                    Permitted Use of the Premises by Tenant is
                                    prevented or materially interfered with,
                                    shall be abated proportionately, but only to
                                    the extent of rental abatement insurance
                                    proceeds received by Landlord during the
                                    time and to the extent the Premises are
                                    unfit for occupancy.

                                    C. GREATER THAN 180 DAYS. If the Premises or
                                    Building should be so damaged by fire or by
                                    other casualty that rebuilding or repairs
                                    cannot in Landlord's estimation be completed
                                    within one hundred eighty (180) days after
                                    such damage, this Lease shall terminate and
                                    the Rent shall be abated during the
                                    unexpired portion of this Lease, effective
                                    upon the date of the occurrence of such
                                    damage. Notwithstanding anything in this
                                    Section 23, if the Premises or any material
                                    part of the Building or the Project that
                                    Tenant is entitled to use under this Lease
                                    is damaged by any casualty, then Tenant

                                       21
<PAGE>

                                    shall have the right to terminate this Lease
                                    if the Premises or such parts of' the
                                    Building or the Project cannot be fully
                                    restored by Landlord to their prior
                                    condition within two hundred seventy (270)
                                    days after the date of such damage.

                                    D. TENANT'S FAULT. If the Premises are
                                    damaged by fire or other casualty resulting
                                    from the fault negligence, or breach of this
                                    Lease by Tenant or any of Tenant's Parties,
                                    Base Rent and Additional Rent shall not be
                                    DIMINISHED during the repair of such damage,
                                    except to the extent of any rental
                                    interruption insurance carried by Landlord,
                                    and, subject to the terms of Paragraph 4
                                    hereof, Tenant shall be liable to Landlord
                                    for the cost and expense of the repair and
                                    restoration of the Building caused thereby
                                    to the extent such cost and expense is not
                                    covered by insurance proceeds.

                                    E. UNINSURED CASUALTY. Notwithstanding
                                    anything herein to the contrary, in the
                                    event that the Premises or Building are
                                    damaged or destroyed and are not fully
                                    covered by the insurance proceeds received
                                    by Landlord or in the event that the holder
                                    of any indebtedness secured by a mortgage or
                                    deed of trust covering the Premises legally
                                    requires that the insurance proceeds be,
                                    applied to such indebtedness, then in either
                                    case Landlord shall have the right to
                                    terminate this Lease by delivering written
                                    notice of termination (a "Termination
                                    Notice") to Tenant within thirty (30) days
                                    after the date of notice to Landlord that
                                    said damage or destruction is not fully
                                    covered by insurance or such requirement is
                                    made by any such holder, as the case may be,
                                    whereupon all rights and obligations
                                    hereunder shall cease and terminate.
                                    Notwithstanding the foregoing, Tenant may
                                    defeat Landlord's termination right
                                    hereunder by providing Landlord with written
                                    notice thereof within ten (10) days of
                                    receipt of such Termination Notice and
                                    further providing Landlord with the funds
                                    necessary to complete rebuilding of the
                                    damage or destruction (after subtracting
                                    the, available insurance proceeds) within
                                    thirty (30) days after receipt of the
                                    Termination Notice, which funds shall be
                                    used to repair such damage in the same
                                    manner and order described in paragraph 4.C.
                                    (1) of the Work Letter.

                                    F. Waiver. Except as otherwise provided in
                                    this Paragraph 23, Tenant hereby waives the
                                    provisions of Sections 1932, 1933(4), 1941
                                    and 1.942 of the Civil Code of California.

HOLDING OVER               24.      If Tenant shall retain the possession of the
                                    Premises or any portion thereof without
                                    Landlord's consent following the
                                    expiration of the Lease or sooner
                                    termination for any reason, then Tenant
                                    shall pay to Landlord for each day of
                                    such retention one hundred fifty percent
                                    (150%) of the amount of the daily rental
                                    as of the last month prior to the date of
                                    expiration or termination Tenant shall
                                    also indemnify, defend, protect and hold
                                    Landlord harmless from any loss,
                                    liability or cost including reasonable
                                    attorneys' fees, resulting from delay by
                                    Tenant, in surrendering the Premises,
                                    including, without limitation, any claims
                                    made by any succeeding tenant founded on
                                    such delay. Acceptance of Rent by
                                    Landlord following expiration or
                                    termination shall not constitute a
                                    renewal of this Lease, and nothing
                                    contained in this Paragraph 24 shall
                                    waive Landlord's right of reentry or any
                                    other right Unless Landlord consents in
                                    writing to Tenant's holding over, Tenant
                                    shall be only a Tenant at sufferance,
                                    whether or not Landlord accepts any Rent
                                    from. Tenant while Tenant is holding over
                                    without Landlord's written consent.
                                    Additionally, in the event that upon
                                    termination of the Lease, Tenant has not
                                    fulfilled its obligation with respect to
                                    repairs and cleanup of the Premises or
                                    any other Tenant obligations as set forth
                                    in this Lease, then

                                      22

<PAGE>

                                    Landlord shall have the right to perform any
                                    such obligations as it deems necessary at
                                    Tenant's sole cost and expense, and any time
                                    required by Landlord to complete such
                                    obligations shall be considered a period of
                                    holding over and the terms of this Paragraph
                                    24 shall apply.

DEFAULT                    25.      A. EVENTS OF DEFAULT. The occurrence of any
                                    of the following shall constitute an event
                                    of default on the part of Tenant:

                                    (1) Abandonment. Abandonment of the Premises
                                    for a continuous period in excess of thirty
                                    (30) days, Tenant waives any right to notice
                                    Tenant may have under Section 1951.3 of the
                                    Civil Code of the State of California, the
                                    terms of this Paragraph 25A being deemed
                                    such notice to Tenant as required by said
                                    Section 1951.3.

                                    (2) NONPAYMENT OF RENT. Failure to pay any
                                    installment of Rent or any other amount due
                                    and payable hereunder within five (5) days
                                    after written notice that such payment is
                                    due.

                                    (3) OTHER OBLIGATIONS. Failure to perform
                                    any obligation, agreement or covenant under
                                    this Lease other than those matters
                                    specified in subparagraphs (1) and (2) of
                                    this Paragraph 26.A., such failure
                                    continuing for thirty (30) days after
                                    written notice of such failure. If the
                                    nature of the default (other than those
                                    matters specified in subparagraphs (1) and
                                    (2) of this Paragraph 25.A) reasonably
                                    requires more than 30 days to cure, Tenant
                                    shall not be deemed to be in default if
                                    Tenant commences to cure within the 30-day
                                    period and thereafter diligently continues
                                    that cure to completion.

                                    (4) GENERAL ASSIGNMENT. A general assignment
                                    by Tenant for the benefit of creditors.

                                    (5) BANKRUPTCY. The filing of any voluntary
                                    petition in bankruptcy by Tenant, or the
                                    filing of an involuntary petition by
                                    Tenant's creditors, which involuntary
                                    petition remains undischarged for a period
                                    of thirty (30) days (or, in the case of an
                                    involuntary petition, sixty (60) days.) In
                                    the event that under applicable law the
                                    trustee in bankruptcy or Tenant has the
                                    right to affirm this Lease and continue to
                                    perform the obligations of Tenant hereunder,
                                    such trustee or Tenant shall, in such time
                                    period as may be permitted by the bankruptcy
                                    court having jurisdiction, cure all defaults
                                    of Tenant hereunder outstanding as of the
                                    date of the affirmance of this Lease and
                                    provide to Landlord such adequate assurances
                                    as may be necessary to ensure Landlord of
                                    the continued performance of Tenant's
                                    obligation under this Lease.

                                    (6) RECEIVERSHIP. The employment of a
                                    receiver to take possession of substantially
                                    all of Tenants assets or the Premises, if
                                    such appointment remains undismissed or
                                    undischarged for a period of sixty (60) days
                                    after the order therefor.

                                    (7) ATTACHMENT. The attachment execution or
                                    other judicial seizure of all or
                                    substantially all of Tenants assets or the
                                    Premises, if such attachment or other
                                    seizure remains undismissed or undischarged
                                    for a period of sixty (60) days after the
                                    levy thereof.

                                    B. REMEDIES UPON DEFAULT.

                                       23
<PAGE>

                                    (1) TERMINATION. In the event of the
                                    occurrence of any event of default, Landlord
                                    shall have the right to give a written
                                    termination notice to Tenant, and on the
                                    date specified in such notice, Tenant's
                                    right to possession shall terminate, and
                                    this Lease shall terminate unless on or
                                    before such date all arrears of rental and
                                    all other sums payable by Tenant under this
                                    Lease and all costs and expenses incurred by
                                    or on behalf of Landlord hereunder shall
                                    have been paid by Tenant and all other
                                    events of default of this Lease by Tenant at
                                    the time existing shall have been fully
                                    remedied to the satisfaction of Landlord. At
                                    any time after such termination, Landlord
                                    may recover possession of the Premises or
                                    any part thereof and expel and remove
                                    therefrom Tenant and any other person
                                    occupying the same, by any lawful means, and
                                    again repossess and enjoy the Premises
                                    without prejudice to any of the remedies
                                    that Landlord may have under this Lease, or
                                    at law or equity by reason of Tenant's
                                    default or of such termination

                                    (2) CONTINUATION AFTER DEFAULT. Even though
                                    an event of default may have occurred, this
                                    Lease shall continue in effect for so long
                                    as Landlord does not terminate Tenant's
                                    right to possession under Paragraph 25.B.(I)
                                    hereof, and Landlord may enforce all of
                                    Landlord's rights and remedies under this
                                    Lease, including without limitation, the
                                    right to recover Rent as it becomes due,
                                    and Landlord, without terminating this
                                    Lease, may exercise an of the rights and
                                    remedies of a landlord under Section 1951.4
                                    of the Civil Code of the State of California
                                    or any successor code section. Acts of
                                    maintenance, preservation or efforts to
                                    lease the Premises or the appointment of a
                                    receiver upon application of Landlord to
                                    protect Landlord's interest under this Lease
                                    shall not constitute an election to
                                    terminate Tenant's right to possession.

                                    C. DAMAGES AFTER DEFAULT. Should Landlord
                                    terminate this Lease pursuant to the
                                    provisions of Paragraph 25.B.(I) hereof,
                                    Landlord shall have the rights and remedies
                                    of a Landlord provided by Section 1951.2 of
                                    the Civil Code of the State of California or
                                    successor code sections. Upon such
                                    termination, in addition to any other rights
                                    and remedies to which Landlord may be
                                    entitled under applicable law, Landlord
                                    shall be entitled to recover from Tenant:
                                    (1) the worth at the time of award of the
                                    unpaid Rent and other amounts which had been
                                    earned at the time of termination, (2) the
                                    worth at the time of award of the amount by
                                    which the unpaid Rent which would have been
                                    earned after termination until the time of
                                    award exceeds the amount of such Rent loss
                                    that Tenant proves could have been
                                    reasonably avoided; (3) the worth at the
                                    time of award of the amount by which the
                                    unpaid Rent for the balance of the Tenant
                                    after the time of award exceeds the amount
                                    of such Rent loss that the Tenant proves
                                    could be reasonably avoided; and (4) any
                                    other amount necessary to compensate
                                    Landlord for all the detriment proximately
                                    caused by Tenant's failure to perform
                                    Tenant's obligations under this Lease or
                                    which, in the ordinary course of things,
                                    would be likely to result therefrom. The
                                    "worth at the time of award" of the amounts
                                    referred to in (1) and (2) above, shall be
                                    computed at the lesser of the "prime rate,"
                                    as announced from time to time by Wells
                                    Fargo Bank, N.A. (San Francisco), plus five
                                    (5) percentage points, or the maximum
                                    interest rate allowed by law ("Applicable
                                    Interest Rate"). The "worth at the time of
                                    award" of the amount referred to in (3)
                                    above shall be computed by discounting such
                                    amount at the Federal Discount Rate of the
                                    Federal Reserve Bank of San Francisco at the
                                    time of the award.

                                    D. LATE CHARGE. If any installment of Rent
                                    is not paid within five (5) days after
                                    Landlord shall have given Tenant notice of
                                    nonpayment (provided

                                      24

<PAGE>

                                    that Landlord shall not be required to
                                    provide such a notice for more than one (1)
                                    default in any twelve (1-2) consecutive
                                    month period), such amount shall bear
                                    interest at the Applicable Interest Rate,
                                    from the date on which said payment was
                                    originally due until the date on which
                                    Landlord shall receive said payment. In
                                    addition, Tenant shall pay Landlord a late
                                    charge equal to three percent (3%) of the
                                    delinquency, to compensate Landlord for the
                                    loss of the use of the amount not paid and
                                    the administrative costs caused by the
                                    delinquency, the parties agreeing that
                                    Landlord's damage by virtue of such
                                    delinquencies would be difficult to compute
                                    and the amount stated herein represents a
                                    reasonable estimate thereof. This provision
                                    shall not relieve Tenant of Tenant's
                                    obligation to pay Rent at the time and in
                                    the manner herein specified.

                                    E. REMEDIES CUMULATIVE. All rights,
                                    privileges and elections or remedies of the
                                    parties are cumulative and not alternative,
                                    to the extent permitted by law and except as
                                    otherwise provided herein.

LIENS                      26.      Tenant shall keep the Premises free from
                                    liens arising out of or related to work
                                    performed, materials or supplies diminished
                                    or obligation incurred by Tenant or in
                                    connection with work made, suffered or done
                                    by or on behalf of Tenant in or on the
                                    Premises or Building. In the event that
                                    Tenant shall not, within twenty (20) days
                                    following the imposition of any such lien,
                                    cause the same to be released of record by
                                    payment or posting of a proper bond,
                                    Landlord shall have, in addition to all
                                    other remedies provided herein and by law,
                                    the right, but not the obligation, to cause
                                    the same to be released by such means as
                                    Landlord shall deem proper, including
                                    payment of the claim giving rise to such
                                    lien. All sums paid by Landlord on behalf of
                                    Tenant and all expenses incurred by Landlord
                                    in connection therefor shall be payable to
                                    Landlord by Tenant on demand with interest
                                    at the Applicable Interest Rate. Landlord
                                    shall have the right at all times to post
                                    and keep posted on the Premises any notices
                                    permitted or required by law, or which
                                    Landlord shall deem proper, for the
                                    protection, of Landlord, the Premises, the
                                    Building and any other party having an
                                    interest therein, from mechanics' and
                                    materialmen's liens, and Tenant shall give
                                    Landlord not less than ten (10) business
                                    days' prior written notice of the
                                    commencement of any' work in the Premises or
                                    Building which would lawfully give rise to a
                                    claim for mechanics' or materialmen's liens.

TRANSFERS BY               27.      In the event of a sale or conveyance by
LANDLORD                            Landlord of the Building or a foreclosure by
                                    any creditor of Landlord, the same shall
                                    operate to release Landlord from any
                                    liability upon any of the covenants or
                                    conditions, express or implied, herein
                                    contained in favor of Tenant, to the extent
                                    required to be performed after the passing
                                    of title to Landlord's
                                    successor-in-interest. In such event Tenant
                                    agrees to look solely to the responsibility
                                    of the successor-in-interest of Landlord
                                    under this Lease with respect to the
                                    performance of the covenants and duties of
                                    "Landlord" to be performed after the passing
                                    of title to Landlord's
                                    successor-in-interest. This Lease shall not
                                    be affected by any such sale and Tenant
                                    agrees to attorn to the purchaser or
                                    assignee. Landlord's
                                    successor(s)-in-interest shall not have
                                    liability to Tenant with respect to the
                                    failure to perform all of the obligations of
                                    "Landlord," to the extent required to be
                                    performed prior to the date such
                                    successor(s)-in-interest became the owner of
                                    the Building, except that any such
                                    successor(s)-in-interest shall be required
                                    to remedy any continuing Landlord default,
                                    such as a continuing failure to maintain and
                                    repair.

RIGHT OF                   28.      All covenants and agreements to be performed
                                    by Tenant under any of the

                                       25

<PAGE>

LANDLORD TO                         terms of this Lease shall be performed by
PERFORM AND                         Tenant at Tenant's sole cost and expense and
TENANT'S                            without any abatement of Rent. If Tenant
COVENANTS                           shall fail to pay any sum of money, other
                                    than Base Rent, Basic Operating Building
                                    Cost and Basic Operating Office Cost
                                    required to be paid by Tenant hereunder or
                                    shall fail to perform any other act on
                                    Tenant's part to be performed hereunder, and
                                    such failure shall continue for five (5)
                                    days after notice thereof by Landlord,
                                    Landlord may, but shall not be obligated to
                                    do so, and without waiving or releasing
                                    Tenant from any obligations of Tenant, make
                                    any such payment or perform any such act on
                                    Tenant's part to be made or performed. All
                                    sums so paid by Landlord and all necessary
                                    incidental costs together with interest
                                    thereon at the Applicable Interest Rate
                                    from the date such payment by Landlord shall
                                    be payable to Landlord on demand, and Tenant
                                    covenants to pay such sums, and Landlord
                                    shall have, in addition to any other right
                                    or remedy of Landlord, the same right and
                                    remedies in the event of the non payment
                                    thereof by Tenant as in the case of default
                                    by Tenant in the payment of Base Rent and
                                    Basic Operating Building Cost.

WAIVER                     29.      If either Landlord or Tenant waives the
                                    performance of any term, covenant or
                                    condition contained in this Lease, such
                                    waiver shall not be deemed a waiver of any
                                    subsequent breach of the same or any other
                                    term, covenant or condition contained
                                    herein. The acceptance of Rent by Landlord
                                    shall not constitute a waiver of any
                                    preceding breach by Tenant of any term,
                                    covenant or condition of this Lease,
                                    regardless of Landlord's knowledge of such
                                    preceding breach at the time Landlord
                                    accepted such Rent. Failure by Landlord to
                                    enforce any of the terms, covenants or
                                    conditions of this Lease for any length of
                                    time shall not be deemed to waive or to
                                    decrease the right of Landlord to insist
                                    thereafter upon strict performance by
                                    Tenant. Waiver of any term, covenant or
                                    condition contained in this, Lease may only
                                    be made by a written document signed by
                                    Landlord.

NOTICES                    30.      Each provision of this Lease or of any
                                    applicable governmental laws, ordinances,
                                    regulations and other requirements with
                                    reference to sending, mailing, or delivery
                                    of any notice or the making of any payment
                                    by Landlord or Tenant to the other shall be
                                    deemed to be complied with when and if the
                                    following steps are taken.

                                    A. RENT. All Rent and other payments
                                    required to be made by Tenant to Landlord
                                    hereunder shall be payable to Landlord at
                                    the address set forth in the Basic Lease
                                    Information, or at such other address as
                                    Landlord may specify from time to time by
                                    written notice delivered in accordance
                                    herewith. Tenant's obligation to pay Rent
                                    and any other amounts to Landlord under the
                                    terms of this Lease shall not be deemed
                                    satisfied until such Rent and other amounts
                                    have been actually received by Landlord.

                                    B. OTHER. All notices, demands consents and
                                    approvals which may or are required to be
                                    given by either party to the, other
                                    hereunder shall be in writing and either
                                    personally delivered, sent by commercial
                                    overnight courier, or mailed, certified or
                                    registered, postage prepaid, and addressed
                                    to the party to be notified at the address
                                    for such party as specified in the Basic
                                    Lease Information or to such other place as
                                    the party to be notified may from time to
                                    time designate by at least fifteen (15) days
                                    notice to the notifying party. Notices shall
                                    be deemed served upon receipt or refusal to
                                    accept delivery.

ATTORNEYS'                 31.      In the event that Landlord places the
FEES                                enforcement of this Lease, or any part
                                    thereof, or the collection of any Rent due,
                                    or to become due hereunder, or

                                      26
<PAGE>

                                    recovery of possession of the Premises in
                                    the hands of an attorney, Tenant shall pay
                                    to Landlord, upon demand, Landlord's
                                    reasonable attorneys' fees and court costs.
                                    In any action which Landlord or Tenant
                                    brings to enforce its respective rights
                                    hereunder, the unsuccessful party shall pay
                                    all costs incurred by the prevailing party
                                    including reasonable attorneys' fees, to be
                                    fixed by the court, and said costs and
                                    attorneys' fees shall be a part of the
                                    judgment in said action.

SUCCESSORS                 32.      This Lease shall be binding upon and inure
AND ASSIGNS                         to the benefit of Landlord, its successors
                                    and assigns, and shall be binding upon and
                                    inure to the benefit of Tenant, its
                                    successors, and to the extent an assignment
                                    is approved by Landlord hereunder, Tenant's
                                    assigns.

FORCE                      33.      Whenever period of time is herein prescribed
MAJEURE                             for action to be taken by Landlord or Tenant
                                    (except for the payment of Rent or any other
                                    costs or expenses under this Lease) such
                                    party shall not be liable or responsible
                                    for, and there shall be excluded from the
                                    computation for any such period of time, any
                                    delays due to strikes, riots, acts of God,
                                    shortages of labor or materials, war,
                                    governmental laws, regulations or
                                    restrictions or any other causes of any kind
                                    whatsoever which are beyond the control of
                                    Landlord. This Paragraph 33 shall not
                                    extend, or delay any time at which Tenant
                                    shall be entitled to terminate this Lease.

BROKERAGE                  34.      Landlord shall pay a brokerage commission to
COMMISSION                          Broker in accordance with a separate
                                    agreement between Landlord and Broker.
                                    Tenant warrants to Landlord that Tenant's
                                    sole contact with Landlord or with the
                                    Premises in connection with this transaction
                                    has been directly with Landlord and Broker,
                                    and that no other broker or finder can
                                    properly claim a right to a commission or a
                                    finder's fee based upon contacts between the
                                    claimant and Tenant with respect to Landlord
                                    or the Premises. Tenant shall indemnify,
                                    defend by counsel acceptable to Landlord,
                                    protect and hold Landlord harmless from and
                                    against any loss, cost or expense,
                                    including, but not limited to, attorneys'
                                    fees and costs, resulting from any claim for
                                    a fee or commission by any broker or finder
                                    in connection with the Premises and this
                                    Lease other than Broker.

MISCELLAN-                 3.5.     A. GENERAL. The term "Tenant" or any
EOUS                                pronoun used in place thereof shall indicate
                                    and include the masculine or feminine, the
                                    singular or plural number, individuals,
                                    firms or corporations, and their respective
                                    successors, executors, administrators and
                                    permitted assigns, according to the context
                                    hereof

                                    B. TIME. Time is of the essence regarding
                                    this Lease and all of its provisions.

                                    C. CHOICE OF LAW., This Lease shall in all
                                    respects be governed by the laws of the
                                    State of California.

                                    D. ENTIRE AGREEMENT. This Lease, together
                                    with its Exhibits, contains all the
                                    agreements of the parties hereto and
                                    supersedes any previous negotiations. There
                                    have been no representations made by the
                                    Landlord or understandings made between the
                                    parties other than those set forth in this
                                    Lease and its exhibits.

                                       27
<PAGE>

                                    E. MODIFICATION. This Lease may not be
                                    modified except by a written instrument by
                                    the parties hereto.

                                    F. SEVERABILITY. If, for any reason
                                    whatsoever, any of the provisions hereof
                                    shall be unenforceable or ineffective, all
                                    of the other provisions shall be and remain
                                    in full force and effect.

                                    G. Recordation. Tenant shall not record this
                                    Lease or a short form memorandum hereof.

                                    H. EXAMINATION OF LEASE. Submission of this
                                    Lease to Tenant does not constitute an
                                    option or offer to lease and this Lease is
                                    not effective. otherwise until execution and
                                    delivery by both Landlord and Tenant.

                                    I. ACCORD AND SATISFACTION. No payment by
                                    Tenant of a lesser amount than the Rent nor
                                    any endorsement on any check or letter
                                    accompanying any check or payment of Rent
                                    shall be deemed an accord and satisfaction
                                    of full payment of Rent, and Landlord may
                                    accept such payment without prejudice to
                                    Landlord's right to recover the balance of
                                    such to Rent or to pursue other remedies,

                                    J. EASEMENTS. Landlord may grant easements
                                    on the Building and dedicate for public use
                                    portions of the Building without Tenant's
                                    consent; provided that no such grant or
                                    dedication shall substantially interfere
                                    with Tenant's use of the Premises, nor shall
                                    nay such grant or dedication materially
                                    interfere with Tenant's access to the
                                    Premises or parking at the Property as set
                                    forth in this Lease or materially increase
                                    the costs or obligations or decrease the
                                    rights of Tenant under this Lease. Upon
                                    Landlord's demand, Tenant shall execute,
                                    acknowledge and deliver to Landlord
                                    documents, instruments, maps and plats
                                    necessary to effectuate Tenant's covenants
                                    hereunder.

                                    K. DRAFTING AND DETERMINATION PRESUMPTION.
                                    The parties acknowledge that this Lease has
                                    been agreed to by both the parties, that
                                    both Landlord and Tenant have consulted with
                                    attorneys with respect to the terms of this
                                    Lease and that no presumption shall be
                                    created against Landlord because Landlord
                                    drafted this Lease. Except as otherwise
                                    specifically set forth in this Lease, with
                                    respect to any consent, determination or
                                    estimation of Landlord required in this
                                    Lease or requested of Landlord Landlord's
                                    consent, determination or estimation shall
                                    be reasonably made.

                                    L. EXHIBITS. Exhibits A, B, Bl, C and D
                                    attached hereto are hereby incorporated
                                    herein by this reference.

                                    M. No Light, Air or View Easements Any
                                    diminution or shutting off of light air or
                                    view by any structure which may be erected
                                    on lands adjacent to or in the vicinity of
                                    the Building shall in no way affect this
                                    Lease or impose any liability on Landlord.

                                    N. No Third Party Benefit. This Lease is a
                                    contract between Landlord and Tenant and
                                    nothing herein is intended to create any
                                    third party benefit.

                                    0. Building. Landlord shall have the right
                                    at any time to change the name of the
                                    Building, to increase the size of t he real
                                    property upon which the

                                       28

<PAGE>

                                    Building is located by adding additional
                                    real property thereto, to construct other
                                    buildings or improvements on, any portion of
                                    such real property, to change the location
                                    and/or character of or to make alterations
                                    or additions to such real property. Tenant
                                    shall not use the Building's name for any
                                    purpose other than as part of its business.
                                    address. Any use of such name in the
                                    designation of Tenant's business shall
                                    constitute a default under this Lease.

                                    P. SURVIVAL OF OBLIGATIONS., Any obligations
                                    of the parties arising prior to the
                                    expiration of the Lease shall survive the
                                    termination of the Lease, and each party
                                    shall promptly perform all such obligations
                                    whether or not this Lease has expired.

                                    Q. INDEPENDENT COVENANTS. Each covenant,
                                    agreement, obligation or other provision of
                                    this Lease to be. performed by Tenant are
                                    separate and independent covenants of
                                    Tenant, and not dependent on any other
                                    provision of the Lease.

                                    R. JOINT AND SEVERAL LIABILITY. If Tenant
                                    comprises more than one entity. or person,
                                    or if this Lease is guaranteed by any party,
                                    all such persons shall be jointly and
                                    severally liable for payment of rents and
                                    for performance of Tenant's obligations
                                    hereunder.

                                    S. OFFER TO LEASE. The submission of this
                                    Lease to Tenant or its broker or other agent
                                    does not constitute an offer to Tenant to
                                    lease the Premises. This Lease shall have no
                                    force and effect until (a) it is executed
                                    and delivered by Tenant to Landlord and (b)
                                    it is fully reviewed and executed by
                                    Landlord.

APPROVAL                   36.      Except as specifically stated to the
                                    contrary in this Lease, whenever this Lease
                                    requires an approval, consent designation,
                                    determination, selection or judgment by
                                    either Landlord or Tenant, such approval,
                                    consent, designation, determination,
                                    selection or judgment and any conditions
                                    imposed thereby shall be reasonable and
                                    shall not be unreasonably withheld or
                                    delayed and, in exercising any right or
                                    remedy hereunder, each party shall at all
                                    times act reasonably and in good faith.

PARKING                    37.      Landlord grants to Tenant and Tenant's
                                    customers, suppliers, employees and invitees
                                    a nonexclusive license to use parking spaces
                                    on the Property for the use of motor
                                    vehicles during the Lease Term subject to
                                    rights reserved to Landlord as specified in
                                    this Paragraph 37. Landlord reserves the
                                    right to promulgate rules and regulations
                                    relating to the parking areas; to make
                                    changes in the parking layout from time to
                                    time; and to do and perform any other acts
                                    in and to these areas and improvements as
                                    Landlord reasonably determines to be
                                    advisable. Tenant agrees not to overburden
                                    the parking. facilities and to abide by and
                                    conform with the rules and regulations and
                                    to cause. its employees and agents to abide
                                    by and conform to the rules and regulations.
                                    Currently, parking available for Tenant's
                                    use is allotted at (three (3)) spaces per
                                    one thousand (1,000) rental square feet of
                                    the Premises.

                                       29

<PAGE>

SIGNATURES   IN WITNESS WHEREOF, the parties hereto have executed this lease
             the day and year first above written.

                                          "Landlord"

                                WJT, LLC,
                                a California limited liability company

                                By: /s/ James Tong
                                   ---------------------------------------
                                   Name: James Tong
                                   Its:  Managing Partner
                                         ---------------------------------

                                By:
                                   ---------------------------------------
                                   Name: Wendahl K.S. Ting
                                   Its:
                                         ---------------------------------

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

                                "TENANT"

                                POLYCOM, INC.,
                                a Delaware corporation

                                By: /s/ Robert C. Hagerty
                                   ---------------------------------------
                                   Name:  ROBERT C. HAGERTY
                                        ----------------------------------
                                   Title: CHAIRMAN
                                         ---------------------------------

                                Date: 2-19-01
                                     -------------------------------------

                                              APPROVED AS TO FORM

                                               /s/ illegible
                                              ----------------------------
                                              POLYCOM LEGAL

                                       30

<PAGE>

                                  LEASE RIDER

This Lease Rider is attached to and forms a -part of that certain Lease dated as
of _____________, __2001 by and between WJT, LLC, a California limited liability
company, as Landlord, and POLYCOM, INC., a Delaware corporation, as Tenant, and
constitutes additional covenants and agreements thereto as set forth in the
Lease, with the covenants and agreements contained herein to prevail in the
event of any conflict. between the covenants and agreements contained herein
and those in the Lease.

EXHIBIT A TRANSPORTATION MANAGEMENT

Tenant agrees to comply with any lawful regulations or ordinances of the City of
Pleasanton regarding transportation management within the City.

                                       31

<PAGE>

                                   EXHIBIT A

                              Property Description

All of that land situated in the State of California, County of Alameda, City of
Pleasanton, and more particularly described as follows:

 LOT 35B PARCEL MAP 7215 FILED DECEMBER 10, 1997 IN BOOK 234 AT PAGES 3 AND 4,
 ALAMEDA COUNTY RECORDS.

 ASSESSOR'S PARCEL NO.: 941-2759-011 (PORTION)

                                       8

<PAGE>

                                   EXHIBIT B

                            PLANS AND SPECIFICATIONS

                                   EXHIBIT B

<PAGE>

                                    EXHIBIT B

                               TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms. and conditions relating to
the construction of the Tenant Improvements in the Premises. This Tenant Work
Letter is essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction. All references in this Tenant Work Letter to Articles or
Sections of "the Lease" shall mean the relevant portion of Office Lease to which
this Tenant Work Letter is attached as Exhibit BI and of which this Tenant Work
Letter forms a part.

   1. LANDLORD'S INITIAL CONSTRUCTION IN THE PREMISES. Landlord has constructed,
or will construct, at its sole cost and expense, the Base Building. As used
herein, the term "Base Building" shall mean a concrete and steel two (2)
story building containing approximately 50,375 rentable square feet with
lobbies therein, a roof and undistributed HVAC, and undropped sprinkler
lines, elevators and four (4) bathrooms.

   2. TENANT IMPROVEMENTS.

   A. Tenant Improvement Allowance. Tenant shall be entitled to a one time
tenant (the "Tenant Improvement Allowance") in an amount equal to
Thirty-Eight Dollar ($38.00) per rentable square foot of space in the
Premises for the costs relating to the initial construction of Tenant
improvements which are permanently affixed to the Premises (the "Tenant
Improvements"). In no event shall Landlord be obligated to make
disbursements for Tenant Improvements pursuant to this Tenant Work Letter in
a total amount which exceeds the Tenant Improvement Allowance.

   B. Disbursement of the Tenant Improvement Allowance.

   (1) Tenant Improvement Allowance Items. Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord (each of which disbursements shall be made pursuant to Landlord's
disbursement process) which shall consist of monthly disbursements to the
Contractor and retainage of ten percent (10%) of the cost of the Tenant
Improvements until Substantial Completion) only for the following items and
costs (collectively the "Tenant Improvement Allowance Items"):

       (i) The payment of plan check permit and license fees relating to
construction of the Tenant Improvements;

       (ii) The cost of construction of the Tenant Improvements as set forth in
the Construction Drawings as that term is defined in Section 3.A below,
including, without limitation, testing and inspection costs, and contractors'
fees and general conditions;

       (iii) The cost of any changes in the Base Building work when such changes
are required by the Construction Drawings (including if such changes are due to
the fact that such work is prepared on. an unoccupied basis), such cost to
include all direct architectural and/or engineering fees, and expenses incurred
in connection therewith;

       (iv) The cost of any changes to the Construction Drawings or Tenant
Improvements required by law;

       (v) A portion of the costs of the tenant demising walls and public
corridor walls and materials, if any, as designated by Landlord; and

                                   EXHIBIT B1
                                       1

<PAGE>

   C. Unused Allowance. In the event that the Tenant Improvement Allowance
exceeds the total cost of Tenant Improvement Allowance items, as that term is
defined in Section 2.B.1, such excess shall be disbursed by Landlord to Tenant.)
provided Tenant is not then in default under the terms of the Lease or this
Tenant Work Letter), within thirty (30) days following the later to occur of

       (i) Tenant's occupancy of the entire Premises:

       (ii) the commencement of payment of Rent hereunder: or

       (iii) Final Completion of the Tenant Improvements.

3. CONSTRUCTION DRAWINGS.

   A. Selection of Architect/Construction Drawings. Tenant shall retain on
behalf of Landlord, Hoover Associates; Inc. (the "Architect') to prepare the
Construction Drawings and engineering consultants designated by Landlord (the
"Engineers"), to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, life safety, and
sprinkler work of the Tenant Improvements. The plans and drawings to be prepared
by Architect and the Engineers hereunder shall be known collectively as the,
"Construction Drawings". All Construction Drawings shall comply in all respects
with the provisions of the Specifications, shall be in the drawing format
determined by Landlord, and shall be subject to Landlord's reasonable approval.
Landlord's review of the Construction Drawings shall be for its sole purpose and
shall not obligate Landlord to review the same, for quality, design, code
compliance or other like matters. Accordingly, Landlord shall have no liability
whatsoever in connection therewith and shall not be responsible for any
omissions or errors contained in the Construction Drawings.

   B. Final Space Plan. On or before the date set forth in Schedule 2 attached
hereto, Tenant shall prepare and forward to Landlord three copies, of the final
space plan for Tenant Improvements. in the Premises (the "Final Space Plan")
before any. architectural working drawings or engineering drawings have
commenced. The Final Space Plan shall include a layout and description of all
offices, rooms and other partitions, their intended use and the equipment to be
contained therein. Landlord may request clarification or more specific drawings
for special use items not included in the Final Space Plan. Landlord shall,
within five (5) business days after Landlord receives such Final Space Plan, (i)
approve the Final Space Plan as submitted, or (ii) approve the Final Space Plan
subject to specified conditions to be complied with when the Final Working
Drawings are submitted by Tenant to Landlord.

   C. Final Working Drawings. Upon the approval of the Final Space Plan by
Landlord, but in no event later than the date which is sixty (60) days after the
date on which the Lease is executed, Tenant shall promptly cause the Architect
and the Engineers to complete the architectural and engineering drawings for the
Premises and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits. (collectively, the, "Final Working Drawings") and shall
submit the same to Landlord for Landlord's approval. The Final Working Drawings
shall be sealed by the Architect or a certified registered engineer. Landlord
shall, within five (5) business days after Landlord receives the Final Working
Drawings, either (i) approve the Final Working Drawings, (ii) approve the Final
Working Drawings subject to specified conditions to be satisfied by Tenant prior
to submitting the Approved Working Drawings for permits as set forth in Section
3.D, below. Tenant shall cause the Architect to provide Landlord with a
sufficient number of sets of the Approved Working Drawings as that term is
defined in Section 3.D, as may be required for distribution to the Contractor
and subcontractors for construction of the Tenant Improvements.

   D. Permits. The Final Working Drawings shall be approved by Landlord (the
"Approved Working Drawings") prior to commencement of construction of the Tenant
Improvements. Landlord shall immediately submit the Approved Working Drawings to
the* appropriate municipal authorities for all applicable building and other
permits (the "Permits") necessary to allow Contractor (as that term is defined
iii Section 4.A), below, to commence and fully complete the construction of the
Tenant Improvements, and shall endeavor to obtain the Permits as quickly as
possible. Landlord shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises.

                                  EXHIBIT B 1
                                       2

<PAGE>

   E. Changes to Approved Working Drawings.: In the event Tenant desires to
change the Approved Working Drawings, Tenant shall deliver notice of the same to
Landlord, setting forth in detail the changes Tenant desires to make to the
Approved Working Drawings. Landlord shall, within five (5) business days of
receipt thereof, either (i) approve. the Tenant Change or (ii) disapprove the
Tenant Change and deliver a notice to Tenant specifying in detail the reasons
for. Landlord's disapproval. In the event that such changes would directly or
indirectly delay the "Substantial Completion", as that term is defined in
Section 5.A of this Tenant Work Letter, of Tenant's Improvements. Such delay
shall be deemed to be a Tenant Delay under Section 5.D. Tenant shall pay any
additional costs that arise as a direct result of such Tenant Change.

   F. Construction Schedule; Time Deadlines. As promptly as is practical,
Landlord shall prepare and provide Tenant a copy of a construction schedule
showing in reasonable detail the schedule for construction of the Tenant
Improvements. Landlord and Tenant shall use their respective best good faith,
efforts and all due diligence to cooperate with (i) the Architect, the
Engineers, and each other to complete all phases of the Construction Drawings
and the permitting process and to receive the Permits, and (ii) the Contractor
for approval of the "Cost Proposal" as that term is defined in Section 4.B of
this Tenant Work Letter, as soon as possible after the execution of the Lease,
and, in that regard, shall advise each other on a scheduled basis to be
determined reasonably by Landlord, as to Landlord's and Tenant's progress in
connection with the same. The applicable dates for approval of items, plans and
drawings as described in this Section 3, Section 4 below, and in this Tenant
Work Letter are set forth and further elaborated upon in Schedule 2 (the "Time
Deadlines"), attached hereto. Landlord, and Tenant agree to comply with the Time
Deadlines.

   4. CONSTRUCTION OF THE TENANT IMPROVEMENTS.

   A. Bidding of Contractors; Cost Proposal, After the Approved Working Drawings
are signed by Landlord and Tenant Landlord shall cause the Contractor to solicit
bids from at least three (3) general contractors for the construction of the
Tenant Improvements and shall select one of the bidding contractors, based on
the best combination of price and quality of work as the contractor (the
"Contractor") to perform the Tenant Improvements. The Contractor may be an
affiliate of Landlord. Upon selection of the Contractor, Landlord shall provide
Tenant with a cost proposal which shall include, as nearly as possible, the cost
of all Tenant Improvement Allowance Items to be incurred by Tenant in connection
with the construction of the Tenant Improvements. Tenant shall approve or
disapprove the cost proposal ("Cost Proposal") and shall deliver the same to
Landlord within five (5) business days of the receipt of the thereof. Upon
receipt of the same by Landlord, Landlord shall be released by Tenant to
independently retain Contractor, on behalf of Tenant, to commence construction
of the Tenant Improvements in accordance with the Approved Working Drawings and
the Cost Proposal. The date by which Tenant must approve and deliver the Cost
Proposal to Landlord shall be known hereafter as the "Cost Proposal Delivery
Date".

   B. Construction of Tenant Improvements by Contractor under the Supervision of
Landlord.

   (1) Pro-Rata Amount. Landlord and Tenant acknowledge and agree that the cost
of the Tenant Improvements is to be made in monthly progress payments once
construction of the Tenant Improvements has commenced. In connection therewith,
Tenant shall deliver to Landlord on a monthly basis, within ten (10) days of
invoice therefor, Tenant's Pro Rata Amount of the Tenant Improvements costs. As
used herein, the term Tenant's Pro-Rata Amount for each such monthly invoice
shall mean an amount determined by multiplying each such invoice by a fraction,
the numerator of which is the amount of the Cast Approval, minus the amount of
the Tenant Improvement Allowance, and the denominator of which is the amount of
the Cost Approval. In the event that, after the Cost Proposal Delivery Date, any
revisions, changes, or substitutions shall be made to the Construction Drawings
or the Tenant Improvements which increase the cost of the Tenant Improvements,
or should the cost of the Tenant I Improvements increase for any other reason,
such additional costs shall be paid by Tenant to Landlord immediately upon
Landlord's request as an addition to Tenant's Pro-Rata Amount.

   (2) Landlord's Retention of Contractor. Landlord shall independently retain
Contractor, on behalf of Tenant, to construct the Tenant Improvements in
accordance with the Approved Working Drawings and Landlord shall supervise the
construction by Contractor, and Landlord shall receive a construction management
fee equal to two percent (2%) of the cost of Tenant Improvements in connection
with the Landlord's supervision of the Contractor.

                                   EXHIBIT B1
                                        3

<PAGE>

   (3) As Built Drawings. At the conclusion of construction, Tenant shall have
the Architect update the Approved Working Drawings as necessary to reflect
changes made during the course of construction that deviate from the Approved
Working Drawings. Tenant shall deliver to Landlord within ninety (90) days
following issuance of a certificate of occupancy for the Premises, one
"record-set" of as-built drawings of the Premises made on a 4 mil
polyester based permanent mylar or approved equal and two (2) sets of copies of
such record drawings certified by the Architect shall to be true and correct (or
at Landlord's request, Auto CAD Disk File "As Builts").

   (4) Inspection by Landlord. In the event that Landlord determines that an
error or omission exists in the Approved Construction Drawings such that the
Tenant Improvements if and/or as constructed pursuant thereto might adversely
affect the mechanical, electrical, plumbing, heating, ventilating and
air conditioning or lifesafety systems serving the Building, the curtain wall of
the Building, the structure or exterior appearance of the Building or any other
tenant's use of such other tenant's leased premises, Landlord shall advise
Tenant of such error or omission and Tenant shall take such action, at Tenant's
expense, as may be necessary to correct such defect.

   5. Completion of Tenant Improvements

   A. Substantial Completion. For purposes of the Lease, the Premises shall be
deemed to be "Substantially Complete" upon the date (the date of "Substantial
Completion') upon which: (i) the Base Building is substantially completed, and
(ii) the Tenant Improvements in the Premises have been completed by Contractor
pursuant to the Approved Working Drawings so that Tenant can use the Premise for
their intended purposes without material interference to Tenant conducting its
ordinary business activities, with the exception of any punch list items
consisting of incomplete, minor or insubstantial details of construction,
mechanical type adjustments or finishing touches like touch lip painting. If
there is a dispute between Landlord and Tenant as to whether Substantial
Completion has occurred the determination of the Architect shall be conclusive
and binding on the parties.

   B . Notice of Substantial Completion. Landlord shall give Tenant at least ten
(10) business days advance notice of the estimated date of Substantial
Completion.

   C. Correction of Punch. List Items. Within thirty (30) days following
Substantial Completion of the Tenant Improvements in the Premises, Tenant shall
notify Landlord and Contractor, in writing, of those punch list items which need
to be completed or corrected. Upon receipt of the punch list, Landlord shall
cause the Contractor to proceed diligently to remedy all such items.

   D. Tenant Delay of Substantial Completion. If there shall be a delay in the
Substantial Completion of the Tenant Improvements as a direct, indirect partial,
or total result of the occurrence of any of the following events (individually
or collectively "Tenant Delay"):

   (1) Tenant's failure to comply with the Time Deadlines;

   (2) Tenant's failure to timely approve any matter requiring Tenant's
approval;

   (3) A breach by Tenant of the terms of this Tenant Work Letter or the Lease;

   (4) Changes in any of the Construction Drawings after approval of the same
by Landlord or because the same do not comply with Code or other applicable
laws;

   (5) Tenant's request for changes in the Approved Working Drawings;

   (6) Tenant's requirement for materials, components, finishes or improvements
which are not available in a commercially reasonable time given the anticipated
date of Substantial Completion of the Tenant Improvements as set forth in the
Lease;

   (7) Changes to the Base Building required by the Approved Working Drawings;
or

                                   EXHIBIT B 1
                                        4

<PAGE>

   (8) Any other acts or omissions of Tenant, or its agents, or employees of
which Tenant is given written notice and does not cure within one day of receipt
of such notice then, notwithstanding anything to the contrary set forth in the
Lease or this Tenant Work Letter and regardless of the actual date of the
Substantial Completion of the Tenant Improvements, the Lease Commencement Pate
shall be deemed to be the date the Lease Commencement Date would have occurred
if no Tenant Delay had occurred.

           E. Landlord Delays. Notwithstanding anything to the contrary herein,
the Term Commencement Date shall be delayed one (1) day for each day of Landlord
Delay. The term "Landlord Delay" as used herein, shall mean any (1) delay in the
giving of authorizations or approvals by Landlord required by Landlord pursuant
to the terms of the Lease; (2) delay attributable to the unreasonable
interference of Landlord, its agents or contractors with the design of the
tenant improvements or the failure or unreasonable refusal of any such party to
permit Tenant, its agents or contractors, access to and use of the Building or
any Building facilities or services, which access and use are reasonably
required for the orderly and continuous performance of the work necessary for
Tenant to complete its move into the Premises, No such act of delay shall be
deemed a Landlord Delay until Tenant has provided Landlord with written notice
thereof (not more than ten (10) days after the date on which such delay is
alleged to have occurred) and two (2) business days in which to cure such delay.
If such delay is not cured within such two (2) business day period, then a
Landlord Delay shall be deemed to have occurred, starting on the day after such
cure period has elapsed.

           6. Miscellaneous.

                     A. Tenant's Representative. Tenant has designated the
person(s) named in Schedule 1 as Tenant's sole representative with respect to
the matters set forth in this Tenant Work Letter, who, until further notice to
Landlord, shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.

                     B. Landlord's Representative. Landlord has designated the
person(s) named in Schedule 1 'as Landlord's sole representative with respect to
the matters set forth in this Tenant Work Letter, who, until further notice to
Tenant shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.

                     C. Time of the Essence in This Tenant Work Letter. Unless
otherwise indicated, all references herein to a "number of days" shall mean. and
refer to calendar days.* In all instances where Tenant is required to approve or
deliver an item, if no written notice of approval is given or the item is not
delivered within the stated time period, at Landlord's option, at the end of
such period the item shall automatically be deemed approved or delivered by
Tenant and the next succeeding time period shall commence.

                     D. Tenant's Entry Into the Premises Prior to Substantial
Completion. Provided that Tenant and its agents do not significantly interfere
with Contractor's work in the Building and the Premises, Landlord and Contractor
shall allow Tenant access to the Premises prior to the Substantial Completion of
the Tenant Improvements for the purpose of Tenant installing equipment
furniture, work-stations, fixtures (including Tenant's data and telephone
equipment), or other improvements (not included in Tenant Improvements) in the
Premises. Prior to Tenant's entry into the Premises as permitted by the terms of
this Section 6.A, Tenant shall submit a schedule to Landlord and Contractor, for
their approval, which schedule shall detail the timing and purpose of Tenant's
entry. Tenant shall hold Landlord harmless from and indemnify, protect and
defend Landlord against any loss or damage to the Building or Premises and
against injury to any persons caused by Tenant's actions pursuant to this
Section 6.D. All such property or equipment brought into, kept in and stored
upon the Premises, or the Building, pursuant to this Section 6.D shall be at the
risk of Tenant only and Tenant shall hold harmless and indemnify, protect and
defend Landlord from any claims arising out of damage to, or loss of, same
including subrogation claims by Tenant's insurance carrier.

                     E. Tenant's Agents. All subcontractors, laborers,
materialmen, and suppliers retained directly by Tenant shall conduct their
activities around the Premises, Building and the Property in a harmonious
relationship with all subcontractors, laborers, materialmen and suppliers at the
Premises, Building and Real Property.

                                   EXHIBIT B 1
                                       5

<PAGE>

                     F. Ownership of Tenant Improvements. All Tenant
Improvements (but excluding, signs, furniture, trade fixtures, office equipment
and items of a like nature) that may be installed or placed in or about the
Premises from time to time shall be and become the property of Landlord on
installation.

                                   EXHIBIT B 1
                                       6

<PAGE>

                                    EXHIBIT C

                     MEMORANDUM OF TERM COMMENCEMENT DATE.

LANDLORD:  WJT, LLC

TENANT:    POLYCOM, INC., a Delaware corporation

PREMISES:
         ---------------------------------------

         ---------------------------------------
         Pursuant to Paragraph 3 of the above-referenced Lease, the Commencement
         Date is hereby established as
                                      ------------------

Dated:
         -------------------

"Landlord"

WJT, LLC

By.
   -------------------------
Name: James Tong
Its:
      ----------------------
By:
   -------------------------
   Name: Wendahl K.S. Ting
   Its:
       ------------------------

"Tenant"

POLYCOM, INC.,
a Delaware corporation

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

                                   EXHIBIT C

<PAGE>

                                    EXHIBIT D

                              RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the Rules and Regulations Set
forth in this Exhibit D, as reasonably modified by Landlord from time to time in
writing. Landlord shall not be responsible to Tenant for the nonperformance of
any of said Rules and. Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.

1.       SIGNAGE

         No sign, placard, picture, advertisement, name or notice, shall be
         installed or displayed on any part of the outside or inside of the
         building without the prior written consent of the Landlord, Landlord
         shall have the right to remove, at Tenants expense and without written
         notice, any sign installed or displayed in violation of this rule. All
         approved signs or lettering on doors and walls shall be printed,
         painted, affixed or inscribed at the expense of Tenant by a person
         chosen by Landlord.

2.       WINDOW COVERINGS

         If Landlord objects in writing to any curtains, blinds, shades or
         screens attached to or hung in or used in connection with any window or
         door of the Premise, Tenant shall immediately discontinue such use. No
         awning shall be permitted on any part of the Premises. Tenant shall not
         place anything against glass partitions or doors or windows which may
         appear unsightly from outside the Premises.

3.       FLOOR COVERINGS

         Tenant shall not lay linoleum, tile, carpet or other similar floor in
         any manner except by a past or other material, which may easily be
         removed with water, the use of cement or other similar adhesive
         materials being expressly. prohibited, The expense of repairing any
         damage resulting from a violation of this rule shall be borne by
         Tenant. Tenant shall provide and cause all Tenant's employees to use
         protective floor mats under all desk chairs used in the Premises.

4.       ACCESS

         Tenant shall not loiter in or obstruct any sidewalks, balls, passages,
         exits, entrances, elevators, escalators or stairways of the Building.
         The halls, passages, exits, entrances, elevators, escalators and
         stairways shall be used only as a means of ingress and egress for the,
         leased Premises, and Landlord shall in all cases retain the right to
         control and prevent access thereto to all persons whose presence in the
         judgement of Landlord would be prejudicial to the safety, character,
         reputation and interests of the Building and its tenants provided that
         nothing herein contained shall be construed to prevent such access to
         persons with whom any tenant normally deals in the ordinary course of
         its business, unless such persons are engaged in illegal activities. No
         tenant and no employee or invitee of any tenant shall go upon the roof
         of the Building, the mechanical rooms, air conditioning rooms,
         electrical closets, janitorial closets, or in other restricted access
         areas within the Building. Landlord reserves the right to close and
         keep' locked all entrance and exit doors of the Building during such
         hours as are customary for comparable buildings in the City of San
         Francisco. Tenant, its employees or agents must be Sure that the doors
         to the Building are securely closed and locked ,when leaving the
         Premises after the normal hours of business for the Building. Any
         tenant, its employees or agents or any other persons entering or
         leaving the Building at any time when it is so locked, or any time
         when. it is considered to be after normal business hours for the
         Building, may be required to sign the Building Register when so doing.
         Access to the Building may be refused Unless the person seeking access
         has the proper identification or has previously arranged a pass for
         access to the Building. Landlord and its agents shall in no case be
         liable for damages for any error with. regard to the admission to or
         exclusion from the Building of any person. In case of invasion, mob
         riot, public excitement or other commotion, Landlord reserves the right
         to prevent access to the Building during the continuance of same by any
         means it deems appropriate for the safety and protection of life and
         property. All re-keying of office doors or changes to the card access
         system, after occupancy, will be at the expense of the Tenant. Tenant
         shall not

                                   EXHIBIT D
                                       1

<PAGE>

         re-key any doors or change the card access system in any way without
         making prior arrangements with Landlord.

5.       JANITORIAL SERVICES

         All cleaning and janitorial services for the Building and the Premises
         shall be provided exclusively through Landlord,, and except with the
         written consent of Landlord, no person or persons other than those
         approved by Landlord shall be employed by Tenant or permitted to enter
         the Building for the purpose of cleaning the same. Tenant shall not
         cause any unnecessary labor by carelessness or indifference to the good
         order and cleanliness of the Premises. Landlord shall not in any way be
         responsible to any tenant for any loss of property on the Premises,
         however occurring, or for any damage to any Tenants property by the
         janitor or any other employee or any other person. Janitor services
         shall include ordinary dusting and cleaning by the janitor assigned to
         do such work and shall not include cleaning, of carpets or rugs, except
         NORMAL vacuuming, or moving of furniture, interior window cleaning,
         coffee or eating area cleaning, and other special services. Janitorial
         services shall not exceed five (5) times per calendar week. Janitor
         services will not be furnished on nights when rooms are occupied or to
         rooms which are locked. Window cleaning shall be provided through
         Landlord at Landlord's discretion.

6.
       WIRING

         Landlord reserves the right to approve both where and how telephonic
         wires, security alarms and similar equipment are to be introduced to
         the Premises. No boring or cutting for wires shall be allowed without
         express written consent of Landlord. The location of telephone, call
         boxes and other office equipment affixed to the Premises shall be
         subject to the approval of Landlord. Landlord makes no representation
         to Tenant regarding the condition, security, availability or
         suitability of existing intrabuilding network cabling or any
         telecommunication, services located within the Building for Tenant's
         purposes. Tenant hereby waives any claim against Landlord for damages
         if Tenant's telecommunication services are in any way interrupted,
         damaged or otherwise interfered with, except to the extent caused by
         the gross negligence or willful misconduct. of Landlord, its agents or
         employees, provided that in no. event shall any such interruptions,
         damages, or interference entitle Tenant to any consequential damages
         (including damages for loss of business) or relieve tenant of any of
         its obligations under the Lease.

         Tenant shall maintain and repair all telecommunications cabling and
         wiring within or exclusively, serving the Premises. At the Landlord's
         written request, all voice and data telecommunication cabling
         installed in connection with Tenant's business shall be removed at
         Tenant's sole cost and expense at the termination or expiration of the
         Lease.

7.       ELEVATOR

         The elevator shall be available for use by tenant(s) in the Building
         subject to such reasonable scheduling as Landlord in its discretion
         shall deem appropriate and no equipment, materials, furniture,
         packages, supplies, merchandise or other property will be received in
         the Building unless approved by Landlord or carried in the elevators
         except between such hours and in such elevators as may be designated
         and approved by Landlord.

8.       LOADS

         Tenant shall not place a load upon any floor of the Premises which
         exceeds 2.0 pounds per square foot partition load or 80 pounds per
         square foot live load. Landlord shall have the right to prescribe the
         weight, size and position of all equipment materials, furniture or
         other property brought into the Building. Heavy objects shall, if
         considered necessary by Tenant, stand on such platforms as determined
         by Landlord necessary to properly distribute the weight. Business
         machines and mechanical equipment belonging to Tenant which cause noise
         or vibration that may be transmitted to the structure of the Building
         or to any space therein to such a degree as to be objectionable to
         Landlord or to any tenants in the Building shall be placed and
         maintained by Tenant at Tenant's expense, on vibration eliminators or
         other devices sufficient

                                   EXHIBIT D
                                       2

<PAGE>

         to eliminate noise or vibration. The persons employed to move such
         equipment in or out of the Building must be acceptable to Landlord.
         Landlord will not be responsible for loss of, or damage to, any such
         equipment or other property from any cause, and all damage done to the
         Building by maintaining or moving such equipment or other property
         shall be repaired at the expense of the Tenant.

9.       TOXICS

         Tenant shall not use or keep in the Premises any kerosene, gasoline or
         flammable or combustible fluid or material other than limited
         quantities necessary for the operation or maintenance of office
         equipment. Tenant shall not use or permit to be used in the Premises
         any foul or noxious gas or substance, or permit or allow the Premises
         to be occupied or used in a manner offensive or objectionable to
         Landlord or other occupants of the Building by reason of noise, odors
         or vibrations. Tenant shall not bring into or keep within the Building
         or the Premises any animals, fish or birds, bicycles or other vehicles.

10.      HEATING/AIR CONDITIONING

         Tenant shall not use any method of heating or air conditioning other
         than that supplied by Landlord, unless Tenant has Landlord's written
         approval for said alteration. Heating or air conditioning alterations
         shall be governed by guidelines established in section 12 of the Lease.
         Heating and air conditioning is available during the hours of 7:00 a.m.
         to 6:00 p.m., Monday through Friday. In the event Tenant requires
         heating and air conditioning during off hours, Saturdays, Sundays, or
         holidays, Landlord on twenty-four (24) hours' prior written notice from
         Tenant may provide such services at an hourly rate to be established by
         Landlord, from time to time.

11.      NATURAL RESOURCE USE

         Tenant shall not waste electricity, water or air-conditioning and
         agrees to cooperate fully with Landlord to assure the most effective
         operation of the Building's heating and air-conditioning, and shall
         refrain from attempting to adjust any controls other than room
         thermostats installed for Tenant's use. Tenant shall keep corridor
         doors closed.

12.      BUILDING NAME/ADDRESS

         Landlord reserves the right, exercisable without notice and without
         liability to Tenant to change the name and street address of the
         Building.

13.      SECURE PREMISES

         Tenant shall close and lock the doors of its Premises and entirely shut
         off all water faucets or other water apparatus a and electricity, gas
         or air outlets, and all electric machines (coffee pots) before Tenant
         and its employees leave the Premises. Tenant shall be responsible for
         any damage or injuries sustained by other tenants or occupants of the
         Building or by Landlord for noncompliance with this rule.

14.      VENDORS

         Tenant shall not obtain for use on the Premises ice, food, beverage,
         towel or other similar services or accept barbering or bootblacking
         services upon the Premises, except at such hours and under such
         regulations as may be fixed by Landlord. Tenant may obtain bottled
         water service provided by an independent vendor. Tenant shall not
         disturb, solicit, or canvass any occupant of the Building nor shall
         Tenant permit or cause others to do so and Tenant shall cooperate to
         prevent same by others.

15.      RESTROOMS

         The toilet rooms, toilets, urinals, wash bowls and other apparatus
         shall not be used for any purpose other than that for which they were
         constructed, no foreign substance of any kind whatsoever shall be
         thrown

                                   EXHIBIT D
                                       3

<PAGE>

         therein, and the expense of any breakage, stoppage or damage resulting
         from the violation of this rule shall be borne by the Tenant who, or
         whose employees or invitees, shall have caused it.

16.      RETAIL SALES

         the sale at retail, of newspapers, magazines, periodicals, theater
         tickets or Tenant shall not sell, or permit any other good or
         merchandise to the general public in or on the Premises. Tenant shall
         not make any room-to-room solicitation of business from other tenants
         in the Building. Tenant shall not use the Premises for any business or
         activity other than that specifically provided for 'in such Tenant's
         lease. Canvassing, soliciting and distribution of handbills or any
         other written material, and peddling in the Building are prohibited,
         and each tenant shall cooperate to prevent same.

17.      BUILDING EXTERIOR

         Tenant shall not install any radio or television antenna, loudspeaker
         or other device on the roof or exterior walls of the Building or
         without Landlord's prior written approval. Tenant shall not interfere
         with radio or television broadcasting or reception from or in the
         Building or elsewhere.

18.      MAINTENANCE OF WALLS/CARPET

         Tenant shall not mark drive nails, screw or drill into the partitions,
         woodwork or plaster or in any way deface the Premises or any part
         thereof except for nails and screws used for normal decorating
         purposes. Landlord reserves the right to direct electricians as to
         where and how telephone and telegraph wires are to be introduced to the
         Premises. Tenant shall not cut or bore holes for wires. Tenant shall
         not affix any floor covering to the floor of the Premises in any manner
         except as approved by Landlord. Tenant shall repair any damage
         resulting from noncompliance with this rule. In all carpeted areas
         where desks and chairs are utilized, Landlord shall require Tenant at
         Tenants sole cost, to place mats under each and every chair in order to
         protect said carpeting from unnecessary wear and tear.

19.      VENDING, MACHINES

         Tenant shall not install, maintain or operate upon the Premises any
         vending machines without the written consent of Landlord.

20.      TRASH STORAGE

         Tenant shall store, all its trash and garbage within its Premises.
         Tenant shall not place in any trash box or receptacle any material
         which cannot be disposed of in. the ordinary and customary manner of
         trash and garbage disposal. All garbage and refuse disposal shall be
         made in accordance, with directions issued from time, to time by
         Landlord.

21.      COOKING

         The Premises shall not be used for the storage of merchandise held for
         sale to the general public, or for lodging or for manufacturing of any
         kind without prior written approval of Landlord, nor shall Premises be
         used for any improper, immoral or objectionable purpose. No cooking
         shall be done or permitted by any Tenant on the Premises, except for
         that use by the Tenant of Underwriters' Laboratory approved equipment
         inclusive of a microwave oven for heating food and equipment for
         brewing coffee, tea, hot chocolate and similar beverages shall be
         permitted, provided that such equipment and use is in accordance with
         all applicable federal, state. and city laws, codes, ordinances, rules
         and regulations: Tenant may install a refrigerator in the Premises for
         ordinary use by Tenant's employees.

                                    EXHIBIT D
                                       4

<PAGE>

22.      HAND TRUCKS

         Tenant shall not use in any space or in the public halls of the
         Building any hand trucks except those equipped with rubber tires and
         side guards or such other material handling equipment as Landlord may
         approve. Tenant shall not bring any other vehicles of any kind into the
         Building. Tenant shall obey all Building rules and regulations covering
         the timing, procedures and restrictions for moving objects in and out
         of the Premises (i.e., masonite over file).

23.      TENANT USE OF BUILDING, NAME

         Without the written consent of Landlord, Tenant shall not use the name
         of the Building in connection with or in promoting or advertising the
         business of Tenant except as Tenant's address.

24.      LIFE SAFETY

         Tenant shall comply with all safety, fire protection and evacuation
         procedures and regulations established by Landlord or any governmental
         agency, including the attendance of required safety seminars and
         demonstrations. Tenant, Tenants agents, employees, guests and invitees
         shall observe all non-smoking areas as may be established either by law
         or Landlord including, but not limited to, the ground floor interior
         and exterior lobbies.

25.      THEFT

         Tenant assumes any and all responsibility for protecting its Premises
         from the robbery and pilferage. All doors opening to public corridors
         shall be kept closed at all times.

26.      NOTIFICATION

         The requirements of Tenant will be attended to only upon appropriate
         application to the office of the Building by an authorized individual.
         Employees of Landlord shall not perform any work or do anything outside
         of their regular duties unless under special instructions from
         Landlord, and no employee of Landlord will admit any person (Tenant or
         otherwise) to any office without specific instructions from Landlord.

27.      LANDLORD CONTROL

         Landlord reserves the right to exclude or expel from the Building any
         person who, in Landlord's judgement, is intoxicated or under the
         influence of liquor or drugs or who is in violation of any rules and
         regulations of the Building. Landlord shall have the right to control
         and operate the public portions of the Building, the public facilities,
         the heating and air conditioning, and any other facilities famished for
         the common use of Tenants, in such manner as is customary for
         comparable buildings in the City of San Francisco. Landlord reserves
         the right to make such other and reasonable rules and regulations as in
         its judgement may from time to time be needed for care and cleanliness
         of the building and for the preservation of good order therein. Tenant
         agrees to abide by all such rules and regulations hereinabove stated
         and any additional rules and regulations which are adopted. 7) No
         improper noises, vibrations or odors will be permitted in the Building,
         nor shall any person be permitted to interfere in any way with tenants
         or those having business with them, No person will be permitted to
         bring or keep within the Building any animal, bird, or bicycle or any
         toxic or flammable substances without Landlord's prior permission. No
         person shall throw trash, refuse, cigarettes or other substances of any
         kind any place within or out of the Building except in the. refuse
         containers provided therefor.

                                    EXHIBIT D
                                       5

<PAGE>

28.      LEASE AGREEMENT

         These Rules and Regulations are in addition to, and shall not be
         construed to in any way modify or amend, in whole or in part, the
         terms, covenants, agreements and conditions of any lease of premises in
         the Building.

29.      BUILDING

         The word "Building" a's used herein means the Building of which the
         Premises are a part.

30.      ELEVATOR USE

         See Exhibit D-1.

         TENANT RESPONSIBILITY

         Tenant shall be responsible for the observance of all of the foregoing
         rules by Tenant's employees, agents, clients, customers, invitees and
         guests.

32.      SERVICES

         Tenant shall not obtain for use on the Premises ice, drinking water,
         food, beverage, towel or other similar services or accept barbering or
         bootblacking services upon the Premises, except at such hours and under
         such regulations as may be fixed by Landlord.

33.      OTHER INSTALLATION  PROHIBITED

         Tenant shall not install any radio or television antenna, loudspeaker
         or other device on the roof or exterior walls of the Building. Tenant
         shall not interfere with radio or television broadcasting or reception
         from or in the Building elsewhere.

34.      PARKING

         Tenant shall not park its vehicles in any area designated by Landlord
         as areas for parking by visitors to the Building. Tenant shall not
         leave vehicles in the Building parking areas overnight nor park any
         vehicle in the Building parking areas other than automobiles,
         motorcycles, motor driven or non-motor driven bicycles or four-wheeled
         trucks. Landlord may, in its sole discretion, designate separate areas
         for bicycles and motorcycles.

35.      OTHER

         Tenant shall be deemed to have read these Rules and Regulations and to
         have agreed to abide by them as a condition to his/her occupancy of the
         Premises.

         The normal business hours ("Business Hours") of the Building shall be
         8:00 a.m. to 6:00 p.m., Monday through Friday, holidays excepted.

                                    EXHIBIT D
                                       5

<PAGE>

                                   EXHIBIT D-1

                                  ELEVATOR USE

CONDITIONS

1.       Masonite protection required on elevator floor (Contractors: also'
         around interior walls) during moves. Contact Building Management for
         details prior to each move.

2.       Cardboard protection folded and MASKING taped around edges of elevator
         entrance frames Cardboard to span height of no less than 6 feet.

ELEVATOR DIMENSIONS:

     Interior Width
     (left to right when facing rear wall of elevator):           inches wide.
                                                       ----------
     Interior Depth Excluding Elevator Door Indentation
     (front right or left comer of rear or left comer):           inches deep.
                                                       ----------
Width of Elevator Entrance/Doors:          inches wide.
                                 ----------
Height of Elevator Interior:          inches tall.
                            ----------
HEIGHT OF ELEVATOR ENTRANCE (FROM OUTSIDE FACING ENTRANCE):

          feet               inches or          inches tall.
----------         ----------         ----------
Prohibited:

1.      Use of STOP Emergency alarm button in non-emergencies.,
2.      Holding, jamming, propping, blocking, obstructing or impeding of
        elevator entrances and doors.
3.      Use/providing of keys for operation of elevator(s).
4.      Tampering with elevator controls, locks, etc.

                                                             Initials:
                                                                      ----------
                                                             Initials:
                                                                      ----------
                                   EXHIBIT D-1
                                       1.Prepared by MERRILL CORPORATION www.edgaradvantage.com

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FIFTH AMENDMENT
  TO
  STORAGE AND DISTRIBUTION AGREEMENT    
  

THIS
FIFTH AMENDMENT TO STORAGE AND DISTRIBUTION AGREEMENT is entered into this 1st day of September, 2000 by and between AIRBORNE LOGISTICS SERVICES, a division of ABX Air Inc., ("ALS") and MULTIPLE
ZONES INTERNATIONAL, INC., a Washington Corporation ("MZI"). 

 
 

RECITALS    
  

	A.
	MZI
and Airborne Freight Corporation ("Airborne") entered into that certain Storage and Distribution Agreement dated September 28, 1992 (the "Primary Agreement").

	B.
	Airborne
assigned all of its interest in and to the Agreement to ALS (the "Assignment").

	C.
	The
term of the Primary Agreement was extended pursuant to that certain Letter Agreement dated May 23, 1995 (the "Extension"). The Primary Agreement was later amended by that
certain First Amendment to Storage and Distribution Agreement dated December 22, 1995 (the "First Amendment"). The Primary Agreement was additionally amended by that certain Second Amendment to
Storage and Distribution Agreement dated October 3rd, 1996 (the "Second Amendment"). The Primary Agreement, as amended, was further amended pursuant to that certain Letter Agreement dated
October 10, 1997 (the "Second Extension"). The Primary Agreement, as amended, was further amended by that certain Letter Agreement dated December 31, 1997 (the "Third Amendment"). The
Primary Agreement, as amended, was further amended by that certain Letter Agreement dated September 20, 1999 (the "Fourth Amendment"). The Primary Agreement, the Assignment, the Extension, the
First Amendment, the Second Amendment, the Second Extension, the Third Amendment, and the Fourth Amendment are referred to collectively herein as the "Agreement."

	D.
	The
parties have agreed to modify the charges for services under the Agreement and extend the Term of the Agreement, all in accordance with this Amendment. 

    NOW
THEREFORE, the parties agree to amend the Agreement as follows: 

	1.
	Except
as specifically amended herein, the Agreement shall remain in full force and effect.

	2.
	For
the term of this Fifth Amendment (9/01/00-8/31/03), the provisions of the Fourth Amendment, Schedule 1 ("Rates and Charges"), Schedule IA ("Definitions"), Schedule 1B
("Terms and Conditions"), Exhibit 1 ("Revised Receiving, Inventory Control and Shipping Estimates"), Exhibit 2 ("Limit of Inventory Liability"), and Exhibit 2 Attachment A ("Stock
Adjustment Codes") are hereby superseded and replaced in their entirety by the provisions of this Fifth Amendment, Schedule 1 ("Rates and Charges"), Schedule IA ("Definitions"), Schedule IB ("Terms
and Conditions"), Exhibit 1 ("Revised Receiving, Inventory Control and Shipping Estimates"), Exhibit 2 ("Limit of Inventory Liability"), and Exhibit 2 Attachment A ("Stock
Adjustment Codes") all of which are attached hereto.

	3.
	For
the term of this Fifth Amendment, the transaction fees listed in Schedule 1 (denoted by * * *) will
be increased by a factor of * for the years of the Agreement, commencing September 1, 2001 and September 1, 2002 as an escalator for the wage component of those costs. 

*=redaction 

	4.
	Operational
Metrics shall be added to the "Agreement" as Exhibit 3. The Operational Metrics and associated operational goals shall be mutually agreeable to both ALS and MZI.
ALS and MZI will mutually be responsible for gathering data required to support reporting of described metrics. 

1

 
	5.
	The
following Termination Clauses will be applied for the term of this Fifth Amendment:

	a)
	*
In
this event, MZI shall have no more than 180 days to remove all MZI owned inventory and property from the ALS Wilmington, Ohio, warehouse. If termination for convenience is enacted, the terminating
party shall pay all labor and transportation costs associated with moving MZI owned inventory and property from the Wilmington, Ohio, warehouse. 

*=redaction

	b)
	Termination
for Breach: 

Either
MZI or ALS may terminate this agreement for material breach thereof by giving the other party not less than 30 days written notice of its intent to terminate and specifying in the notice the
reason or reasons for such termination. If the breach is not cured within the time stated in the notice, the termination shall be effective on the date specified in the notice. The party in breach
must be given at least a 30 day cure period. The party determined to be in breach, shall pay all labor and transportation costs associated with moving MZI owned inventory and property from the
Wilmington, Ohio, warehouse. 

	6.
	Renewal
Term 

ALS
and MZI agree to enter into the following schedule of negotiations no later than 5 months prior to expiration of this Fifth Amendment. This following schedule of dates and listed terms will
replace those previously agreed upon prior to Amendment 5: 

	1)
	ALS
shall notify MZI no later than April 1, 2003 of the rates it intends to charge MZI for the contract term proceeding Amendment Five.

	2)
	MZI
shall have until June 1, 2003 to accept or reject the pricing provided by ALS.

	3)
	If
MZI accepts the pricing the rates shall become effective September 1, 2003.

	4)
	If
MZI rejects the pricing, MZI shall have until October 31, 2003 to vacate the ALS Warehouse in Wilmington, Ohio. 

    Additionally,
prior to March 31, 2001, MZI and ALS agree to incorporate all pricing, provisions and Amendments of the existing Agreement into a new Agreement that will be used
as the legal document of record moving forward. It is acknowledged that the existing Agreement is outdated and cumbersome to interpret due to the number of Amendments that have been made. The purpose
of developing a new Agreement is for ease of interpretation only. No pricing or provisions shall be modified when converting to the new Agreement. 

2

  

 
 

Schedule 1
  Rates and Charges    
  

    The following Schedule of Rates and Charges will apply from September 1, 2000 until August 31, 2003, unless otherwise extended or modified by the terms of this
agreement and mutually Weed upon by ALS and MZI. 

	Item #
	 	Item*
	 	Unit Basis
	 	Per Unit

Rate
	 	Wage Escalator

	1	 	Receiving Fee	 	Line	 	†	 	***
	2	 	Order Handling Fee	 	Package	 	 	 	***
	 	 	 	 	—under 16,000 packages/week	 	†	 	 
	 	 	 	 	—16,001 - 20,000 packages week:	 	†	 	 
	 	 	 	 	—20,001 - 24000 packages/week:	 	†	 	 
	 	 	 	 	—24,001 - 28,000 packages/week:	 	†	 	 
	 	 	 	 	—28,001+ packages/week:	 	†	 	 
	2A	 	Large Order Fee	 	Package:	 	 	 	***
	 	 	 	 	—under 16,000 packages/week:	 	†	 	 
	 	 	 	 	—16,001 - 20,000 packages/week:	 	†	 	 
	 	 	 	 	—20,001 - 24,000 packages/week:	 	†	 	 
	 	 	 	 	—24,001 - 28,000 packages/week:	 	†	 	 
	 	 	 	 	—28,001+ packages/week:	 	†	 	 
	3	 	Packaging	 	Package	 	†	 	 
	4	 	Storage	 	Square Foot/yr.	 	†	 	 
	4A	 	Additional Storage	 	Square Foot/yr.	 	†	 	 
	5	 	UPS Order Fee	 	Package (UPS)	 	†	 	 
	6	 	Other Carrier Charge	 	Order	 	†	 	***
	7	 	Intl. Paperwork Fee	 	Order	 	†	 	***
	8	 	Return to Vendor Charge	 	Order	 	†	 	***
	9	 	Postal Machine Fee	 	Fixed/weekly	 	†	 	 
	10	 	Management Fee	 	Fixed/weekly	 	†	 	***
	11	 	Special Projects	 	Per Project	 	**	 	***
	12	 	Physical Inventory Count	 	Per Physical	 	**	 	***
	13	 	Systems Support	 	Hourly	 	**	 	***
	14	 	Will Call	 	Order	 	†	 	***
	15	 	New Capital Purchase	 	Fixed/weekly	 	**	 	 

    Note:  All
Item Charges are billed weekly. 

	*
	Please
refer to Schedule 1A for definitions of the above pricing items. The definitions are not meant as a "scope of work," but instead a brief description that establishes a common
understanding between ALS and MZI of the intent and purpose behind each item to be charged.

	**
	Refer
to Schedule IA for details.

	***
	Each
billable item in Schedule l above indicated by (***) will be increased by a factor of † for the years of the Agreement commencing
September 1, 2001, and September 1, 2002, to account for an increase in the wage component of each item. 

† = redaction

3

  

 
 

Amendment 5
  Schedule 1A
  Definitions    
  

    For
purposes of this Fifth Amendment, the following definitions shall apply for the period 9/01/00 through 8/31/03. 

1.  Receiving Charges  

    A receiving charge is invoked for each line received against an outstanding Purchase Order (P.0.) within the SGA System. ALS will tabulate these charges daily
on a manual basis until a systems solution is developed by MZI. 

2.  Order Handling Charges  

    Order handling charges will be applied for each package within a sales order. A sales order is defined as an individual request for product which ALS receives
for fulfillment. An order must generate a printed collate and be destined to only one consignee. This order is represented by one master order number and any subsequent associated sub order numbers. 

    A
package is defined as a prepared shipping container, containing 1 or more items, which will individually be recognized as an "order shipped" by the current SGA manifesting system,
within the current confirmation process. The Postage and Handling Report will be used as the official document when calculating order handling changes. 

    All
orders will be charged in this manner with the exception of orders for LTL carriers and Will Call. LTL and Will Call orders are charged on a "per sales order" basis. 

2A. Large Order Handling Fee  

    A
Large Order Handling Fee will be assessed incrementally to all orders exceeding 5 different line items and/or 30 pieces per line. If an order is placed that exceeds 5 line items per
order and has over 30 pieces per line, a large order handling fee(s) will be applied based on whichever criteria is greater. 

	
 
	
 	

 
	
 	

Per Unit
	
 	

Extended

	Example A:	 	Regular Order—12 line items; 20 pieces	 	*	 	*
	 	 	Large Order Handling (based on line items >5)	 	*	 	*
	 	 	    Total Charges	 	 	 	*
	 	 	    (assumes 18,000 orders per week)	 	 	 	 
	Example B:	 	Regular Order—1 line items; 125 pieces	 	*	 	*
	 	 	Large Order Handling (based on pieces >30)	 	*	 	*
	 	 	    Total Charges	 	 	 	*
	 	 	    (assumes 22,000 orders per week)	 	 	 	 

3.  Packaging Charges  

    A packaging charge of  *  
will be applied to each package shipped. This charge will be applied in addition to all order handling fees as well as all large order handling fees. In the event of a price change by the manufacturer
or delivery company, the change in price (increase or decrease) will be passed on to MZI. Any request for packaging not used in the current operation may be priced separately. 

	*
	=
 redaction 

4

 

4.  Storage Charges  

    A  *  per year charge will be assessed with a minimum requirement of  *  sq. ft. The space will
be in the Airborne Commerce Park and includes storage, processing and the required common area to operate the MZI fulfillment operation. The charges will be billed on a weekly basis in the fixed
amount of  *  . The minimum storage requirement of  *  will be subject to a quarterly review and may be increased or decreased as
mutually agreed by ALS and MZI. Should ALS desire to transition the existing MZI Operation from Building 10 to another Commerce Park Facility, ALS shall be required to submit a proposal of transition
that MZI must approve. If MZI does not accept and approve the transition plan by ALS, then ALS agrees to leave the MZI Operation in Building 10 for the duration of Amendment 5. 

4A. Additional Storage Charges  

    Additional Storage in the Airborne Commerce Park may be rented at a rate of  *  . This space is subject to availability and will
be rented in a minimum 2 bay quantity representing approximately  *  . 

5.  UPS Order Fee  

    Fee added to all UPS packages for additional handling and labor requirements. Additional fees may be negotiated between ALS and MZI if UPS services currently
not utilized are required. Current UPS services utilized include UPS Ground and Ground track. 

6.  Other Carrier Charge  

    Additional work is required to prepare and fulfill orders not processed through the SGA manifesting system. Such work may include, but is not limited to,
manual creation of shipping label(s), preparation of required shipping documentation, and operation of multiple stand alone manifesting systems. At the request of MZI additional carriers or services
may be added in the future. Any additions may be priced separately depending on work requirements. 

7.  International Paperwork  

    Fee for processing of international paperwork. MZI is responsible for providing ALS accurate and complete information required for International documentation.
This fee is a processing fee only. This fee does not include any duties, taxes, customs or related transportation fees, or fees and various tariff charges applicable to creating or processing such
documents such as Certificates of Origin, Consular Legalization and other similar extra charge international documents. 

	*
	=
 redaction 

8.  Return To Vendor Charge (RTV/RMA)  

    Additional charge for preparation of all return to vendor shipments. ALS will have a maximum of 4 business days to process and ship RTV's/RMA's. ALS must have
the RTV/RMA paperwork available for processing by 10:00 a.m. EST for Day 1 (out of the 4 day maximum) to begin. If ALS is unable to process and ship an RTV/RMA within the guidelines described above,
ALS will notify MZI within 24 hours of receiving the RTV to advise MZI the reason for which the RTV/RMA may not be processed within the 4 day period. If ALS fails to notify MZI within 24 hours that an
RTV/RMA may not be processed in the 4 day period, and shipping of the RTV/RMA exceeds the 4 day period, and ALS' failure to meet the 4 day processing window is the cause of a vendors refusal to accept
the RTV/RMA, then ALS agrees to waive the Return To Vendor Charge to MZI 

5

 

and shall be responsible for reimbursing MZI for transportation charges of returning product to the ALS warehouse and/or re-shipping the RTV/RMA. 

9.  Postal Machine Fee  

    Allocation of postal machine lease rate plus rate updates and supplies. Actual postage charges will be billed to MZI. 

10. Management Fee  

    Weekly fee to cover cost of ALS management of MZI fulfillment operations. The fee includes such expenses as administration, management salary, billing costs,
customer service, human resources, supplies, security, employee safety and similar overhead. 

11. Special Projects  

    Any task or activity requested by MZI, not included in the listed item prices. Such activities include, but are not limited to liquidations, bulk moves and
specified training events. Please refer to the following schedule for specific labor charges (travel and associated expenses are in addition to labor): 

    a.  Planned
Projects: Specific times, dates, and requirements must be agreed upon by MZI and ALS no later than 72 hours prior to project start time. Regular time rates
applicable to work performed Monday - Saturday, 0600 - 1800 only. 

       Labor
(regular time)  *  

       Labor
(regular over time)  *  

       Labor
(Sundays)  *  

    b.  Unplanned
Projects: Projects requested with less than 72 hours notice. 

       Labor
(regular time)  *  

       Labor
(regular over time)  *  

       Labor
(Sundays)  *  

    c.  Holiday
rates will be provided upon request. Holidays are defined by the Airborne Transportation Holiday Schedule. 

    d.  Normal
management hours and responsibilities are included in Overhead Charges. If additional management involvement is required to supervise a project it will be
billed at a rate of  *  . ALS and
MZI will mutually agree that additional management involvement is required prior to assignment or billing. 

	*
	=
 redaction 

12. Physical Inventory Charges  

    All Physical Inventory Counts are billed to MZI in the following manner (hours required for physical inventory preparation and post physical reconciliation
will also be included): 

    a.  Labor
(regular time)  *  

       Labor
(over time)  *  

       Labor
(Sunday)  *  

6

 

       Labor (Supervisor)  *  

    b.  Equipment  *  

    c.  Management
Fee  *  

13. Systems Support  

    ALS provides immediate on-site support of MZI systems when necessary. This is charged by the hour and billed weekly. There is a minimum charge. of 30 minutes
per occurrence, 

    a.  Routine
Maintenance:  *  

        Service
Calls not requiring response within 30 minutes.

Times Available: 9:00 a.m. - 2:00 a.m. Eastern Standard Time (M-F) 

    b.  Urgent
Support:  *  

        Service
call will be made within 30 minutes of request.

Times Available: 9:00 a.m. - 2:00 a.m. Eastern Standard Time (M-F) 

    c.  Weekends/After
Hours/Holiday Support: Price  *  

        After
Hours: (2:01 a.m. - 8:59 a.m., 7 days per week) 

        Weekends
(Saturday 2:01 a.m. - Monday 8:59 a.m.) 

        Holidays
as defined by Airborne Transportation Holiday Schedule. 

15. Will Call Fee  

    There will be a  *  to all Will Call orders. This will be applied when a customer requests to pick the order up at ALS between
the 0600—2000, Monday—Saturday. Will Call orders have special handling and staging requirements that require additional labor and security measures. 

16. New Capital Purchase  

If
volumes or order characteristics change from the forecast amounts as shown in exhibit I, so that additional capital equipment (non-replacement) is required to effectively run the MZI operation, ALS
may bill MZI the charges for such equipment. The weekly charges to be billed to MZI will be negotiated between ALS and MZI prior to the time of purchase. 

	*
	=
 redaction 

7

  

 
 

Amendment 5
  Schedule 1B
  Terms and Conditions    
  

    For purposes of this Fifth Amendment, the following Terms and Conditions shall apply for the period 9/1/00 through 8/31/03. 

	1.
	Receiving,
Inventory Control and Shipping Statistics shall be within  *  projections (Exhibit 1) provided by MZI. If Receiving, Inventory Control, or
Shipping Statistics are not within  *  , either MZI or ALS may request that revised pricing be proposed (by ALS) to more accurately reflect the cost of operations
resulting from such change in characteristics. If forecasts are not within  *  characteristics, and either party requests that revised pricing be proposed, the
following procedures shall apply:

	1a.
	ALS
or MZI may request a revised Order Handling Fee (OHF) and Large Order Fee (LOF) (see Schedule I, Item 2 and 2a) within the first five working days of the next quarter. The
proposed pricing shall be subject to a  *  in any 6 month period. The OHF and LOF shall be negotiated separately.

	1b.
	MZI
and ALS shall have 10 calendar days from the proposal date in 1a. above to agree to or negotiate revised OHF & LOF pricing. Both ALS and MZI shall have appropriate
representatives available for negotiation during the negotiating period.

	1c.
	If
MZI accepts the pricing, the new OHF & LOP pricing, shall go into effect the first Monday of the next weekly billing period.

	1d.
	If
ALS and MZI are unable to reach agreement of revised OHF & LOF pricing within the 10 calendar day period, the current OHF & LOF (as defined in Schedule 1) shall remain in effect
and MZI shall have 180 days, to remove all inventory and owned property from ALS' facility.

	1e.
	If
after implementation of OHF & LOF price increases, MZI regains volumes to within  *  Receiving, Inventory Control and Shipping Characteristic
(Exhibit 1) projections for 8 consecutive weeks, OHF &
LOF pricing shall return to the original contract terms (Schedule 1) on Monday of the next weekly billing period. 

	2.
	MZI
will provide ALS with a revised forecast for the proceeding year on 8/31/00, 8/31/01 and 8/31/02. Each revised forecast shall replace the existing forecast as Exhibit 1.

	3.
	*

*
= redaction 

    IN
WITNESS WHEREOF, the parties have executed this Amendment on the date first written above. 

	MULTIPLE ZONES INTERNATIONAL,	 	AIRBORNE LOGISTICS SERVICES, INC.

a division of ABX Air Inc. 

	By:	[Illegible]
	 	By:	[Illegible]

	

Its:	

CFO
	
 	

By:	

Sr. Vice President
 9.15.2000

8

QuickLinks

FIFTH AMENDMENT TO STORAGE AND DISTRIBUTION AGREEMENT

RECITALS

Schedule 1 Rates and Charges

Amendment 5 Schedule 1A Definitions

Amendment 5 Schedule 1B Terms and Conditions

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