Document:

<PAGE>

                                                                    Exhibit 10.8

                    WESTBURY INTERNATIONAL (1991) CORPORATION

                                                          Landlord

                                     - and -

                              LEGATO SYSTEMS, INC.

                                                          Tenant

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

                                      LEASE

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

                            WESTBURY BUSINESS PARK I

                  1111 International Blvd., Burlington, Ontario

                                    PREMISES
                                    --------

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Article                                                                   Page
-------                                                                   ----
ARTICLE I INTERPRETATION                                                      1
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1.01    Some basic lease provisions                                           1
1.02    Schedules                                                             2
1.03    Defined Terms                                                         3
1.04    Net Lease                                                             8
1.05    Obligations as Covenants                                              9
1.06    Entire Agreement                                                      9
1.07    Partial Invalidity                                                    9
1.08    Table of Contents, Headings and Numbering                             9
1.09    Divisions of the Lease                                                9
1.10    Number and Gender                                                     9
1.11    Where Tenant is a Partnership                                         9
1.12    Governing Law                                                        10
1.13    Successors and Assigns                                               10
1.14    Time of the Essence                                                  10
1.15    Generally Accepted Accounting Principles                             10

ARTICLE II DEMISE AND TERM                                                   10
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2.01    Lease of Premises                                                    10
2.02    Area of the Premises                                                 10
2.03    Use of Additional Areas                                              11
2.04    Term                                                                 11
2.05    Surrender of the Premises                                            11
2.06    Overholding                                                          11
2.07    Modification of Premises                                             12
2.08    Parking                                                              12

ARTICLE III RENT AND OPERATING COSTS                                         12
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3.01    Covenant to Pay                                                      12
3.02    Basic Rent                                                           12
3.03    Tenant to Pay Proportionate Share of Operating Costs                 12
3.04    Allocation of Operating Costs                                        13
3.05    Additional Rent Treated as Rent                                      13
3.06    Interest on Amounts in Default                                       13

ARTICLE IV TAXES                                                             14
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4.01    Taxes payable by the Landlord                                        14
4.02    Taxes payable by the Tenant                                          14
4.03    Other Taxes of the Tenant                                            15
4.04    Tenant's Responsibility                                              16
4.05    Assessment Appeals                                                   16

ARTICLE V CONTROL OF THE OFFICE CAMPUS                                       17
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5.01    Operation of the Office Campus by the Landlord                       17
5.02    Control of the Office Campus by the Landlord                         17
5.03    Rules and Regulations                                                18
5.04    Signs and Advertising                                                18

ARTICLE VI COMMON AREAS, BUILDING SERVICES, UTILITIES                        19
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6.01    Common Areas and Office Campus Systems                               19
6.02    Interior Climate Control in the Premises                             19
6.03    Caretaking and Cleaning of the Premises                              20
6.04    Utility Services, Light Bulbs                                        21
6.05    Tenant Not to Overload Facilities                                    21

                                      i

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ARTICLE VII USE OF THE PREMISES                                              22
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7.01    Use and Occupancy                                                    22
7.02    Compliance With Law                                                  22
7.03    Nuisance and Waste                                                   23
7.04    Tenant Not to Overload Floors                                        23
7.05    Inflammable Liquid or Dangerous Materials                            23
7.06    Defacing of Walls                                                    23

ARTICLE VIII REPAIRS, ALTERATIONS, LEASEHOLD IMPROVEMENTS, SUBSTANTIAL
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DAMAGE OR DESTRUCTION                                                        24
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8.01    Repair by the Landlord                                               24
8.02    Repair by the Tenant                                                 24
8.03    Landlord's Approval of Leasehold Improvements and Tenant's Repairs   25
8.04    Tenant to Discharge All Liens                                        27
8.05    Tenant to Notify Landlord of Damage                                  27
8.06    Substantial Damage or Destruction                                    27
8.07    Removal of Leasehold Improvements, Trade Fixtures and Chattels       29

ARTICLE IX INSURANCE                                                         30
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9.01    Tenant's Insurance Coverage                                          30
9.02    Policy Requirements                                                  31
9.03    Tenant's Failure to Insure                                           32
9.04    Insurance Proceeds for Loss of Leasehold Improvements                32
9.05    Increase in Insurance Premiums or Cancellation of Insurance          32
9.06    Landlord's Insurance                                                 33

ARTICLE X LIMITATION OF LIABILITIES                                          34
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10.01   Limitation of the Landlord's Liability                               34
10.02   Risk of Loss                                                         36
10.03   Acceptance of Premises                                               36
10.04   No Claim for Inconvenience                                           36
10.05   Indemnity by Tenant                                                  36
10.06   No Waiver                                                            37
10.07   Accord and Satisfaction                                              37
10.08   No Partnership or Agency                                             38
10.09   Excusable Delay                                                      38

ARTICLE XI ACCESS                                                            38
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11.01   Entry by Landlord                                                    38
11.02   Exhibiting Premises                                                  39
11.03   Where the Tenant is Not Available                                    39

ARTICLE XII STATUS CERTIFICATES; SUBORDINATION AND ATTORNMENT; FINANCIAL
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INFORMATION                                                                  39
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12.01   Status Certificates                                                  39
12.02   Subordination and Attornment                                         40
12.03   Information on Corporate Organization                                40

ARTICLE XIII ASSIGNING AND SUBLETTING                                        40
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13.01   Landlord's Consent Required                                          40
13.02   Landlord's Right to Terminate                                        41
13.03   Tenant Not Released on Transfer                                      41
13.04   Change in Control of Tenant                                          41
13.05   No Advertising of the Premises                                       42
13.06   Excess Rent                                                          42
13.07   Assignment by Landlord                                               43

                                       ii

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ARTICLE XIV DEFAULT                                                          43
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14.01    Landlord's Right to Cure                                            43
14.02    Right to Re-enter                                                   43
14.03    Right to Relet                                                      45
14.04    Expenses                                                            45
14.05    Waiver of Exemption for Distress                                    45
14.06    Lien on Tenant's Goods and Equipment                                45
14.07    Default of Payment Collectible as Additional Rent                   46
14.08    Remedies are Cumulative                                             46
14.09    Act of Subtenants                                                   46
14.10    Waiver of Offset                                                    46

ARTICLE XV MISCELLANEOUS                                                     46
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15.01    Notices                                                             46
15.02    Registration of Lease                                               47
15.03    Quiet Enjoyment                                                     48
15.04    Landlord's Records                                                  48
15.05    Decisions                                                           48
15.06    Acceptance of Lease                                                 48

ARTICLE XVI ADDITIONAL LEASE PROVISIONS                                      48
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16.01    Extension Option                                                    48
16.02    Landlord's Work                                                     49
16.03    Tenant's Work and Allowance                                         49
16.04    Tenant's Right of Cancellation                                      50
16.05    Payment of Tenant's Overholding Costs                               50
16.06    Liquidated Damages                                                  51
16.07    Rent Free Days                                                      51
16.08    Option on Additional Space                                          51
16.09    Comparable Development                                              52
16.10    Management Responsibility and Fees                                  52

SCHEDULES
----------

Schedule A Description of Land
Schedule B Plan of the Office Campus
Schedule C Floor plan(s) of the Premises
Schedule D Rules and Regulations
Schedule E Methods of Measurement of Rentable Area and Useable Area
Schedule F Landlord's Work
Schedule G Tenant's Work
Schedule H Construction Schedule

                                      iii

<PAGE>

This lease made the 14th day of December, 1999.
                    ----

BETWEEN:

                    WESTBURY INTERNATIONAL (1991) CORPORATION

                                (the "Landlord")

                                     - and -

                              LEGATO SYSTEMS, INC.

                                 (the "Tenant"),

                EVIDENCES THAT, in consideration of the rents reserved and the
covenants and agreements contained below, the Landlord and the Tenant agree as
follows:

                                    ARTICLE I
                                 INTERPRETATION

    1.01        Some basic lease provisions

                The following are some basic lease provisions that form part of,
 and are referred to in other provisions of, this lease:

        (1)     The term of this lease shall commence on the Commencement Date
and, unless extended pursuant to the terms of this lease or by agreement between
the parties, shall expire on September 30, 2010.
                             ------------------

        (2)     The Premises (hereinafter "the Premises") are those parts of
the Building as follows:

                Floor       Useable Area (sq.ft.)     Rentable Area (sq.ft.)
                -----       ---------------------     ---------------------
                1            10,392                             11,184
                2            16,866                             18,040
                3            18,677                             19,898
                4            18,677                             19,898
                5            18,677                             19,898
                6            18,677                             19,898
                7            18,677                             19,898

                and which are shown on the floor plans attached as Schedule "C".
                The Useable Area and Rentable Area for each floor, or portion
                thereof, shall be calculated as set out in Schedule "E".

        (3)     The Building address is 1000 International Blvd.,
                                        -----------------------
                Burlington, Ontario.
                -------------------

        (4)     The Rentable Area of the Premises is approximately 128,714 sq.
                ft.

        (5)     The Useable Area of the Premises is approximately 120,643 sq.
                ft.

        (6)     The Commencement Date of this lease shall be subject to the
rights of cancellation by the Tenant herein, the date which is the earliest of:

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                                     - 2 -

                       (i)     the date that the Landlord has given the Tenant
                               written notice that the Landlord has
                               substantially completed the Landlord's Work and
                               the Tenant's Work with respect to the Initial
                               Premises, which determination shall be final and
                               binding on both parties;

                       (ii)    the date that the Tenant  occupies  the  Premises
                               or any part  thereof  for the  purpose of
                               conducting business, and

                       (iii)   May 20. 2001.
                               ------------

        (7)     Subject to section 3.02, the Basic Rent referred to in section
                3.02 is as follows:

                (a)    For the Initial Premises:

                       (i)     From and after the Commencement Date until
                       ---     September 30, 2005 $1,513,296.00 per year,
                               ------------------
                               payable in equal consecutive monthly installments
                               of $126,108.00 each in advance on the first day
                               of each calendar month, based on an annual rate
                               of $15.50 per square foot of Rentable Area of the
                               Premises, the first such installment to be paid
                               on the Commencement Date.

                (b)    For the Remaining Premises:

                       (i)     From the date the Tenant occupies any part of the
                               Remaining Premises ("Subsequent Commencement
                               Date" until September 30, 2005, an amount equal
                               to the product obtained by multiplying the
                               Rentable Area of such part of the Remaining
                               Premises x $15.50, such amount to be paid in
                               equal consecutive monthly installments in advance
                               on the first day of each calendar month, the
                               first such installment to be paid on the
                               Subsequent Commencement Date; provided however
                               that if any of the Remaining Premises are
                               unoccupied by the Tenant on the first anniversary
                               date of the Commencement Date, ("Final
                               Commencement Date"), the Tenant shall commence
                               payment of Basic Rent for such unoccupied space
                               from the Final Commencement Date in an amount
                               equal to the product obtained by multiplying the
                               Rentable Area of such part of the Remaining
                               Premises x $15.50, such amount to be paid in
                               equal consecutive monthly installments in advance
                               on the first day of each calendar month, the
                               first such installment to be paid on the Final
                               Commencement Date.

                (c)    For the Premises:

                         (i)   from October 1, 2005 until September 30, 2010,
                               the sum of $2,297,509.20 per year, payable in
                               equal consecutive monthly installments of
                               $191,459.10 each in advance on the first day of
                               each calendar month, based on an annual rate of
                               $17.85 per square foot of Rentable Area of the
                               Premises, the first of such installment to be
                               paid on October 1, 2005.

        (8) The Landlord acknowledges receipt from the Tenant of $252,216.00
("Deposit") to be held by the Landlord without interest thereon to the Tenant
and to be applied by the Landlord on account of the Basic Rent and Additional
Rent payable under this Lease for the first two months of the Term.
                                            ---
1.02        Schedules

            The schedules to this lease are a part of it and consist of:

            Schedule A Description of Land
            Schedule B Plan of the Office Campus
            Schedule C Floor plan(s) of the Premises

<PAGE>
                                     - 3 -

                Schedule D Rules and Regulations
                Schedule E Methods of measurement of Rentable Area and Useable
                 Area
                Schedule F Landlord's Work
                Schedule G Tenant's Work
                Schedule H Construction Schedule

1.03            Defined Terms

                In this lease,

                "Accountant" means the chartered accountant (who may be the
Landlord's internal accountant or auditor) from time to time named by the
Landlord;

                "Additional Rent" means any and all sums of money or charges
required to be paid by the Tenant under this lease (except Basic Rent) whether
or not designated "Additional Rent" and whether or not payable to the Landlord;

                "Architect" means the architect from time to time named by the
Landlord and approved by the Tenant;

                "Basic Rent" means the annual rent payable by the Tenant
 pursuant to section 3.02;

                "Building" means the office building structure bearing the
municipal address identified in section 1.01(3) in which the Premises are
located that the Landlord is constructing or has constructed as part of the
Office Campus including all improvements, equipment, facilities, installations,
systems and services and all public areas that are in or adjacent to the
structure or that serve or are for the benefit of the structure, or as such
structure, improvements, equipment, facilities, installations, systems, services
and public areas may be altered, expanded or reduced from time to time;

                "Business Day" means any day that is not a Saturday, a Sunday
or a holiday as defined in the Interpretation Act of Ontario;

                "Business Hours" means the period from 7:00 a.m. to 6:00 p.m. on
any Business Day; "Commencement Date" means the date specified in section 1.01
(6);

                "Common Areas" means those areas, as expanded, reduced or
rearranged from time to time, in the Office Campus that serve or are intended to
be used by or to benefit more than one tenant or component of the Office Campus
and that are not rented or designated or intended by the Landlord to be rented,
including, but not limited to, passenger and service elevator lobbies,
entrances, access and service corridors, indoor and outdoor walkways (both open
and enclosed), stairways, public washrooms, landscaped or planted areas, the
mailroom, electrical, telephone, meter, valve, mechanical, storage and janitor
rooms, shipping and receiving areas and loading docks, and driveways and
laneways;

                "Current Market Rental Rate" means the rental rate on a square
foot basis charged for similar premises located in the same municipality as the
Building;

                "Indemnifier" means, if applicable, the person that has executed
or agreed to execute an indemnity agreement, in form and substance satisfactory
to the Landlord, in respect of the Tenant's obligations under this lease;

                "Initial Premises" mean the portion of the Premises located on
floors 2 to 6 inclusive containing approximately 97,632 square feet of Rentable
Area.

                "Land" means the land described in Schedule A;

                "Lease Year" means a period of twelve (12) consecutive calendar
months during the Term commencing on the Commencement Date;

                "Leasehold Improvements" means any and all improvements from
time to time made to, erected in or installed on the Premises (i) by the Tenant
or by a subtenant of the Tenant or by any other

<PAGE>
                                     - 4 -

occupant of the Premises; or (ii) by the Landlord or others on behalf of the
Tenant, a subtenant of the Tenant or any other occupant of the Premises,
including, but not limited to, alterations, partitions, additions,
installations, decorations and fixtures (other than the trade fixtures of the
Tenant, a subtenant of the Tenant or any other occupant of the Premises), and
any and all related equipment, appurtenances and components including, but not
limited to, electrical, lighting, telecommunication and plumbing fixtures and
installations and all their ancillary components such as conduits, pipes and
wiring;

                "Mortgage" means a mortgage or charge (including a deed of trust
and mortgage securing bonds and all indentures supplemental thereto) which may
now or in the future affect the Office Campus, and includes all renewals,
modifications, consolidations, replacements and extensions thereof;

                "Mortgagee" means the mortgagee or trustee for bondholders, as
the case may be, named in a Mortgage;

                "Office Campus" means the Land, as expanded, reduced or
rearranged from time to time including the Building, the buildings and other
improvements erected on the Land from time to time, the fixtures installed
thereon or therein from time to time, and the Office Campus Systems.

                "Office Campus Systems" means all systems, services,
installations, facilities, machinery and equipment from time to time installed
in or servicing the Office Campus intended for the use or benefit of more than
one tenant or component of the Office Campus or for the Common Areas.

                "Operating Costs" means the total of all expenses, costs, fees,
rentals, disbursements and outlays of every kind paid, payable or incurred by or
on behalf of the Landlord on an accrual basis (or on a cash basis to the extent
the Landlord considers appropriate and in accordance with generally accepted
accounting principles) to discharge its obligations under this lease and to own,
operate, maintain supervise and administer the Building and the Office Campus.
Without limiting the generality of the foregoing:

                (a) subject to certain exclusions and deductions hereinafter
                    provided in paragraphs (b) and (c) of this definition,
                    Operating Costs may include but are not limited to:

                    (i)   the cost of indoor and outdoor cleaning including
                          cleaning of all glass and windows, and janitorial
                          services;

                    (ii)  the costs of snow and ice removal and garbage and
                          waste collection and disposal;

                    (iii) the cost of replacing building standard electric
                          fixtures, ballasts, tubes, starters, lamps and light
                          bulbs (either by way of group relamping or otherwise);

                    (iv)  the cost of maintaining and replacing indoor and
                          outdoor gardening and landscaping in Common Areas;

                    (v)   the cost of operating, inspecting, maintaining,
                          servicing and repairing the Office Campus Systems
                          (including the cost of any replacements of Office
                          Campus Systems properly chargeable to the Lease Year
                          in which they are incurred in accordance with
                          generally accepted accounting principles);

                    (vi)  the cost of providing heating, ventilating and
                          air-conditioning, interior climate control, hot and
                          cold water, electric light and power, telephone,
                          steam, gas, sewage disposal and other utilities and
                          services not otherwise directly charged or chargeable
                          to tenants of the Office Campus;

                    (vii) the cost of providing security and supervision;

<PAGE>

                                     - 5 -

                 (viii)  the cost of maintaining and replacing signs and
                         directory boards;

                 (ix)    the costs of all insurance in respect of casualties,
                         contingencies, and losses against which the Landlord
                         may reasonably insure including insurance provided for
                         in section 9.06;

                 (x)     accounting costs incurred in connection with the
                         maintenance, repair, operation, administration or
                         management of the Office Campus including computations
                         required for the imposition of charges to tenants, the
                         costs of preparing statements and opinions for tenants
                         and audit fees and expenses that in the Landlord's
                         opinion are required to be incurred for the
                         determination or verification of any Operating Costs or
                         tenants' shares of Taxes;

                 (xi)    the current Market Rental Rate of space used by the
                         Landlord in connection with the maintenance, repair,
                         operation, administration or management of the Office
                         Campus, including office space, staifrooms, storage
                         space for supplies or equipment for the Office Campus,
                         workshops, and facilities for common use by, or service
                         to, tenants and other occupants of the Office Campus;

                 (xii)   to the extent not covered in item (xv), the costs of
                         direct supervision and of management and all other
                         indirect expenses to the extent allocable to the
                         maintenance, repair, operation, administration or
                         management of the Office Campus or any part of it;

                 (xiii)  all costs and expenses (including legal and other
                         professional fees and interest and penalties on
                         deferred payments) incurred by the Landlord in
                         contesting, resisting or appealing any Taxes except to
                         the extent that the charges are incurred simply as a
                         result of the Landlord's oversight in payment of Taxes
                         to the appropriate taxing authorities when due rather
                         than in the context of a bona fide contest, resistance
                         or appeal of any Taxes, up to a maximum of savings in
                         Taxes resulting from such contestation, resistance or
                         appeal;

                 (xiv)   management fees, notwithstanding management by the
                         Landlord, equal to 3% of the Basic Rent;

                 (xv)    the amount of all salaries, wages and fringe benefits
                         (including all benefits and employee contributions paid
                         to or for employees, managers, and superintendents) to
                         the extent that they are employed by the Landlord in
                         connection with the maintenance, repair, operation,
                         administration or management of the Office Campus or
                         any part of it;

                 (xvi)   fees and expenses of architects, engineers, quantity
                         surveyors and other consultants retained by the
                         Landlord except in connection with matters specifically
                         excluded from Operating Costs;

                 (xvii)  the costs of supplies, tools, equipment and materials
                         used in connection with the maintenance, repair,
                         operation, administration, management or caretaking of
                         the Office Campus;

                 (xviii) periodic depreciation in accordance with generally
                         accepted accounting principals of the capital cost of
                         machinery, equipment, facilities, systems, and property
                         installed in or used in connection with the Office
                         Campus (except to the extent that the costs are charged
                         fully to income account in the Landlord's tax year in
                         which they are incurred) and the capital cost of any
                         renovation or replacement of any part of the Common

<PAGE>
                                       - 6 -

               Areas, Office Campus Systems or Structural Elements which is not
               in excess of FIVE THOUSAND DOLLARS ($5,000.00) and not recovered
               out of insurance proceeds, in each case together with interest at
               the Prime Rate on the undepreciated capital costs of all such
               items being depreciated from time to time.

     (xix)     sales and excise taxes on goods and services provided by or on
               behalf of the Landlord in the management, operation, maintenance
               and repair of the Office Campus or any part of it including Sales
               Taxes payable by the Landlord on the purchase of goods and
               services included in Operating Costs (excluding any such Sales
               Taxes as are or will be available to the Landlord when claimed as
               a credit or refund in determining the Landlord's net tax
               liability on account of Sales Taxes or would be so available if
               the Landlord properly complied with the requirements for claiming
               such refund or credit);

     (xx)      capital tax, if exigible, being the applicable amount (as
               hereinafter defined) of any tax or taxes payable under federal
               and/or provincial legislation by the Landlord, based upon or
               computed by reference to the paid-up capital or place of business
               of the Landlord as determined for the purposes of that tax; and
               for the purpose of this clause the phrase "applicable amount" of
               that tax means the amount of tax that would be payable if the
               Office Campus were the Landlord's only establishment and, should
               the Landlord convey all or any part of the Office Campus, the
               word "Landlord" includes, severally, each of the persons or firms
               that may then constitute the Landlord; and any capital tax, if
               exigible under federal and/or provincial legislation, being the
               amount of any taxes payable in any taxation year calculated based
               on the original cost of the Office Campus and allocated (1) for
               the Building; and (2) solely to the Landlord; but only to the
               extent that the Landlord does not receive credits on account of
               such taxes by way of reductions in the amount of corporate surtax
               payable in any such taxation year;

     (xxi)     in addition to the foregoing specific provisions, all other
               direct and indirect costs and expenses of every kind, to the
               extent incurred in or allocable to the maintenance, repair,
               operation, administration or management of all or any part of the
               Office Campus or any of its appurtenances;

(a)  except to the extent otherwise provided in paragraph (a) of this
     definition, above, Operating Costs exclude:

     (i)       Taxes;

     (ii)      debt service on the financing or refinancing of the Office
               Campus;

     (iii)     capital cost of any renovation or replacement of any part of the
               Common Areas, Office Campus Systems or Structural Elements and
               not recovered out of insurance proceeds in excess of FIVE
               THOUSAND DOLLARS ($5,000.00);

     (iv)      all ownership costs not reasonably allocable to the actual
               maintenance, repair, operation, administration or management of
               the Office Campus;

     (v)       initial costs of construction of the Office Campus, changes made
               to accommodate the special requirements of specific tenants and
               the capital costs of additions, improvements and modernizations
               to the Office Campus after the date of original construction; and

<PAGE>
                                       - 7 -

          (vi)  expenses of redecorating and renovating rentable space for new
                tenants;

     (a)  in computing Operating Costs there will be credited as a deduction;

          (i)   an amount equal to the net proceeds of insurance actually
                recovered by the Landlord for damage to the Office Campus to the
                extent that the cost to repair such damage is included in
                Operating Costs; and

          (ii)  an amount equal to recoveries by the Landlord in respect of
                warranties or guarantees relating to the construction of the
                Office Campus or any part of it to the extent that the repair
                costs in respect of the work covered by warranty or guarantee is
                included in Operating Costs;

          (iii) all amounts chargeable directly to specific tenants of the
                Office Campus under lease provisions similar to sections 6.02(3)
                and 6.04(2) of this lease, by reason of their excess consumption
                of water, hydro or other utilities, to the extent that those
                amounts are included in Operating Costs;

     (a)  in computing Operating Costs, if less than 95% of the Office Campus is
          occupied during any period for which a computation must be made, the
          amount of Operating Costs will be increased to reflect the additional
          costs that would have been incurred had 95% of the Office Campus been
          occupied during that period; and

     (b)  any costs that are not directly incurred by the Landlord but are
          chargeable as Operating Costs may be estimated by the Landlord on a
          reasonable basis to the extent that the Landlord cannot ascertain the
          exact amount;

     "Premises" means the premises let to the Tenant identified in section
1.01(2). The Premises do not include any part of the outside face of (i) the
exterior walls or the glazing of the Building or (ii) the demising walls, if
any, or the roof, floor and ceiling slabs;

     "Prime Rate" means the minimum conventional lending rate of interest
charged by the Canadian chartered bank designated from time to time by the
Landlord for loans in Canadian funds to its most credit-worthy commercial
customers plus two (2) percentage points;

     "Proportionate Share" of any amount for any period means the result
obtained in dollars when the amount is multiplied by a fraction which has, as
its numerator, the Rentable Area of that part of the Premises that the Tenant is
then currently obligated to pay Basic Rent thereon and, as its denominator, the
Rentable Area of the Office Campus except that where Taxes or Operating Costs
are properly allocated only to the Building in the Landlord's reasonable
discretion the denominator shall be the Rentable Area of the Building.

     "Remaining Premises" means that portion of the Premises not comprising the
Initial Premises;

     "Rent" means Basic Rent and Additional Rent;

     "Rentable Area" of the Office Campus, Building, Premises or other space
means the floor area expressed in square feet, determined in accordance with the
method of floor measurement set out in Schedule E and adjusted from time to time
to reflect any expansion, reduction, rearrangement or relocation of space;

     "Rules and Regulations" means the rules and regulations contained in
Schedule C, as amended from time to time in accordance with section 5.03 and
such other rules and regulations adopted and promulgated by the Landlord from
time to time in accordance with section 5.03;

<PAGE>
                                       - 8 -

     "Sales Taxes" means all business transfer, multi-stage sales, sales, use,
consumption, value-added or other similar taxes imposed by the Government of
Canada or by any provincial or local government upon the Landlord, or the
Tenant, or in respect of this lease, or the payments made by the Tenant
hereunder or the goods and services provided by the Landlord hereunder
including, without limitation, the rental of the Premises and the provision of
administrative services to the Tenant hereunder;

     "Structural Elements" means those parts of any building within the Office
Campus consisting of the footings and foundations, structural columns and beams,
structural subfloors, bearing walls, exterior walls and glazing, roofs and their
component parts;

     "Taxes" means all taxes, levies, rates, charges, duties, assessments
(including assessments for local improvements or for benefits from public works,
even though the improvements or works may have been begun or completed before
the beginning of the Term, or may not be completed during the Term) and licence,
permit or inspection fees that may be imposed, levied, rated, charged or
assessed

          (a)  on, in respect of, or against the Office Campus, the Land, the
               Building or any part of it, or

          (b)  against the Landlord in respect of or arising out of the leasing,
               use, occupation, operation or ownership of the Office Campus, the
               Land, the Building or any part of it other than a business tax
               levied generally in respect of the Landlord's business, or

          (c)  on, in respect of, or against, or measured by, all or any part of
               revenues specifically attributable to the Office Campus, the Land
               or the Building,

and all other taxes, levies, rates, charges, duties, assessments or payments,
whether or not of the foregoing character, and whether or not in existence at
the beginning of the Term,

          (d)  that may be imposed, levied, rated or assessed against or charged
               to the Landlord or Tenant in lieu of or in addition to any of the
               foregoing, or

          (e)  that may become a charge, lien or encumbrance against the Office
               Campus, the Building or the Land,

in every case, whether general or special, ordinary or extraordinary and whether
levied, rated, charged or assessed by a municipal, regional, school, provincial,
federal or other lawful taxing authority, together with all interest and
penalties in respect thereof, and any of the above items may individually be
referred to as a "Tax", but Taxes does not include any general income,
corporation, or profits taxes on the Landlord's income or capital or any
inheritance or transfer taxes;

     "Tenant" includes its successors and assigns; "Term" means the term of this
lease as specified in section 1.01(1), as extended from time to time as a result
of any extension option, unless sooner terminated under the provisions of this
lease, and the expression "end of the Term" means the expiration or earlier
termination of the Term;

     "Useable Area" of the Premises means the floor area expressed in square
feet, determined in accordance with the method of floor measurement set out in
Schedule E.

1.04 Net Lease

     Except as expressly set out in this lease, (a) it is intended to be a
completely carefree net lease for the Landlord, (b) the Landlord is not
responsible for any costs, charges, expenses or outlays of any kind arising from
or relating to the Office Campus (including the Premises), or to their use,
occupancy or contents or to the businesses carried out in the Office Campus, and
(c) the Tenant will pay

<PAGE>
                                       - 9 -

all costs, charges, expenses and impositions of every kind arising from or
relating to the Premises and to their use, occupancy and contents, and, as
provided in this lease, its share of all costs, charges, expenses and
impositions of every kind arising from or relating to the Office Campus.

1.05 Obligations as Covenants

     Each obligation or agreement of the Landlord or of the Tenant expressed in
this lease, even though not expressed as a covenant, is for all purposes
considered to be a covenant.

1.06 Entire Agreement

     There are no covenants, promises, agreements, conditions, understandings,
warranties or representations, either oral or written, between the Landlord and
the Tenant concerning the Premises or the Office Campus unless set out in this
lease, including any attached riders and appendices, signed or initialled by
both parties, except for provisions contained in an offer to lease executed by
the Landlord and the Tenant that are expressly stated to continue in effect
after the execution and delivery of this lease. To the extent that there is a
conflict between this lease and the offer to lease, the provision in this lease
prevails. No subsequent alteration, amendment, change or addition to this lease
will be binding upon the Landlord or the Tenant unless in writing and signed by
both the Landlord and the Tenant.

1.07 Partial Invalidity

     If a provision of this lease or its application to a person or circumstance
is to any extent invalid, illegal or unenforceable, the remainder of this lease,
or the application of the provision to persons or circumstances other than those
as to which it is invalid or unenforceable, will not be affected thereby, and
each provision of this lease may be enforced to the full extent permitted by
law. Neither party is obliged to enforce any term, covenant or condition of this
lease against any person if, or to the extent by so doing, that party is caused
to be in breach of any law, rule, regulation or enactment from time to time in
force.

1.08 Table of Contents, Headings and Numbering

     The table of contents, article and section headings, and article and
section numbers are inserted for convenient reference only. They do not define,
limit or describe the scope or intent of the various articles and sections of
the lease nor do they modify the express provisions of this lease, and they are
not to be considered when interpreting this lease.

1.09 Divisions of the Lease

     All references in this lease to schedules, articles, sections and other
subdivisions refer to those in this lease unless otherwise indicated.

1.10 Number and Gender

     All words denoting number and gender will be construed so as to denote the
number and gender required by the context.

1.11 Where Tenant is a Partnership

     If the Tenant is a partnership each person who is currently a member of the
partnership and each person who becomes a member of the partnership or of any
successor partnership will be and continue to be liable jointly and severally
for the full and complete performance of, and will be and

<PAGE>
                                       - 10 -

continue to be subject to, the terms, covenants and conditions of this lease,
whether or not that person ceases to be a member of the partnership or successor
partnership.

1.12 Governing Law

     This lease will be interpreted and enforced according to the law of
Ontario.

1.13 Successors and Assigns

     All rights granted to, and liabilities imposed upon, the parties in this
lease benefit and bind the successors and assigns of the Landlord and, subject
to the qualification in the next sentence, the heirs, executors, administrators,
successors and assigns of the Tenant, as the case may be. No rights will benefit
an assignee or successor of the Tenant unless the assignment to the assignee or
successor has received the Landlord's written consent as provided in Article 13.
If the Tenant consists of more than one individual, corporation, firm, person or
entity, they are bound jointly and severally by the terms, covenants and
conditions in this lease.

1.14 Time of the Essence

     Time is of the essence of this lease and every part of it.

1.15 Generally Accepted Accounting Principles

     The phrase "generally accepted accounting principles", when used in this
lease means accounting principles generally accepted in Ontario at the time the
proper accounting treatment for the relevant cost or allocation is to be
determined.

                                   ARTICLE II
                                 DEMISE AND TERM

2.01 Lease of Premises

     In consideration of the rents reserved and the covenants, conditions and
agreements contained in this lease on the part of the Tenant to be paid,
performed, complied with and observed, the Landlord demises and lets to the
Tenant, and the Tenant takes on and leases from the Landlord the Premises.

     To have and to hold the Premises unto the Tenant for and during the Term,
unless sooner terminated as provided in this lease, subject to the covenants,
conditions, agreements and restrictions contained in this lease.

2.02 Area of the Premises

     Notwithstanding the estimated Rentable Area of the Premises and the
estimated Useable Area of the Premises are set out in sections 1.01(4) and
1.01(5) respectively, the Landlord will calculate the actual Rentable Area of
the Premises and Useable Area of the Premises and will provide the Tenant with a
statement of same, which statement shall be conclusive and binding on the
parties. The Landlord will recalculate the Useable Area and/or the Rentable Area
of the Premises whenever required because of a rearrangement of partitioning or
floor space or other changed condition on the floor or floors on which the
Premises are located and will notify the Tenant of the Useable Area and Rentable
Area as recalculated.

<PAGE>
                                     - 11 -

2.03 Use of Additional Areas

     Subject to sections 5.02 and 5.03 and to the Rules and Regulations, the
Landlord grants to the Tenant, its employees, agents, invitees and persons
having business with the Tenant, in common with the Landlord, its other tenants,
sub-tenants and all others similarly entitled or permitted, a non-exclusive
licence to use, during the Term, to the extent necessary for the Tenant to carry
on its business in the Premises, the following:

          (a)  the public entrance doors, lobby, public concourses, stairways
               and elevators of the Building; and

          (b)  the corridors and public washrooms, if any, on the floor(s) of
               the Building on which the Premises are situate.

     In addition, subject to sections 5.02 and 5.03 and to the Rules and
Regulations, the Landlord will allow the Tenant, during Business Hours, the use
or the benefit of all parts of the Common Areas located in the Building.

2.04 Term

     The Term begins on the Commencement Date and, subject to the other
provisions of this lease, the lease will be in full force and effect. There are
no rights to renew or extend this lease or the Term except by agreement in
writing with the Landlord.

2.05 Surrender of the Premises

     At the end of the Term, the Tenant will peaceably surrender and yield up
the Premises to the Landlord in as good condition, repair and decoration as the
Tenant is required to maintain the Premises throughout the Term, subject to
reasonable wear and tear, and such covenant shall survive the termination of
this lease. The Tenant will surrender all keys for the Premises to the Landlord
at the place then fixed for the payment of Rent and will inform the Landlord of
all combinations of locks, safes and vaults, if any, that will remain in the
Premises. The Tenant shall remove all its trade fixtures before surrendering the
Premises, but shall not remove any Leasehold Improvements.

     Despite any other provision of this lease, the Tenant will immediately
repair any damage to the Premises or elsewhere in the Office Campus caused by
the installation or removal of its trade fixtures. Failure on the Tenant's part
to repair any damage caused by the installation or removal of its trade fixtures
will entitle the Landlord itself to repair all damage to the Premises or
elsewhere caused by the installation or removal of the Tenant's trade fixtures
and the Tenant will pay to the Landlord within 15 days after receipt of an
invoice from the Landlord setting out reasonable particulars of the charges, as
Additional Rent, the Landlord's total cost of repair plus a sum equal to 15% of
the Landlord's total cost.

2.06 Overholding

     If the Tenant remains in possession after the end of the Term with the
Landlord's consent but without having executed and delivered a new lease or an
agreement extending the Term, in form and substance satisfactory to the
Landlord, there is no tacit renewal of this lease or extension of the Term,
despite any statutory provisions or legal presumption to the contrary, and a
tenancy from year to year will not be implied by law, but the Tenant will be
considered to be a monthly tenant only, paying a monthly Basic Rent in advance
on the first day of each month equal to 150% the amount of the last monthly
instalment of annual Basic Rent immediately theretofore payable and paying
Additional Rent and otherwise upon and subject to the same covenants, agreements
and conditions of this lease, except as to the length of the tenancy and except
for any renewal or extension options. The period of the monthly tenancy will be
considered to form part of the Term.

<PAGE>
                                       - 12 -

2.07 Modification of Premises

     The Landlord reserves the right to rearrange any demising walls for
purposes of providing required fire or emergency corridors or of otherwise
complying with the law from time to time. The Landlord's exercise of its rights
under this section does not constitute a re-entry or a breach of the Landlord's
covenant for quiet enjoyment contained in this lease or implied by law.

2.08 Parking

     The Tenant shall be allowed parking space free of charge in the parking
areas set aside for the Building from time to time but the Tenant acknowledges
that parking is on an unreserved basis for all tenants. Parking for the Building
shall be supplied by the Landlord on the basis of four (4) spaces per 1 one
thousand (1,000) rentable square feet.

                                   ARTICLE III
                            RENT AND OPERATING COSTS

3.01 Covenant to Pay

     The Tenant will pay Rent to the Landlord at the address designated herein
(or to such other person or at such other place as the Landlord may from time to
time designate in writing) promptly when due in lawful money of Canada without
any deduction, abatement, set-off or compensation except to the extent that
abatement is specifically provided for in this lease.

3.02 Basic Rent

     The Tenant will pay to the Landlord, without any prior demand therefor, as
Basic Rent, the amounts identified in section 1.01(7) in the manner set out
therein. When the actual Rentable Area of the Premises has been calculated or
recalculated, the Basic Rent will, if necessary, be adjusted. Basic Rent is
considered to accrue from day to day, and where it becomes necessary to
calculate Basic Rent for an irregular period of less than twelve calendar months
or an instalment of Basic Rent for a period of less than one calendar month, an
appropriate apportionment and adjustment will be made. If Basic Rent begins to
accrue pursuant to section 3.02 on any day other than the 1st day of a calendar
month, the Tenant will pay in advance on that day a portion of the Basic Rent
prorated on a daily basis from that day to the end of the month in which that
day occurs based upon a period of 365 days.

3.03 Tenant to Pay Proportionate Share of Operating Costs

     (1) The Tenant will pay to the Landlord throughout the Term, as Additional
Rent, the Tenant's Proportionate Share of Operating Costs.

     (2) Before the Commencement Date and the beginning of each accounting
period for the Office Campus (which shall not exceed fifteen months) or as soon
as possible thereafter, the Landlord will estimate Operating Costs for the
ensuing accounting period on a reasonable basis and will notify the Tenant of
its Proportionate Share of estimated Operating Costs. Where any cost is
attributable to more than one Lease Year or accounting period, the Landlord
shall apportion such cost between or among the relevant Lease Years or
accounting periods in accordance with generally accepted accounting principles
and the decision of the Landlord shall be final. The Tenant will pay to the
Landlord without any prior demand therefor its Proportionate Share of estimated
Operating Costs in equal monthly instalments in advance on the 1st day of each
month during the accounting periods. From time to time during an accounting
period the Landlord, acting reasonably, may re-estimate Operating Costs for that
accounting period and may notify the Tenant of the re-estimated amount and of
the Tenant's Proportionate Share of the re-estimated amount and may adjust
monthly instalments for the remainder of the accounting period so that, after
crediting the Tenant for instalments paid based on the previous

<PAGE>
                                       - 13 -

estimate or estimates, the Tenant's Proportionate Share of Operating Costs will
be paid in full during the Lease Year. When all information necessary to
calculate actual Operating Costs becomes available after the end of each
accounting period, the Landlord will provide the Tenant with a statement of
actual Operating Costs, certified by a responsible officer of the Landlord, and
will recalculate and advise the Tenant of the Tenant's Proportionate Share of
Operating Costs for the Lease Year. Any readjustment required by the
recalculation will be made without interest. If the Tenant has paid more than
its Proportionate Share of actual Operating Costs, the Landlord will credit the
overpayment toward the Tenants' Proportionate Share of Operating Costs for the
following Lease Year. If the Tenant has paid less than its Proportionate Share
of actual Operating Costs, the Tenant will pay the difference to the Landlord
within 30 days after receipt of an invoice from the Landlord setting out
reasonable particulars of the charges. If the Tenant's Proportionate Share of
Operating Costs for any Lease Year has not been finally determined before the
end of the Term, the parties will make any necessary readjustment in the payment
of the Tenant's Proportionate Share immediately after the actual Operating Costs
for that Lease Year have been determined, and this obligation will survive the
end of the Term.

     (3) Neither party may claim a readjustment of a Proportionate Share of
Operating Costs based upon an error of estimation, determination or calculation
of the Proportionate Share or of Operating Costs unless claimed in writing
before one year from the date the final statement was received from the Landlord
for the Lease Year to which the claim relates. In the case of any dispute over
the estimation, determination or calculation of the Proportionate Share or of
Operating Costs, a report from the Accountant in connection with such claim will
be conclusive and binding on the parties.

     (4) Operating Costs for an accounting period containing fewer than 365 days
will be subject to a per diem pro rata reduction based on a period of 365 days.

     (5) At any reasonable time within 12 months after the Landlord furnishes to
the Tenant the statement of Operating Costs the Landlord shall make available to
the Tenant, and the Tenant shall have the right by its officers or auditors to
examine the records of the Landlord relating thereto to establish or confirm the
amount of the Operating Costs payable for such accounting period. The cost of
each such examination by the Tenant shall be borne by the Tenant unless such
examination discloses a variation in excess of 5% of the Operating Costs for the
period with respect to which such examination is conducted in which event such
cost shall be borne solely by the Landlord. Every overpayment by the Tenant
shall be repaid to the Tenant or, at the option of the Tenant, shall be applied
pro tanto in satisfaction of the next ensuing payment of Operating Costs. The
Tenant shall forthwith pay the amount of every underpayment by the Tenant.

3.04 Allocation of Operating Costs

     The Landlord reserves the right to allocate, in its reasonable discretion,
all Operating Costs of the Office Campus among the Building and any other
buildings forming part of the Office Campus.

3.05 Additional Rent Treated as Rent

     All Additional Rent is considered to be rent and payable and recoverable as
rent, but in the manner provided in this lease, and the Landlord has all the
rights against the Tenant for default in payment of Additional Rent that it has
against the Tenant for default in payment of Basic Rent.

3.06 Interest on Amounts in Default

     If the Tenant fails to pay when due any amount of Rent, the unpaid amount
will bear interest, payable monthly, from the due date to the date of payment at
an annual rate of interest that is equal to the Prime Rate from time to time
commencing with the time of the default.

<PAGE>
                                       - 14 -

                                   ARTICLE IV
                                      TAXES

4.01 Taxes payable by the Landlord

     The Landlord will pay all Taxes, subject to sections 4.02 and 4.03. The
Landlord may, however, defer payment of Taxes or any Tax, or defer compliance
with any statute, law, by-law, regulation or ordinance that deals with Taxes, to
the full extent permitted by law, as long as it diligently is prosecuting in
good faith a contest or appeal of any such Taxes.

4.02 Taxes payable by the Tenant

     (1) In each Lease Year, to the extent that there are separate tax bills for
all or part of the Premises, the Tenant will:

          (a)  pay, as Additional Rent, directly to the taxing authorities (or
               to the Landlord if the Landlord so directs) and discharge during
               the Term and within the times stipulated by the taxing
               authorities, all Taxes that are imposed, levied, rated, charged
               or assessed on, in respect of, or against all or part of the
               Premises based on one or more separate tax bills for all or part
               of the Premises rendered by a lawful taxing authority;

          (b)  except to the extent that the Landlord otherwise directs, deliver
               to the Landlord, within 10 days after the Tenant receives it, a
               copy of each separate tax bill and assessment notice for all or
               part of the Premises; and

          (c)  except to the extent that the Landlord otherwise directs,
               promptly deliver to the Landlord receipts evidencing the payment
               of such Taxes and furnish such other relevant information as the
               Landlord reasonably requires.

     (2) In each Lease Year, to the extent that there are no separate tax bills
for the Premises or that there are separate tax bills for only part of the
Premises, but there are assessments from the assessing authorities allocating a
separate assessment or separate assessments to all or part of the Premises in
respect of which there is no separate tax bill, the Landlord will allocate to
the Premises or to that part of the Premises, as the case may be, a portion of
Taxes based on the separate assessment or assessments, and the Tenant will pay
to the Landlord, as Additional Rent, in accordance with section 4.02(5), the
portion of Taxes so allocated by the Landlord.

     (3) In each Lease Year, to the extent that there are no separate tax bills
for the Premises or that there are tax bills for only part of the Premises and
there are no assessments from the assessing authorities allocating a separate
assessment or separate assessments to all or part of the Premises in respect of
which there is no separate tax bill, the Landlord will allocate separate tax
bills and a portion of Taxes on such basis as the Landlord may from time to time
consider to be equitable, having regard, without limitation, to such factors as
the various uses of leased premises in the Building, the location of the
Premises, the value of the Leasehold Improvements in the Premises, any separate
assessments rendered for the Premises or assessment principles most recently
used by a lawful taxing authority with respect to the calculation of Taxes. The
Tenant will pay to the Landlord, as Additional Rent, in accordance with section
4.02(5), the portion of Taxes so allocated by the Landlord. In the Landlord's
sole discretion, the portion of Taxes so allocated to the Premises may be the
Proportionate Share of Taxes.

     (4) In each Lease Year, to the extent that there are separate tax bills or
separate assessments for non-rentable parts of the Building such as all or part
of the Common Areas in or adjacent to the Building or the Office Campus Systems
in the Building or to the extent that a portion of the Landlord's tax bills or
assessments for the premises it occupies for the conduct of its business is
referable to such non-rentable parts of the Building (and the tax bills or
assessments for the leased premises of tenants

<PAGE>
                                       - 15 -

do not contain a similar component in respect of non-rentable parts of the
Building), the Tenant will pay to the Landlord, as Additional Rent, in
accordance with section 4.02(5), its Proportionate Share of the Taxes in respect
of, or referable on a reasonable basis to, such non-rentable parts of the
Building.

     (5)   Before the beginning of each Lease Year or as soon as possible
thereafter, the Landlord will estimate, on a reasonable basis, and will notify
the Tenant of the total amount payable by the Tenant in the Lease Year in
respect of Taxes (the "Total Amount"). The Landlord will deliver to the Tenant a
statement showing in reasonable detail the information relevant and necessary to
the estimation or calculation of the Total Amount. The Landlord will base its
estimate on Taxes for the previous year and the Landlord's projection, on a
reasonable basis, of the escalation in Taxes in the current year. The Tenant
will pay to the Landlord, as Additional Rent, on the first (1st) day of each
month in each Lease Year, one-twelfth of the Landlord's estimate of the Total
Amount payable by the Tenant. From time to time during the Lease Year the
Landlord, acting reasonably, may re-estimate the Total Amount for that Lease
Year and may notify the Tenant of the re-estimated Total Amount and may adjust
monthly instalments for the remainder of the Lease Year so that, after crediting
the Tenant for instalments paid based on the previous estimate or estimates, the
Total Amount will be paid in full during the Lease Year. Despite the foregoing,
when all information necessary to calculate the Total Amount becomes available,
including the relevant final tax bills, the Landlord will provide the Tenant
with a statement showing the calculation of the total amount, certified by a
responsible officer of the Landlord and, on the first (1st) day of the month
next following the delivery of the statement by the Landlord, the Tenant will
pay to the Landlord the balance of the Total Amount, after receiving credit for
instalments paid based on the previous estimate or estimates. If the Tenant has
paid more than the Total Amount, the Landlord will credit the overpayment toward
the Tenant's tax account for the following year. If the Total Amount for any
Lease Year has not been finally determined before the end of the Term, the
parties will make any necessary readjustment in the payment of the Total Amount
immediately after it has been determined, and this obligation will survive the
end of the Term. Neither party may claim a readjustment in respect of the amount
paid or payable by the Tenant on account of Taxes based upon an error of
estimation, determination, calculation or allocation unless claimed in writing
before one year after the end of the Lease Year to which the claim relates. In
the case of any dispute over the estimation, determination, calculation or
allocation of the Tenant's share of Taxes, a report from the Accountant in
connection with such claim will be conclusive and binding on the parties.
Despite the foregoing provisions of this subsection, to the extent that any such
claim is based on a dispute over the calculation or measurement of Useable Area
or Rentable Area, the provisions contained in section 2.02 will govern. For a
Lease Year containing fewer than 365 days any portion of Taxes payable by the
Tenant that relates to a full 12-month period will be subject to a per diem pro
rata reduction based on a period of 365 days.

4.03       Other Taxes of the Tenant

           In addition to the portion of Taxes payable by the Tenant pursuant to
section 4.02, the Tenant will pay, as Additional Rent, to the lawful taxing
authorities, or to the Landlord, if the Landlord so directs (and if the Landlord
is required, as agent of the taxing authority, to collect taxes of the type
described in this section or, alternatively, if arrears of any taxes of the type
described in this section would constitute a lien on the Building or on the
Land), when they become due and payable, all taxes, Sales Taxes, rates, duties,
levies, assessments, licence fees and other charges that are levied, rated,
charged or assessed against or in respect of (a) this lease, the payments made
by the Tenant hereunder, or the goods and services provided by the Landlord
hereunder; (b) all Leasehold Improvements and the Tenant's trade fixtures,
equipment, facilities and chattels on or in the Premises, the Building or the
Land or any part thereof, or against the Landlord, as owner of the Office
Campus, in respect of any of the foregoing; and (c) any and every business
carried on in the Premises, or the use or occupancy of the Premises or of any
other part of the Building or the Land by the Tenant and every subtenant or
licensee of the Tenant or by any other occupant of the Premises, or against the
Landlord, as owner of the Office Campus (but excluding any taxes that are
general business taxes assessed against the Landlord's business generally), in
respect of any of the foregoing; and whether in any case, any such taxes, rates,
duties, assessments or licence fees are levied, rated, charged or assessed by a
federal, provincial, municipal, school or other body (collectively referred to
as "Business Taxes"). If there are not separate

<PAGE>
                                       - 16 -

tax bills provided for Business Taxes, the Landlord may allocate to the Tenant
on an equitable basis, as determined by the Landlord from time to time, a
portion of such taxes, if any, that may be levied or charged against the
Landlord or the Office Campus, the Building or the Land in respect of
businesses, uses, goods and services, or occupancies generally in or of the
Building, other than taxes that are general business taxes assessed against the
Landlord's business generally.

4.04      Tenant's Responsibility

     (1)  The Tenant, upon the Landlord's request, will:

          (a)  promptly deliver to the Landlord for inspection, receipts for
               payment of all Taxes payable by the Tenant under section 4.02(1)
               and of all Business Taxes payable by the Tenant under section
               4.03;

          (b)  promptly deliver to the Landlord notices of assessments of Taxes,
               Sales Taxes, Business Taxes or other assessments received by the
               Tenant that relate to the Premises; and

          (c)  furnish such other information in connection with Taxes, Sales
               Taxes, and Business Taxes payable by the Tenant under section
               4.02 and section 4.03, respectively, as the Landlord reasonably
               requests from time to time.

     (2)  The Tenant will promptly indemnify and keep indemnified the Landlord
from and against payment for all loss, costs, charges and expenses occasioned by
or arising from all such Taxes, Sales Taxes and Business Taxes and any taxes
which may in future be levied in lieu of such taxes, or which may be assessed
against any rentals payable pursuant to this lease in lieu of such Taxes, Sales
Taxes or Business Taxes, whether against the Landlord or the Tenant, including
without limitation, any increase whatsoever occurring in same.

     (3)  If by reason of the act, election or religion of the Tenant or any
subtenant or licensee of the Tenant or any occupant of the Premises, all or any
part of the Premises is assessed for the support of separate schools, the Tenant
will pay to the Landlord, within 30 days after receipt of an invoice from the
Landlord setting out reasonable particulars of the charges, the amount by which
the Taxes payable in respect of the Premises, the Building or the Land exceeds
those that would have been payable had all the Premises been assessed for the
support of public schools. To the extent that any increase in Takes can be
identified as being attributable to a separate school designation made by the
Landlord or by any other tenant or occupant of the Building, the Tenant will not
be responsible for payment of any such increase.

4.05      Assessment Appeals

          The Tenant will not appeal any government assessment or determination
of the value of the Premises, the Building, or the Land or a portion thereof
whether or not the assessment or determination affects the amount in respect of
Taxes or Business Taxes to be paid by the Tenant. The Tenant instead will rely
on the Landlord to conduct any appeal in the interest of all occupants of the
Building and the Landlord will not do so unless the appeal, in the reasonable
opinion of the Landlord, would lead to a favourable result. The Landlord will
not be responsible to the Tenant for any action or failure to act under this
section unless the decision to act or not to act was not made in good faith. The
cost of all appeals by the Landlord will be included in Operating Costs.

          Despite the foregoing, if the Landlord chooses not to appeal an
assessment or determination of the value of the Premises, the Tenant may
contest, to the extent permitted by law, at its expense and by appropriate
proceedings conducted diligently and in good faith, the assessment or
determination of the value of the Premises but only on the following conditions:
(i) the contestation will not relieve the Tenant from paying its share of Taxes,
as provided in section 4.02, when due and payable, and (ii) the contestation
will not relieve the Tenant from paying amounts payable under section

<PAGE>
                                     - 17 -

4.02(1)(a) and 4.03 when due and payable unless applicable law permits the
contestation before payment without subjecting the Building or any part of it or
any interest in it to danger of forfeiture or sale and without subjecting the
Landlord to civil or criminal liability for failure to pay those amounts, and
(iii) the Tenant will indemnify the Landlord against payment of all loss, costs,
charges, expenses and damages occasioned by or arising from the contestation by
the Tenant of any assessment including any increase in assessment arising as a
result of the contestation. The Tenant may contest its assessment of those
Business Taxes which are assessed directly against the Tenant or its Premises,
without the Landlord's approval, as long as the Tenant notifies the Landlord of
all its intention to contest and as long as the Tenant keeps the Landlord
advised of the status of the contestation on a regular basis and as long as the
Tenant indemnifies the Landlord against payment of all loss, costs, charges,
expenses and damages occasioned by or arising from the contestation, including
any increase in realty assessments arising as a result of the contestation. If
any assessment or tax is changed as a result of such contestation an appropriate
readjustment will be made between the parties, if appropriate.

                                    ARTICLE V
                          CONTROL OF THE OFFICE CAMPUS

5.01 Operation of the Office Campus by the Landlord

     Subject to the other provisions of this lease, the Landlord or its agents
will operate me Office Campus and maintain, clean, light, heat, ventilate and
air condition the Premises and the Common Areas located in or adjacent to the
Building in a reputable manner as would a prudent landlord of comparable
developments in the same municipality, having regard to the size, age, location,
nature, character and use of the Office Campus.

5.02 Control of the Office Campus by the Landlord

     (1)  The Landlord has at all times the exclusive right to control, manage
and operate the Office Campus, but not so as to deny access to the Premises
except in the case of emergency. Without limiting the generality of the
foregoing, the Landlord may, at any time:

          (a)  close all or part of the Office Campus to the extent necessary,
               in the opinion of the Landlord's legal counsel, to prevent the
               public or any person from obtaining rights in all or part of the
               Office Campus other than the rights that would ordinarily accrue
               to tenants in respect of their leased premises under a lease such
               as this:

          (b)  grant, modify and terminate easements and make agreements
               pertaining to the use and maintenance of all or part of the
               Office Campus;

          (c)  temporarily obstruct or close off all or part of the Office
               Campus for the purpose of maintenance, repair, replacement or
               construction;

          (d)  make such Rules and Regulations concerning the use of the Common
               Areas as the Landlord considers advisable from time to time and
               organize parking facilities and/or allocating parking spaces for
               the use of particular tenants in any parking lot or parking
               garage in such manner as may seem necessary or desirable in the
               Landlord's sole discretion for the proper and efficient operation
               of the Office Campus;

          (e)  improve, alter, add to and subtract from the Office Campus,
               rearrange or relocate the various components, facilities and
               improvements constituting the Office Campus, build additional
               storeys on the Building and construct additional facilities
               adjoining or near the Office Campus; and

<PAGE>
                                       - 18 -

          (f)  do and perform such other acts in and to the Office Campus or its
               component parts as the Landlord, in exercising sound business
               judgment, determines to be advisable for the proper and more
               efficient operation of the Office Campus, but not so as to
               derogate materially from the Tenant's rights under the lease.

     (2)  Despite anything contained in this lease, the Landlord is not liable
(unless arising from the negligence of the Landlord or a person for whom the
Landlord is in law responsible) if as a result of the Landlord's exercise of its
rights set out in section 5.02(1) the facilities or systems in, or improvements
to, the Office Campus are diminished or altered, nor is the Tenant entitled to
any compensation or damages for loss of services or repayment or abatement of
Rent, nor may any diminution or alteration of the facilities or systems in, or
improvements to, the Office Campus be considered a re-entry or a breach of the
Landlord's covenant for quiet enjoyment contained in this lease or implied by
law.

     (3)  Despite anything contained in this lease, except where the Landlord is
exercising its right of re-entry or termination, the Landlord will make
reasonable efforts in exercising its rights under section 5.02(1), having regard
to the nature of the right being exercised, (i) not to unreasonably interfere
with the Tenant's business operations in, access to or its use and enjoyment of,
the Premises, or (ii) not to change or in any manner alter the location or
layout of the Premises or any portion of it, except as specifically provided in
section 2.07.

5.03      Rules and Regulations

          The Tenant will observe and comply with and will cause its employees,
agents, invitees and all others having business with the Tenant or over whom the
Tenant can reasonably be expected to exercise control to observe and comply with
the Rules and Regulations. The Landlord is entitled to amend, supplement or
replace the Rules and Regulations applicable to the Premises or elsewhere in the
Office Campus from time to time to the extent that the Landlord, acting
reasonably, considers necessary for the safety, care, cleanliness, security or
proper or more efficient operation of the Building, the Land or the Office
Campus or for the preservation of good order in the Office Campus and all such
Rules and Regulations will be considered to form part of this lease after
written notice of same is given to the Tenant.

          The Tenant's failure to observe and comply with all or any of the
Rules and Regulations constitutes a default under this lease in the same manner
and to the same extent as if they were contained in the lease as covenants and
conditions. To enforce the Rules and Regulations, the Landlord may resort to all
the remedies in this lease provided for a breach of the lease and all legal and
equitable remedies whether or not provided for in this lease. The Landlord is
not liable to the Tenant for the nonobservance or violation by any other tenant
of any of the Rules and Regulations or of the terms, covenants, agreement or
conditions of any other lease or premises in the Office Campus, and the Landlord
is not obligated to enforce any Rules and Regulations or terms, covenants,
agreements or conditions of other leases as against other tenants, and is not
liable for any loss or damage resulting from the non-observance or violation or
non-enforcement of the Rules and Regulations or terms, covenants, agreements or
conditions of other leases. The Landlord will make reasonable efforts to enforce
the Rules and Regulations.

5.04      Signs and Advertising

     (1)  The Tenant will not paint, affix, inscribe, display or erect or cause
to be painted, affixed, inscribed, displayed or erected any sign, notice,
picture, lettering, insignia, decoration or advertising material of any kind
anywhere outside the Premises or upon the surfaces of any window, wall or
entrance or exit door to the Premises or anywhere within the Premises so as to
be visible from outside the Premises.

     (2)  Despite section 5.04(1) the Tenant will have the right to affix or
cause to be affixed, in a manner first to be approved in writing by the
Landlord, such signage as the Tenant may require

<PAGE>
                                       - 19 -

throughout the Building and provided such signage conforms to the Landlord's
uniform sign policy. The Tenant will install and maintain all signage at its own
expense.

     (3) Despite section 5.04(1) and as long as the Tenant continues to occupy
at least 50% of the Rentable Area of the Building, the Tenant shall have the
exclusive right to signage on the exterior of the Building provided such signage
complies with the Landlord's reasonable requirements. Such signage shall be
installed and maintained at the cost of the Tenant. Notwithstanding the
foregoing the Tenant acknowledges that the Landlord will have its building sign
over the front entrance of the Building.

                                   ARTICLE VI
                   COMMON AREAS, BUILDING SERVICES, UTILITIES

6.01     Common Areas and Office Campus Systems

         The Tenant, its employees, agents, invitees and others having business
with the Tenant and all others using the Common Areas, and the elevators, if
any, will do so at their sole risk. The Landlord will maintain and keep in good
repair the essential base building systems that are required for the effective
operation of the Building. If the interior climate control systems or the
mechanical, electrical or lighting systems servicing the Building are damaged or
destroyed, the Landlord will begin their repair or replacement as soon as
conveniently possible and will act with reasonable diligence to repair or
replace them and put them in working order, subject to the provisions of Section
8.06 hereof.

6.02     Interior Climate Control in the Premises

     (1) The Landlord will provide during Business Hours except when making
repairs, alterations or improvements and subject to compliance with law and with
applicable government energy-related programmes, by means of interior climate
control systems, processed air in such quantities and at such temperatures as to
maintain in the Premises conditions of reasonable temperature and comfort in
accordance with prevailing standards of interior climate control in the same
municipality for normal general office usage in comparable developments, having
regard to the size, age, location, nature, character and use of the Office
Campus. All expenses relating to the provision of interior climate control
services in accordance with the standard requirements of tenants in the Office
Campus generally or in accordance with section 6.02(2) will form part of
Operating Costs and will be payable by the Tenant in accordance with section
3.03.

     (2) The Landlord may, in addition to the hours specified in section
6.02(1), in accordance with local practice and in its sole discretion, also
provide interior climate control services to the Premises at times other than
during the hours set out in section 6.02(1), but the provision of such
additional services will not prevent the Landlord from later curtailing or
reducing the hours of service outside the hours set out in section 6.02(1).

     (3) If the Tenant requests the provision of interior climate control
services to its Premises outside the hours during which the Landlord provides
interior climate control services on a standard basis to all tenants of the
Office Campus or in accordance with sections 6.02(1) or (2), the Landlord will
provide such services to the Tenant at cost, to be paid by the Tenant to the
Landlord, as Additional Rent, within 30 days after receipt of an invoice from
the Landlord setting out reasonable particulars of the charges. If the Tenant
requests interior climate control standards or conditions that in the Landlord's
opinion, arrived at reasonably, differ in any material respect from the standard
requirements of office tenants in the Office Campus generally for general office
usage (such as, for example, special requirements for computer installations,
photocopying rooms, print shops or meeting rooms), and it is feasible to comply
with the request for those different standards or conditions, all extra costs,
both recurring and non-recurring, of compliance with those different standards
or conditions will be paid by the Tenant to the Landlord, as Additional Rent,
within 30 days after receipt of an invoice from the Landlord setting out
reasonable particulars of the charges, in the case of non-recurring or capital
costs.

<PAGE>
                                       - 20 -

Recurring, or operating costs will be estimated and allocated by the Landlord
from time to time on a reasonable basis and paid by the Tenant to the Landlord,
as Additional Rent, on the first (1st) day of each month.

     (4) If the interior climate control systems (excluding Leasehold
Improvements) are damaged or destroyed or, in the Landlord's opinion, require
repairs, inspection, overhauling or replacement, the Landlord will carry out the
work with all reasonable speed. The Landlord is not responsible for the failure
or inadequacy of the interior climate control systems to perform their function
if the failure or inadequacy results from the arrangement of partitioning in the
Premises or from changes or alterations to the partitioning, or from the use of
heat-generating equipment, or (if the Landlord has supplied window shading
devices) from failure to shade windows that are exposed to direct sunlight or
from the use of electric power in the Premises in excess of three watts per
square foot of Useable Area of the Premises), or if there is more than one
person to every 100 square feet of Useable Area of the Premises on an open floor
basis, or if heating, ventilating or air-conditioning vents or air returns
within the Premises have not been kept free and clear of all obstructions and
objects or if the Premises are used in a way that does not comply with the
Landlord's design criteria.

     (5) Rebalancing of the interior climate control systems necessitated by
installation Of partitions, equipment or fixtures by or on behalf of the Tenant
will be performed by the Landlord at the Tenant's cost. To the extent necessary
to obtain maximum efficiency from the interior climate control systems serving
the Premises, the Landlord will, at the Tenant's cost (capital and, if
applicable, operating), payable within 30 days after receipt of an invoice from
the Landlord setting out reasonable particulars of the charges, as Additional
Rent, attempt to modify the interior climate control systems to suit the
interior office layout, or use or partitioning, of the Premises to the extent
that the systems are capable of modification and to the extent that there is no
adverse effect on the Office Campus systems, on the Building generally or on
other tenants.

     (6) The Tenant will keep all heating, ventilating and air-conditioning
vents and air returns within the Premises free and clear of all obstructions and
objects and acknowledges that it understands that failure to do so may result in
damage to or breakage of glass.

     (7) The Tenant acknowledges that proper adjustment and balancing of the
interior climate control systems may take up to one year following completion
and substantial occupancy of the Building.

6.03 Caretaking and Cleaning of the Premises

     (1) The Landlord will provide janitorial and cleaning services to the
Premises generally in accordance with the prevailing standards for comparable
developments in the same municipality, having regard to the size, age, location,
nature, character and use of the Office Campus. Except for the obligation to
maintain the general standard of service required by this Section and the
negligence of the Landlord or a person for whom the Landlord is in law
responsible, the Landlord is not responsible for any act of omission or
commission on the part of the person or persons employed or retained to do the
work, or for any loss or damage thereby sustained by the Tenant, its employees,
agents, invitees, suppliers, clients, customers or others having business with
the Tenant. The Landlord is relieved of the foregoing obligation to provide
services in respect of any part of the Premises to which the person or persons
employed or retained to do the work is not granted access.

     (2) The Tenant will not permit the Premises to become untidy, unsightly or
hazardous or permit unreasonable quantities of refuse or waste to accumulate in
the Premises and will leave the Premises in a reasonably tidy condition at the
end of each Business Day to facilitate performance of the Landlord's janitorial
and cleaning services. The Tenant will not interfere with the performance of
these services.

<PAGE>
                                       - 21 -

6.04     Utility Services, Light Bulbs

     (1) The Landlord, subject to interruption beyond its control, will provide
and allow the Tenant to use all utility services (including electricity and
tempered water) from time to time serving the Building in such quantities as the
LandlOrd, acting reasonably, from time to time determines constitutes usual use
for tenants in the Building generally.

     (2) If the Tenant requires the provision of utility services (including
electricity and water) in quantities that would exceed usual use, as determined
from time to time by the Landlord, the Landlord shall supply excess quantities,
at the Tenant's cost and expense, if the Landlord, in its sole discretion,
determines that the provision of the excess utilities (i) is within the capacity
of the existing structural, mechanical and electrical systems of the Building,
(ii) would not affect the operation, the aesthetics or the structure of the
Building or any other part of the Office Campus, (iii) would not reduce the
efficiency of existing electricity, water or other utility services supplied to
other tenants or to the Office Campus as a whole and would not unduly diminish
the future `availability of additional services, having regard to the reasonably
foreseeable additional requirements of the Landlord and of other tenants, and
(iv) would not contravene any law, regulation or municipal by-law. The Tenant
will pay to the Landlord, within 30 days after receipt of an invoice from the
Landlord setting out reasonable particulars of the charges, the cost of
providing all such additional or non-standard utility services, the cost to be
determined by the Landlord in a reasonable manner. In case of a dispute over the
reasonableness of such cost, the Landlord's determination, if verified by a
licensed engineer selected by the Landlord (who may be an employee of the
Landlord), will be conclusive and binding on the parties.

     (3) The Landlord will replace throughout the Term building standard
electric light fixtures, bulbs, tubes, starters and ballasts in the Premises. In
carrying out its obligation, the Landlord may adopt a system of periodic group
relamping and reballasting in accordance with sound building management
practices. The Landlord will replace light bulbs, tubes, starters and ballasts
which are not building standard when they burn out, after notice from the
Tenant, and the Tenant will pay the Landlord, as Additional Rent, within 30 days
after receipt of an invoice from the Landlord setting out reasonable particulars
of the charges, the cost of replacement and installation, plus a sum equal to
15% of the cost.

6.05     Tenant Not to Overload Facilities

         The Tenant will not bring into or install on the Premises any equipment
that will exceed or overload the capacity of any utility or electrical or
mechanical facilities servicing the Premises or the Building nor will the Tenant
bring into or install on the Premises any additional utility or electrical or
mechanical facility that the Landlord has not approved. If any equipment
installed by the Tenant requires additional utility, electrical or mechanical
facilities and, in the Landlord's opinion, such facilities are available,
subject to all the provisions of section 8.03 including, without limitation,
section 8.03(5), the necessary work may be performed by the Tenant's
contractors.

         The Tenant will allow the Landlord or its authorized agents to make
periodic inspections of all facilities using electricity or water in the
Premises. The Tenant will pay the Landlord, as Additional Rent, within 30 days
after receipt of an invoice from the Landlord setting out reasonable particulars
of the charges, the capital costs and costs of installation and maintenance of
all meters (including check meters) that may be installed by the Landlord to
measure or estimate the consumption of any utility used in the Premises, and all
related costs such as the costs of circuitry changes where required.

<PAGE>
                                     - 22 -

                                   ARTICLE VII

                               USE OF THE PREMISES

7.01     Use and Occupancy

         The Tenant will not use or occupy the Premises or permit them to be
used or occupied (i) for any purpose other than for general office purposes,
research and development, software development, sales and marketing and other
related uses; or (ii) for any purpose or in any manner that does not comply with
the terms, covenants and conditions of this lease and with all applicable laws,
by-laws, and regulations. The Tenant will begin to conduct its business
operations in the Premises on the Commencement Date and will thereafter conduct
its business operations throughout the Term in the whole of such Premises as the
Tenant may occupy from time to time in a reputable, first class manner.

7.02     Compliance With Law

     (1) The Tenant will promptly, at its expense, and subject to section 8.03,

         (a)   observe and comply with the requirements of all government
               authorities and all applicable statutes, laws, by-laws,
               regulations, orders and ordinances at any time or from time to
               time in force during the Term pertaining to or affecting the
               Premises or the Leasehold Improvements or the trade fixtures,
               furniture or equipment installed by the Tenant or the Tenant's
               particular use of the Premises or the conduct of any business in
               the Premises, or the making of any repairs, replacements,
               alterations, changes, additions, deletions, substitutions or
               improvements to the Premises;

         (b)   obtain all necessary permits, licences and approvals relating to
               the Tenant's particular use of the Premises or the conduct of any
               business in the Premises; and

         (c)   observe and comply with all relevant policy, fire, health, safety
               and sanitary requirements, regulations, orders and directions of
               any federal, provincial or municipal authority.

     (2) Despite section 7.02(1), to the extent that the Landlord's Work to the
Premises or the Building did not comply with requirements of government
authorities or applicable statutes, laws, bylaws, regulations, orders or
ordinances in force immediately before the beginning of the Term and to the
extent that the Landlord has not subsequently complied in all material respects
with such law, the Tenant will not be responsible for ensuring such compliance.

     (3) Without first obtaining the Landlord's written consent, the Tenant will
not use the Premises in a way that would impose on the Landlord an obligation to
modify, extend, alter or replace any part of the Premises or any improvements,
fixtures, furniture or equipment. If the Tenant at any time or from time to
time, without first obtaining the Landlord's written consent, does or omits to
do or permits to be done or to be omitted to be done any act or anything that
results in such an obligation being imposed on the Landlord, the Landlord may,
by notice to the Tenant, require the Tenant to correct the commission or
omission or to do the work necessary to comply with the obligation, in either
case, within a stipulated reasonable time, having regard to the period of time,
if any, that has been imposed on the Landlord to do the work, and if the Tenant
fails to correct the commission or omission or do the necessary work within the
stipulated time, the Landlord may, at its option, either do or cause to be done
the work necessary to comply with the obligation, at the Tenant's expense, or
terminate this lease. Despite the foregoing, if the Tenant's commission or
omission represents a contravention of any law, by-law, regulation, fire code or
reasonable requirement of the Landlord that could, in the Landlord's judgment,
result in the cancellation of insurance or adversely affect the management or
operation of the Building and if time does not permit giving the Tenant an
opportunity to cure, then the Landlord may immediately begin to do or cause to
be done the work necessary to comply with the obligation, at the

<PAGE>
                                       - 23 -

Tenant's expense, or, if the cost of compliance would be excessive, terminate
this lease. If the Landlord undertakes any work to be done pursuant to this
section, at the Tenant's expense, either itself or through its agents, the
Tenant will pay the Landlord, as Additional Rent, within 15 days after receipt
of an invoice from the Landlord setting out reasonable particulars of the
charges, the actual cost of the work plus a sum equal to 15% of the cost.

7.03 Nuisance and Waste

     The Tenant will not carry on any business or commit, suffer or permit any
act or anything that may constitute a nuisance, danger, annoyance or an unlawful
use or be offensive to the Landlord or other tenants or occupants of the Office
Campus, nor commit, suffer or permit any waste or damage to the Premises or any
other part of the Office Campus or to the Leasehold Improvements or to the
Tenant's trade fixtures.

7.04 Tenant Not to Overload Floors

     The Tenant will first seek the Landlord's written approval before bringing
upon any part of the Premises or anywhere else in the Office Campus any
machinery, equipment, object, article or thing that by reason of its weight,
size or use might possibly damage the Premises or another part of the Office
Campus, and the Tenant will pay for all costs incurred by the Landlord, the
Architect and the Landlord's engineers to assess whether the installation may be
permitted and, if so, where it should be located. The Tenant will not at any
time overload the floors of the Premises. If the Premises or another part of the
Office Campus is damaged by any machinery, equipment, object, article or thing
brought in by, for, or on behalf of, the Tenant or by overloading, or by any
act, neglect, or misuse on the part of the Tenant, or any of its employees,
agents, invitees, client, customers or any other person having business with the
Tenant, regardless of whether or not the machinery, equipment, object, article
or thing was brought upon the Premises or elsewhere in the Office Campus with
the Landlord's approval or located in accordance with the direction of the
Landlord's engineers, the Tenant immediately will repair the damage or, at the
Landlord's option, will pay to the Landlord, as Additional Rent, within 15 days
after receipt of an invoice from the Landlord setting out reasonable particulars
of the charges, the cost of repairing the damage plus a sum equal to 15% of the
cost.

7.05 Inflammable Liquid or Dangerous Materials

     The Tenant will not bring into or store in the Premises or anywhere else in
the Office Campus any inflammable liquid or environmentally unsafe, toxic,
dangerous, explosive or combustible material, provided that the foregoing shall
not apply to normal and usual office supplies and materials.

7.06 Defacing of Walls

     The Tenant will not drill into or deface the walls, ceilings, demising
partitions, floors, windows, wood, stone or metalwork within the Premises
without first obtaining the Landlord's written consent and in accordance with
the Landlord's directions. Failure on the Tenant's part to comply with these
provisions will entitle the Landlord, in addition to any other remedies it may
have, to repair the damage and the Tenant will pay the Landlord, as Additional
Rent, within 15 days after receipt of an invoice from the Landlord setting out
reasonable particulars of the charges, the cost of repair plus a sum equal to
15% of the cost.

<PAGE>
                                       - 24 -

                                  ARTICLE VIII
                  REPAIRS, ALTERATIONS, LEASEHOLD IMPROVEMENTS,
                        SUBSTANTIAL DAMAGE OR DESTRUCTION

8.01 Repair by the Landlord

     (1) Subject to section 8.06 and except for such degree of wear and tear as
shall be reasonable from time to time having regard to the size, age, location,
nature, character and use of the Office Campus, the Landlord will at all times
throughout the Term make such repairs to the Common Areas, the Structural
Elements and those of the Office Campus Systems that the Landlord has in this
lease expressly agreed to repair as may be necessary to keep them in a good and
substantial state of maintenance and repair, in accordance with prevailing
standards for comparable developments in the same municipality, having regard to
the size, age, location, nature, character and use of the Office Campus. The
cost of such maintenance and repairs (except for the cost of repairing or
replacing any inherent structural defects or weaknesses) will be included in
Operating Costs, unless the Landlord is required, by reason of the particular
use of the Premises or the business carried on by the Tenant, to make such
repairs due to the application of laws, regulations, by-laws or ordinances or
the direction, rules or regulations of any duly constituted regulatory body, in
which case the Tenant is solely liable and responsible for the total cost of all
such repairs plus a sum equal to 15% of the total cost of the repairs, which
shall become due and payable to the Landlord as Additional Rent within 30 days
after receipt of an invoice from the Landlord setting out reasonable particulars
of the charges. The Landlord is not obligated to repair or maintain the
Leasehold Improvements. Furthermore, despite the foregoing, the Landlord is not
obligated to make any repairs or replacements necessitated by any casualty
against which the Landlord is not insured unless, and except to the extent (both
as to policy limits and policy terms and conditions) that the casualty is
customarily insured against by reasonably prudent owners of comparable
developments in the same municipality, having regard to the size, age, location,
nature, character and use of the Office Campus.

     (2) If the Office Campus Systems are damaged or destroyed or require
repair, to the extent that the Landlord is obligated to repair or replace the
Office Campus Systems the Landlord will have a reasonable time within which to
make the repairs or replacements reasonably required for the resumption of
service of the Office Campus Systems.

     (3) Despite any other term, covenant or condition contained in this lease
including, but not limited to, the Landlord's obligation to repair set out in
sections 6.01 and 8.01(1), any provision requiring or entitling the Landlord to
take out insurance, and the Tenant's obligation to pay its Proportionate Share
of Operating Costs, if the Office Campus or any part of it including, but not
limited to, the Structural Elements, the Office Campus Systems, and any exterior
or glazing of the Building, require repair, restoration or replacement or become
impaired, damaged, destroyed or stopped up through the negligence, carelessness,
misuse or deliberate act of the Tenant, its employees, invitees or others for
whom the Tenant is in law responsible, the Tenant will pay to the Landlord, as
Additional Rent, within 30 days after receipt of an invoice from the Landlord
setting out reasonable particulars of the charges, the cost of the required
repairs, restorations, replacements or alterations, plus a sum equal to 15% of
the cost.

8.02 Repair by the Tenant

     (1) The Tenant will, at all times throughout the Term, at its sole expense,
but subject to sections 8.03 and 8.06 and except for such degree of wear and
tear as shall be reasonable from time to time for the Premises having regard to
the size, age, location, nature and character of the Office Campus, keep and
maintain the Premises in a good and substantial state of repair and decoration
in accordance with prevailing standards for comparable developments in the same
municipality, having regard to the size, age, location, nature, character and
use of the Office Campus. The Tenant's obligation to repair and maintain the
Premises extends, without limitation, to all Leasehold Improvements and to trade
fixtures installed in the Premises by or on behalf of the Tenant or its
subtenants, if any, but does not include repairs to be made by the Landlord
under sections 6.01 and 8.01

<PAGE>
                                     - 25 -

or repairs of construction defects in installations made by the Landlord in the
Premises, for which the Landlord is responsible. The Tenant's obligation to
repair and maintain the Premises also includes, but is not limited to, periodic
repainting and redecoration and cleaning of carpets and other floor coverings
and curtains, drapes and other window coverings at reasonable intervals, as
determined by the Tenant, acting reasonably, in accordance with first class
standards.

     (2) The Tenant will permit the Landlord and its authorized agents or
representatives to enter the Premises from time to time to examine the condition
of the Premises and to view the state of repair and the Tenant will make all
needed repairs and replacements with due diligence and dispatch according to the
Landlord's written notice. The Landlord's failure to give notice does not
relieve the Tenant from its obligations under subsection 8.02(1). In exercising
its right of entry under this section the Landlord will make reasonable efforts
to minimize interference with the Tenant's business operations.

     (3) The Tenant's obligation to repair does not extend to (a) maintenance,
repairs or replacements necessitated by the negligent or wilful acts or
omissions of the Landlord or those for whom it is in law responsible except
where such negligence occurs during the remedying of, or the attempt to remedy,
a default of the Tenant or those for whom the Tenant is in law responsible and
except where the Tenant is indemnified by insurance or would have been
indemnified by insurance which it is required to carry but for its failure to
obtain or maintain the required insurance or but for deficiencies or omissions
in the policy or coverage obtained; (b) maintenance, repairs or replacements to
Structural Elements except where necessitated by the negligent or wilful acts or
omissions of the Tenant or those for whom it is in law responsible; (c)
maintenance, repairs or replacements necessitated by structural defects or
weaknesses or faulty workmanship or defective materials in Landlord's Work; or
(d) maintenance, repairs or replacements necessitated by casualty to the extent
that the maintenance, repairs or replacements are covered by insurance which the
Landlord is required to maintain (or would have been covered by such insurance
had the Landlord not elected to self-insure) or which the Landlord otherwise
maintains.

8.03 Landlord's Approval of Leasehold Improvements and Tenant's Repairs

     (1)  The Tenant will not, without first obtaining the Landlord's written
consent, which will not be unreasonably withheld,

          (a)  make, erect or install in or about the Premises any Leasehold
               Improvements other than the Initial Leasehold Improvements; or

          (b)  alter, change, add to, subtract from or make substitutions to, or
               improve any part of the Premises or Leasehold Improvements.

     (2)  When requesting the Landlord's consent, the Tenant will submit to the
Landlord in writing details of the proposed work, to the extent reasonably
required by the Landlord, including drawings and specifications prepared by
qualified architects or engineers and conforming with good engineering
practices.

     (3)  The Landlord's consent will be conditional on its receipt from the
Tenant of:

          (a)  such indemnification from the Tenant against liens, costs,
               damages and expenses as the Landlord, acting reasonably,
               requires;

          (b)  payment of the Landlord's cost of having the Architect and/or the
               Landlord's engineers review and approve the proposed work where
               the Landlord, acting reasonably, considers it appropriate to have
               the proposed work reviewed by a consultant who is not an in-house
               employee of the Landlord and approved to ensure that it does not
               adversely affect or interfere with the Structural Elements or any
               of the Office Campus Systems;

<PAGE>
                                       - 26 -

               provided that the Tenant shall provide to the Landlord evidence,
               satisfactory to the Landlord, that the Tenant has obtained, at
               its expense, all necessary consents, permits, and licences from
               all government and regulatory authorities claiming jurisdiction
               prior to the commencement of any work and will provide the
               Landlord with proof of acceptance of such work by the appropriate
               public offices when such work is finished.

     (4)  All work referred to in section 8.03(1) will be performed:

          (a)  in accordance with the description of the work and the drawings
               and specifications approved by the Landlord;

          (b)  in accordance with reasonable conditions, regulations, controls,
               and requirements imposed by the Landlord including, but not
               limited to, insurance requirements, and in compliance with design
               criteria from time to time established by the Landlord for the
               Office Campus;

          (c)  to the extent required by the Landlord having regard to the
               nature of the work being performed, under the supervision of the
               Landlord or its agents and subject to a final inspection by the
               Architect and/or the Landlord's engineers, the costs of the
               inspection to be borne by the Tenant and payable, within 30 days
               after receipt of an invoice from the Landlord setting out
               reasonable particulars of the charges, as Additional Rent;

          (d)  in accordance with all applicable laws and the requirements of
               all government and regulatory authorities claiming jurisdiction;

          (e)  by competent workmen whose labour union affiliations are
               compatible with those of workmen employed by the Landlord and its
               contractors, the Landlord being entitled, if it requires, to
               approve or disapprove the contractors and tradesmen employed or
               retained by the Tenant and any subcontractors;

          (f)  completed as expeditiously as possible in a good and workmanlike
               manner and with new materials of first-class quality during hours
               designated by the Landlord and in a way that will not
               unreasonably interfere with the quiet enjoyment by other tenants
               of their premises or with work being done by the Landlord on the
               Premises or elsewhere in the Office Campus or with work being
               done by other tenants without causing any damage to the Premises
               or any other part of the Office Campus; and

          (g)  solely at the Tenant's risk and expense.

     (5)  Despite any other provision of this lease, if any work that the Tenant
proposes to do or have done may affect or interfere with the Structural Elements
or any of the Office Campus Systems within the Building, the Landlord may choose
to perform the work itself or to have its own contractors perform the work, in
either case, at competitive rates and, at the Tenant's sole cost. Upon
completion of the work, the Tenant will pay to the Landlord within 30 days after
receipt of an invoice from the Landlord setting out reasonable particulars of
the charges, as Additional Rent, the Landlord's total cost of the work
(including, but not limited to, the fees of any architectural and engineering
consultants) plus a sum equal to 15% of the total cost of the work. The Tenant
may not do, or have done, any work which may weaken or endanger the structure of
the Office Campus or any part of it or adversely affect the condition or
operation of, or diminish the value of, any part of the Office Campus or the
Office Campus Systems or affect or interfere with the outside appearance of the
Building.

     (6)  Performance by or on behalf of the Tenant of any work without the
Landlord's consent or without complying with the provisions of this section
constitutes a default under the lease and, in addition to the Landlord's other
remedies, the Landlord may require the Tenant, at the Tenant's cost, promptly to
remove the work or that part of the work to which the Landlord objects, and to
restore the

<PAGE>
                                       - 27 -

Premises to their previous condition. Failure on the Tenant's part to comply
with the Landlord's requirement that the work be removed will entitle the
Landlord to remove the work to which it objects and to restore the Premises to
their previous condition; the Landlord will not be liable for loss or damage to
the Leasehold Improvements or to any of the Tenant's property or to the Tenant's
business by reason of the Landlord's actions and the Tenant will pay to the
Landlord within 15 days after receipt of an invoice from the Landlord setting
out reasonable particulars of the charges, as Additional Rent, the Landlord's
total cost of removing the work and restoring the Premises (including, but not
limited to, the fees of any architectural and engineering consultants) plus a
sum equal to 15% of the Landlord's total cost. The Landlord's performance or
removal of any work pursuant to this subsection is not a reentry or a breach of
the Landlord's covenant for quiet enjoyment contained in this lease or implied
by law.

8.04 Tenant to Discharge All Liens

     (1) The Tenant will at all times during the period that the Tenant is given
possession of the Premises and throughout the Term promptly pay all its
contractors, suppliers and workmen and all charges incurred by or on behalf of
the Tenant, its subtenants or any other persons occupying the Premises with its
permission for any work, material or services that may be done, supplied, or
performed at any time in respect of the Premises and the Tenant will do
everything necessary to ensure that no lien is registered against the Office
Campus or any part of it or against the Landlord's interest in the Office Campus
or against the Tenant's interest in the Premises or in the Leasehold
Improvements and if any such lien arises or is preserved or perfected, the
Tenant will discharge it or cause it to be discharged at the Tenant's expense
within 20 days after notice from the Landlord.

     (2) If the Tenant fails to discharge any such lien or cause it to be
discharged as aforesaid, then in addition to the Landlord's other remedies, the
Landlord may, but need not, discharge it by paying the amount claimed to be due
into Court and the amount so paid by the Landlord and all costs and expenses
incurred as a result of the registration or obtaining a discharge of any such
lien including, without limitation, solicitors' fees (on a solicitor and his
client basis) will be due and payable within 15 days after receipt of an invoice
from the Landlord setting out reasonable particulars of the charges by the
Tenant to the Landlord as Additional Rent.

     (3) Nothing in this section prohibits the Tenant from diligently contesting
the validity of any construction lien as long as the Tenant, at the Landlord's
request, pays the disputed amount into court or posts the necessary security so
that the lien can be vacated or discharged from title.

8.05 Tenant to Notify Landlord of Damage

     The Tenant will promptly notify the Landlord of damage to, or deficiencies
or defects in, any part of the Premises or any Office Campus System serving, or
located in, the Premises regardless of whether it is the Landlord or the Tenant
that is obligated to repair the damage, deficiency or defect.

8.06 Substantial Damage or Destruction

     (1) In this section, "unoccupiable" means unfit for occupancy by the Tenant
for the purposes of carrying on its business and "occupiable" means fit for
occupancy by the Tenant for the purposes of carrying on its business. All or any
part of the Premises to which the Tenant cannot have access because of damage or
destruction to the Building is considered to be unoccupiable, regardless of
whether or not the Premises is itself damaged.

     (2) If damage or destruction by any cause by which proceeds of insurance
are available to the Landlord renders all or part of the Premises unoccupiable:

          (a)  The Landlord will repair and restore the Building with all
               reasonable diligence, and replace existing Leasehold
               Improvements.

<PAGE>
                                       - 28 -

          (b)  If all or part of the Premises is unoccupiable, Basic Rent from
               the date of the damage or destruction until the Premises are
               again occupiable will abate in the proportion that the part of
               the Premises that is unoccupiable bears to the Useable Area of
               the Premises. The amount of the abatement will diminish
               proportionately as repairs are made and more of the Premises is
               returned to an occupiable state. Despite the above provisions, as
               long as the Tenant or its subtenant is not in fact using any part
               of the Premises for the conduct of its business and as long as
               more than half the Useable Area of the Premises is unoccupiable,
               then Basic Rent will abate totally until at least half the
               Useable Area of the Premises are again occupiable.

          (c)  Despite any other provision hereof of this section 8.06,

               (i)   where more than 50% of the Useable Area of the Premises is
                     unoccupiable and it will take more than 240 days to repair
                     the damage or destruction to the state in which the Tenant
                     can again use substantially all the Premises for its
                     business, then the Landlord or the Tenant may terminate
                     lease by giving the other party written notice no later
                     this 45 days after the date of such damage Or destruction
                     in than which case the Term will expire on the date of the
                     notice if the Tenant is unable effectively to use the
                     Premises after the damage or destruction or 30 days after
                     the date of the notice in any other case; and

          Upon expiration of the Term pursuant to this subsection, the Tenant
          will surrender the Premises and all its interest therein to the
          Landlord and Basic Rent and other payments that should appropriately
          be apportioned will be apportioned to the date of termination except
          Basic Rent that has abated pursuant to this subsection. The Tenant
          will remain liable to the Landlord for all sums accrued due under this
          lease to the date of termination, and the Landlord may re-enter and
          repossess the Premises discharged of this lease.

          (d)  Despite any other provision of this section 8.06,

               (i)   if the necessary repairs have been made within 15 days
                     after the date of the damage or destruction, there will be
                      no abatement of Basic Rent;

               (ii)  to the extent that the damage or destruction required by
                     the provisions of this section 8.06 to be repaired and
                     restored by the Landlord shall have been caused by the
                     negligence of the Tenant or of a person for whom the Tenant
                     is in law responsible (including, but not limited to, a
                     subtenant of the Tenant), there will be no abatement of
                     Basic Rent, and the Tenant shall reimburse the Landlord for
                     the full cost of carrying out such repair and restoration;

               (iii) to the extent that any part of the Premises remains
                     unoccupiable because the Tenant's repairs have not been
                     completed, no abatement of Basic Rent to which the Tenant
                     would otherwise be entitled will extend beyond the date by
                     which, in the opinion of the Landlord arrived at on a
                     reasonable basis, the Tenant's repairs would have been
                     completed had the Tenant exercised reasonable diligence.

     (3) Despite any of the foregoing provisions, or if the Building or any of
the Office Campus Systems is destroyed or damaged to such a material extent that
in the opinion of the Landlord, acting reasonably, the Building must or should
be totally or partially demolished whether or not the Landlord intends to
reconstruct the Building in whole or in part and whether or not all or part of
the Premises is rendered unoccupiable by such occurrence, and if all the
necessary repair and restoration work cannot be completed within 240 days from
the date of the damage or destruction, then the Landlord may, at its option,
terminate this lease by giving the Tenant written notice no later than 45 days
after the date of

<PAGE>
                                       - 29 -

the damage or destruction, in which case the Term will expire on the date of the
notice if the Tenant is unable effectively to use the Premises after the damage
or destruction or 30 days after the date of the notice in any other case.

     Upon expiration of the Term pursuant to this subsection, the Tenant will
surrender the Premises and all its interest therein to the Landlord, and Basic
Rent and other payments that should appropriately be apportioned will be
apportioned to the date of termination except Basic Rent that has abated
pursuant to subsection 8.06(2). The Tenant will remain liable to the Landlord
for all sums accrued due under this lease to the date of termination, and the
Landlord may re-enter and repossess the Premises discharged of this lease.

     If the Landlord has not chosen to terminate this lease within the 45 day
period, the Landlord will repair and restore the Building with all reasonable
diligence to the extent of the Landlord's obligation to repair under section
8.01.

     (4) In none of the above-mentioned cases will the Tenant have any claim
against the Landlord for any damages sustained by the Tenant nor will the
Landlord be obligated to rebuild the Building or any part of it in accordance
with the original drawings and specifications. No damages, compensation or claim
whatsoever will be payable by the Landlord for inconvenience, loss of business
or annoyance or other loss or damage whatsoever arising from the occurrence of
any such damage to or destruction of the Premises or of the Building and/or its
repair or restoration.

     (5) A statement from the Architect as to the length of time it will take to
repair the damage or destruction to the state in which the Tenant can again use
substantially all the Premises for its business, will be conclusive and binding
on the Landlord and the Tenant.

8.07 Removal of Leasehold Improvements, Trade Fixtures and Chattels

     (1) The Tenant shall not remove Leasehold Improvements from the Premises
either during or at the end of the Term. All Leasehold Improvements shall be
deemed to have become the Property of the Landlord immediately upon their
installation. If so requested by the Landlord, the Tenant shall remove any items
of Leasehold Improvements, other than the Tenant's Work as detailed in Schedule
G and as may be shown on Schedule C, designated by the Landlord not later than
the expiration or other sooner termination of the Term. The Landlord shall make
such designation at the time it provides its consent to any Leasehold
Improvements as required in section 8.03.

     (2) The Tenant will give the Landlord such access to the Premises before
the end of the Term as the Landlord considers necessary for it to determine the
extent of removal of Leasehold Improvements and trade fixtures and restoration
that it requires in accordance with its rights under this lease.

     (3) The Tenant will make every removal of trade fixtures, required or
permitted under this lease, whether during or at the end of the Term, at times
designated by the Landlord and will promptly make good any damage caused to the
Premises or any other part of the Office Campus by the installation or removal
of trade fixtures required or permitted to be removed.

     (4) If the Tenant does not remove its trade fixtures, furniture and
equipment within 30 days after the end of the Term, the trade fixtures,
furniture and equipment will, at the Landlord's option, become the Landlord's
property absolutely and the Landlord may remove them from the Premises and sell
or dispose of them in such manner as it considers advisable. To the extent that
any costs of removal or restoration are not recovered from the net proceeds of
sale of such items, the Landlord may recover the balance from the Tenant.

     (5) For certainty, the Tenant's trade fixtures do not include any Office
Campus Systems, any floor coverings affixed to the floor of the Premises, or any
fixtures, facilities, equipment or installations installed by the Landlord or at
its expense.

<PAGE>
                                       - 30 -

     (6) The Tenant's obligations under this section will survive the end of the
Term.

     (7) If the Tenant has failed to make every removal of Leasehold
Improvements required or permitted under this lease within a reasonable period
of time after notice from the Landlord, the Landlord shall make such removal and
the Tenant will reimburse the Landlord for all costs and expenses incurred
thereby within 30 days of receipt of an invoice from the Landlord for such costs
and expenses.

                                   ARTICLE IX
                                    INSURANCE

9.01     Tenant's Insurance Coverage

     (1) The Tenant will take out and keep in force, at its expense, throughout
the Term and during such other times as the Tenant occupies the Premises or part
of the Premises:

         (a)   insurance in respect of all risks of direct physical loss or
               damage including sprinkler leakage and subject only to those
               exclusions normally found in a standard insurance industry "all
               risks" policy in such amounts as may from time to time be
               required by the Landlord, acting reasonably, but in no event for
               less than (i) the full replacement cost, on a stated amount
               basis, covering all Leasehold Improvements, and (ii) 90% of the
               full replacement cost, on a stated amount basis, covering all the
               Tenant's furniture, trade fixtures, equipment, and all other
               property of every kind located or installed in the Premises which
               is either owned by the Tenant or for which the Tenant is in law
               responsible;

         (b)   comprehensive broad form boiler and machinery insurance on a
               blanket repair and replacement value basis in respect of boilers,
               pressure vessels, air-conditioning equipment and miscellaneous
               electrical apparatus placed in the Premises by or on behalf of
               the Tenant, and Tenant's furniture, trade fixtures, equipment,
               stock in trade and all other property of every kind located or
               installed in the Premises which is either owned by the Tenant or
               for which the Tenant is in law responsible;

         (c)   business interruption insurance in such amounts as will reimburse
               the Tenant for direct or indirect loss of earnings attributable
               to all perils insured against in sections 9.01(1)(a) and
               9.01(1)(b) and other perils commonly insured against by prudent
               tenants or attributable to loss of access to the Premises or the
               Building as a result of such perils;

         (d)   commercial general liability insurance covering bodily injury,
               death, property damage, personal liability, contractual
               liability, non-owned automobile liability, employers' liability
               and contractors' protective insurance coverage, all on an
               occurrence basis, with respect to (i) the Premises, (ii) the
               business carried on in or from the Premises, (iii) use or
               occupancy of the Premises and of any other part of the Office
               Campus by the Tenant, its subtenants, concessionaires, licensees
               and other persons conducting business in or from the Premises,
               and non-occupancy of the Premises and (iv) all construction,
               installation, alteration or repair of, in or to the Premises by
               or on behalf of the Tenant;

         (e)   tenants' legal liability insurance for the replacement cost of
               the portion of the Premises occupied by the Tenant, including
               loss of use of the Premises; and

         (f)   such other insurance, and in such amounts, as the Landlord or
               Mortgagee, if any, acting reasonably, may require from time to
               time, the test of reasonableness being what is required of
               tenants by other reasonably prudent owners or

<PAGE>
                                       - 31 -

               mortgagees of comparable developments in the same municipality,
               having regard to the size, age, location, nature, character and
               use of the Office Campus.

9.02     Policy Requirements

     (1) Insurance policies required to be maintained by the Tenant must (i) be
taken out with insurers acceptable to the Landlord, acting reasonably; (ii) be
in form and substance satisfactory from time to time to the Landlord, acting
reasonably; (iii) be non-contributing with, and applicable only as primary and
not as excess to, any other insurance available to the Landlord or the
Mortgagee, if any; (iv) not be invalidated as respects the interests of the
Landlord and of the Mortgagee, if any, by reason of any breach or violation of
any warranties, representations, declarations or conditions contained in the
policies; and (v) contain an agreement on the part of the insurer to notify the
Landlord and the Mortgagee, if any, in writing at least 30 days before any
cancellation or termination of the policy of any material change to the policy.
The policies may be written with such deductibles and exclusions as reasonably
prudent owners and mortgagees of comparable developments in the same
municipality, having regard to the size, age, location, nature, character and
use of the Office Campus, customarily accept in the case of tenants with
covenants of a similar quality as that of the Tenant and occupying a comparable
amount of space and putting their leased premises to comparable uses.

     (2) Insurance policies required to be maintained by the Tenant pursuant to
sections 9.01(1)(a)(i) and 9.01(1)(b) must (i) name the Landlord its directors,
officers, agents, employees and invitees, and any persons, firms, or
corporations designated by the Landlord as additional named insureds, as their
interests may appear; (ii) contain a release by the Tenant in favour of the
Landlord and its directors, officers, servants, employees, agents and invitees,
in respect of any claim which the Tenant might otherwise have against the
Landlord for reimbursement in respect of damage covered by the said policies;
(iii) if there is a Mortgagee, contain a standard mortgage clause; and (iv)
provide that any proceeds recoverable for loss of Leasehold Improvements will be
payable to the Landlord. (All proceeds received for the loss of Leasehold
Improvements will be dealt with in accordance with section 9.04).

     (3) Insurance policies required to be maintained by the Tenant pursuant to
section 9.01(1)(d) must (i) be written on a comprehensive basis with inclusive
limits of not less than $2,000,000, on an occurrence basis, for death of, or
bodily injury to, any one or more persons, or for property loss or damage, or
with such higher inclusive limits as the Landlord, acting reasonably, or a
Mortgagee, if any, requires from time to time, the test of reasonableness being
what is required of tenants by other reasonably prudent owners or mortgagees of
comparable developments in the same municipality, having regard to the size,
age, location, nature, character and use of the Office Campus; and (ii) contain
a severability of interests clause, and a cross-liability clause protecting the
Landlord, its directors, officers, servants, employees, agents and invitees, and
other named insureds designated by it against claims by the Tenant as if the
Landlord and other named insureds designated by it were separately insured.

     (4) The Tenant will submit to the Landlord certificates in form and
substance acceptable to the Landlord or, if required by the Landlord or the
Mortgagee, if any, certified copies of each such insurance policy signed by the
insurer before the beginning of the Term and thereafter at least annually. At
least 15 days before coverage under any policy will expire, the Tenant will
submit to the Landlord a certificate of insurance in form and substance
acceptable to the Landlord or, if required by the Landlord or the Mortgagee, if
any, a certified copy of an insurance policy signed by the insurer evidencing
the renewal of the existing policy or its satisfactory replacement. The Landlord
may require the Tenant to submit the certificates of insurance or certified
copies of policies evidencing compliance with the requirements of this Article 9
before the Tenant is permitted access to the Premises. No review or approval of
any such insurance certificate or policy by the Landlord will derogate from or
diminish the Landlord's rights or the Tenant's obligations contained in this
lease, including, without limitation, those contained in this Article 9.

     (5) The Tenant hereby releases the Landlord and waives any and all claims
against the Landlord and those for whom the Landlord is in law responsible with
respect to occurrences insured

<PAGE>
                                     - 32 -

against or required to be insured against by the Tenant hereunder whether any
such claims arise as a result of the negligence or otherwise of the Landlord or
those for whom it is in law responsible.

9.03     Tenant's Failure to Insure

         If:

         (a)  The Tenant fails to take out or to keep in force any insurance
              referred to in section 9.01(1), or

         (b)  the Landlord or a Mortgagee has notified the Tenant in writing
              that it does not approve of a policy or certificate of insurance
              and has given the Tenant its reasons for not approving the policy
              or certificate, and the Tenant has not begun diligently to rectify
              the situation within 48 hours after written notice from the
              Landlord or Mortgagee, or has not thereafter proceeded diligently
              to complete the rectification of the situation,

the Landlord may, but need not, effect the insurance at the Tenant's expense
and, without prejudice to the Landlord's other rights and remedies, the Tenant
will pay to the Landlord within 30 days after receipt of an invoice from the
Landlord setting out reasonable particulars of the charges, as Additional Rent,
the Landlord's cost of effecting the insurance, including, but not limited to,
the premiums paid, plus a sum equal to 15% of the Landlord's cost.

9.04     Insurance Proceeds for Loss of Leasehold Improvements

         All proceeds payable whether to the Landlord or to the Tenant in
respect of the loss of Leasehold Improvements pursuant to section 9.02(2) will
be made available toward the repair, restoration or replacement of the Leasehold
Improvements, as required, unless this lease is terminated, in which case such
proceeds shall be payable to the Landlord.

9.05     Increase in Insurance Premiums or Cancellation of Insurance

     (1) Nothing will be done, omitted to be done, brought into, kept, used,
sold or offered for sale on or from the Premises nor will the Tenant do, bring
into, keep or permit to be done or kept anything anywhere else in the Office
Campus that may contravene any of the Tenant's insurance policies (whether
direct damage or liability) relating to the Premises or any of the Landlord's
insurance policies (whether direct damage or liability) relating to all or any
part of the Office Campus or that would subject any insurance policy to
cancellation, would result in a refusal to renew any insurance policy or would
prevent the Landlord from obtaining policies with companies acceptable to the
Landlord. The Tenant will promptly comply with all requirements of (i) the
Insurers Advisory Organization of Canada or of any successor or similar
organization, (ii) the Landlord's insurers, and (iii) all insurance policies now
or in the future in effect, pertaining to or affecting all or part of the Office
Campus.

     (2) If (i) the use or occupancy of the Premises, or (ii) the conduct of
business in the Premises, or (iii) anything brought into, kept or used in the
Premises, or (iv) any acts or omissions of the Tenant or anyone for whom the
Tenant is legally responsible in the Office Campus or any part of it, causes or
results in any increase in premiums for the insurance from time to time carried
by the Landlord in respect of the Office Campus (whether direct damage or
liability), the Tenant will pay any such increase in premiums, as Additional
Rent, within 15 days after receipt of an invoice from the Landlord accompanied
by particulars of the increase in premiums. In determining whether increased
premiums are caused by, or are the result of, any of the foregoing, a schedule
issued by the organization calculating the insurance rates for the Office Campus
showing the various components of the rates will be conclusive evidence of the
several items and charges that make up the insurance rates. Any rate attributed
to the Tenant or to the Premises that exceeds the rate for normal use of the
Premises without any operations that would constitute a potential hazard will
conclusively be considered to be caused by

<PAGE>
                                     - 33 -

the Tenant's use or occupancy. If the Landlord has chosen to self-insure, the
Tenant will pay to the Landlord, as Additional Rent, within 30 days after
receipt of an invoice from the Landlord setting out reasonable particulars of
the charges the amount that otherwise would have been payable under this
subsection had the Landlord not chosen to self-insure.

     (3)  If (i) the use or occupancy of the Premises, or (ii) the conduct of
business in the Premises, or (iii) anything brought into, kept or used in the
Premises, or (iv) any acts or omissions of the Tenant or anyone for whom the
Tenant is in law responsible in the Office Campus or any part of it, causes or
could result in the cancellation of, or the reduction in coverage under, any
insurance policy (direct damage or liability) relating to the Office Campus or
any part of it, and if the Tenant fails to remedy the condition giving rise to
the cancellation or potential cancellation of, or reduction or potential
reduction in, coverage within 48 hours after notice thereof by the Landlord, so
that the Landlord may reinstate, or avoid cancellation of, or reduction in
coverage of, the policy, as the case may be, the Landlord or its agents may, but
need not, either

          (a)  enter the Premises and remedy the condition giving rise to the
               cancellation or potential cancellation of, or reduction or
               potential reduction in, coverage (including removal of any
               offending article), in which case the Tenant will pay to the
               Landlord the cost of remedying the condition within 15 days after
               receipt of an invoice from the Landlord setting out reasonable
               particulars of the charges, as Additional Rent, and the Landlord
               will not be liable for loss or damage to the Tenant's property or
               to the property of others located on the Premises or to the
               Tenant's business by reason of the Landlord's actions, and no
               such entry is a reentry or a breach of the Landlord's covenant
               for quiet enjoyment contained in this lease or implied by law; or

          (b)  if the Landlord is unable to remedy the conditions in accordance
               with (a) above, re-enter the Premises and take possession in
               which case Article 14 will apply.

9.06      Landlord's Insurance

     (1)  Subject to section 9.06(2), the Landlord will take out or cause to be
taken out and keep in force throughout the Term:

          (a)  insurance on the Building in respect of all risks of direct
               physical loss or damage including sprinkler leakage and subject
               only to those exclusions normally found in a standard insurance
               industry "all risks" policy such other perils as are from time to
               time defined in the usual extended coverage endorsement
               including, without limitation, sprinkler leakages, in an amount
               equal to the full replacement cost of the Building (but which may
               exclude the cost of foundations and footings and permit a
               deductible amount to be assumed by the Landlord);

          (b)  commercial general liability insurance in respect of the Building
               and the Office Campus in an amount of at least $2,000,000.00 for
               claims for personal injury or property damages arising out of any
               one occurrence;

          (c)  boiler, pressure vessels and machinery insurance in respect of
               any boilers, pressure vessels and machinery operated in the
               Building (other than in the Premises or other areas that are
               rented) in an amount equal to the full replacement cost of the
               Building, and

          (d)  such other insurances as the Landlord, in its sole discretion
               elects to obtain, or any Mortgagee of the Office Campus requires.

     (2) The Tenant hereby acknowledges that no insurable interest is conferred
on the Tenant by the terms of this Section, and that the Tenant has no right to
receive any proceeds of insurance, notwithstanding the Tenant's contribution to
the Landlord's insurance costs.

<PAGE>
                                     - 34 -

     (3) Upon the request of the Tenant from time to time the Landlord will
furnish a statement as to the perils in respect of which and the amounts to
which it has insured the Building and the improvements and installations in the
Premises, and also of the perils and amounts as to which the Landlord is
self-insuring the Building and the improvements and installations in the
Premises.

     (4) Notwithstanding the Tenants' contribution to the Landlord's insurance
costs, and notwithstanding anything contained in Articles 8 and 9 hereof, the
Tenant shall be liable to reimburse the Landlord as required by the terms of the
said articles, for work done or expenditures made in respect of which the
Landlord is obligated hereunder to carry insurance, or does otherwise carry
insurance. If and only to the extent that the Landlord shall have been
indemnified in respect of such work or expenditure by insurance, (the Landlord
covenanting to diligently make and pursue all claims under its insurance
policies applicable thereto), then and only to that extent the Landlord releases
the Tenant and those for whom the Tenant is in law responsible from any and all
such liability to reimburse the Landlord.

     (5) The Landlord will make reasonable efforts to have included in the
insurance policies required hereunder to be maintained by the Landlord
provisions whereby releases of liability granted by the Landlord hereunder in
favour of the Tenant shall not affect the right of the Landlord to recover under
said policies. If and so often as additional premiums are required to be paid by
the insurer for including such provisions in the policies, the amounts of said
additional premiums shall be payable by the Tenant within 15 days after receipt
of an invoice from the Landlord.

     (6) The Landlord hereby releases the Tenant and waives any and all claims
against the Tenant and those for whom the Tenant is in law responsible with
respect to occurrences insured against or required to be insured against by the
Landlord hereunder whether any such claims arise as a result of the negligence
or otherwise of the Tenant or those for whom it is in law responsible. The
Landlord agrees to pay the Tenant the amount of any additional premiums required
by the Tenant's insurers to be paid by reason of the granting of this release,
said payment to be made within 15 days after receipt of an invoice from the
Tenant.

                                    ARTICLE X
                            LIMITATION OF LIABILITIES

10.01    Limitation of the Landlord's Liability

     (1) Despite any other provision in this lease, the Landlord is not liable
for

          (a)  the death or illness of, or bodily injury to, the Tenant, its
               employees, agents, invitees, licensees or any other person on the
               Premises or elsewhere in the Office Campus, or

          (b)  the loss of, or damage to, the property (located on the Premises
               or elsewhere in the Office Campus) of the Tenant, its employees,
               agents, invitees, or licensees or of any other person,

caused by, or arising or resulting from or out of, or attributable to, any
occurrence, situation or act of omission or commission in, upon, at, or relating
to, the Premises or elsewhere in the Office Campus, or any other cause whatever
unless, subject to section 10.01(2), caused by the Landlord's actual, provable
negligence or wilful default but, despite the foregoing, in no circumstances
will the Landlord be liable for any consequential or economic damages, loss or
injury or for damages for personal discomfort or inconvenience.

     (2) Without limiting the generality of section 10.01(1), despite any other
provision in this lease, in no circumstances is the Landlord liable, regardless
of whether or not the property loss or damage results from the negligence or
fault of the Landlord, its employees or agents or others for whom it is in law
responsible,

<PAGE>
                                       - 35 -

          (a)  for the loss of, or damage to, the property of the Tenant, its
               employees, agents, invitees, licensees or any other person, or
               for any other damages, loss or injury caused by, resulting from,
               attributable to, or occasioned during:

               (i)   fire, explosion, flood, steam, gas, electricity, water,
                     rain, ice,, snow, falling plaster, falling partitions,
                     falling glass, falling metal, falling signs, falling
                     ceiling tile, falling ceiling fixtures (including part or
                     all of  the ceiling T-grid system), falling lamps or bulbs
                     or falling diffuser coverings, war, insurrection,
                     earthquake; or

               (ii)  dampness or leaks of any substance (including steam, gas,
                     oil, water, rain, ice and snow) from or into any part of
                     the Office Campus or from the street or from the ground or
                     any other place, whether by breakage, leakage, breakdown,
                     obstruction or other defect or any other reason; or

               (iii) the failure, whether by breakdown or other cause, to supply
                     adequate drainage or snow or ice removal; or

               (iv)  the interruption of any public utility or other service of
                     the arrangement or condition of any electric or other
                     wiring or sprinkler heads; or

               (v)   anything done or omitted to be done by any other tenant or
                     occupant or other person in the Office Campus or by an
                     occupant of property adjacent to the Office Campus or by a
                     member of the public; or

               (vi)  construction, alterations or repairs, or any private,
                     public or quasi-public work; or

               (vii) any act or omission (including theft, malfeasance or
                     negligence) on the part of an agent, contractor or person
                     from time to time employed by the Landlord to perform
                     janitorial, cleaning security, maintenance, repair,
                     supervisory or o1her services or any other work in or about
                     the Premises or elsewhere in the Office Campus; or

              (viii) the operation, non-operation (for whatever reason),
                     inadequacy or failure of the Office Campus Systems or
                     facilities within the Building, or delays in the
                     performance of any repairs, replacements or maintenance
                     for which the Landlord is responsible under this lease; nor
                     will the Tenant be entitled to any compensation or damages
                     for loss of service or repayment or abatement of Rent
                     during any period of non-operation or inadequate operation
                     or as a result of delays of the type referred to in this
                     clause above; or

               (ix)  use of the Common Areas or of any of the Office Campus
                     Systems or of any parking areas or garages; or

               (x)   the Landlord's failure to provide the service of Office
                     Campus Systems or facilities within the Building due to
                     power failure, strikes or labour disruptions or any other
                     cause beyond the Landlord's reasonable control, or the
                     carrying out of any repairs, maintenance or replacement of
                     Office Campus Systems or the facilities within the
                     Building; and the Tenant is not entitled to any
                     compensation or damages for loss of service or repayment or
                     abatement of Rent as a result of a failure to provide
                     service of Office Campus Systems or the facilities within
                     the Building regardless of cause; or

          (b)  for loss of, or damage to, any of the Tenant's property or the
               property of its subtenants, employees, agents or invites
               entrusted to the care or control of the

<PAGE>
                                     - 36 -

          Landlord, its employees, agents or others for whom the Landlord is
          legally responsible; or

      (c) for loss of, or damage to, money, securities, negotiable instruments,
          papers or other valuables of, or in the possession of, the Tenant, its
          employees, invitees or others, regardless of how the loss or damage
          was caused.

10.02 Risk of Loss

      All property of the Tenant or of any other person kept or stored on the
Premises or elsewhere in the Office Campus will be kept or stored at the
Tenant's risk and the Tenant will indemnify and save the Landlord harmless from
and against all claims arising out of loss of or damage to any of the Tenant's
property or to the property of any other person, including subrogation claims by
the Tenant's insurers.

10.03 Acceptance of Premises

      The Tenant shall inspect the Premises together with the Landlord's
representative before taking possession and will complete the Landlord's
standard Acceptance Form itemizing any defects or deficiencies in the Premises
that prevent or diminish their use. Except to the extent set out on the
Acceptance Form, the Tenant will be considered for all purposes to have accepted
the Premises in their then existing condition and the Landlord will not have any
further obligation to the Tenant for defects or deficiencies except (i) latent
defects that could not be discovered on a reasonable examination, (ii) defects
or faults in Structural Elements, as they relate to the Premises, not caused by
acts or omissions of the Tenant.

10.04 No Claim for Inconvenience

      The Tenant will not be entitled to claim for compensation for damages,
inconvenience, nuisance or discomfort arising from the necessity of repair or
renovation or rebuilding of any portion of the Building or the Office Campus.

l0.05 Indemnity by Tenant

      Despite any other provision in this lease, the Tenant will defend and
indemnify the Landlord and save it harmless against, in respect of and from:

      (a) all claims for personal injury or death, property loss or damage or
          any other loss or damage of every kind arising out of, or resulting
          from

          (i)   any occurrence, situation or act of omission or commission in,
                upon or at the Premises; or

          (ii)  any occurrence, situation or act of omission or commission in,
                upon or at the Office Campus (other than the Premises) to the
                extent that the claim relates to the injury or death of, or loss
                of or damage to property of or in the care of, the Tenant, its
                employees, invitees or licensees or any other person at the
                Office Campus for the purpose of attending at the Premises; or

          (iii) the use or occupation of the Premises by the Tenant or any
                subtenant, agent, employee, invitee or licensee of the Tenant or
                by any other person for whom the Tenant is legally responsible;
                or

<PAGE>
                                     - 37 -

          (iv) the conduct of any work by, or any act or omission of, the Tenant
               or any subtenant, agent, employee, invitee or licensee of the
               Tenant or of any other person for whom the Tenant is legally
               responsible; and

      (b) all costs, expenses, charges, penalties, losses, liabilities and
          damages, suits and actions of every kind incurred or suffered by the
          Landlord in connection with or arising out of all claims of the type
          referred to in paragraph (a), except to the extent caused by the
          negligence of the Landlord or a person for whom the Landlord is in law
          responsible, and the expenses of all actions and proceedings
          pertaining thereto including, but not limited to, reasonable legal
          fees on a solicitor and his client basis; and

      (c) all costs, expenses, charges, penalties, losses, liabilities and
          damages incurred or suffered by the Landlord arising from any breach
          or non-performance by the Tenant of any of its covenants or
          obligations under this lease or non-compliance by the Tenant with any
          of the conditions of this lease;

      (d) any contract, lien, privilege, mortgage, charge or encumbrance of the
          Office Campus arising from or occasioned by the act, default or
          negligence of the Tenant, its officers, agents, servants, employees,
          contractors, customers, invitees or licensees; and

      (e) all costs and expenses, including but not limited to, legal fees (on a
          solicitor and his client basis) that may be incurred or paid by the
          Landlord in enforcing against the Tenant performance of its covenants
          and agreements contained in this lease and compliance with the
          conditions contained in this lease.

      The Tenant's obligation under this section will survive the end of the
Term.

10.06 No Waiver

      The Landlord's failure to insist in one or more cases upon the strict
performance or observance of a covenant or compliance with a condition of this
lease or to exercise any of its rights arising out of the Tenant's default will
not constitute a waiver of the Landlord's right to insist upon the performance
or observance of the covenant or compliance with the condition, or performance
or observance of any other covenant or compliance with any other condition. The
Landlord's acceptance of Rent, whether or not with the knowledge of a breach of
a covenant or condition contained in this lease, will not constitute a waiver of
the breach. The Landlord's acceptance of Rent from any person other than the
Tenant will not be considered a recognition of any rights not expressly granted
in the lease or a waiver of any of the Landlord's rights, or an admission or
consent that the person is a subtenant or assignee of the lease. No waiver by
the Landlord or Tenant of a provision of this lease will be considered to have
been made unless in writing and signed by the Landlord and the Tenant.

10.07 Accord and Satisfaction

      No payment by the Tenant or receipt by the Landlord of a lesser amount
than the monthly payment of Basic Rent and Additional Rent herein stipulated is
considered to be other than on account of the earliest stipulated Basic Rent or
Additional Rent. No endorsement or statement on any cheque or in any letter
accompanying any cheque or rent payment may be considered an acknowledgement of
full payment or an accord and satisfaction. The Landlord may accept and cash any
such cheque or payment without prejudice to the Landlord's right to recover the
balance of such rent or pursue any other remedy that the Landlord may have under
this lease or by statute, or in equity at law.

<PAGE>
                                     - 38 -

10.08 No Partnership or Agency

      This lease does not create a partnership or joint venture between the
Landlord and the Tenant nor does it create the relationship of principal and
agent, although a limited principal-agent relationship may be created in the
future in accordance with section 14.03.

10.09 Excusable Delay

      If, because of a circumstance beyond the control of a party, the party is
delayed in performing or observing a covenant or in complying with a condition
under the terms of this lease that it is required to do by a specified date or
within a specified period of time, and if the circumstance is neither caused by
the default or act of commission or omission of that party nor avoidable by the
exercise of reasonable effort or foresight by that party, the date or period of
time by or within which it is to perform, observe or comply will be extended by
a period of time equal to the duration of the delay, and the other party to this
lease will not be entitled to compensation for damages, inconvenience, nuisance
or discomfort occasioned thereby. Such circumstances include, but are not
limited to, strikes or other labour or industrial disturbances, civil
disturbance, acts, orders, legislation, regulations or directives of any
government or other public authorities, act of the public enemy, war, riot,
sabotage, blockage, embargo, shortage of materials and supplies, explosion and
act of God. Nothing in this section, however, excuses a delay caused by lack of
funds or other financial circumstances or excuses the Tenant from paying when
due and payable any moneys payable pursuant to this lease.

                                   ARTICLE XI
                                     ACCESS

11.01 Entry by Landlord

      The Tenant will permit the Landlord and its authorized agents, employees
and contractors to enter upon the Premises at any time or times to examine and
inspect the Premises, to provide janitorial and maintenance services and to make
all repairs, alterations, changes, adjustments, improvements or additions to the
Premises or the Building or any part of the Office Campus including the Office
Campus Systems that the Landlord considers necessary or desirable, whether for
the direct benefit of the Premises or where necessary to serve another part of
the Office Campus. For these purposes, the Landlord may take all material into
and upon the Premises that is required therefor and may have access to the
overhead conduits and access panels to shafts and the Landlord may check,
calibrate, adjust and balance controls and other parts of the Office Campus
Systems. The Rent required to be paid pursuant to this lease will not abate or
be reduced while any such repairs, alterations, changes, adjustments,
improvements or additions are being made due to loss or interruption of the
Tenant's business, and the Landlord will not be liable as a result of such entry
for any injury or death caused to any person or for loss or damage to the
property of the Tenant or of others. The Tenant will not obstruct pipes,
conduits, ducts or shafts or other parts of the Office Campus Systems so as to
prevent reasonable access to them. The Tenant will provide free and unhampered
access to the Premises for the above purposes and will not be entitled to
compensation for any damages, inconvenience, nuisance or discomfort caused
thereby, but the Landlord in exercising its rights under this lease will make
reasonable efforts to minimize interference with the Tenant's use and enjoyment
of the Premises. No entry made or work undertaken by or on behalf of the
Landlord upon the Premises pursuant to this section is a re-entry or a breach of
the Landlord's covenant for quiet enjoyment contained in this lease or implied
by law. Despite the foregoing, the Landlord will endeavour to give the Tenant at
least 48 hours prior notice before doing any repair or maintenance work during
Business Hours except in the case of emergencies.

<PAGE>
                                     - 39 -

11.02 Exhibiting Premises

      Upon 24 hours prior written notice to the Tenant the Tenant will permit
the Landlord and the Landlord's agents to exhibit the Premises at all reasonable
hours during the last 6 months of the Term to prospective tenants and to all
other persons having written authority to view the Premises from the Landlord or
the Landlord's agents. The Landlord may enter the Premises at all reasonable
hours during the Term to show the Office Campus to prospective purchasers or
mortgagees.

11.03 Where the Tenant is Not Available

      If the Tenant is not personally present to admit entry into the Premises,
at any time, when for reason of an emergency an entry into the Premises is
necessary or permissible, the Landlord or its agent may, to the extent
necessary, forcibly enter the Premises without rendering the Landlord or its
agent liable therefor, without affecting the obligations and covenants of this
lease, and without constituting a re-entry or a breach of the Landlord's
covenant for quiet enjoyment contained in this lease or implied by law. Nothing
in this section, however, imposes upon the Landlord any obligation,
responsibility or liability for the care, maintenance or repair of the Premises
or any part of them.

                                   ARTICLE XII
                     STATUS CERTIFICATES; SUBORDINATION AND
                        ATTORNMENT; FINANCIAL INFORMATION

12.01 Status Certificates

      The Tenant will from time to time deliver, within 15 days after receipt of
a written request from the Landlord, in a form supplied by the Landlord, a
status certificate addressed to the Landlord, or to a prospective purchaser,
assignee, lessee or mortgagee of the Land, the Premises, the Building or the
Office Campus, as requested, certifying, according to the facts,

      (a) that this lease is unmodified and in full force and effect or, if
          there have been modifications, that this lease is in full force and
          effect as modified, stating the modifications, or that this lease is
          not in full force and effect;

      (b) the Commencement Date;

      (c) the rental payable under the lease and the date to which Basic Rent
          and Additional Rent have been paid;

      (d) whether or not there are any defaults or alleged default by the Tenant
          in the payment of any Rent or in any other respect under this lease,
          specifying the nature and extent of all defaults, if any, and stating
          whether a notice of default has been served on the Tenant;

      (e) whether or not there are any defaults or alleged defaults by the
          Landlord under this lease, specifying the nature and extent of all
          defaults, if any, and stating whether a notice of default has been
          served on the Landlord;

      (f) whether the Tenant has any defences, set-offs or counterclaims against
          enforcement of its obligations under this lease;

      (g) with reasonable particularity, details of the Tenant's financial
          standing and corporate organization; and

      (h) as to any other matters pertaining to the lease which the Landlord,
          acting reasonably, may request,

<PAGE>
                                       - 40 -

it being intended that any such certificate may be relied upon by the Landlord
or by any prospective purchaser, assignee, lessee or mortgagee of the Land, the
Premises, the Building or the Office Campus.

12.02 Subordination and Attornment

      At the Landlord's request, the Tenant will (i) subordinate this lease to
Mortgages that may affect the Building Land in the future, (ii) execute promptly
documents in confirmation of the subordination, and (iii) enter into an
agreement with the Mortgagee that if the Mortgagee becomes a mortgagee in
possession or takes steps to realize its security the Tenant will attorn to the
Mortgagee and become the Mortgagee's tenant or the tenant of any purchaser from
the Mortgagee for the unexpired residue of the Term on all the terms and
conditions of this lease. If the Tenant fails to execute any of the documents
referred to in the previous sentence within 30 days after being requested by the
Landlord to do so, such failure shall be deemed a default under this lease and
in addition to any other remedy under this lease.

12.03 Information on Corporate Organization

      The Tenant will, upon request, provide the Landlord with such publicly
available information as to the Tenant's corporate organization as the Landlord
or a Mortgagee, if any, reasonably requires. Failure of the Tenant to comply
with the Landlord's request herein constitutes a default under this lease
entitling the Landlord to exercise all its remedies under this lease.

                                  ARTICLE XIII
                            ASSIGNING AND SUBLETTING

13.01 Landlord's Consent Required

      The Tenant will not assign this lease in whole or in part, nor sublet all
or part of the Premises, nor mortgage or encumber this lease with respect to all
or part of the Premises, nor suffer or permit the occupation of, or part with or
share possession of, all or part of the Premises with any person including, but
not limited to, an assignee or subtenant of an approved subtenant (all the
foregoing being sometimes hereinafter collectively referred to as a "Transfer"),
unless, in each case, it has first requested in writing and obtained the
Landlord's written consent thereto, which will not be unreasonably withheld.
Without limiting the grounds for withholding consent to a Transfer, the
Landlord's refusal to consent to a Transfer will not be considered unreasonable
if a reason for withholding the consent is (i) that the Landlord has concerns,
on reasonable grounds, about the business, financial background, business
history or creditworthiness of the proposed transferee, (the "Transferee") or
about the use to which the Premises may be put; or (ii) except in the case of a
proposed Transfer of this lease in respect of the entire Premises, that the
Landlord has other premises in the Office Campus that would suit the
Transferee's needs; or (iii) the Transferee's refusal to execute an agreement of
the type referred to in section 13.03; or (iv) that there is no independent
access from the corridor to the part of the Premises in respect of which the
Tenant has requested consent to a Transfer (except that the Tenant may, at its
cost, provide the necessary inter-connecting corridor for independent access
from the corridor to the part of the Premises to which the Transfer pertains, it
being understood that such inter-connecting corridor will remain Rentable Area);
or (v) that the proposed use or division of the Premises would adversely affect
the Common Areas or Office Campus Systems, the appearance or aesthetics of the
Building, or the nature of the Building as first class office premises. The
consent by the Landlord to any Transfer, if granted, will not constitute a
waiver of the necessity for a consent to a subsequent Transfer. This prohibition
against a Transfer is considered to include a prohibition against any Transfer
by operation of law. No Transfer will take place by reason of the Landlord's
failure to give notice to the Tenant within 15 days as required by section
13.02.

     Notwithstanding anything to the contrary in this lease, Tenant may, without
Landlord's prior written consent and without any participation by the Landlord
in assignment and subletting

<PAGE>
                                       - 41 -

proceeds, sublet the Premises or assign this lease to: (i) a subsidiary,
affiliate, division or corporation controlling, controlled by or under common
control with Tenant, provided that upon such relationship ceasing to exist, such
subletting or assignment shall be rescinded, (ii) a successor corporation
related to Tenant by merger, consolidation, nonbankruptcy, reorganization, or
government action; or (iii) a purchaser of substantially all of Tenant's
business and assets located in Canada. For the purpose of this lease, sale of
Tenant's capital stock through any public exchange or issuances for purposes of
raising financing shall not be deemed an assignment, subletting, or any other
transfer of the lease or the Premises.

13.02 Landlord's Right to Terminate

      Whenever the Tenant intends to effect a Transfer, the Tenant will give the
Landlord prior written notice of its intention, identifying the Transferee and
providing such information as the Landlord or Mortgagee, if any, requests
including, without limitation, information about the principals of the
Transferee and its business, business history, reputation, financial strength
and creditworthiness and about the use to which the Premises will be put. The
Tenant will submit with its request for consent a true copy of any offer or
agreement to take an assignment or sublease. The Landlord will, within 15 days
after having received the Tenant's notice and all the information it reasonably
requires, notify the Tenant in writing either that it consents or does not
consent to the Transfer, in accordance with the provisions and qualifications in
this Article 13. The Landlord acknowledges that the Tenant will be subletting
such space as is excess to its needs as at the Commencement Date, provided such
subleases shall not exceed two years in term. The Landlord consents to such
subletting provided the provisions of section 13.01 relating to Landlord's
consent are otherwise complied with.

13.03 Tenant Not Released on Transfer

      (1) The Landlord's acceptance of a payment from a Transferee is not to be
considered a waiver of the Tenant's obligation not to effect a Transfer without
the Landlord's written consent nor is it to be considered consent to the
Transfer nor does it release the Tenant from the further performance of its
obligations under this lease.

      (2) Documents evidencing the Landlord's consent to a Transfer, if
permitted or consented to by the Landlord, will be prepared by the Landlord or
its solicitors, and all reasonable related legal costs will be paid by the
Tenant to the Landlord or its solicitors, as Additional Rent, within 30 days
after receipt of an invoice from the Landlord setting out reasonable particulars
of the charges.

      (3) A consent by the Landlord to a Transfer, will, at the Landlord's
option, be conditional on the prompt execution by the Transferee of an agreement
directly with the Landlord to be bound by all the terms, covenants and
conditions contained in this lease as if the Transferee had originally executed
this lease as tenant. Despite any Transfer permitted or consented to by the
Landlord, the Tenant will remain jointly and severally liable with the
Transferee on this lease and will not be released from compliance with any of
the terms, covenants and conditions of this lease during the Term or during the
term of any renewal period pursuant to an option to renew. In the event this
lease is repudiated or is disclaimed or terminated by any trustee in bankruptcy
of any assignee of this lease, the original Tenant named in this lease, upon
notice from the Landlord given within thirty (30) days of such repudiation,
disclaimer or termination, shall enter into a lease with the Landlord upon the
same terms and conditions as contained herein except for the duration of term,
which shall expire on the date this lease would have expired save for such
repudiation, disclaimer or termination.

13.04 Change in Control of Tenant

      If after the date of execution of this lease shares in the capital of
either the Tenant or a corporation that controls the Tenant are transferred by
sale, assignment, bequest, inheritance, operation of law or other disposition,
or are issued by subscription or allotment, or are cancelled or redeemed, so as
to result in a change in the effective voting or other control of the Tenant, or
of a corporation that

<PAGE>
                                       - 42 -

controls the Tenant, by the person or persons holding control on the date of
execution of this lease (or on the date when the Tenant becomes a corporation,
if later, or on the date the Landlord has consented to a Transfer to a
corporation, if later, whichever is applicable), or if other steps are taken to
accomplish a change of control, the Tenant promptly will notify the Landlord in
writing of the change of control, which will be considered to be an assignment
of this lease to which sections 13.01, 13.02 and 13.03(1) and (2) apply. Whether
or not the Tenant notifies the Landlord, unless the Landlord previously had
consented to the change of control, the Landlord may, within 60 days after it
learns of the change of control, notify the Tenant that it elects to terminate
this lease. If the Landlord notifies the Tenant that it elects to terminate this
lease because of a change in control, the Tenant may advise the Landlord, within
15 days after receipt of written notice of the Landlord's election, that the
Tenant chooses to reinstate this lease by arranging for the transfer, sale,
assignment or other disposition (the "Re-Transfer") from the shareholders of the
Tenant or the corporation that controls the Tenant after such change in control
to the shareholders of the Tenant or the corporation that controls the Tenant
existing on the date of execution of this lease (or on the date when the Tenant
becomes a corporation, if later, or on the date the Landlord has consented to a
Transfer to a corporation, if later, whichever is applicable). If the
Re-Transfer is effected within 30 days following the date the Tenant receives
written notice of the Landlord's election and if immediately thereafter the
Tenant provides the Landlord with evidence satisfactory to the Landlord that the
Re-Transfer has been effected this lease will be reinstated for the balance of
the Term; otherwise, this lease will terminate 45 days after the date on which
the Tenant receives written notice of the Landlord's election, unless in the
meantime the Landlord otherwise agrees. The Tenant will make available to the
Landlord or its lawful representatives all corporate books and records of the
Tenant and of any corporation that controls the Tenant for inspection at all
reasonable times, to ascertain to the extent possible whether there has been a
change of control. For the purposes of this section, control means the direct or
indirect beneficial ownership of more than 50% of the voting shares in the
capital of a corporation.

13.05 No Advertising of the Premises

      The Tenant will not print, publish, post, display or broadcast any notice
or advertisement or otherwise advertise that all or part of the Premises is
available for lease or sublease or is otherwise available for the purpose of
effecting a Transfer, and it will not permit any broker or other person to do
any of the foregoing, unless the complete text and format of any such notice or
advertisement is first approved in writing by the Landlord. Without restricting
or limiting the Landlord's right to refuse any text or format on other grounds,
no text or format proposed by the Tenant may contain a reference to the rental
rate for the Premises.

13.06 Excess Rent

      If an approved Transferee has sublet or obtained an assignment of all or
part of the Premises from the Tenant and has agreed to pay the Tenant a rent or
other amount in respect of its use of the Premises or any part of the Premises
that exceeds the rent payable by the Tenant to the Landlord (or a pro-rated
portion of such rent in the case of a sublease or assignment of less than the
entire Premises), the Tenant will pay to the Landlord monthly, as Additional
Rent, an amount equal to 50% of the excess rent received by the Tenant from the
Transferee. In determining excess rent the Tenant shall be entitled to deduct
costs and expenses incurred by the Tenant for alternations to the Premises,
brokerage commissions and legal fees. For purposes of this section, rent
includes any premiums, bonuses, key money or lump sum payments made by the
Transferee to the Tenant, or as the Tenant may direct, that may reasonably be
considered to be for the use of all or part of the Premises, or amounts payable
for the purchase or use of Leasehold Improvements or chattels in excess of their
fair market value, lump sums to be amortized over the term of the sublease for
the purposes of calculating the rent. A Transferee under section 13.01 is
considered to be an approved Transferee for purposes of this section.

<PAGE>
                                       - 43 -

13.07     Assignment by Landlord

      (1) If the Landlord sells or otherwise disposes of the Building or the
Land or any part thereof or an interest in the Building, in the Land or in the
Office Campus or in this lease or enters into a concurrent lease for the
Premises or the Building or the Land, to the extent that the purchaser or
assignee assumes responsibility for compliance with the covenants and
obligations of the Landlord under this lease, the Landlord without further
written agreement will be relieved of liability under the covenants and
obligations contained in this Lease.

      (2) If, as a result of a sale or other disposition of the Land or of a
portion of the Land or of an interest in the Land or in a portion thereof or in
the Building or in the Office Campus or a portion thereof or for any other
reason, the Landlord chooses to treat the Land as two parcels of land as if they
were owned by separate entities, the Landlord may advise the Tenant accordingly
by notice in writing and from and after the date set out in the notice all
references in this lease to "Office Campus" will be deemed to read "Building"
and all references to "Land", other than in this section will be deemed to
include only that parcel of the Land on which the Building is situate and that
portion of the Land within such severed parcel.

                                   ARTICLE XIV
                                     DEFAULT

14.01     Landlord's Right to Cure

      Whenever there is a default under this lease by the Tenant, in addition to
all the Landlord's other rights and remedies under this lease or by statute or
at common law or in equity, the Landlord may, but need not, remedy or attempt to
remedy the default, and in so doing may enter the Premises to perform work or do
other things. The Landlord's costs in remedying or attempting to remedy the
default and in repairing any damage resulting from the default or from the
remedying of the default together with a sum equal to 15% of the Landlord's
costs will be payable to the Tenant to the Landlord, as Additional Rent, within
15 days after receipt of an invoice from the Landlord setting out reasonable
particulars of the charges. The Landlord will not be responsible to the Tenant
for loss or damage resulting from such entry or action by the Landlord unless
caused by the negligence of the Landlord or a person for whom the Landlord is in
law responsible, and nothing the Landlord does under this section is a re-entry
or a breach of the Landlord's covenant for quiet enjoyment contained in this
lease or implied by law.

14.02     Right to Re-enter

      (1) If and whenever:

          (a)  the Tenant fails to pay any instalment of Rent or Additional Rent
               when due and payable and such default continues for a period of
               ten (10) days after notice from the Landlord; or

          (b)  the Tenant or an agent of the Tenant intentionally or recklessly
               falsifies a report, certificate or statement required to be
               furnished to the Landlord pursuant to this lease; or

          (c)  the Tenant fails to pay any Taxes, Sales Taxes or Business Taxes
               as defined in Article 4 herein when due and payable and such
               default continues for a period of ten (10) days after notice from
               the Landlord; or

          (d)  the Tenant or an Indemnifier becomes bankrupt or insolvent or
               takes the benefit of present or future legislation for bankrupt
               or insolvent debtors or files a

<PAGE>

          proposal or makes an assignment for the benefit of creditors or an
          arrangement or compromise; or

     (e)  a receiver, interim receiver, trustee, liquidator or a receiver and
          manager is appointed for all or part of the Tenant's property or
          business; or

     (f)  steps are taken or an action or proceedings are instituted by the
          Tenant or by another party including, without limitation, a court or
          government body of competent jurisdiction for the dissolution or
          winding-up of the Tenant or for the liquidation of its assets; or

     (g)  the Tenant makes a sale in bulk of any of its assets on the Premises
          (other than a bulk sale made to an assignee or subtenant pursuant to
          an assignment or subletting permitted under this lease and pursuant to
          the Bulk Sales Act of Ontario); or

     (h)  the Tenant vacates, abandons or attempts to vacate or abandon the
          Premises; or

     (i)  the Tenant assigns, transfers, encumbers, sublets or permits the
          occupation or use or the parting with or sharing possession of all or
          part of the Premises to or by anyone except as permitted by this
          lease; or

     (j)  this lease, the Term or a substantial part of the Tenant's assets are
          seized, attached or taken in execution; or

     (k)  the Tenant fails to observe, perform or comply with any of the terms,
          covenants or conditions of this lease to be observed, performed or
          complied with by the Tenant, other than the terms, covenants or
          conditions specifically referred to above in paragraphs (a) to (j)
          inclusive and such default shall continue for a period of fifteen
          (15) days or such longer period as may be reasonably required in the
          circumstances to cure such default, after written notice by the
          Landlord to the Tenant specifying with reasonable particularly the
          nature of such default and requiring same to be remedied; or

     (l)  re-entry is permitted under another provision of this lease,

then and in every such case, in addition to all its other rights, the Landlord
may immediately re-enter the Premises or any part of them in the name of the
whole and have again, repossess and enjoy them as of its former estate, in which
event the Landlord may remove all persons and property from the Premises and
store any removed property in a public warehouse or elsewhere at the cost of and
for the account of the Tenant, or sell or otherwise dispose of any property on
the Premises as the Landlord considers advisable, all without service of notice
or resort to legal process and without the Landlord being considered guilty of
trespass or becoming liable for any loss or damage occasioned thereby anything
contained in any statute of law to the contrary notwithstanding, including the
provisions of section 19(2) of the Commercial Tenancies Act (Ontario) or any
legislation that amends or replaces such section. Such forfeiture shall be
wholly without prejudice to the rights of the Landlord to recover arrears of
rent or damages for any antecedent default by the Tenant of its covenants,
obligations or agreements under this lease or of any term or condition of this
lease and provided further that notwithstanding any such forfeiture the Landlord
may subsequently recover from the Tenant damages for loss of Rent suffered by
reason of this lease having been prematurely determined. For certainty, this
right of re-entry applies to all the Tenant's covenants in this lease, whether
positive or negative.

     (2) Immediately upon the occurrence of any of the events referred to in
section 14.02(1), in addition to all the Landlord's other rights, the full
amount of the current month's instalment of Basic Rent and of all Additional
Rent payments for the current month together with the next 3 months'
instalments of Basic Rent and of all Additional Rent, all of which will be
considered to be accruing due

<PAGE>
                                     - 45 -

on a day-to-day basis, will become due and payable as accelerated rent and will
be recoverable by the Landlord in the same manner as the rents hereby reserved
and as if rent were in arrears.

 14.03   Right to Relet

     (1) If the Landlord chooses to re-enter the Premises, or if it takes
possession pursuant to legal proceedings or pursuant to any notice provided for
by law it may either terminate this lease or it may from time to time, without
terminating this lease, make such alterations and repairs as are necessary to
relet the Premises or any part of them, as the Tenant's agent, for such term or
terms (which may be for a term extending beyond the Term) and at such rent and
upon such other terms, covenants and conditions as the Landlord in its sole
discretion considers advisable. Upon each such reletting all rent received by
the Landlord from the reletting will be applied, first to the payment of any
indebtedness from the Tenant to the Landlord other than Basic Rent or Additional
Rent due under this lease; second, to the payment of any costs and expenses of
the reletting including, but not limited to, brokerage fees and solicitor's fees
and of costs of alterations and repairs and of costs of tenant inducements;
third, to the payment of Basic Rent and Additional Rent due and unpaid under
this lease; and the residue, if any, will be held by the Landlord and applied in
payment of future Rent as it becomes due and payable. If rent received from the
reletting during any month is less than that to be paid under this lease during
that month by the Tenant, the Tenant will pay any deficiency which will be
calculated and paid monthly in advance on or before the first day of each and
every month. No such re-entry or taking of possession of the Premises by the
Landlord will be construed as a choice on its part to terminate this lease
unless a written notice of such intention is given to the Tenant. Despite any
such reletting without termination the Landlord may at any time thereafter
choose to terminate this lease for the previous breach.

     (2) If the Landlord at any time terminates this lease for any breach, in
addition to all its other remedies, it may recover from the Tenant all damages
it incurs by reason of the breach, including the cost of recovering, altering
and reletting the Premises, solicitor's fees (on a solicitor and his client
basis) and including the value at the time of the termination of the excess, if
any, of the amount of Rent required to be paid pursuant to this lease for the
remainder of the Term over the then reasonable rental value of the Premises for
the remainder of the Term, all of which amounts will be immediately due and
payable by the Tenant to the Landlord.

 14.04   Expenses

         If legal action is brought for recovery of possession of the
Premises or for the recovery of Rent, or because of the breach of any term, or
covenant or non-compliance with any condition contained in this lease to be
performed or complied with on the part of the Tenant, and a breach or
non-compliance is established, the Tenant will pay to the Landlord all expenses
incurred in connection with the action, including solicitor's fees (on a
solicitor and his client basis), unless a court otherwise awards.

14.05    Waiver of Exemption for Distress

         Despite any applicable legislation, as amended or replaced from time to
time, none of the Tenant's goods and chattels on the Premises at any time during
the Term will be exempt from levy by distress for Rent in arrears. If the Tenant
claims an exemption or if the Landlord levies distress, this section may be
pleaded as an estoppel against the Tenant in an action brought to test the
Landlord's right to levy distress against goods of the type exempted in the
legislation, the Tenant waiving, as it does, all benefit that could or might
have accrued to it under the legislation but for this section.

14.06    Lien on Tenant's Goods and Equipment

         If at any time while the Tenant is in possession of the Premises or
during the Term or at the expiration or earlier termination of the Term the
Tenant is in default under a covenant or an obligation contained in this lease,
the Landlord has a lien on all goods, inventory, stock-in-trade, equipment and
facilities of the Tenant as security against loss or damage resulting from the
default and

<PAGE>
                                     - 46 -

none of the goods, inventory, stock-in-trade, equipment or facilities will be
removed by the Tenant until the default is corrected, unless otherwise permitted
in writing by the Landlord. The provisions of this section will survive the
expiration of the Term or earlier termination of this lease.

14.07    Default of Payment Collectible as Additional Rent

         If the Tenant is in default in the payment of amounts or charges
required to be paid pursuant to this lease, they will, if not paid when due and
payable, be collectible as Additional Rent, immediately on demand, but nothing
in this lease is considered to suspend or delay the payment of any amount of
money or charge when it becomes due and payable, or limit any other remedy of
the Landlord.

14.08    Remedies are Cumulative

         Mention in this lease of a particular remedy of the Landlord in respect
of a default by the Tenant does not preclude the Landlord from exercising
another remedy in respect of that default, whether available at common law or in
equity or by statute or expressly provided for in this lease. No remedy is
exclusive or dependent upon any other remedy, but the Landlord may from time to
time exercise one or more of such remedies generally or in combination, such
remedies being cumulative and not alternative, but shall be without duplication
of recovery.

14.09    Act of Subtenants

         An act or omission on the part of a subtenant of the Tenant that if
done, or omitted to be done, by the Tenant would constitute a breach of a
covenant or condition in this lease or would impose obligations on the Tenant or
entitle the Landlord to exercise remedies is considered for all purposes to be
the act or omission of the Tenant and entitles the Landlord to enforce its
remedies under this lease or at law against the Tenant.

14.10    Waiver of Offset

         The Tenant hereby waives and renounces any and all existing and future
claims, offsets and compensation against any Rent, and agrees to pay such Rent
regardless of any claim, offset or compensation which may be asserted by the
Tenant or on its behalf.

                                   ARTICLE XV
                                  MISCELLANEOUS

15.01    Notices

         Each notice, demand, approval, consent, waiver, statement or request
(in this section collectively referred to as "notice") required or permitted to
be given under this lease by either party to the other must be in writing and
will be considered to have been sufficiently and effectively given if signed by
or on behalf of the party giving the notice and personally served on or sent by
facsimile or delivered by courier, or mailed in Canada by registered mail,
postage prepaid, to:

LANDLORD:                              Westbury International (1991) Corporation
                                       Garden Level
                                       1100 Burloak Drive
                                       Burlington, Ontario
                                       L7L 6B2

<PAGE>
                                     - 47 -

                           Attention:  Michael H. DeGroote, President
                           ------------------------------------------
                           Fax:   (905) 335-6256

TENANT:                    At the Premises.

                           Attention: ____________
                           Fax:

                           and at:

                           Legato Systems Inc.
                           3210 Porter Drive
                           Palo Alto, California 94304
                           U.S.A.
                           Attention:  Manager of Facilities Engineering
                                       ---------------------------------
                           Fax:   1-650-812-6027

         If the Tenant is not in possession of the Premises or a responsible
person with whom a notice could be left cannot be located on the Premises, a
notice to the Tenant will be considered to have been personally served if posted
conspicuously anywhere in the Premises near a main entrance to the Premises.

         A notice given in the manner set out above will be considered to have
been received:

         (a)  on the date of delivery, if served personally or by courier;

         (b)  on the date of sending, if served by facsimile; and

         (c)  on the 14th business day after the date of mailing by Canadian
              registered mail, except that no notice may be mailed during any
              period in which Canadian postal workers are on strike or in which
              Canadian mail service is disrupted or in which a postal strike or
              disruption of mail service which may be anticipated to affect
              normal mail delivery is imminent and if such a postal strike or
              disruption of service does begin within five days following the
              mailing of a notice, the notice will be considered to be received
              on the seventh business day after the termination of the strike
              or the resumption of normal mail service unless the party sending
              the notice delivers it by personal service.

Either party may from time to time change the address to which notices are to be
mailed or delivered by communicating such change to the other in the manner set
out above. If at any time during the Term, the Tenant consists of more than one
person, corporation or other entity, then a notice, given by the Landlord
addressed to one of such persons, corporation or other entities will be
considered to have been duly given to the Tenant for all purposes under this
lease, and the first of any such notices given by one of such persons,
corporations or other entities to the Landlord will be considered to have been
duly given by the Tenant for all purposes under this lease, it being the
intention that each such person, corporation or other entity irrevocably
designates all other such persons, corporations and other entities or any one of
them as its agents for the purpose of giving and receiving all notices required
by or which may be given or received under this lease.

15.02    Registration of Lease

         The Tenant shall not register or permit the registration on its behalf
of this lease or an assignment of this lease in this form in any land registry
office. If the Tenant wishes to register a document for the purpose of giving
notice of this lease or of an assignment of this lease, the Tenant shall obtain
the Landlord's consent to the form of notice prior to its registration of the
notice. The

<PAGE>
                                      -48-

Tenant will be responsible for payment of all costs, expenses and fees necessary
for the registration of the notice.

     No instrument will be registered against title to all the Land. When the
Landlord consents to the registration of an instrument, it will identify the
appropriate parcel or parcels within which the Premises are situate and notice
will be registered only against title to that parcel or parcels.

15.03    Quiet Enjoyment

         If the Tenant pays the Basic Rent and Additional Rent, when due and
payable, and performs and complies with all the other terms, covenants and
conditions on the Tenant's part to be performed and complied with, the Tenant
will peaceably and quietly hold and enjoy the Premises for the Term without
hindrance or interruption by the Landlord, or any other person lawfully claiming
by, through or under the Landlord subject, nevertheless, to the terms, covenants
and conditions of this lease. The Tenant acknowledges that the exercise by the
Landlord of any of the rights conferred on the Landlord under this lease will
not be deemed to be a constructive or actual eviction of the Tenant and will not
be considered to be a breach of the Landlord's covenant for quiet enjoyment.

15.04    Landlord's Records

         The Landlord will keep proper records relating to Taxes, Operating
Costs and all other items of Additional Rent payable by the Tenant. For any
Lease Year in respect of which the Landlord has not provided the Tenant with
statements pertaining to Operating Costs as contemplated in section 3.03, on
reasonable advance written notice no earlier than six months following the end
of the accounting period for purposes of the calculation of Operating Costs, the
Landlord will give reasonable access to auditors from a recognized firm of
chartered accountants of national standing, representing the Tenant, to inspect
the Landlord's records relating to Operating Costs at the Tenant's expense. This
right of inspection cannot be exercised later than 1 year following the end of
the Lease Year in respect of which an inspection is requested.

15.05    Decisions

         Whenever in this lease the consent, approval, leave, designation,
judgment, discretion, permission or similar decision is required of the Landlord
or the Tenant or their respective architects, engineers, auditors, assessors,
consultants and other similar parties, except as otherwise specifically provided
in the Lease, such consents, approvals, leaves, designations, judgments,
discretions, permissions or decisions shall not be withheld or exercised
unreasonably and all of such parties shall be bound to act reasonably and within
such time limitations as are reasonable in all the circumstances.

15.06    Acceptance of Lease

         The Tenant hereby accepts this lease of the Premises to be held by it
as tenant, subject to the terms, covenants and conditions set out above and
below.

                          ARTICLE XVI
                  ADDITIONAL LEASE PROVISIONS

16.01    Extension Option

     (1) At the Tenant's option, but on the conditions set out in section
16.01(2), the Landlord will extend the Term

<PAGE>
                                      -49-

          (a)  for a further period of 5 years (the "first extension period")
                                      ---
               beginning on October 1, 2010 and ending on September 30, 2015,
                            ---------------               ------------------
               this option referred to as the "first extension option";

          (b)  for a further period of 5 years (the "second extension period")
                                      ---
               beginning on October 1, 2015 and ending on September 30, 2020,
                            ---------------               ------------------
               this option referred to as the "second extension option".

     (2)  The Tenant's options to have the Term extended, as set out in section
16.01(1), are subject to the following conditions:

          (a)  The Tenant may exercise an extension option only by delivery
               to the Landlord of a written request for the extension no later
               than six calendar months prior to the expiry of the initial term
               or the current extension period, as the case may be.

          (b)  The Landlord need not extend the Term even though the Tenant
               has exercised an extension option if the Tenant is in default
               under the lease at the time the extension period is to begin or
               if the Tenant has frequently or persistently been in default
               under the lease with respect to payment of Basic Rent or
               Additional Rent before the extension period is to begin.

          (c)  There will be no further right to extend the Term or to renew the
               lease, other than as set out in this Article 16.

          (d)  For certainty, no extension option may be exercised in
               respect of less than the entire space under lease to the Tenant
               in the Building immediately before the beginning of the extension
               period that results from the exercise of that extension option.

          (e)  If the Tenant exercises an extension option, the Basic Rent
               payable for the Premises will be the greater of:

               (i)  the Basic Rent payable during the last year of the Term or
                    extended period of the Term as the case may be; or

               (ii) the then Current Market Rental Rate.

          (f)  At the Landlord's request, the Tenant will execute and deliver
               a lease extending agreement, prepared by the Landlord, to
               document the extension of the Term in respect of each extension
               option that is validly exercised, subject to subsection
               16.01(2)(b), all terms and conditions of this lease (except for
               Basic Rent) remaining the same.

          (g)  If the Tenant fails to exercise the first extension option
               provided in this section, or if for any reason under this
               subsection the Term is not extended, then this section will be
               void and of no further force or effect and the second extension
               option will be void.

16.02     Landlord's Work

          The Landlord agrees to construct the Building as provided in Schedule
"F" and pursuant to the time frame set out in Schedule "H" with a projected
Commencement Date of November 1, 2000.

16.03     Tenant's Work and Allowance

          The Tenant acknowledges that Tenant's Work for the Initial
Premises, detailed in Schedule "G" and for the Remaining Premises, is to be
carried out for the Tenant by the Landlord's

<PAGE>
                                      -50-

contractor, Cooper Construction Limited ("Cooper"). Tenant further acknowledges
that the Tenant's Work for the Initial Premises will be done contemporaneously
with the Landlord's Work and pursuant to the time frame set out in Schedule "H",
and that the Landlord shall deliver the Initial Premises to the Tenant on a
"move-in" basis on or before the Commencement Date. All plans and specifications
for the construction of the Tenant's Work for the Initial Premises shall be
prepared by the Tenant's space planner in accordance with Article I of
Schedule "G". All Tenant's Work will be constructed in accordance with the
detailed plans, specifications and material selections and the cost estimate
thereof as approved in advance by the Landlord and Tenant and shall be based on
an allowance of Twenty Five Dollars ($25.00) per square foot of Rentable Area
for both the Initial Premises and the Remaining Premises. The work will be
carried out on an "open book" basis. The Landlord will keep the Tenant informed
as to the costs expended from time to time and will provide the Tenant with a
detailed accounting of the costs to construct the Tenant's Work. In the event
the costs of the Tenant's Work may exceed the said allowance, the Landlord shall
so inform the Tenant on a timely basis and the Tenant shall be entitled to seek
alternative bids for such work. If the total cost of the work is less than the
specified allowance, such underage may be applied by the Tenant towards payment
of Rent. If the cost of the work exceeds the specified allowance as a result of
the Tenant's actions and not those of the Landlord, such overage shall be paid
directly by the Tenant to the Landlord or amortized as Additional Rent over the
initial Term of the Lease, if agreed to by the Landlord.

         The Tenant acknowledges that in order for the Landlord to deliver the
Initial Premises to the Tenant as scheduled, time is of the essence and that the
Tenant must co-operate in an efficient and timely manner with the Landlord in
finalizing all aspects of the Tenant's Work so that construction of the Tenant's
Work can be carried out substantially in accordance with the time frames set out
in Schedule H. The Tenant covenants that it will carry out its obligations with
respect to the finalization of the plans, specifications and costing of the
Tenant's Work in a professional and diligent manner so as not to cause the
Landlord any delay in fulfilling its scheduled obligations to deliver the
Initial Premises on time.

16.04    Tenant's Right of Cancellation

         Notwithstanding anything in this lease to the contrary, the Tenant
shall have the right to cancel the lease if the Commencement Date has not
occurred by February 28, 2001, subject to any extension of the Commencement Date
as a result of Excusable Delay as provided for in section 10.09, provided
however, if the Commencement Date has not occurred by April 30, 2001, regardless
of any Excusable Delay, the Tenant may cancel the Lease, provided however the
Tenant shall give written notice of such cancellation to the Landlord within
twenty (20) days after February 28, 2001 or April 30, 2001, as the case may be.

16.05    Payment of Tenant's Overholding Costs

         In the event the Landlord is delayed in providing to the Tenant the
Initial Premises (including the work to be completed for the Tenant as specified
in this section 16.03) by December 31, 2000 ("Deadline Date"), the Landlord
shall pay the Tenant's lease obligations at its existing premises (the "Current
Premises") containing approximately 24,000 square feet of rentable area on the
main and second floors of 3370 South Service Road, Burlington, Ontario, incurred
as a result of Tenant's remaining in its Current Premises, including, without
limitation, overholding rent and other charges, fees, reimbursements,
indemnification amounts and damage amounts that the Tenant is required to pay
under its lease for the Current Premises, the rent payable by the Tenant for the
term of the first one year renewal of the lease of the Current Premises if the
Tenant is required to exercise its option to renew such lease provided the
Tenant shall give 15 days' written notice to the Landlord prior to exercising
such option and any other costs incurred by the Tenant as a result of
unavailability of the Initial Premises by the Deadline Date, (such excess costs
hereinafter collectively referred to as "Overholding Costs"). The Tenant shall
deliver a copy of its existing lease to the Landlord within 3 business days of
request of same by the Landlord. The Tenant shall deliver to the Landlord copies
of invoices and supporting material ("Invoices") received from the Tenant's
existing landlord requesting the Tenant's payment of the Overholding Costs. The
Landlord shall pay to the Tenant the Overholding Costs within

<PAGE>
                                      -51-

30 days of delivery of the Invoices. Provided that if the Tenant has not elected
to cancel this Lease, the Landlord shall be responsible for the Overholding
Costs until such time as the Tenant takes occupancy of the Initial Premises.

16.06    Liquidated Damages

         Notwithstanding any Excusable Delay and in addition to the obligation
to pay Overholding Costs as specified in section 16.05, the Landlord shall pay
to the Tenant, as liquidated damages and not as a penalty, for its failure to
deliver the Initial Premises to the Landlord by the Commencement Date the sum
of $100.00 for every day that the Commencement Date is extended beyond November
15, 2000, until December 31, 2000, and the sum of $200.00 for every day that the
Commencement Date is extended beyond December 31, 2000; provided such damages
shall cease effective the date in which the Tenant may have elected to cancel
the lease as provided for in section 16.04.

16.07    Rent Free Days

         In addition to the liquidated damages provided for in section 16.06,
the Tenant shall be entitled, if it elects to continue the lease, to one (1) day
of free Rent for each day that the Commencement Date is delayed beyond March 1,
2001, regardless of Excusable Delay.

16.08    Option on Additional Space

         Within twelve (12) months of the Commencement Date the Tenant may give
notice to the Landlord that it wishes to lease space in addition to the
Premises, such space to be not less than 50% of the Rentable Area in a building
to be built by the Landlord within the Office Campus. The Landlord and the
Tenant shall negotiate in good faith the Rent, the Term, the amount and location
of space to be taken by the Tenant and such other terms as may be material to
such new lease arrangement within

<PAGE>
                                      -52-

thirty (30) days of receipt of such notice by the Landlord. All other terms of
the new lease shall be the same as contained herein. The Landlord shall
construct the new building within 14 months from the date of the agreement
between the Landlord and the Tenant on the terms of such new lease.

16.09    Comparable Development

         Whenever the phrase "comparable development" is used in this lease, it
shall mean any office building or group of office buildings within the Greater
Toronto Area being of a similar size, age, nature, character and use.

16.10    Management Responsibility and Fees

         The Landlord agrees to manage the Building and Office Campus in a
professional manner as would a prudent owner of a first class commercial
complex. The Landlord recognizes the Tenant's interest as a major tenant in the
Building in insuring that the Building is maintained in the most cost effective
manner and agrees that the Tenant may undertake certain aspects of the
maintenance and custody of the Premises including, without limitation, security,
cleaning and maintenance. To the extent that the Tenant undertakes any of such
functions, the Tenant shall be solely responsible for the cost thereof which
shall not be included in Operating Costs. The Landlord and the Tenant shall
agree on the various items which the Tenant may wish to undertake itself. To the
extent that the Tenant undertakes and pays for such matters that would otherwise
be included in Operating Costs if performed by the Landlord, the Landlord agrees
that the Tenant's share of the management fee included in Operating Costs shall
be reduced proportionately. Such reduction shall be in the same ratio that the
cost of such undertakings by the Tenant bears to sum of the Operating Costs and
the cost of such undertakings.

         IN WITNESS WHEREOF the Landlord and the Tenant and where applicable the
Indemnifier have signed this lease as of the day and year first above written.

                               WESTBURY INTERNATIONAL (1991) CORPORATION

                               Per:
                                    ------------------------------------------
                               Name:
                               Title:

                               Per: /s/ Mike Degroote
                                    ------------------------------------------
                               Name: MIKE DEGROOTE
                               Title: PRESIDENT, CEO

                               We have authority to bind the Corporation

                               LEGATO SYSTEMS, INC.

                               Per: /s/ Steve Wise
                                   -------------------------------------------
                               Name:    Steve Wise
                               Title:   Chief Financial Officer
                               Per: /s/ Louis C. Cole
                                   -------------------------------------------
                               Name:    Louis C. Cole
                               Title:   CEO/President

                               We have authority to bind the Corporation

<PAGE>

                                  SCHEDULE "A"

                attached to and forming part of the Lease between
                         Legato Systems, Inc. ("Tenant")
                                       and
             Westbury International (1991) Corporation ("Landlord")

                      Description of Land ("Office Campus")
                      -------------------------------------

Part of Block 1, Plan 20M-473
City of Burlington, in the Regional Municipality of Halton

                         Description of Land ("Building")
                         -------------------------------

Part of Block 1, Plan 20M-473
City of Burlington, in the Regional Municipality of Halton
being Parts 1 through 8 inclusive on Plan 20R-._______

<PAGE>

                                  SCHEDULE "B"

               attached to and forming part of the Lease between
                        Legato Systems, Inc. ("Tenant")
                                      and
             Westbury International (1991) Corporation ("Landlord")

                           Plan of the Office Campus
                           -------------------------

                            Westbury Business Park 1
                              Burlington, Ontario

                                   [GRAPHIC]

<PAGE>

                                 SCHEDULE "C-1"

               attached to and forming part of the Lease between
                        Legato Systems, Inc. ("Tenant")
                                      and
             Westbury International (1991) Corporation ("Landlord")

                   Floor Plans of the Premises--Ground Floor
                   -----------------------------------------

                                  [FLOOR PLAN]

<PAGE>

                                 SCHEDULE "C-2"

               attached to and forming part of the Lease between
                        Legato Systems, Inc. ("Tenant")
                                      and
             Westbury International (1991) Corporation ("Landlord")

                   Floor Plans of the Premises--Second Floor
                   -----------------------------------------

                                  [FLOOR PLAN]

<PAGE>

                                 SCHEDULE "C-3"

               attached to and forming part of the Lease between
                        Legato Systems, Inc. ("Tenant")
                                      and
             Westbury International (1991) Corporation ("Landlord")

            Floor Plans of the Premises--Typical Floor (Floors 3-7)
            -------------------------------------------------------

                                 [FLOOR PLANS]

<PAGE>

                                  SCHEDULE "D"

                attached to and forming part of the Lease between
                         Legato Systems, Inc. ("Tenant")
                                       and
             Westbury International (1991) Corporation ("Landlord")

                              Rules and Regulations
                              ---------------------

 1.  ADDITIONAL LOCKS PROHIBITED

     The Tenant shall not install, alter any lock or install any new or
additional locks or bolts on any doors or windows of the Premises without
providing Landlord with a copy of any keys or access cards, as the case may be,
for such locks. The Landlord will supply the Tenant with two (2) keys for the
entrance door to the Premises and all locks (both within the Premises and on the
access doors to the Premises) will be standard to permit access by the
Landlord's master key. The Tenant may not make or permit duplicate keys to be
made, but the Landlord will supply the Tenant with additional keys, as may be
reasonably required, upon the Tenant's written request and at the Tenant's
expense. On termination of the Tenant's lease, the Tenant will surrender to the
Landlord all keys to the Premises and to other parts of the Office Campus. No
changes may be made to existing locks (within the Premises or on the access
doors to the Premises) or to the lock mechanisms without the Landlord's approval
and co-ordination. All entrance doors to the Premises must be left locked when
the Premises are not in use.

2.   ACCESS OUTSIDE BUSINESS HOURS

     The Landlord may require all persons entering and leaving the Building
outside Business Hours to identify themselves to the satisfaction of a watchman
or security guard and to register and to comply with other security rules on
entering and leaving the Building. The Landlord may deny access to the Premises
outside Business Hours to anyone who is not authorized by the Tenant in writing,
by pass or otherwise, in a form approved by the Landlord, to have access to the
Premises or who does not have a key to the Premises, and the Landlord need not
open the door to the Premises to admit anyone who does not have a key. When
security service is in effect, the Landlord may designate one or more entrances
and exits through which entrance to, deliveries to and exit from the Building
must be made. The Landlord may prevent removal of goods from the Building by
anyone who does not have satisfactory written authorization to do so. The
Landlord may institute a photo identification security system in which case
identification cards may be obtained from the Landlord at the Tenant's expense.
The Tenant is responsible for all persons who it authorizes to have access to
the Building and is liable to the Landlord for all their acts while in the
Office Campus. The Landlord may require the names of all persons entitled to
enter the Premises outside of Business Hours. Anyone found in the Building
without appropriate identification will be subject to surveillance by the
Landlord's employees and agents. The Landlord is, however, not responsible for
failure to enforce this rule.

 3.  EVACUATION PROCEDURES

     The Landlord may, from time to time, publish emergency fire regulations and
evacuation procedures in consultation with the applicable municipal authorities.

 4.  OVERCROWDING

     The Tenant may not invite to the Premises, or permit the visit of, persons
in such numbers or under such conditions as to interfere with the use or
enjoyment of the

<PAGE>

                                     Page 2

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

entrances, lobbies, corridors, elevators or facilities of the
Office Campus by other tenants and the Tenant will not permit the
Premises to be or become overcrowded.

5.   INGRESS AND EGRESS

     The entrances, lobbies, hallways, corridors, passages, stairwells,
elevators if any, and other facilities of the Building are for use only for
access to and exit from the Premises and other parts of the Building and they
are not to be obstructed or misused. No waste paper, dust, garbage, refuse or
anything else that would obstruct the entrances, lobbies, hallways, corridors,
passages, stairwells, elevators or other facilities of the Building or tend to
make them appear unclean or untidy may be placed there.

6.   OBSTRUCTIONS

     The windows and entrance doors, if any, that reflect or admit light or air
into the halls, passageways, or other public places in the Building may not be
covered or obstructed, except by blinds and drapes approved by the Landlord and
properly used. No books, packages, files, papers, bottles, flower pots, or any
other articles of any kind may be placed upon or hung from any window sills or
on the perimeter heating or ventilating units.

     Nothing may be thrown or dropped out of the windows or doors or down the
passageways or stairs or elevator shafts or from the terraces nor may anything
be swept into the corridors, elevator lobbies or stairwells of the Building.

7.   RESTRICTIONS OF NOISE

     No improper, unseemly or disturbing noise may be made in the Building nor
may any musical or sound-producing instrument or device be operated or used
inside the Premises in a way that may be heard outside the Premises. The Tenant
will not disturb or interfere with, or permit the disturbance of or interference
with, other occupants of the Building or of neighboring buildings.

8.   NO CANVASSING

     Canvassing, soliciting and peddling in the Building are prohibited and the
Tenant will co-operate to prevent such activities.

9.   PLUMBING

     The toilets, urinals, water closets, sinks and other water apparatus may
not be used for any purposes other than those for which they were constructed,
and no sanitary napkins, sweepings, rubbish, grease, rags, ashes or other
substances or materials may be thrown into them. Any damage resulting from
misuse shall be borne by the tenants by whom or by whose agents, employees,
invitees or licensees the damage was caused. Water may not be run unless it is
in actual use.

10.  CARE OF WALLS

     The Tenant shall be responsible to repair damage caused by driven nails,
spikes, hooks or screws into any part of the Premises.

11.  OPENING OF DOORS & WINDOWS

     When the Premises are not in use during the day or evening, all windows and
doors, if any, leading or opening directly outdoors and all other doors must be
securely closed to avoid possible damage from fire, storms, rain or freezing.

<PAGE>

                                     Page 3

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

12.  PLACING OF HEAVY OBJECTS

     No safe, business machine or other heavy office equipment may be brought
into or taken out of the Premises or the Building or positions, constructed,
installed or moved anywhere in the Premises or the Building without the
Landlord's prior written consent or other than in accordance with the Landlord's
requirements. No such moving may take place during Business Hours without the
Landlord's prior written consent. All damage done to the Building by moving or
using any heavy equipment or other office equipment or furniture will be
repaired at the Tenant's expense.

13.  DELIVERIES

     The Landlord may designate which entrance or entrances may be used for
deliveries to and from the Building. The Landlord may restrict and regulate the
use of public areas of the Building for deliveries (including, but not limited
to, the right to allocate the elevator and the reasonable hours of use of same
for delivery service). The Landlord may require at least 24 hours notice of the
Tenant's desire to use the elevators, which in all cases will be subject to
availability. No freight or bulky matter of any description will be received
into the Building or carried in the elevators except during hours approved by
the Landlord.

14.  NO DEBRIS

     No debris, garbage, trash or refuse may be placed or left in or upon any
part of the Building outside of the Premises and the Tenant may not permit any
undue accumulation of debris, garbage, trash or refuse in or outside the
Premises. The Premises must be kept tidy and free from rubbish, and rubbish must
be deposited in receptacles which are either designated or clearly intended for
waste.

15.  WINDOW CLEANING

     The Tenant will permit window cleaners to clean inside and outside windows
during Business Hours.

16.  FLOOR COVERINGS

     The Tenant may not, without the Landlord's prior written consent, lay floor
coverings other than unaffixed rugs. To the extent that any floor covering is
approved by the Landlord, it or any underpadding that is affixed to the floor
may only be affixed with a paste or other water-soluble material, the use of
cement or similar adhesive material being expressly prohibited.

17.  DRAPES, ETC.

     The Tenant is responsible for cleaning drapes, curtains and other window
coverings and carpets, broadloom and other floor coverings that may be installed
in its Premises, whether installed by the Landlord or the Tenant. No curtains,
blinds, shades or screens may be attached to, or hung in, or used in connection
with, any window or door of the Premises without the Landlord's prior written
consent. Curtains, blinds, shades, screens and all other window coverings must
be of a quality, type, design and neutral colour, and attached in a manner,
approved by the Landlord in writing. No window covering will be approved for use
unless it is of an open-weave material and is installed so as not to affect
detrimentally glass or air circulation.

18.  NO SLEEPING

     The Premises may not be used for sleeping, lodging or residential
purposes or for the storage of personal effects or articles other than those
required for business purposes

<PAGE>

                                     Page 4

No space in the Building may be used for manufacturing or for any immoral or
illegal purposes.

          No space may be used for the storage of merchandise or for the sale of
merchandise, goods or property, and no auction sales may be made by the Tenant
without the Landlord's prior written consent.

19.       USE OF NAME

          Tenants may not use the name of the Office Campus or the name of the
Landlord in any advertising without the Landlord's prior written consent.

20.       PERMITS

          If any apparatus used or installed by the Tenant requires a permit as
a condition for its installation, the Tenant must file a copy of the permit with
the Landlord.

21.       TAX AUTHORITY REQUESTS

          The Tenant will promptly notify the Landlord of all requests by any
taxing authority for information relating to the Premises (including Leasehold
Improvements, machinery and equipment) or the Tenant's occupation or use thereof
and any such information to be given by the Tenant to the taxing authority will
be forwarded by the Tenant to the Landlord for delivery to the taxing authority.

22.       TENANTS' REQUIREMENTS

          Tenants' requirements will be attended to only upon written
application to the building manager or such other authorized representative as
the Landlord may from time to time designate in writing. The Landlord's
employees will not perform any work or do anything outside of their regular
duties, unless under specific instructions from the Landlord's management
office, from the building manager or from such other authorized representative
as designated by the Landlord in writing.

23.       ANIMALS, BIRDS PROHIBITED

          No animals or birds of any kind may be brought into or kept in or
about the Office Campus.

24.       PARKING

          The parking of cars in any parking lot or parking garage will be
subject to the reasonable regulations of the Landlord.

 25.      CO-OPERATION

          It is the Tenant's duty to assist and co-operate with the Landlord in
preventing damage to the Premises.

 26.      BICYCLES PROHIBITED

          No bicycles or other vehicles shall be brought within the Building
without the written consent of the Landlord.

27. Notwithstanding the foregoing, nothing contained herein shall in any way
interfere with the Tenant's ability to undertake maintenance and custody of the
Premises as set forth in Section 16.10 of the Lease.

<PAGE>

                                  SCHEDULE "E"

                attached to and forming part of the Lease between
                         Legato Systems, Inc. ("Tenant")
                                       and
             Westbury International (1991) Corporation ("Landlord")

             Method of Measurement of Rentable Area and Useable Area
             -------------------------------------------------------

Measurement of Rentable Area and Useable Area shall be measured in accordance
with BOMA standard method for measuring floor area (ANSI-BOMAZ65.1 - 1996).

<PAGE>

                                  SCHEDULE "F"

                attached to and forming part of the Lease between

                         Legato Systems, Inc. ("Tenant")

                                       and

             Westbury International (1991) Corporation ("Landlord")

                                 LANDLORD'S WORK
                                 ---------------

                                    ARTICLE I
                    GENERAL DESIGN AND CONSTRUCTION CRITERIA

1.01      Landlord is responsible for delivery of the Building and all related
          site improvements in a timely manner and in accordance with drawings
          and specifications prepared by its architectural, structural,
          mechanical and electrical consultants as described herein.

1.02      In addition, Landlord will construct, or cause to be constructed, the
          Leasehold Improvements within the premises ("Tenant's Work") in
          accordance with the provisions of Section 16.03, Tenant's Work and
          Allowance, of the Lease.

1.03      The Landlord shall, upon completion of the Initial Premises, completed
          as to both Landlord's Work and Tenant's Work, deliver to the Tenant
          occupancy permits or such other confirmations as may be available from
          all regulatory authorities having jurisdiction over the Premises that
          the Initial Premises can be occupied by the Tenant. In addition the
          Initial Premises shall be fully finished (subject to only minor
          finishing items) such that the Tenant shall be fully operational in
          all aspects of its business from the Initial Premises.

1.04      Subject to the provisions hereof, Tenant is free to utilize designers,
          space planners and equipment suppliers of its choice.

1.05      Tenant is responsible for preparation of all design drawings and plans
          and specifications relating to completion of the Premises for
          occupation by Tenant.

1.06      Tenant shall impose and enforce all terms hereof on any designer,
          space planners and equipment suppliers engaged by Tenant.

                                   ARTICLE II
                     LANDLORD'S DRAWINGS AND SPECIFICATIONS

2.01      As soon as practicable after acceptance of the Offer to Lease or
          leased, Landlord shall deliver to Tenant Drawings and Specifications
          containing basic information pertinent to the Premises as set out in
          Article 2.02, and shall advise Tenant of its schedule for completion
          of Landlord's Work and Tenant's Work.

2.02      The Drawings and Specifications will contain the following information
          about the Premises:

          (a)      A dimensioned outline floor plan or plans showing the
                   building module.

          (b)      Dimensioned structural drawings showing the size and layout
                   of the framing for the floor(s).

          (c)      Dimensioned mechanical drawings showing the location of:

                   (i)  primary and secondary air distribution ductwork and
                        controls for an open floor plan,

                   (ii) sprinkler system for an open floor plan,

<PAGE>
                                     Page 2

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

                  (iii) heating and cooling units and controls for an open floor
                        plan,

                  (iv)  water supply and drainage systems, and access for Tenant
                        connections,

                  (v)   fire hose cabinets,

                  (vi)  life safety systems.

         (d)      Dimensioned electrical drawings and reflected ceiling plan or
                  plans showing the location of:

                  (i)   Recessed fluorescent lighting fixtures for an open floor
                        plan,

                  (ii)  fire detection and fire warning systems,

                  (iii) electrical panels, and empty conduit and junction boxes,
                        and

                  (iv)  telephone back-board panels, and empty conduit or cable
                        trays.

2.03     Tenant's designer, space planner and equipment suppliers are
         responsible to become familiar with the Building working drawings,
         design criteria and construction procedures to permit completion of
         proper and adequate architectural, structural, mechanical and
         electrical working drawings for Tenant's Work.

                                   ARTICLE III
                                 LANDLORD'S WORK

3.01     At no cost to Tenant, Landlord shall supply the Premises improved and
         finished to the extent described in Article 3.02.

3.02     Landlord shall provide the following (the "Landlord's Work"), all in
         accordance with the Building Standard (being the quantity and quality
         of materials, finishing and workmanship from time to time specified by
         Landlord for the Building):

         (a)      Service Core        Complete with finished elevators (with
                                      security lock-off system if included in
                                      the Building Standard), elevator lobby
                                      (with carpet, lights, and finished walls
                                      and ceiling, except in the case of full
                                      floor tenancies), stairways, ventilation
                                      shafts, and finished and painted
                                      electrical/telephone and janitor rooms,
                                      and mechanical room if any.

         (b)      Doors               Finished doors, complete with frame, trim
                                      and hardware, installed on washrooms,
                                      stairwells, and electrical, janitor, and
                                      mechanical and telephone rooms.

         (c)      Ceilings            Installed modular ceiling suspension
                                      system based on a 1500 mm (5'-0") module,
                                      with 500 mm by 1500 mm (20" x 60" fissured
                                      lay-in acoustic tiles delivered to
                                      premises for installation.

         (d)      Lights              Installed recessed fluorescent 20" x 60"
                                      light fixtures, complete with 0.125" clear
                                      prismatic acrylic lenses, including
                                      initial installation of lamps and
                                      ballasts, wired to electrical distribution
                                      panel(s), for an open floor plan. Fixtures
                                      will feature two 4 ft. white T-8 lamps
                                      with 347 v electronic ballast and will
                                      provide 60 F.C. illumination at desk level
                                      for an open floor plan. The lighting
                                      system will have a computer controlled
                                      time management system for energy
                                      efficiency and conservation.

         (e)      Floors              Poured in place concrete floor with
                                      trowelled finish, level to specified
                                      tolerances and designed to floor loading
                                      capacity of 50 lbs. per sq. ft. live load
                                      plus 25 lbs. per sq. ft. partition load.

<PAGE>

                                     Page 3

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

          (f)     Heating, Cooling    Perimeter and interior zone heating,
                  and Ventilation     cooling and ventilation by individual
                                      heat pump units distributed to an open
                                      floor plan complete with controls and
                                      thermostats. Each floor will comprise
                                      twenty separately zoned areas. Fresh air
                                      for ventilation will be provided on a
                                      constant basis at 20 C.F.M. per person.
                                      System will incorporate a continuous
                                      general exhaust system and a steam
                                      humidification system. Cooling tower
                                      located in mechanical penthouse.

         (g)      Water and Drainage  Access at a central location to domestic
                                      cold and hot water, drainage and vent
                                      systems.

         (h)      Washrooms           Two common washrooms finished with ceramic
                                      tile floors and walls, painted drywall
                                      ceilings, plastic laminate vanities,
                                      factory painted metal toilet partitions,
                                      washroom accessories, plumbing fixtures,
                                      lighting and all mechanical services. All
                                      washroom fixtures will be white vitreous
                                      china with electronic "no touch" faucets.

         (i)      Electrical          Building will be powered by 1500 KVA
                                      pad-mounted transformer with secondary
                                      voltage of 347/600 v 3-phase 4-wire.
                                      Access at panels in electrical closet for
                                      distribution of Building Standard
                                      electrical power. Design capacities are as
                                      follows: 1.25 watts per sq. ft. for
                                      lighting; 3 watts per sq. ft. for clean
                                      power (computers and electronic
                                      equipment); and 2 watts per sq. ft. for
                                      regular power (copiers, serveries, etc.).
                                      Each floor will include a telephone
                                      closet providing adequate telephone, data
                                      and fibre optic risers with vertical
                                      sleeves to accommodate Tenant
                                      distribution.

         (j)      Window Coverings    If included in the Building Standard,
                                      window coverings installed on all exterior
                                      windows.

         (k)      Sprinklers          A sprinkler system with heat detectors for
                                      an open floor plan. Semi-recessed chrome
                                      sprinkler heads to be turned down. The
                                      system will be monitored by a "notifier"
                                      addressable fire alarm system.

         (l)      Walls               Perimeter walls and columns shall be
                                      drywalled, sanded and primed ready for
                                      painting. Corridor and demising
                                      partitions, except in the case of
                                      full-floor tenancies will be full-height
                                      slab-to-slab height partition constructed
                                      of 2 1/2" metal studs at 16" on centre,
                                      with one layer of W' gypsum board each
                                      side and 2W' sound attenuation blankets
                                      between; walls taped, sanded and ready for
                                      paint.

         (m)      Entrance Doors      Except in the case of full floor
                                      tenancies, one Building Standard entrance
                                      door complete with frame, trim and
                                      hardware. If required by the applicable
                                      fire code, a second Building Standard exit
                                      door.

         (n)      General Exhaust     If available and included in the Building
                  System              Standard, access to the general exhaust
                                      system ducts for reproduction, photocopy,
                                      arid other office-type equipment requiring
                                      special exhaust systems.

         (o)      Security System     Access to the Building will be controlled
                                      by a keyless card entry system to the
                                      Building perimeter and elevators.

3.03     Landlord shall carry out such work with all due diligence. It is
         understood that certain of Landlord's Work can only be undertaken at
         the same time as or subsequent to work done by Tenant, and that
         certain work (including correction of deficiencies) may be undertaken
         or completed subsequent to the Commencement Date of the Lease executed
         by Landlord and Tenant.

<PAGE>

                                  SCHEDULE "G"

                attached to and forming part of the Lease between

                         Legato Systems, Inc. ("Tenant")

                                       and

             Westbury International (1991) Corporation ("Landlord")

                                  TENANT'S WORK
                                  -------------

                                    ARTICLE I
                        TENANT'S PLANS AND SPECIFICATIONS

    1.01     On or before February 1, 2000, Tenant shall deliver to Landlord a
             narrative space planning program describing the scope of the
             Tenant's Work.

    1.02     On or before May 1, 2000, Tenant shall deliver to Landlord
             sufficient plans and specifications for Tenant's Work for tendering
             purposes and building permit application, and such other
             information as may be reasonably requested by Landlord. Such plans
             and specifications shall include floor plans, interior elevations,
             details of any special installations which will affect the Building
             or perimeter walls of the Premises, complete plans for all
             mechanical, plumbing and electrical work, specifications for all
             materials and finishes to be used, and performance characteristics
             for fixtures and equipment. Where applicable, such plans and
             specifications shall include sections and elevations for Tenant
             entries, details of signage (which shall conform to Landlord's sign
             criteria), reflected ceiling plans, and changes in sprinkler head
             locations.

    1.03     Not more than 10 working days after receipt by Landlord of plans
             and specifications referred to in Articles 1.01 and 1.02, Landlord
             shall notify Tenant either of its approval thereof or of the
             changes required. If Landlord notifies Tenant that changes are
             required, Tenant shall within 15 working days of such notification
             submit to Landlord, for its approval, plans and specifications
             amended in accordance with the changes so required.

    1.04     Not more than 10 working days after the Landlord's approval of
             the final Tenant's Plans and Specifications, the Landlord will
             advise the Tenant as to the cost of the Tenant's Work in
             accordance with the provisions of Section 16.03, Tenant's Work
             and Allowance, of the Lease. The cost of the Tenant's Work will
             be detailed on a spreadsheet analysis supported by three
             competitive tenders for each element of the work along with a
             recommendation for awarding subcontractors, to be approved by the
             Tenant. It is acknowledged that the cost of Tenant's Work shall
             include General Conditions which cover the contractor's
             incremental direct job costs of superintendency, project
             management and insurance only in the amount of $67,000.00,
             consultants' fees including interior design based on $2.50 per
             sq. ft., and contractor's fee of 4.5%.

                                   ARTICLE II
                                  TENANT'S WORK

     2.01    All work required to complete the Premises for occupancy which is
             not set out in Article 1.02 (the "Tenant's Work") shall be
             performed by Landlord.

     2.02    Landlord shall provide permits, fees, work and materials required
             to complete the Premises for occupancy except as set out in
             Article 1.02, including but not limited to the following:

             (a)     Ceilings     Modification of ceiling suspension system as
                                  required, and installation of all lay-in
                                  acoustic tiles supplied by Landlord.

<PAGE>

                                     Page 2

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

             (b)     Lights          Relocation of lights, or supply and
                                     installation of supplementary lights (which
                                     shall not cause Building Standard load to
                                     be exceeded) and all light switching. Panel
                                     breakers are not acceptable for switching.

             (c)     Walls, Doors    Supply, installation and finishing of all
                     and Decorating  interior partitions, doors (including and
                                     in the case of full floor tenancies, doors
                                     to elevator lobby), fixtures, and
                                     furnishings, and decoration and finishing
                                     of all surfaces within the Premises.
                                     Upgraded variations of the Building
                                     Standard entrance door are available at
                                     Tenant's expense.

             (d)     Floors          Supply and installation of carpet and base
                                     or other floor coverings.

             (e)     Heating,        Supply and installation of any approved
                     Cooling and     modification to the systems, including
                     Ventilation     additional units, controls, and special
                                     ventilation, cooling and exhaust
                                     requirements.

             (f)     Water and       Supply and installation of any plumbing
                     Drainage        services to and in the Premises (e.g.
                                     private washrooms, kitchens, etc.) all from
                                     the point of access provided by Landlord.

             (g)     Elevator        If security lock-off system is included in
                     Lobbies         the Building Standard, connections to such
                                     system if required by full floor tenancies.

             (h)     Power           Supply and installation of electrical
                                     distribution systems for power and
                                     supplementary lighting to and in the
                                     Premises from the electrical room,
                                     including any special electrical systems
                                     (e.g. for reproduction equipment,
                                     computers, etc.) and any approved
                                     modifications to base Building systems to
                                     accommodate the same.

             (i)     Sprinklers      Supply and installation of any approved
                                     modifications to the sprinklers, fire
                                     detection and fire warning systems, and to
                                     the sprinkler system. Supply and
                                     installation of safety and emergency
                                     equipment and lighting as required by
                                     Tenant or any regulatory authority having
                                     jurisdiction which is additional to the
                                     base systems provided by Landlord. Supply
                                     and installation of all fire extinguishers
                                     within the Tenant's Premises.

             (j)     Stairways       If Tenant occupies two or more floors,
                                     where structurally feasible, stairways and
                                     other means of private access between such
                                     floors required by Tenant and approved by
                                     Landlord, including approved modifications
                                     to the base Building structure framing and
                                     floor slab.

             (k)     Telephones      Supply and installation of telephone and
                                     communication systems to and in the
                                     Premises from the electrical or telephone
                                     rooms, provided that Landlord may require
                                     all or portions of equipment servicing such
                                     systems to be contained within the
                                     Premises.

             (1)     Special         Supply and installation of any special
                     Services        services required by Tenant and approved
                                     by Landlord (e.g. natural gas, compressed
                                     air, auxiliary condenser water system,
                                     auxiliary exhaust system, emergency power,
                                     uninterrupted power supply, etc.).

    2.03     Modifications to the base Building systems and special requirements
             of Tenant can be considered by Landlord only if applied for at the
             time Tenant's plans and specifications are submitted for approval
             and if they are compatible with the capacity and character of the
             Building. Any such approved modifications shall be made at Tenant's
             expense and by Landlord's contractor.

<PAGE>

                                  SCHEDULE "H"

               attached to and forming part of the Lease between
                        Legato Systems, Inc. ("Tenant")
                                      and
             Westbury International (1991) Corporation ("Landlord")

                             CONSTRUCTION SCHEDULE
                             ---------------------

                                    [CHART]<PAGE>

                                                                     EXHIBIT 4.1

                              NEOTHERAPEUTICS, INC.

                                     WARRANT

Dated:  March __, 2002                                           Number ________

     NeoTherapeutics, Inc., a Delaware corporation (the "Company"), hereby
                                                         -------
certifies that, for value received, [________________] or its registered assigns
("Holder"), is entitled, subject to the terms set forth below, to purchase from
  ------
the Company up to a total of [_______] shares of Common Stock, $.001 par value
per share (the "Common Stock"), of the Company (each such share, a "Warrant
                ------------                                        -------
Share" and all such shares, the "Warrant Shares") at an exercise price equal to
-----                            --------------
$2.75 per share (as adjusted from time to time as provided in Section 7, the
"Exercise Price"), at any time and from time to time from and after the date
 --------------
hereof and through and including March __, 2007 (the "Expiration Date"), and
                                                      ---------------
subject to the following terms and conditions:

     1. Registration of Warrant. The Company shall register this Warrant upon
        -----------------------
records to be maintained by the Company for that purpose (the "Warrant
                                                               -------
Register"), in the name of the record Holder hereof from time to time. The
--------
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, and the Company shall not be affected by
notice to the contrary.

     2. Registration of Transfers and Exchanges.
        ---------------------------------------

        (a) This Warrant may not be sold, transferred, assigned pledged,
hypothecated or otherwise disposed, directly or indirectly, in whole or in part,
without the prior written consent of the Company. Any attempted sale, transfer,
assignment, pledge, hypothecation or other disposition of this Warrant, or any
portion thereof, shall be void and without any force or effect; provided,
however, that, subject to compliance with any applicable securities laws, the
Holder may transfer this Warrant, or any portion thereof, without the prior
written consent of the Company, if such transfer is to (i) a spouse, child,
grandchild, parent, sibling or custodian or trustee for the benefit of any such
relatives, or (ii) any shareholder or affiliate entity.

        (b) The Company shall register the transfer of any portion of this
Warrant in conformance with Section 2(a) in the Warrant Register, upon surrender
of this Warrant, with the Form of Assignment attached hereto duly completed and
signed, to the Company at the office specified in or pursuant to Section 10.
Upon any such registration or transfer, a new warrant to purchase Common Stock,
in substantially the form of this Warrant (any such new warrant, a "New
                                                                    ---
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
-------
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of this Warrant.

<PAGE>

        (c) This Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company specified in or pursuant to Section 10 for
one or more New Warrants, evidencing in the aggregate the right to purchase the
number of Warrant Shares which may then be purchased hereunder.

     3. Duration and Exercise of Warrant.
        --------------------------------

        (a) This Warrant shall be exercisable by the then registered Holder on
any business day before 5:00 P.M., California time, at any time and from time to
time on or after the date hereof to and including the Expiration Date. At 5:00
P.M., California time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value.

        (b) Upon surrender of this Warrant, with the Form of Election to
Purchase attached hereto duly completed and signed, to the Company at its
address for notice set forth in Section 10 and upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, in the manner provided hereunder, all as specified by the
Holder in the Form of Election to Purchase, the Company shall promptly (and in
any event, within four business days) issue or cause to be issued and cause to
be delivered to or upon the written order of the Holder and in such name or
names as the Holder may designate, a certificate for the Warrant Shares issuable
upon such exercise. Any person so designated by the Holder to receive Warrant
Shares shall be deemed to have become holder of record of such Warrant Shares as
of the Date of Exercise of this Warrant.

        A "Date of Exercise" means the date on which the Company shall have
received (i) this Warrant (or any New Warrant, as applicable), with the Form of
Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

        (c) This Warrant shall be exercisable, either in its entirety or, from
time to time, for a portion of the number of Warrant Shares. If less than all of
the Warrant Shares which may be purchased under this Warrant are exercised at
any time, the Company shall issue or cause to be issued, at its expense, a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares
for which no exercise has been evidenced by this Warrant.

        (d) Prior to the exercise of this Warrant, the Holder shall not be
entitled to any rights as a stockholder of the Company with respect to the
Warrant Shares, including (without limitation) the right to vote such shares,
receive dividends or other distributions thereon or be notified of stockholder
meetings (except as otherwise set forth in Section 7(f) herein).

        (e) If by the tenth business day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 3(b), then the Holder will have the right to rescind such
exercise.

        (f) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision

<PAGE>

hereof, the recovery of any judgment against any Person or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other Person of any obligation
to the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a Holder's right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     4. Payment of Taxes. The Company will pay any documentary stamp taxes
        ----------------
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

     5. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
        ----------------------
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and indemnity, if
requested, satisfactory to it. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

     6. Reservation of Warrant Shares. The Company covenants that it will at all
        -----------------------------
times reserve and keep available out of the aggregate of its authorized but
unissued Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other actual contingent purchase
rights of persons other than the Holder. The Company covenants that all Warrant
Shares that shall be so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly authorized, validly issued and fully paid and nonassessable.

     7. Certain Adjustments. The Exercise Price and number of Warrant Shares
        -------------------
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 7. Upon each such adjustment of the Exercise
Price pursuant to this Section 7, the Holder shall thereafter prior to the
Expiration Date be entitled to purchase, at the Exercise Price resulting from
such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

<PAGE>

        (a) If the Company, at any time while this Warrant is outstanding, (i)
shall pay a stock dividend (except scheduled dividends paid on outstanding
preferred stock which contain a stated dividend rate) or otherwise make a
distribution or distributions on shares of its Common Stock payable in shares of
Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger
number of shares, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and the denominator shall
be the number of shares of Common Stock (excluding treasury shares, if any)
outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision or
combination, and shall apply to successive subdivisions and combinations.

        (b) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 7(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

        (c) If the Company, at any time while this Warrant is outstanding, shall
distribute to all holders of Common Stock (and not to holders of this Warrant)
evidences of its indebtedness or assets or rights or warrants to subscribe for
or purchase any security (excluding those referred to in Sections 7(a), and
(b)), other than as part of its dissolution or liquidation or the winding up of
its affairs, then in each such case the Exercise Price shall be determined by
multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a fraction of which the denominator shall be the fair market value of a share of
Common Stock determined as of the record date mentioned above, and of which the
numerator shall be the fair market value of a share of Common Stock determined
as of such record date less the fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of Common Stock as determined by the Company's independent
certified public accountants that regularly examines the financial statements of
the Company (an "Appraiser").
                 ---------

        (d) For the purposes of this Section 7, the following clauses shall also
be applicable:

<PAGE>

            (i)  Record Date. In case the Company shall take a record of the
                 -----------
                 holders of its Common Stock for the purpose of entitling them
                 (A) to receive a dividend or other distribution payable in
                 Common Stock or in securities convertible or exchangeable into
                 shares of Common Stock, or (B) to subscribe for or purchase
                 Common Stock or securities convertible or exchangeable into
                 shares of Common Stock, then such record date shall be deemed
                 to be the date of the issue or sale of the shares of Common
                 Stock deemed to have been issued or sold upon the declaration
                 of such dividend or the making of such other distribution or
                 the date of the granting of such right of subscription or
                 purchase, as the case may be.

            (ii) Treasury Shares. The number of shares of Common Stock
                 ---------------
                 outstanding at any given time shall not include shares owned or
                 held by or for the account of the Company, and the disposition
                 of any such shares shall be considered an issue or sale of
                 Common Stock.

        (e) All calculations under this Section 7 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be.

        (f) If:

            (i)   the Company shall declare a dividend (or any other
                  distribution) on its Common Stock; or

            (ii)  the Company shall declare a special nonrecurring cash dividend
                  on or a redemption of its Common Stock; or

            (iii) the Company shall authorize the granting to all holders of the
                  Common Stock rights or warrants to subscribe for or purchase
                  any shares of capital stock of any class or of any rights; or

            (iv)  the approval of any stockholders of the Company shall be
                  required in connection with any reclassification of the Common
                  Stock of the Company, any consolidation or merger to which the
                  Company is a party, any sale or transfer of all or
                  substantially all of the assets of the Company, or any
                  compulsory share exchange whereby the Common Stock is
                  converted into other securities, cash or property; or

            (v)   the Company shall authorize the voluntary dissolution,
                  liquidation or winding up of the affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, at least 30 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not

<PAGE>

to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

     8. Payment of Exercise Price. The Holder shall pay the Exercise Price in
        -------------------------
immediately available funds by certified check or bank draft payable to the
order of the Company or by wire transfer to an account designated by the
Company.

     9. Fractional Shares. The Company shall not be required to issue or cause
        -----------------
to be issued fractional Warrant Shares on the exercise of this Warrant. The
number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction
of a Warrant Share would, except for the provisions of this Section 9, be
issuable on the exercise of this Warrant, the Company shall pay an amount in
cash equal to the Exercise Price multiplied by such fraction.

     10. Notices. Any and all notices or other communications or deliveries
         -------
hereunder shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section prior to 5:00 p.m. (California time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section later than 5:00 p.m. (California time) on any date and earlier than
11:59 p.m. (California time) on such date, (iii) the business day following
the date of mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if
to the Company, to 157 Technology Drive, Irvine, CA 92618, Attention: Chief
Financial Officer, or to facsimile no. (949) 788-6706, or (ii) if to the
Holder, to the Holder at the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section 10.

     11. Warrant Agent. The Company shall serve as warrant agent under this
         -------------
Warrant. The Company may appoint a new warrant agent upon notice to the Holder
in accordance with Section 10. Any corporation into which the Company may be
merged or any corporation resulting from any consolidation to which the
Company shall be a party or any corporation to which the Company transfers
substantially all of its corporate assets shall be a successor warrant agent
under this Warrant without any further act. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed
(by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

     12. Miscellaneous.
         -------------

<PAGE>

        (a) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing signed by the Company and the Holder
and their successors and assigns.

        (b) Subject to Section 12(a), above, nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or cause under this Warrant. This
Warrant shall inure to the sole and exclusive benefit of the Company and the
Holder.

        (c) This Warrant shall be governed by and construed and enforced in
accordance with the internal laws of the State of California without regard to
the principles of conflicts of law thereof. The Company and the Holder hereby
irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in Orange County, California, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, or that such
suit, action or proceeding is improper. Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy
thereof sent to it at the address in effect for notices to it under this
instrument and in the manner set forth in Section 10 above, and agrees that
such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

        (d) The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

        (e) In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                    NEOTHERAPEUTICS, INC.

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                          FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To NeoTherapeutics, Inc.:

     In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase __________
shares of Common Stock ("Common Stock"), $.001 par value per share, of
NeoTherapeutics, Inc. encloses herewith $__________ in cash, certified or
official bank check or checks, which sum represents the aggregate Exercise
Price (as defined in the Warrant) for the number of shares of Common Stock to
which this Form of Election to Purchase relates, together with any applicable
taxes payable by the undersigned pursuant to the Warrant.

     The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                    PLEASE INSERT SOCIAL SECURITY OR
                                    TAX IDENTIFICATION NUMBER

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

--------------------------------------------------------------------------------
                        (Please print name and address)

     If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests
that a New Warrant (as defined in the Warrant) evidencing the right to
purchase the shares of Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:

--------------------------------------------------------------------------------
                        (Please print name and address)

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

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

<PAGE>

Dated:  __________, ____            Name of Holder:

                                    (Print) ____________________________________

                                    (By:) ______________________________________

                                    (Name:)
                                    (Title:)
                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    the Warrant)

<PAGE>

                              FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________ the right represented by the Warrant enclosed with
this Form of Assignment to purchase __________ shares of Common Stock of
NeoTherapeutics, Inc. to which the Warrant relates and appoints
____________________ attorney to transfer said right on the books of
NeoTherapeutics, Inc. with full power of substitution in the premises.

Dated:  __________, ____

                                    ____________________________________________
                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    the Warrant)

                                    ____________________________________________
                                    Address of Transferee

                                    ____________________________________________

                                    ____________________________________________

In the presence of:

____________________________

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