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                                                                  EXHIBIT 10.22

                           STANDARD OFFICE LEASE - NET
                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

1.  BASIC LEASE PROVISIONS ("Basic Lease Provisions")

    1.1 PARTIES: This Lease, dated for reference purposes only, March 7, 2000,
is made by and between GVE DISTEL ASSOCIATES, a California General Partnership,
(herein called "Lessor") and TALARIAN CORPORATION, a California Corporation,
doing business under the name of TALARIAN CORPORATION (herein called "Lessee").

    1.2 PREMISES: located on the first floor, consisting of approximately 16,359
rentable square feet, more or less, as defined in paragraph 2 and as shown on
Exhibit "A" hereto (the "Premises").

    1.3 BUILDING: Commonly described as being located at 333 Distel Circle, in
the City of Los Altos, County of Santa Clara, State of California, as more
particularly described in Exhibit "A" hereto, and as defined in paragraph 2.

    1.4 USE: General Office, and all legally related issues, subject to
paragraph 6.

    1.5 TERM: Five (5) Years commencing June 1, 2000 ("Commencement Date") and
ending May 31, 2005, as defined in paragraph 3.

    1.6 BASE RENT: $53,166.75 per month, payable on the first day of each month,
per paragraph 4.1.

    1.7 BASE RENT INCREASE: On Annually, on the anniversary of the Commencement
Date, the monthly Base Rent payable under paragraph 1.6 above shall be adjusted
as provided in paragraph 4.3 below.

    1.8 RENT PAID UPON EXECUTION: $106,333.50 for first month's rent
($53,166.75) plus Security Deposit ($53,166.75).

    1.9 SECURITY DEPOSIT: $53,166.75

    1.10 LESSEE'S SHARE OF OPERATING EXPENSES: 50% as defined in paragraph 4.2.

2.  PREMISES, PARKING AND COMMON AREAS.

    2.1 PREMISES: The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic Lease
Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project." Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2, as
the "Premises," including rights to the Common Areas as hereinafter specified.

    2.2 VEHICLE PARKING: So long as Lessee is not in default, and subject to the
rules and regulations attached hereto, and as established by Lessor from time to
time, Lessee shall be entitled to use 53 unassigned parking spaces in the Office
Building Project at the monthly rate applicable from time to time for monthly
parking as set by Lessor and/or its licensee.

         2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.

         2.2.2 The monthly parking rate per parking space will be $0.00 per
month at the commencement of the term of this Lease, and is subject to change
upon five (5) days prior written notice to Lessee. Monthly parking fees shall be
payable one month in advance prior to the first day of each calendar month.

    2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and of
other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators, parking areas to the extent not otherwise prohibited by
this Lease, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.

    2.4 COMMON AREAS - RULES AND REGULATIONS. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with respect
to the Office Building Project and Common Areas, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform. Lessor or
such other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
modify, amend and enforce said rules and regulations. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees, their agents, employees and invitees of the Office Building
Project.

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    2.5 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:

         (a) To make changes to the Building interior and exterior and Common
Areas, including, without limitation, changes in the location, size, shape,
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls, landscaped areas and walkways;
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law;

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

         (c) To designate other land and improvements outside the boundaries of
the Office Building Project to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional relationship to the
Office Building Project;

         (d) To add additional buildings and improvements to the Common Areas;

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

         (f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgment deem to be appropriate.

3.  TERM.

    3.1 TERM. The term and Commencement Date of this Lease shall be as specified
in paragraph 1.5 of the Basic Lease Provisions.

    3.2 DELAY IN POSSESSION. Notwithstanding said Commencement Date, if for any
reason Lessor cannot deliver possession of the Premises to Lessee on said date
and subject to paragraph 3.2.2, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this lease or the
obligations of Lessee hereunder or extend the term hereof; but in such case,
Lessee shall not be obligated to pay rent or perform any other obligation of
Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee, as
hereinafter defined; provided, however, that if Lessor shall not have delivered
possession of the Premises within sixty (60) days following said Commencement
Date, as the same may be extended under the terms of a Work Letter executed by
Lessor and Lessee, Lessee may, at Lessee's option, by notice in writing to
Lessor with ten (10) days thereafter, cancel this Lease. In which event the
parties shall be discharged from all obligations hereunder; provided, however,
that, as to Lessee's obligations, Lessee first reimburses Lessor for all costs
incurred for Non-Standard Improvements and, as to Lessor's obligations, Lessor
shall return any money previously deposited by Lessee (less any offsets due
Lessor for Non-Standard Improvements); and provided further, that if such
written notice by Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate and be of
no further force or effect.

         3.2.1 POSSESSION TENDERED-DEFINED. Possession of the Premises shall be
deemed tendered to Lessee ("Tender of Possession") when (1) the improvements to
be provided by Lessor under this Lease are substantially completed, (2) the
Building utilities are ready for use in the Premises, (3) Lessee has reasonable
access to the Premises, and (4) ten (10) days shall have expired following
advance written notice to Lessee of the occurrence of the matters described in
(1), (2) and (3), above of this paragraph 3.2.1.

         3.2.2 DELAYS CAUSED BY LESSEE. There shall be no abatement of rent, and
the sixty (60) day period following the Commencement Date before which Lessee's
right to cancel this Lease accrues under paragraph 3.2, shall be deemed extended
to the extent of any delays caused by acts or omissions of Lessee, its agents,
employees and contractors.

    3.3 EARLY POSSESSION. If Lessee occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Lessee shall
pay rent for such occupancy.

    3.4 UNCERTAIN COMMENCEMENT. In the event commencement of the Lease term is
defined as the completion of the improvements, Lessee and Lessor shall execute
an amendment to this Lease establishing the date of Tender of Possession (as
defined in paragraph 3.2.1) or the actual taking of possession by Lessee,
whichever first occurs, as the Commencement Date.

4.  RENT.

    4.1 BASE RENT. Subject to adjustment as hereinafter provided in paragraph
4.3, and except as may be otherwise expressly provided in this Lease, Lessee
shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6 of
the Basic Lease Provisions, without offset or deduction. Lessee shall pay Lessor
upon execution hereof the advance Base Rent described in paragraph 1.8 of the
Basic Lease Provisions. Rent for any period during the term hereof which is for
less than one month shall be prorated based upon the actual number of days of
the calendar month involved Rent shall be payable in lawful money of the United
States to Lessor at the address stated herein or to such other persons or at
such other places as Lessor may designate in writing.

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    4.2 OPERATING EXPENSES. Lessee shall pay to Lessor during the term hereof,
in addition to the Base Rent, Lessee's Share, as hereinafter defined, of all
Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:

         (a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate square footage of the
Premises by the total approximate square footage of the rentable space contained
in the Office Building Project. It is understood and agreed that the square
footage figures set forth in the Basic Lease Provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Office Building Project.

         (b) "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its reasonable
discretion, for:

             (i) The operation, repair, maintenance, and replacement, in neat,
clean, safe, good order and condition, of the Office Building Project, including
but not limited to, the following:

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

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

             (ii) Trash disposal, janitorial and security services;

             (iii) Any other service to be provided by Lessor that is elsewhere
in this Lease stated to be an "Operating Expense";

             (iv) The cost of the premiums for the liability and property
insurance policies to be maintained by Lessor under paragraph 8 hereof;

             (v) The amount of the real property taxes to be paid by Lessor
under paragraph 10.1 hereof;

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

             (vii) Labor, salaries and applicable fringe benefits and costs,
materials, supplies and tools, used in maintaining and/or cleaning the Office
Building Project and accounting and a management fee attributable to the
operation of the Office Building Project.

             (viii) Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated thereby amortized
over its useful life according to Federal Income tax regulations or guidelines
for depreciation thereof (including interest on the unamortized balance as is
then reasonable in the judgment of Lessor's accountants);

             (ix) Replacements of equipment or improvements that have a useful
life for depreciation purposes according to Federal Income tax guidelines of
five (5) years or less, as amortized over such life.

         (c) Operating Expenses shall not include the costs of replacements of
equipment or improvements that have a useful life for Federal income tax
purposes in excess of five (5) years unless it is of the type described in
paragraph 4.2(b)(viii), in which case their cost shall be included as above
provided.

         (d) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.

         (e) Lessee's Share of Operating Expenses shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each calendar year of the Lease term, on the same day as the
Base Rent is due hereunder. In the event that Lessee pays Lessor's estimate of
Lessee's Share of Operating Expenses as aforesaid, Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Operating
Expenses incurred during the preceding year. If Lessee's payments under this
paragraph 4.2(e) during said preceding calendar year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit (except in final
year of Lease, Lessee will be paid, not credited) the amount of such overpayment
against Lessee's Share of Operating Expenses next falling due. If Lessee's
payments under this paragraph during said preceding calendar year were less than
Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within ten (10) days after delivery by Lessor to Lessee
of said statement. Lessee shall be allowed to audit the Operating Expenses on an
annual basis. Lessor shall reasonably cooperate in providing such annual figures
to assist Lessee in its audit. All costs associated with the audit shall be
borne by Lessee, unless Lessee's audit proves, through use of

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Generally Accepted Accounting Principles (GAAP), that Lessor's actual figures
are a ten percent (10%) or greater overstatement than Lessee's actual figures.
Operating Expenses shall not include:

             (i)  costs of alterations of tenant premises;

             (ii) costs, depreciation or amortization of capital improvements
other than capital improvements identified in Section 7.A.3;

             (iii) interest and principal payments on mortgages or any other
debt costs, or rental payments on any ground lease of the project;

             (iv) real estate brokers' leasing commissions;

             (v) legal fees, space planner fees and advertising expenses
incurred with regard to leasing the Building or Project or portions thereof;

             (vi) any cost or expenditure for which Landlord may be reimbursed
by others (e.g., insurance proceeds, warranties, or tort claims);

             (vii) the cost of any service furnished to any tenant of the
Project which Landlord does not make available to Tenant;

             (viii) expense reserves;

             (ix) franchise or income taxes imposed upon Landlord;

             (x) legal and auditing fees which are for the benefit of Landlord,
such as collecting delinquent rents, preparing tax returns, and other financial
statements;

             (xi) the wages of any employee for services not related directly to
the management, maintenance, operation and repair of the Building or Project;

             (xii) fines, penalties and interest; and

             (xiii) any costs incurred in connection with the repair of the
structural parts of the Building or project, which structural parts include only
the foundation and subflooring and the structural condition of the roof and the
exterior walls of the Building or Project.

    4.3 RENT INCREASE.

         4.3.1 At the times set forth in paragraph 1.7 of the Basic Lease
Provisions, the monthly Base Rent payable under paragraph 4.1 of this Lease
shall be adjusted by the increase, if any, in the Consumer Price Index of the
Bureau of Labor Statistics of the Department of Labor for All Urban Consumers,
(1967 = 100), "All Items," for the city nearest the location of the Building,
herein referred to as "C.P.I." since the date of this Lease. Rent increases to
be at a minimum of three percent (3%), and up to a maximum of six percent (6%).

         4.3.2 The monthly Base Rent payable pursuant to paragraph 4.3.1 shall
be calculated as follows: the Base Rent payable for the first month of the term
of this Lease, as set forth in paragraph 4.1 of this Lease, shall be multiplied
by a fraction the numerator of which shall be the C.P.I. of the calendar month
during which the adjustment is to take effect, and the denominator of which
shall be the C.P.I. for the calendar month in which the original Lease term
commences. The sum so calculated shall constitute the new monthly Base Rent
hereunder, but, in no event, shall such new monthly Base Rent be less than the
Base Rent payable for the month immediately preceding the date for the rent
adjustment.

         4.3.3 In the event the compilation and/or publication of the C.P.I.
shall be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the index most nearly the same as the C.P.I. shall
be used to make such calculations. In the event that Lessor and Lessee cannot
agree on such alternative index, then the matter shall be submitted for decision
to the American Arbitration Association in the county in which the Premises are
located, in accordance with the then rules of said association and the decision
of the arbitrators shall be binding upon the parties, notwithstanding one party
failing to appear after due notice of the proceeding. The cost of said
Arbitrators shall be paid equally by Lessor and Lessee.

         4.3.4 Lessee shall continue to pay the rent at the rate previously in
effect until the increase, if any, is determined. Within five (5) days following
the date on which the increase is determined, Lessee shall make such payment to
Lessor as will bring the increased rental current, commencing with the effective
date of such increase through the date of any rental installments then due.
Thereafter the rental shall be paid at the increased rate.

         4.3.5 At such time as the amount of any change in rental required by
this Lease is known or determined, Lessor and Lessee shall execute an amendment
to this Lease setting forth such change.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lessee's obligations hereunder. If
lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent

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or other charge in default for the payment of any other sum to which Lessor may
become obligated by reason of Lessee's default, or to compensate Lessor for any
loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all
or any portion of said deposit, Lessee shall within ten (10) days after written
demand therefor deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount then required of Lessee. If the monthly Base Rent
shall, from time to time, increase during the term of this Lease. Lessee shall,
at the time of such increase, deposit with Lessor additional money as a security
deposit so that the total amount of the security deposit held by Lessor shall at
all times bear the same proportion to the then current Base Rent as the initial
security deposit bears to the initial Base Rent set forth in paragraph 1.6 of
the Basic Lease Provisions. Lessor shall not be required to keep said security
deposit separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor's option, to the last assignee,
if any, of Lessee's interest hereunder) at the expiration of the term hereof,
and after Lessee has vacated the Premises. No trust relationship is created
herein between Lessor and Lessee with respect to said Security Deposit.

6.  USE.

    6.1 USE. The Premises shall be used and occupied only for the purpose set
forth in paragraph 1.4 of the Basic Lease Provisions or any other use which is
reasonably comparable to that use and for no other purpose.

    6.2 COMPLIANCE WITH LAW.

         (a) Lessor warrants to Lessee that the Premises, in the state existing
on the date that the Lease term commences, but without regard to alterations or
improvements made by Lessee or the use for which Lessee will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such Lease term
Commencement Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Lessor, after written notice
from Lessee, to promptly, at Lessor's sole cost and expense, rectify any such
violation.

         (b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the Premises and the occupation and use by Lessee of the Premises.
Lessee shall conduct its business in a lawful manner and shall not use or permit
the use of the Premises or the Common Areas in any manner that will tend to
create waste or a nuisance or shall tend to disturb other occupants of the
Office Building Project.

    6.3 CONDITION OF PREMISES.

         (a) Lessor shall deliver the Premises to Lessee in a clean condition on
the Lease Commencement Date (unless Lessee is already in possession) and Lessor
warrants to Lessee that the plumbing, lighting, air conditioning, and heating
system in the Premises shall be in good operating condition. In the event that
it is determined that this warranty has been violated, then it shall be the
obligation of Lessor, after receipt of written notice from Lessee setting forth
with specificity the nature of the violation, to promptly, at Lessor's sole
cost, rectify such violation.

         (b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises and the Office Building Project in their condition existing as of
the Lease Commencement Date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business.

7.  MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.

    7.1 LESSOR'S OBLIGATIONS. Lessor shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements that are not ordinarily a part of the Building or are above
then Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any
thereof. Lessee expressly waives the benefits of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the
Premises in good order, condition and repair.

    7.2 LESSEE'S OBLIGATIONS.

         (a) Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements

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that are not ordinarily a part of the Building or that are above then Building
standards. Lessor may, at its option, upon reasonable notice, elect to have
Lessee perform any particular such maintenance or repairs the cost of which is
otherwise Lessee's responsibility hereunder.

         (b) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices by Lessee. Lessee
shall repair any damage to the Premises occasioned by the installation or
removal of Lessee's trade fixtures, alterations, furnishings and equipment.
Except as otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings
and plumbing on the Premises and in good operating condition.

    7.3 ALTERATIONS AND ADDITIONS.

         (a) Lessee shall not, without Lessor's prior written consent make any
alterations, improvements, additions, Utility Installations or repairs in, on or
about the Premises, or the Office Building Project. As used in this paragraph
7.3 the term "Utility Installation" shall mean carpeting, window and wall
coverings, power panels, electrical distribution systems, lighting fixtures, air
conditioning, plumbing, and telephone and telecommunication wiring and
equipment. At the expiration of the term, Lessor may require the removal of any
or all of said alterations, improvements, additions or Utility Installations,
and the restoration of the Premises and the Office Building Project to their
prior condition, at Lessee's expense. Should Lessor permit Lessee to make its
own alterations, improvements, additions or Utility Installations, Lessee shall
use only such contractor as has been expressly approved by Lessor, and Lessor
may require Lessee to provide Lessor, at Lessee's sole cost and expense, a lien
and completion bond in an amount equal to one and one-half times the estimated
cost of such improvements, to insure Lessor against any liability for mechanic's
and materialmen's liens and to insure completion of the work. Should Lessee make
any alterations, improvements, additions or Utility Installations without the
prior approval of Lessor, or use a contractor not expressly approved by Lessor,
Lessor may, at any time during the term of this Lease, require that Lessee
remove any part or all of the same.

         (b) Any alterations, improvements, additions or Utility Installations
in or about the Premises or the Office Building Project that Lessee shall desire
to make shall be presented to Lessor in written form, with proposed detailed
plans. If Lessor shall give its consent to Lessee's making such alteration,
improvement, addition or Utility Installation, the consent shall be deemed
conditioned upon Lessee acquiring a permit to do so from the applicable
governmental agencies, furnishing a copy thereof to Lessor prior to the
commencement of the work, and compliance by Lessee with all conditions of said
permit in a prompt and expeditious manner.

         (c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.

         (d) Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in the Premises by Lessee, and Lessor shall have
the right to post notices of non-responsibility in or on the Premises or the
Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's reasonable attorneys fees and costs in participating in such action
if Lessor shall decide it is to Lessor's best interest so to do.

         (e) All alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may be made to the Premises by Lessee, including but not limited to, floor
coverings, panelings, doors, drapes, built-ins, moldings, sound attenuation, and
lighting and telephone or communication systems, conduit, wiring and outlets,
shall be made and done in a good and workmanlike manner and of good and
sufficient quality and materials and shall be the property of Lessor and remain
upon and be surrendered with the Premises at the expiration of the Lease term,
unless Lessor requires their removal pursuant to paragraph 7.3(a). Provided
Lessee is not in default, notwithstanding the provisions of this paragraph
7.3(e), Lessee's personal property and equipment, other than that which is
affixed to the Premises so that it cannot be removed without material damage to
the Premises or the Building, and other than Utility Installations, shall remain
the property of Lessee and may be removed by Lessee subject to the provisions of
paragraph 7.2.

         (f) Lessee shall provide Lessor with as-built plans and specifications
for any alterations, improvements, additions or Utility Installations.

    7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Lessee's use of the Premises.

                               PAGE 6 OF 19 PAGES
<PAGE>   7

8.  INSURANCE; INDEMNITY.

    8.1 LIABILITY INSURANCE - LESSEE. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease a policy of Comprehensive
General Liability insurance utilizing an insurance Services Office standard form
with Broad Form General Liability Endorsement (GL0404), or equivalent, in an
amount of not less than $1,000,000 per occurrence of bodily injury and property
damage combined or in a greater amount as reasonably determined by Lessor and
shall insure Lessee with Lessor as an additional insured against liability
arising out of the use, occupancy or maintenance of the Premises. Compliance
with the above requirement shall not, however, limit the ability of Lessee
hereunder.

    8.2. LIABILITY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other risks
Lessor deems advisable from time to time, insuring Lessor, but not Lessee,
against liability arising out of the ownership, use, occupancy or maintenance of
the Office Building Project in an amount not less than $5,000,000.00 per
occurrence.

    8.3 PROPERTY INSURANCE - LESSEE. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.

    8.4 PROPERTY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Office Building Project improvements, but not Lessee's personal
property, fixtures, equipment or tenant improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time, utilizing
Insurance Services Office standard form, or equivalent, providing protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, plate glass, and such other perils as
Lessor deems advisable or may be required by a lender having a lien on the
Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain
such deductibles as Lessor or the aforesaid lender may determine. In the event
that the Premises shall suffer an insured loss as defined in paragraph 9.1(f)
hereof, the deductible amounts under the applicable insurance policies shall be
deemed an Operating Expense. Lessee shall not do or permit to be done anything
which shall invalidate the insurance policies carried by Lessor. Lessee shall
pay the entirety of any increase in the property insurance premium for the
Office Building Project over what it was immediately prior to the commencement
of the term of this Lease if the increase is specified by Lessor's insurance
carrier as being caused by the nature of Lessee's occupancy or any act or
omission of Lessee.

    8.5 INSURANCE POLICIES. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days after the
Commencement Date of this Lease. No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor, Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals thereof.

    8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and relieve
the other, and waive their entire right of recovery against the other, for
direct or consequential loss or damage arising out of or incident to the perils
covered by property insurance carried by such party, whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors and/or
invitees. If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.

    8.7 INDEMNITY. Except for situations involving the negligent or willful
misconduct by Lessor or its agents, Lessee shall indemnify and hold harmless
Lessor and its agents, Lessor's master or ground lessor, partners and lenders,
from and against any and all claims for damage to the person or property of
anyone or any entity arising from Lessee's use of the Office Building Project,
or from the conduct of Lessee's business or from any activity, work or things
done, permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the performance
of any obligation on Lessee's part to be performed under the terms of this
Lease, or arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees or invitees and from and against all costs, attorneys
fees, expenses and liabilities incurred by Lessor as the result of any such use,
conduct, activity, work, things done, permitted or suffered, breach, default or
negligence, and in dealing reasonably therewith, including but not limited to
the defense or pursuit of any claim or any action or proceeding involved
therein; and in case any action or proceeding be brought against Lessor by
reason of any such matter, Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property of Lessee
or injury to persons, in, upon or about the Office Building Project arising from
any cause and Lessee hereby waives all claims in respect thereof against Lessor.
Notwithstanding anything herein to the contrary, Lessee shall have no obligation
to indemnify, defend, or hold harmless Lessor or anyone else with respect to
Hazardous Materials that were on, in, or under the Premises when Lessee took
possession thereof.

    8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that Lessor
shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or

                               PAGE 7 OF 19 PAGES
<PAGE>   8
other property of Lessee, Lessee's employees, invitees, customers, or any other
person in or about the Premises or the Office Building Project, nor shall Lessor
be liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible, Lessor shall not be liable
for any damages arising from any act or neglect of any other lessee, occupant or
user of the Office Building Project, nor from the failure of Lessor to enforce
the provisions of any other lease of any other lessee of the Office Building
Project.

    8.9 NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no representation
that the limits or forms of coverage of insurance specified in this paragraph 8
are adequate to cover Lessee's property or obligations under this Lease.

9.  DAMAGE OR DESTRUCTION.

    9.1 DEFINITIONS.

         (a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.

         (b) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent (50%) of the then Replacement Cost of
the Building.

         (c) "Premises Building Total Destruction" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent (50%) or more of the then Replacement Cost of
the Building.

         (d) "Office Building Project Buildings" shall mean all of the buildings
on the Office Building Project site.

         (e) "Office Building Project Buildings Total Destruction" shall mean if
the Office Building Project Buildings are damaged or destroyed to the extent
that the cost of repair is fifty percent (50%) or more of the then Replacement
Cost of the Office Building Project Buildings.

         (f) "Insured Loss" shall mean damage or destruction which was caused by
an event required to be covered by the insurance described in paragraph 8. The
fact that an Insured Loss has a deductible amount shall not make the loss an
uninsured loss.

         (g) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees, other than those installed by Lessor at Lessee's expense.

    9.2 PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.

         (a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an Insured
Loss and which falls into the classification of either Premises Damage or
Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor's expense, repair such
damage (but not Lessee's fixtures, equipment or tenant improvements originally
paid for by Lessee) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.

         (b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is not
an insured Loss and which falls within the classification of Premises Damage or
Premises Building Partial Damage, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense), which
damage prevents Lessee from making any substantial use of the Premises, Lessor
may at Lessor's option either (i) repair such damage as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full
force and effect, or (ii) give written notice to Lessee within thirty (30) days
after the date of the occurrence of such damage of Lessor's intention to cancel
and terminate this Lease as of the date of the occurrence of such damage, in
which event this Lease shall terminate as of the date of the occurrence of such
damage.

    9.3 PREMISES BUILDING TOTAL DESTRUCTION; OFFICE BUILDING PROJECT TOTAL
DESTRUCTION. Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an insured
Loss, which falls into the classifications of either (i) Premises Building Total
Destruction, or (ii) Office Building Project Total Destruction, then Lessor may
at Lessor's option either (i) repair such damage or destruction as soon as
reasonably possible at Lessor's expense (to the extent the required materials
are readily available through usual commercial channels) to its condition
existing at the time of the damage, but not Lessee's fixtures, equipment or
tenant improvements, and this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after the date of
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease, in which case this Lease shall terminate as of the date of the occurrence
of such damage.
                               PAGE 8 OF 19 PAGES
<PAGE>   9

    9.4 DAMAGE NEAR END OF TERM.

         (a) Subject to paragraph 9.4(b), if at any time during the last twelve
(12) months of the term of this Lease there is substantial damage to the
Premises, Lessor may at Lessor's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within 30 days after the date of occurrence of such
damage.

         (b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Damage during the
last twelve (12) months of the term of this Lease. If Lessee duly exercises such
option during said twenty (20) day period, Lessor shall, at Lessor's expense,
repair such damage, but not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option during said twenty (20) day
period, then Lessor may at Lessor's option terminate and cancel this Lease as of
the expiration of said twenty (20) day period by giving written notice to Lessee
of Lessor's election to do so within ten (10) days after the expiration of said
twenty (20) day period, notwithstanding any term or provision in the grant of
option to the contrary.

    9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.

         (a) In the event Lessor repairs or restores the Building or Premises
pursuant to the provisions of this paragraph 9, and any part of the Premises are
not usable (including loss of use due to loss of access or essential services),
the rent payable hereunder (including Lessee's Share of Operating Expenses) for
the period during which such damage, repair or restoration continues shall be
abated, provided (1) the damage was not the result of the negligence of Lessee,
and (2) such abatement shall only be to the extent the operation and
profitability of Lessee's business as operated from the Premises is adversely
affected. Except for said abatement of rent, if any, Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.

         (b) If Lessor shall be obligated to repair or restore the Premises or
the Building under the provisions of this Paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such occurrence, or if
Lessor shall not complete the restoration and repair within six (6) months after
such occurrence, Lessee may at Lessee's option cancel and terminate this Lease
by giving Lessor written notice of Lessee's election to do so at any time prior
to the commencement or completion, respectively, of such repair or restoration.
In such event this Lease shall terminate as of the date of such notice.

         (c) Lessee agrees to cooperate with Lessor in connection with any such
restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.

    9.6 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.

    9.7 WAIVER. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.

10. REAL PROPERTY TAXES.

    10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as defined in
paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.

    10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying any
increase in real property tax specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.

    10.3 DEFINITION OF "REAL PROPERTY TAX". As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project or any portion thereof
by any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Office Building Project or in any
portion thereof, as against Lessor's right to rent or other income therefrom,
and as against Lessor's business of leasing the Office Building Project. The
term "real property tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "real
property tax," or (ii) the nature of which was hereinbefore included within the
definition of "real property tax," or (iii) which is imposed for a service or
right not charged prior to June 1, 1978, or, if previously charged, has been
increased since June 1, 1978, or (iv) which is imposed as a result of a change
in ownership, as defined by applicable local statutes for property tax purposes,
of the Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership,

                               PAGE 9 OF 19 PAGES
<PAGE>   10

or (v) which is imposed by reason of this transaction, any modifications or
changes hereto, or any transfers hereof. All assessments will be amortized over
the maximum deferral period they are paid, and only the amortized amount, plus
interest on the unamortized balance, shall be included as real property taxes
for the year in question.

    10.4 JOINT ASSESSMENT. If the improvements or property, the taxes for which
are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

    10.5 PERSONAL PROPERTY TAXES.

         (a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere.

         (b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.

11. UTILITIES.

    11.1 SERVICES PROVIDED BY LESSOR. Lessor shall provide heating, ventilation,
air conditioning, and janitorial service as reasonably required, reasonable
amounts of electricity for normal lighting and office machines, water for
reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures.

    11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.

    11.3 HOURS OF SERVICE. Said services and utilities shall be provided during
generally accepted business days and hours or such other days or hours as may
hereafter be set forth. Utilities and services required at other times shall be
subject to advance request and reimbursement by Lessee to Lessor of the cost
thereof.

    11.4 EXCESS USAGE BY LESSEE. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security services, over
standard office usage for the Office Building Project. Lessor shall require
Lessee to reimburse Lessor for any excess expenses or costs that may arise out
of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion,
install at Lessee's expense supplemental equipment and/or separate metering
applicable to lessee's excess usage or loading.

    11.5 INTERRUPTIONS. There shall be no abatement of rent and Lessor shall not
be liable in any respect whatsoever for the inadequacy, stoppage, interruption
or discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor's reasonable control or
in cooperation with governmental request or directions.

12. ASSIGNMENT AND SUBLETTING.

    12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by operation
of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all
or any part of Lessee's interest in the Lease or in the Premises, without
Lessor's prior written consent, which Lessor shall not unreasonably withhold.
Lessor shall respond to Lessee's request for consent hereunder in a timely
manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need for notice to Lessee under
paragraph 13.1 "Transfer" within the meaning of this paragraph 12 shall include
the transfer or transfers aggregating: (a) if Lessee is a corporation, more than
fifty percent (50%) of the voting stock of such corporation, or (b) if Lessee is
a partnership, more than twenty-five percent (25%) of the profit and loss
participation in such partnership.

    12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate";
provided that before such assignment shall be effective, (a) said assignee shall
assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall
be given written notice of such assignment and assumption. Any such assignment
shall not, in any way, affect or limit the liability of Lessee under the terms
of this Lease even if after such assignment or subletting the terms of this
Lease are materially changed or altered without the consent of Lessee, the
consent of whom shall not be necessary.

                               PAGE 10 OF 19 PAGES
<PAGE>   11

    12.3 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

         (a) Regardless of Lessor's consent, no assignment or subletting shall
release Lessee of Lessee's obligations hereunder or alter the primary liability
of Lessee to pay the rent and other sums due Lessor hereunder including Lessee's
Share of Operating Expenses, and to perform all other obligations to be
performed by Lessee hereunder.

         (b) Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment.

         (c) Neither a delay in the approval or disapproval of such assignment
or subletting, nor the acceptance of rent, shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for the breach of any of the terms or
conditions of this paragraph 12 of this Lease.

         (d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to such
sublease and the terms thereof.

         (e) The consent by Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent and such
action shall not relieve such persons from liability under this Lease or said
sublease; provided, however, such persons shall not be responsible to the extent
any such amendment or modification enlarges or increases the obligations of the
Lessee or sublessee under this Lease or such sublease.

         (f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by lessor or Lessee.

         (g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgement that no default then
exists under this Lease of the obligations to be performed by Lessee nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.

         (h) The discovery of the fact that any financial statement relied upon
by Lessor in giving its consent to an assignment or subletting was materially
false shall, at Lessor's election, render Lessor's said consent null and void.

         (i) Any profit realized by Lessee as a result of an Assignment or
sublease, (i.e., the Sublease generates greater revenue than this Lease) shall
be split equally by Lessee and Lessor after payment of Lessee's reasonable
leasing expenses resulting from such Sublease, limited only to commissions,
tenant improvements, and reasonable attorneys fees.

    12.4 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of
Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein:

         (a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a default shall occur in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against said sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.

         (b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublease as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublessee shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.

         (c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor

                               PAGE 11 OF 19 PAGES
<PAGE>   12

shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.

         (d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

         (e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee.

    12.5 LESSOR'S EXPENSES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees.

    12.6 CONDITIONS TO CONSENT. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general character
of the other occupants of the Office Building Project and not in violation of
any exclusives or rights then held by other tenants, and (b) the proposed
assignee or sublessee be at least as financially responsible as Lessee was
expected to be at the time of the execution of this Lease or of such assignment
or subletting, whichever is greater.

13. DEFAULT; REMEDIES.

    13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:

         (a) The vacation or abandonment of the Premises by Lessee. Vacation of
the Premises shall include the failure to occupy the Premises for a continuous
period of sixty (60) days or more, whether or not the rent is paid.

         (b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or
subletting), 13.1(a) (vacation or abandonment), 13.1(e) (insolvency), 13.1(f)
(false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33
(auctions), or 41.1 (easements), all of which are hereby deemed to be material,
non-curable defaults without the necessity of any notice by Lessor to Lessee
thereof.

         (c) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.

         (d) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs (b) and (c), above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Lessor to Lessee; provided, however, that if the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commenced such cure within said thirty (30) day period and thereafter diligently
pursues such cure to completion. To the extent permitted by law, such thirty
(30) day notice shall constitute the sole and exclusive notice required to be
given to Lessee under applicable Unlawful Detainer statutes.

         (e) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days; (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.

         (f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.

    13.2 REMEDIES. In the event of any material default or breach of this Lease
by Lessee. Lessor may at any lime thereafter, with or without notice or demand
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such default:

         (a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' lees,
and any real

                               PAGE 12 OF 19 PAGES
<PAGE>   13

estate commission actually paid; the worth at the time of award by the court
having jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.

         (b) Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have vacated or abandoned
the Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

         (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
Unpaid installments of rent and other unpaid monetary obligations of Lessee
under the terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by law.

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

    13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee to
Lessor of Base Rent, Lessee's Share of Operating Expenses or other sums due
hereunder will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Office Building Project. Accordingly, if any Installment of
Base Rent, Operating Expenses, or any other sum due from Lessee shall not be
received by Lessor or Lessor's designee within ten (10) days after such amount
shall be due, then, without any requirement for notice to Lessee, Lessee shall
pay to Lessor a late charge equal to 6% of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of late payment by Lessee. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee's
default with respect to such overdue amount, nor prevent Lessor from exercising
any of the other rights and remedies granted hereunder.

14. CONDEMNATION. If the Premises or any portion thereof or the Office Building
Project are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Lessee's
Share of Operating Expenses shall be reduced in the proportion that the floor
area of the Premises taken bears to the total floor area of the Premises. Common
Areas taken shall be excluded from the Common Areas usable by Lessee and no
reduction of rent shall occur with respect thereto or by reason thereof. Lessor
shall have the option in its sole discretion to terminate this Lease as of the
taking of possession by the condemning authority, by giving written notice to
Lessee of such election within thirty (30) days after receipt of notice of a
taking by condemnation of any part of the Premises or the Office Building
Project. Any award for the taking of all or any part of the Premises or the
Office Building Project under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award or loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.

15. BROKER'S FEE.

    (a) The brokers involved in this transaction are CB Richard Ellis, Inc. -
Tenant's Broker as "listing broker" and N/A as "cooperating broker," licensed
real estate broker(s). A "cooperating broker" is defined as any broker other
than the listing broker entitled to a share of any commission arising under this
Lease. Upon execution of this Lease by both parties, Lessor shall pay to said
brokers jointly, or in such separate shares as they may mutually designate in
writing, a fee as set forth in a separate agreement between Lessor and said
broker(s), or in the event there is no separate agreement between Lessor and
said broker(s), the sum of $___ by separate agreement, for brokerage services
rendered by said broker(s) to Lessor in this transaction.

    (b) Lessor further agrees that (i) if Lessee exercises any Option, as
defined in paragraph 39.1 of this Lease, which is granted to Lessee under this
Lease, or any subsequently granted option which is substantially similar to an
Option granted to Lessee under this Lease, or (ii) if Lessee acquires any rights
to the Premises or other premises

                               PAGE 13 OF 19 PAGES
<PAGE>   14

described in this Lease which are substantially similar to what Lessee would
have acquired had an Option herein granted to Lessee been exercised, or (iii) if
Lessee remains in possession of the Premises after the expiration of the term of
this Lease after having failed to exercise an Option, or (iv) if said broker(s)
are the procuring cause of any other lease or sale entered into between the
parties pertaining to the Premises and/or any adjacent property in which Lessor
has an interest, or (v) if the Base Rent is increased, whether by agreement or
operation of an escalation clause contained herein, then as to any of said
transactions or rent increases, Lessor shall pay said broker(s) a fee in
accordance with the schedule of said broker(s) in effect at the time of
execution of this Lease. Said fee shall be paid at the time such increased
rental is determined.

    (c) Lessor agrees to pay said fee not only on behalf of Lessor but also on
behalf of any person, corporation, association, or other entity having an
ownership interest in said real property or any part thereof, when such fee is
due hereunder. Any transferee of Lessor's interest in this Lease, whether such
transfer is by agreement or by operation of law, shall be deemed to have assumed
Lessor's obligation under this paragraph 15. Each listing and cooperating broker
shall be a third party beneficiary of the provisions of this paragraph 15 to the
extent of their interest in any commission arising under this Lease and may
enforce that right directly against Lessor; provided, however, that all brokers
having a right to any part of such total commission shall be a necessary party
to any suit with respect thereto.

    (d) Lessee and Lessor each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder (other than the
person(s), if any, whose names are set forth in paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.

16. ESTOPPEL CERTIFICATE.

    (a) Each party (as "responding party") shall at any time upon not less than
ten (10) days' prior written notice from the other party ("requesting party")
execute, acknowledge and deliver to the requesting party a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the dale to which the
rent and other charges are paid in advance, if any, and (ii) acknowledging that
there are not, to the responding party's knowledge, any uncured defaults on the
part of the requesting party, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Office Building Project or of the business of Lessee.

    (b) At the requesting party's option, the failure to deliver such statement
within such time shall be a material default of this Lease by the party who is
to respond, without any further notice to such party, or it shall be conclusive
upon such party that (i) this Lease is in full force and effect, without
modification except as may be represented by the requesting party, (ii) there
are no uncured defaults in the requesting party's performance, and (iii) if
Lessor is the requesting party, not more than one month's rent has been paid in
advance.

    (c) If Lessor desires to finance, refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest, Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.

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

19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
then allowable by law or judgments from the date due. Payment of such interest
shall not excuse or cure any default by Lessee under this Lease; provided,
however, that interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.

20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.

21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense and any other expenses payable by Lessee hereunder shall be deemed to be
rent.

                               PAGE 14 OF 19 PAGES
<PAGE>   15

22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Office Building Project and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease.

23. NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified or registered
mail, and shall be deemed sufficiently given if delivered or addressed to Lessee
or to Lessor at the address noted below or adjacent to the signature of the
respective parties, as the case may be. Mailed notices shall be deemed given
upon actual receipt at the address required, or forty-eight hours following
deposit in the mail, postage prepaid, whichever first occurs. Either party may
by notice to the other specify a different address for notice purposes except
that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice purposes. A copy of all notices required
or permitted to be given to Lessor hereunder shall be concurrently transmitted
to such party or parties at such addresses as Lessor may from time to time
hereafter designate by notice to Lessee.

24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.

25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.

26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of the
Premises or any part thereof after the expiration of the term hereof, which
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, except that the rent payable
shall be two hundred percent (200%) of the rent payable immediately preceding
the termination date of this Lease, and all Options, if any, granted under the
terms of this Lease shall be deemed terminated and be of no further effect
during said month to month tenancy.

27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.

29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
where the Office Building Project is located and any litigation concerning this
Lease between the parties hereto shall be initiated in the County in which the
Office Building Project is located.

30. SUBORDINATION.

         (a) This Lease, and any Option or right of first refusal granted
hereby, at Lessor's option, shall be subordinate to any ground lease, mortgage,
deed of trust, or any other hypothecation or security now or hereafter placed
upon the Office Building Project and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Notwithstanding such subordination,
Lessee's right to quiet possession of the Premises shall not be disturbed if
Lessee is not in default and so long as Lessee shall pay the rent and observe
and perform all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee, trustee or ground Lessor
shall elect to have this Lease and any Options granted hereby prior to the lien
of its mortgage, deed of trust or ground lease, and shall have written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
mortgage, deed of trust or ground lease, whether this Lease or such Options are
dated prior or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof.

         (b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee hereunder without
further notice to Lessee or, at Lessor's option, Lessor shall execute such
documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and
in Lessee's name, place and stead, to execute such documents in accordance with
this paragraph 30(b).

31. ATTORNEYS' FEES.

                               PAGE 15 OF 19 PAGES
<PAGE>   16

    31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the same
or a separate suit, and whether or not such action is pursued to decision or
judgment. The provisions of this paragraph shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder.

    31.2 The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred in good faith.

    31.3 Lessor shall be entitled to reasonable attorneys' fees and all other
costs and expenses incurred in the preparation and service of notices of default
and consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such default.

32. LESSOR'S ACCESS.

    32.1 Lessor and Lessor's agents shall have the right to enter the Premises
at reasonable times for the purpose of inspecting the same, performing any
services required of Lessor, showing the same to prospective purchasers,
lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. Lessor may at any time place on or about the Premises or the Building
any ordinary "For Sale" signs and Lessor may at any time during the last 120
days of the term hereof place on or about the Premises any ordinary "For Lease"
signs.

    32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.

    32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and safes,
and in the case of emergency to enter the Premises by any reasonably appropriate
means, and any such entry shall not be deemed a forceable or unlawful entry or
detainer of the Premises or an eviction. Lessee waives any charges for damages
or injuries or interference with Lessee's property or business in connection
therewith.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in violation
of this paragraph shall constitute a material default of this Lease.

34. SIGNS. Lessee shall not place any sign upon the Premises or the Office
Building Project without Lessor's prior written consent. Under no circumstances
shall Lessee place a sign on any roof of the Office Building Project.

35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.

36. CONSENTS. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one party is required to an act of the
other party such consent shall not be unreasonably withheld or delayed.

37. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.

38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Lessee's part
to be observed and performed hereunder, Lessee shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Office Building Project.

39. OPTIONS.

    39.1 DEFINITION. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Office Building Project or other
property of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase the Premises or the Office Building Project, or the
right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.

    39.2 OPTIONS PERSONAL. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises who does so without the intent of

                               PAGE 16 OF 19 PAGES
<PAGE>   17
thereafter assigning this Lease or subletting the Premises or any portion
thereof, and may not be exercised or be assigned, voluntarily or involuntarily,
by or to any person or entity other than Lessee; provided, however, that an
Option may be exercised by or assigned to any Lessee Affiliate as defined in
paragraph 12.2 of this Lease. The Options, if any, herein granted to Lessee are
not assignable separate and apart from this Lease, nor may any Option be
separated from this Lease in any manner, either by reservation or otherwise.

    39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple options to
extend or renew this Lease a later option cannot be exercised unless the prior
option to extend or renew this Lease has been so exercised.

    39.4 EFFECT OF DEFAULT ON OPTIONS.

         (a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing on
the day after a monetary obligation to Lessor is due from Lessee and unpaid
(without any necessity for notice thereof to Lessee) and continuing until the
obligation is paid, or (iii) in the event that Lessor has given to Lessee three
or more notices of default under paragraph 13.1(c), or paragraph 13.1(d),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option, (iv) if Lessee has committed any non-curable breach, including without
limitation those described in paragraph 13.1(b), or is otherwise in default of
any of the terms, covenants or conditions of this Lease.

         (b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).

         (c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1(d) within thirty (30)
days after the date that Lessor gives notice to Lessee of such default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, (iii)
Lessor gives to Lessee three or more notices of default under paragraph 13.1(c),
or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if Lessee
has committed any non-curable breach, including without limitation those
described in paragraph 13.1(b), or is otherwise in default of any of the terms,
covenants and conditions of this Lease.

40. SECURITY MEASURES-LESSOR'S RESERVATIONS.

    40.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from providing security protection for the Office Building Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).

    40.2 Lessor shall have the following rights:

         (a) To change the name, address or title of the Office Building Project
or building in which the Premises are located upon not less then 90 days prior
written notice;

         (b) To, at Lessee's expense, provide and install Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deem appropriate;

         (c) To permit any lessee the exclusive right to conduct any business as
long as such exclusive does not conflict with any rights expressly given herein;

         (d) To place such signs, notices or displays as Lessor reasonably deems
necessary or advisable upon the roof, exterior of the buildings or the Office
Building Project or on pole signs in the Common Areas;

    40.3 Lessee shall not:

         (a) Use a representation (photographic or otherwise) of the Building or
the Office Building Project or their name(s) in connection with Lessee's
business;

         (b) Suffer or permit anyone, except in emergency, to go upon the roof
of the Building.

41. EASEMENTS.

    41.1 Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable, and
to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.

                               PAGE 17 OF 19 PAGES
<PAGE>   18

    41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.

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

43. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of such
entity, represent and warrant that such individual is duly authorized to execute
and deliver this Lease on behalf of said entity. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.

44. CONFLICT. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.

45. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.

46. LENDER MODIFICATION. Lessee agrees to make such reasonable modifications to
this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the Office
Building Project.

47. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively.

48. WORK LETTER. This Lease is supplemented by that certain Work Letter of even
date executed by Lessor and Lessee attached hereto as Exhibit C and incorporated
herein by this reference.

49. ATTACHMENTS. Attached hereto are the following documents which constitute a
part of this Lease:

Addendum 1
Rider 1 - Option to Extend at Market Rental Rate
Exhibit A - Premises
Exhibit B - Rules and Regulations
Exhibit C - Work Letter Agreement

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

               IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR
               SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION
               OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
               ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR
               EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
               CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO;
               THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL
               COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

                               PAGE 18 OF 19 PAGES
<PAGE>   19

                 LESSOR                                LESSEE

GVE DISTEL ASSOCIATES,                   TALARIAN CORPORATION,
a California General Partnership         a California Corporation

By /s/ MARTIN C. MENNE                   By /s/ MICHAEL A. MORGAN
  ---------------------------------        ------------------------------------

      Its Partner                              Its CFO
         --------------------------               -----------------------------

By                                       By
  ---------------------------------        ------------------------------------

      Its                                      Its
         --------------------------               -----------------------------

Executed at                              Executed at
           ------------------------                 ---------------------------
on  5/1/00                               on 5/1/00
   --------------------------------        ------------------------------------

Address 711 North First Street           Address 333 Distel Circle
       ----------------------------             -------------------------------
        San Jose, CA 95112                       Los Altos, CA 94404
       ----------------------------             -------------------------------

                               PAGE 19 OF 19 PAGES
<PAGE>   20

                                   ADDENDUM 1

    This Lease Addendum, by and between GVE DISTEL ASSOCIATES ("Lessor") and
TALARIAN CORPORATION ("Lessee"), shall become a part of the Lease Agreement
dated March 7, 2000, for the Premises located at 333 Distel Circle, Los Altos,
California.

1.  OPERATING EXPENSES AND PROPERTY TAXES. Lessor and Lessee acknowledge and
    agree that Lessee is responsible for its prorata share of all Operating
    Expenses, Property Taxes, Property Insurance, and all common area charges.
    These charges will commence June 2, 2000, and are to be paid monthly by
    Lessee along with the Base Rent. Lessor shall repair and maintain in good
    working order the roof, roof membrane, and all structural portions of the
    Premises and the building, the heating, ventilation, air-conditioning
    equipment servicing the Premises (exclusive of routine maintenance). Lessor
    shall provide five (5) day janitorial service.

2.  FIRST RIGHT OF OPPORTUNITY. Provided Lessee is not in default under the
    terms of this Lease, Lessor shall grant Lessee a right of first opportunity.
    The terms and conditions for the lease of such space shall be those then
    being quoted by Lessor for the leasing of the available space in the
    Building, but in no event shall the annual base rent for such space be less
    than the then current Annual Base Rent, plus escalations, for the Premises.
    Lessee must elect to lease such space within five (5) business days of
    Lessor's offer to lease such space. If Lessee does not timely elect to lease
    such space, Lessor may lease such space to anyone whom Lessor desires, upon
    terms acceptable to Lessor. The rights granted to Lessee hereunder are
    personal to Lessee, and may only be exercised by Lessee when Lessee is in
    possession of the entire Premises.

3.  HAZARDOUS MATERIALS.

    a.  Lessee shall, at its sole expense, comply with all applicable
        governmental rules, regulations, codes, ordinances, statutes, and other
        requirements respecting Hazardous Materials in connection with Lessee's
        activities on or about the Premises or the Property. Lessee shall, at
        its sole cost, perform all clean-up and remedial actions, which may be
        required of Lessee by any governmental authority pertaining to any
        discharge of such materials by Lessee.

    b.  In addition to the indemnity set forth in Paragraph 8.7, Indemnity,
        Lessee shall indemnity and hold Lessor harmless from all costs, claims,
        judgments, losses, demands, causes of action, proceedings or hearings,
        including without limitation Lessor's reasonable attorneys' fees and
        court costs, relating to the storage, placement or use of Hazardous
        Materials by Lessee on or about the Premises, including without
        limitation (i) losses in or reductions to rental income resulting from
        Lessee's use, storage, or disposal of Hazardous materials; (ii) all
        costs of clean-up or other alterations to the Premises necessitated by
        Lessee's use, storage, or disposal of Hazardous Materials,; and (iii)
        any diminution in the fair market value of the Property caused by
        Lessee's use, storage, or disposal of Hazardous Materials. The
        obligations of Lessee under this Paragraph 3. of this Addendum shall
        survive the expiration of the Lease term.

    c.  Lessee hereby acknowledges that asbestos or building materials
        containing asbestos may be present in the Premises as follows:

        (i)   In the linoleum and tile under carpet in conference room, kitchen,
              and corridors

        (ii)  In the roofing materials

        (iii) In the exterior soffit materials

        Lessee further acknowledges that it shall be incumbent upon Lessee to
        conduct its own investigation as to the presence or absence of asbestos
        in the Premises. Lessor shall have absolutely no liability to Lessee
        with regard to the presence and/or release of asbestos in the Premises.
        Notwithstanding anything to the contrary contained herein, Lessor shall,
        at its sole cost, assume full responsibility for any removal or
        encapsulation of asbestos required by any governmental or regulatory
        agency due to Lessee's use or occupancy of the premises, and any and all
        removal or encapsulation shall be conducted in compliance with the
        provisions in the indemnity set forth in Paragraph 8.7.

    d.  Lessor shall indemnify and hold Lessee harmless from all costs, claims,
        judgments, losses, damages, demands, causes of action, proceedings and
        hearings, including without limitation, Lessee's reasonable attorney's
        fees and court costs, arising out of or resulting from any Hazardous
        Materials on the Property or alleged to be on the Property. The
        obligations of Lessor under this Paragraph 3. of this Addendum survive
        the expiration of the Lease Term.

                                        1
<PAGE>   21

        IN WITNESS WHEREOF, Lessor and Lessee have executed and delivered this
Lease Addendum.

LESSOR                                      LESSEE

GVE DISTEL ASSOCIATES,                      TALARIAN CORPORATION,
A California General Partnership            a California Corporation

By: /s/ MICHAEL A. MORGAN                   By: /s/ MARTIN C. MENNE
   ------------------------------              -------------------------------

Date: 5/2/00                                Date: 5/1/00
     ----------------------------                -----------------------------

                                       2
<PAGE>   22

                                     RIDER 1

                     OPTION TO EXTEND AT MARKET RENTAL RATE

This Lease Rider is attached to and made a part of that certain lease dated
March 7, 2000 (the "Lease") between GVE DISTEL ASSOCIATES, a California General
Partnership ("Landlord") and TALARIAN CORPORATION, a California corporation
("Tenant").

    (a) OPTION. Provided Tenant is not in default under the terms of the Lease,
        or would be to default but for the passage of time or the giving of
        notice, or both, Landlord hereby grants to Tenant an option ("Extension
        Option") to extend the Term of the Lease for a period of five (5 ) years
        ("Option Period") upon and subject to the terms and conditions set forth
        hereinbelow. If Tenant desires to exercise its Extension Option granted
        herein, Tenant shall deliver to Landlord written notice of such election
        ("Extension Notice") not later than one hundred eighty (180) days nor
        earlier than three hundred sixty (360) days prior to the expiration of
        the Initial Term of the Lease.

    (b) PROPER EXERCISE. Despite a timely exercise by Tenant, Tenant's Extension
        Option shall not be deemed to be properly exercised if at the end of the
        Initial Term of the Lease Tenant is in default of any of the material
        terms, covenants or conditions of the Lease. Provided Tenant properly
        exercises the Extension Option, the Term of the Lease shall be extended
        for the Option Period, and all of the terms, covenants, and conditions
        of the Lease shall remain unmodified and in full force and effect during
        the Option Period, except that the Annual Basic Rent shall be modified
        as set forth in Subparagraphs (c) and (d) below.

    (c) RENT. The Annual Basic Rent payable during the Option Period shall be at
        95% of the fair market rental value of the Premises, as determined
        herein. The fair market rental value of the Premises shall be determined
        by Landlord based on prevailing market rentals then being paid for
        similar space In projects comparable to the Project in the Los
        Altos/Palo Alto area. In determining the fair market rental value of the
        Premises, Landlord shall specifically exclude any consideration of
        Tenant's occupancy or use of the Premises and the value of any
        Improvements to the Premises made by Tenant which Tenant has negotiated
        for the right to remove at the end of the Lease Term. References herein
        to "fair market rental value" shall not include any lease concessions
        offered by landlords within the above-described area for leased premises
        including, without limitation, free rent, tenant improvement allowances
        or any other payments or concessions of any kind. Landlord shall use its
        best efforts to provide Tenant with written notice of its determination
        of the fair market rental value of the Premises within thirty (30) days
        (but in no event later than sixty (60) days) after the earlier of (i)
        Landlord's receipt of Tenant's Extension Notice and (ii) the last day
        upon which Tenant's Extension Notice could be given, as required in
        Subparagraph (a) above. Tenant shall have fifteen (15) days ("Tenant
        Review Period") after receipt of Landlord's notice of the new Annual
        Basic Rent within which to accept such new Annual Basic Rent or to
        reasonably object thereto in writing. If Tenant fails to respond to
        Landlord within Tenant's Review Period, Tenant shall conclusively be
        deemed to have approved of the new Annual Basic Rent determined by
        Landlord. In the event Tenant objects to the fair market rental value
        submitted by Landlord, Landlord and Tenant shall attempt to agree upon
        the fair market rental value for the Premises, using their best good
        faith efforts. If Landlord and Tenant fail to reach agreement on the
        fair market rental value of the Premises within fifteen (15) days
        following the expiration of Tenant's Review Period (the "Outside
        Agreement Date"), then the fair market rental value for the Premises
        shall be determined by arbitration In accordance with Subparagraph (d)
        below.

    (d) ARBITRATION. Landlord and Tenant shall each, within fifteen (15) days of
        the Outside Agreement Date, appoint one arbitrator who shall by
        profession be a real estate appraiser who shall have been active over
        the five (5) year period ending on the date of such appointment in the
        appraisal of commercial properties in the Los Altos/Palo Alto area. The
        two arbitrators so appointed shall, within fifteen (15) days of the date
        of the appointment of the last appointed arbitrator, agree upon and
        appoint a third arbitrator who shall be qualified under the same
        criteria set forth hereinabove for qualification of the initial two
        arbitrators.

        The determination of the three arbitrators shall be limited solely to
        the Issue of whether Landlord's or Tenant's submitted fair market rental
        value for the Premises is the closest to the actual fair market rental
        value for the Premises as determined by the arbitrators, taking into
        account the requirements of Subparagraph (c) above. Once the three
        arbitrators have been selected, Landlord and Tenant shall, each submit
        to the arbitrators their respective determinations of the fair market
        rental value of the Premises. The three arbitrators shall, within thirty
        (30) days of the submittal of Landlord's and Tenant's determinations of
        the fair market rental value of the Premises. reach a decision as to
        whether the parties shall use Landlord's or Tenant's submitted fair
        market rental value as the Annual Basic Rent, and shall notify Landlord
        and Tenant of their decision. Such decision shall be based upon the
        projected prevailing fair market rental value for similar space in
        projects similar to the Project in the Los Altos/Palo Alto area. The
        decision of the majority of the three arbitrators shall be binding upon
        Landlord and Tenant.

        If either Landlord or Tenant falls to appoint an arbitrator within the
        time period set forth above, the arbitrator appointed by one of them
        shall reach a decision in accordance with this Subparagraph (d), notify
        Landlord and Tenant thereof, and such arbitrator's decision shall be
        binding upon Landlord and Tenant. If the two arbitrators fall to agree
        upon and appoint a third arbitrator, both arbitrators shall be dismissed
        and the matter shall be decided by submission to arbitration under the
        provisions of the American Arbitration Association. All costs of
        arbitration shall be shared equally by Landlord and Tenant.

                                       1
<PAGE>   23

Notwithstanding the foregoing provisions of this Lease Rider, in no event shall
the Annual Basic Rent during the Option Period by less than the Annual Basic
Rent payable by Tenant during the initial Term of this Lease or the preceding
Option Period, as applicable.

----------------------------------        -------------------------------------
Landlord's Initials                       Tenant's Initials

                                       2<PAGE>   1

                                                                  EXHIBIT 10.23

                        SETTLEMENT AND LICENSE AGREEMENT

        Settlement and License Agreement entered into by and between Lockheed
Missiles & Space Company, a California corporation, having its principal place
of business at 1111 Lockheed Way, Sunnyvale, California ("LMSC"), and Talarian
Corporation, a Maryland corporation, having its principal place of business at
426 Poppy Place, Mountain View, California 94043 ("Talarian"), as of the 1st day
of February, 1989.

                                    RECITALS

        A. LMSC has developed a real-time artificial intelligence system,
including hardware, computer software and copyrightable and potentially
patentable features, trade secrets and know-how.

        B. Talarian is qualified and otherwise particularly suited to enhance
the LMSC real-time artificial intelligence system and desires to obtain
licenses, and other rights from LMSC.

        C. LMSC and Talarian wish to settle their differences and to clarify
their mutual rights and obligations with respect to the LMSC real-time
artificial intelligence system.

                                    AGREEMENT

I. DEFINITIONS

        A. Designated Government Contracts. Any grant, agreement, contract or
modification thereof awarded by the Department of Defense or National
Aeronautics & Space Agency, and any classified grant, agreement, contract or
modification thereof awarded by any agency or department of the Federal
Government; provided, however, that Designated

                                       1
<PAGE>   2

Government Contracts do not include small business set asides, grants or awards
(such as the Small Business Innovation Research ("SBIR") Program) for which LMSC
is not eligible.

        B. Lockheed. The Lockheed Corporation, of which LMSC is a wholly owned
subsidiary.

        C. L*STAR Milestones (or Milestones). The milestones identified in the
specification and schedule attached as Exhibit A. D. L*STAR Product. The L*STAR
Technology enhanced by Talarian as it exists six months after the date of
completion of the L*STAR Milestones.

        E. L*STAR Technology. The LMSC-developed real-time artificial
intelligence system, including hardware, computer software, copyrightable and
potentially patentable features, trade secrets and know-how, as it exists on the
date of this Agreement.

        F. Net Receipts. The gross revenues of Talarian, less only returns and
allowances which are actually given and taxes directly imposed upon particular
sales.

        G. Phase 1. The period from execution of the Agreement until the later
of July 1, 1989 or the date upon which all of the Milestones have been met.

        H. Phase 2. A six-month period starting at the end Phase 1.

        I. Start Date. The start date for purposes of measuring any of the
L*STAR Milestones will be the earlier of April 1, 1989 or the date by which
Talarian receives a total of $250,000 in equity or debt financing.

        J. Technology Transfer Period. The period from the date of execution of
this Agreement until the later of February 1, 1990 or the date of delivery of
the L*STAR Product by Talarian to LMSC (comprising both Phase 1 and Phase 2).

                                       2
<PAGE>   3

        K. Technology Package. The set of technology information listed in
Exhibit B to be provided by LMSC to Talarian.

II. LICENSE GRANTS

        A. LMSC License of L*STAR Technology to Talarian. LMSC hereby grants
Talarian a royalty-bearing worldwide license to use, reproduce, make derivatives
of and distribute by sublicense the L*STAR Technology as enhanced in the L*STAR
Product, subject to the following limitations:

           1. Phase 1 Limitation. Until the end of Phase 1, Talarian shall not,
except in conjunction with Lockheed and pursuant to the limitations in Section V
D, (1) market the L*STAR Technology or the L*STAR Product to the Department of
Defense or the National Aeronautics & Space Agency or in connection with any
classified grant, agreement, contract or modification to be awarded by any
agency or department of the Federal Government (excluding small business set
asides, grants or awards (such as the SBIR program) for which LMSC is not
eligible), or (2) make any proposal with respect to their use in Designated
Government Contracts.

           2. Phase 2 Limitation. Until the end of Phase 2, Talarian shall not,
except in conjunction with Lockheed and pursuant to the limitations in Section V
D, enter into a contract for delivery of the L*STAR Technology or any product
developed by use of the L*STAR Technology or derived therefrom (i) as a
subcontractor at any tier under any Designated Government Contract or (ii) as a
prime contractor in any Designated Government Contract.

           3. Material Breach. Failure of Talarian to observe the limitations
set forth in Sections II A 1 and II A 2 shall be considered a material breach of
this Agreement.

                                       3
<PAGE>   4

           4. Perpetual License on Completion of Milestones. Upon completion of
the L*STAR Milestones, the license granted by LMSC to Talarian for the L*STAR
Technology shall become perpetual and irrevocable. Talarian shall own the L*STAR
Product subject to LMSC's ownership of the underlying L*STAR Technology and the
licenses granted to LMSC by Talarian in Section H hereunder.

           5. Damages and Termination of the LMSC License to Talarian. If
Talarian is more than 30 days late in meeting in any L*STAR Milestone, the total
royalties of $700,000 set forth in Section III A shall be increased by $500 per
day for each day beyond 30 days that the Milestone is not met, providing,
however, that the total royalties shall not exceed $1,000,000. If Talarian does
not complete any L*STAR Milestone within 120 days of the specified date for the
Milestone as set forth in Exhibit A, or within 15 months after the Start Date,
the license granted by LMSC to Talarian for the L*STAR Technology will, at
LMSC's option, terminate immediately, provided that LMSC has given Talarian at
least 30 days prior written notice of its intention to terminate if such
Milestone is not completed by such date.

           6. Failure to Agree on Milestones. If Talarian and LMSC disagree
whether a Milestone has been met, the parties will jointly approach a referee
selected by LMSC from the list below to determine whether the Milestone has or
has not been met. The referee will make a decision within 5 working days. The
expenses of the referee will be shared equally by LMSC and Talarian. Referees
acceptable to both parties are Earl D. Sacerdoti, Richard Fikes and Cordell
Green. The decision of the referee will be final. If the referee determines that
the Milestone has been met, there shall be no increase in the royalty cap
accrued with respect to that Milestone from the date the Milestone technology,
in the same form as submitted to the referee, was submitted to LMSC.

                                       4
<PAGE>   5

        B. Talarian's License of the L*STAR Product to LMSC. Talarian hereby
grants to LMSC a perpetual, irrevocable royalty-free, worldwide license to use,
reproduce, make derivatives of and distribute by sublicense the L*STAR Product,
subject to the following limitations:

           1. Use Restriction. During the Technology Transfer Period, LMSC shall
not market or use the L*STAR Technology or the L*STAR Product in non-government
applications except as provided in Section V C.

           2. Product Protection. LMSC will use substantially the same measures
to protect the L*STAR Product and its source code from unauthorized use,
reproduction, derivation, distribution or disclosure as LMSC uses to protect its
own proprietary software and will, if required by law, apply an appropriate
copyright and "restricted rights" notice to all copies of the L*STAR Product and
derivatives thereof in order to protect Talarian's interests therein.

III. ROYALTIES

        A. Royalties Paid by Talarian to LMSC. Talarian shall pay LMSC a royalty
equal to five percent (5%) of Talarian's Net Receipts from licenses and
sublicenses of the L*STAR Technology, the L*STAR Product or any other product
developed or derived therefrom, until a total of $700,000 (plus any addition
thereto pursuant to Section II A 4) has been paid. Royalties will be paid
quarterly within 45 days after the end of the quarter in which Talarian receives
payment. Late royalty payments shall bear interest at the rate of 2% over the
prime rate then quoted by the Bank of America NT&SA.

        B. Records. With respect to the royalties set forth in this section,
Talarian shall keep full, clear and accurate records with respect to any
products subject to a royalty. These records shall be retained for a period of
three (3) years from the date of payment. LMSC shall have the

                                       5
<PAGE>   6

right, through a mutually agreed upon independent Certified Public Accountant
and at LMSC's expense, to examine and audit, not more than once a year during
normal business hours, all records and accounts as may under recognized
accounting practice contain information bearing upon the amount of royalty paid
to LMSC under this Agreement. Prompt adjustments shall be made by Talarian to
compensate for any errors and/or omissions disclosed by such examination or
audit. In the event that the amount of such error and/or omission exceeds
$10,000, Talarian shall pay LMSC an additional fee equal to the cost of the
audit.

IV. DELIVERABLES

        A. Technology Package. LMSC shall deliver the Technology Package to
Talarian within 20 days of execution of this Agreement.

        B. Monthly Delivery of Source Code. By the 5th day of each month during
the Technology Transfer Period, Talarian shall deliver to LMSC a source code
tape of the L*STAR Technology as enhanced by Talarian as it existed on the last
day of the previous month.

        C. Final Delivery of Source Code. Within 5 days after the end of the
Technology Transfer Period, Talarian shall deliver to LMSC a source code tape of
the L*STAR Product as it existed at the end of the Technology Transfer Period.

V. COOPERATION BETWEEN LMSC AND TALARIAN

        A. AI Center as L*STAR Advocate. During the Technology Transfer Period,
the Lockheed Artificial Intelligence Center ("AI Center") will be a strong
advocate for the L*STAR Technology and the L*STAR Product within Lockheed.

        B. Technical Assistance. Talarian will make the L*STAR Product
operational on a DEC VAX computer operating under the current version of the
operating system in the LMSC

                                       6
<PAGE>   7

AI Center. "Operational" means that the L*STAR Product compiles, links, loads,
and runs Talarian's demonstration application.

        C. Technology Transfer Period Commercial Activity by LMSC. During the
Technology Transfer Period, if LMSC desires to make any proposals relating to
the L*STAR Product to a non-government entity, LMSC will team with Talarian for
such proposals.

        D. Coordination through AI Center. During the Technology Transfer
Period, all Talarian activities at Lockheed in connection with the L*STAR
Technology and the L*STAR Product will be coordinated through the AI Center,
unless otherwise agreed. To that end during the Technology Transfer Period
Talarian will notify (pursuant to the notice provisions set forth in Section XII
L) the AI Center of any requests received by Talarian from within Lockheed for
the L*STAR Technology, the L*STAR Product, or support therefor and will inform
anyone within Lockheed who makes such a request that the request must be
directed to and coordinated through the AI Center. All meetings during the
Technology Transfer Period between Talarian and any person or group at Lockheed
relating to the L*STAR Technology, the L*STAR Product or support therefor must
be set up by the AI Center.

        E. Protection of Source Code. During. Phase 1 and Phase 2, neither party
will make the source code of the L*STAR Technology or the L*STAR Product source
code available to any third party without the other party's prior written
consent, which will not be unreasonably withheld. Either party may nonetheless
deposit the L*STAR Technology or L*STAR Product source code with a third party
escrow agent, to be released to licensed users for the limited purposes of
providing support to such users if the party making the deposit ceases to
support the L*STAR Technology or L*STAR Product.

                                       7
<PAGE>   8

        F. Support. For a period of five years from the Start Date, Talarian
will provide support to LMSC for the L*STAR Product .and other Talarian products
derived from the L*STAR Technology, at Talarian's standard prices, terms and
conditions.

VI. FOLLOW-ON PRODUCTS

        A. Talarian's L*STAR Derivative Products. Until the earlier of (i) five
years after the Start Date or (ii) payment by Talarian of the royalty cap,
Talarian will license LMSC, at Talarian's standard list prices less a discount
of 15%, to use copies, in object code, of any standard software product derived
by Talarian from the L*STAR Technology, solely for use within LMSC.

        B. Access to New Technology. Until the earlier of (i) five years after
the Start Date or (ii) payment by Talarian of the royalty cap, Talarian will
notify LMSC of the availability of any new standard software products derived
from the L*STAR Technology or new releases of existing standard products at
least as early as Talarian announces such availability to any other party, and
will offer LMSC the opportunity to receive a beta test version for such products
on the same terms as are offered to any other party.

VII. EMPLOYEES

        Because of the close cooperation and exchange of confidential
information required between the parties in order to achieve the benefits of the
Agreement, (1) Talarian will not, without the written consent of LMSC, at any
time prior to January 1, 1990, hire any LMSC employee who is or was an employee,
staff member or student of the AI Center, except for Tom Laffey and three other
individuals; and (2) LMSC will not, without the written consent of Talarian, at
any time prior to January 1, 1990, hire any person who is at such time, or was
within the immediately preceding three months, an employee of Talarian.

                                       8
<PAGE>   9

VIII. TERMINATION

        A. Expiration. The term of this Agreement shall be five years from the
Start Date or until Talarian has paid the royalty cap, unless earlier terminated
in accordance with Section B below.

        B. Termination. Either party may terminate this Agreement if any of the
following events occur:

           1. If the other party materially breaches any provision hereof.

           2. If either party becomes insolvent or admits, in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or if a petition under any foreign state, or United States
Bankruptcy Act, receivership statute, or the like, as they now exist, or as they
may be amended, is filed by either party; or if such a petition is filed by any
third party or an application for a receiver of either party is made by anyone
and such petition or application is not resolved favorably to either party
within sixty days.

           3. Termination by a party pursuant to this section shall be effective
thirty (30) days after notice of termination is given specifying the reasons
therefor, unless the other party cures the event giving rise to the termination
during the thirty day period. The rights and remedies of each party provided in
this section shall not be exclusive and are in addition to any other rights and
remedies provided by law or this Agreement.

        C. Survival of Rights and Obligations. Each party's rights and
obligations under Section IX below shall survive and continue after any
expiration or termination of this Agreement. In addition, each party's rights
and obligations regarding licenses specified in Section II above shall, to the
extent such licenses have become irrevocable as of the date of termination,
survive such termination.

                                       9
<PAGE>   10

IX. CONFIDENTIALITY AND NON-DISCLOSURE

        A. During the term of this Agreement and for five years thereafter, each
party agrees to hold confidential at a level equivalent to their protection of
their own proprietary information any proprietary information and technical
information that is furnished by the other party and is marked "PROPRIETARY" or
"CONFIDENTIAL" or is identified as such in writing within ten days of its first
disclosure. Notwithstanding any provisions contained herein concerning
nondisclosure of the proprietary information and technical information, both
parties shall have no obligations regarding disclosure of any such information
which (a) is or becomes publicly known through publication, inspection of
products or otherwise and through no wrongful act of the receiving party; (b) is
received from a third party without similar restriction and without breach of
this Agreement; (c) is shown by documentary evidence to be independently
developed by the receiving party; (d) is disclosed to a third party by or on
behalf of the disclosing party without a similar restriction on the third
party's rights; or (e) is released for use by written authorization of the
disclosing party.

X. WARRANTIES

        A. Each party warrants that it shall make its best efforts (i) to insure
that the information provided during the Technology Transfer Period by it to the
other party shall be free from errors and defects and (ii) to insure that such
errors and defects found, if any, shall be promptly corrected and that such
corrections shall be promptly provided to the other party.

        B. EXCEPT AS EXPRESSLY SET FORTH IN SECTION A ABOVE, NO WARRANTIES ARE
GIVEN BY EITHER PARTY, WHETHER EXPRESS, IMPLIED OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT

                                       10
<PAGE>   11

TO INFORMATION OR PRODUCTS DEVELOPED OR DELIVERED HEREUNDER, AND BOTH PARTIES
EXPRESSLY DISCLAIM ANY AND ALL SUCH WARRANTIES. THERE IS NO WARRANTY MADE BY
EITHER PARTY WITH RESPECT TO PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT OR
RIGHTS OR TRADE SECRETS OF THIRD PARTIES.

XI. LIMITATION OF LIABILITY

        IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM THE RIGHTS AND OBLIGATIONS
HEREUNDER, EVEN IF THE PARTY HAS BEEN ADVISED OR OTHERWISE HAS REASON TO KNOW
THE POSSIBILITIES OF SUCH DAMAGES.

XII. MISCELLANEOUS

        A. Assignment. This Agreement and any rights or licenses granted herein
are personal to each party and shall be binding upon and inure to the benefit of
the parties and their respective successors-and assigns; provided, however, that
the successor shall expressly assume in writing the performance of all the terms
and conditions of this Agreement to be performed by the assigning party. During
the Technology Transfer Period, Talarian shall not have any right whatsoever to
assign any of its rights or privileges hereunder without the prior written
consent of LMSC.

        B. No Waiver. No failure or delay on the part of either party exercising
its right of termination hereunder for any one or more causes shall be construed
to prejudice its right of termination for such causes or subsequent causes. Any
failure or delay on the part of either party in the exercise of any right or
privilege hereunder shall not operate as a waiver thereof, nor shall

                                       11
<PAGE>   12

a single or partial exercise of any such right or privilege preclude other or
further exercise thereof or of any right or privilege.

        C. Limitation of Cooperation. Under no circumstances shall the parties
hereto exchange or discuss with one another any matter which is not relevant to
the execution of the obligations of this Agreement. For example, the parties
shall not discuss or exchange information relevant to their specific customers,
marketing policies or activities, or pricing.

        D. Entire Agreement. This Agreement and the exhibits attached hereto and
made a part hereof embody the entire understanding of the parties with respect
to the subject matter contained herein and shall supercede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof. No amendment or
modification of this Agreement shall be valid or binding upon the parties unless
in writing signed by their respect duly authorized officers.

        E. Disclaimers. Nothing contained in this Agreement shall be construed
as:

                1. conferring any rights to use in advertising, publicity or
        other marketing activities, any name, trademark or other designation of
        either party hereto, and either party hereto agrees not to use the
        existence of this Agreement in any marketing activity without the
        express written approval of the other party;

                2. conferring by implication, estoppel or otherwise on either
        party hereunder any license or other right except the licenses and
        rights expressly granted hereunder;

                3. a warranty or representation that the manufacture, sale,
        lease, use, or other disposition of systems and products hereunder will
        be free from infringement of intellectual property rights of third
        parties, including patents, utility model, design patents, copyrights
        and trade secret rights;

                                       12
<PAGE>   13

                4. a warranty that any party will successfully develop products
        based upon the Technology Package transferred hereunder; or

                5. an obligation to bring or prosecute action or suits against
        third parties for any infringement, or to secure and/or maintain any of
        its intellectual property rights.

        F. Force Majeure. Anything contained in this Agreement to the contrary
notwithstanding, the performance of the obligations of the parties hereto shall
be subject to all laws, both present and future, of any government having
jurisdiction over the parties hereto or, act of public enemies, strikes, or
other labor disturbance, fires, floods, acts of God, or any causes of like or
different kind beyond the control of the parties, and the parties hereto shall
be excused from any failure to perform or any delay in the performance of any
obligation hereunder to the extent such failure or delay is caused by such law
or contingency.

        G. Exportation Limitations. LMSC and Talarian both agree not to export
or re-export, or cause to be exported or re-exported, any technical data
received hereunder or the direct product of such technical data, to any country
to which, under the law of the United States, both parties are or may be
prohibited from exporting its technology or the direct product thereof.

        H. Captions. The captions used in this Agreement are for convenience
only and are not to be used in interpreting the obligations of the parties. I.
Applicable Law. The applicable law governing any cause of action arising out of
this Agreement, or the performance of either party, shall be governed by the
laws of the State of California.

        J. No Joint Venture. Nothing contained herein, or done in pursuance of
this Agreement, shall constitute the parties as entering upon a joint venture or
shall constitute either party hereto the agent for the other party for any
purpose or in any sense whatsoever.

                                       13
<PAGE>   14

        K. Severability. In case any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not affect any other
provision of this Agreement. Such provision or provisions shall be ineffective
only to the extent of such invalidity or unenforceability without invalidating
the remainder of such provision or provisions or the remaining provisions of
this Agreement.

        L. Notices. All notices, statements and reports required or permitted by
this Agreement shall be in writing and sent to the party to whom such notice,
statement and report is to be givers at its offices first above mentioned--for
LMSC to the attention of The Manager, AI Center, AIC Building, and for Talarian
to the attention of Thomas Laffey, provided that any party may change its
address for the purposes of notice given pursuant to this section.

LOCKHEED MISSILES & SPACE COMPANY,

                                     By: /s/
                                         --------------------------------------
                                         [name]

                                         V.P. Gen. Mgr. Research & Devlpt.
                                         --------------------------------------
                                         [title]

                                         Mar. 3, 1989
                                         --------------------------------------
                                         [date]

                                         TALARIAN CORPORATION,

                                     By: /s/
                                         --------------------------------------
                                         [name]

                                         Vice President
                                         --------------------------------------
                                         [title]

                                         March 6, 1989
                                         --------------------------------------
                                         [date]

                                       14

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