Document:

<PAGE>

                                                                    EXHIBIT 10.6

                      FIRST AMENDMENT TO LEASE AGREEMENT
                          CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of August 7, 1997, by and between LINCOLN MENLO IV&V
ASSOCIATES LIMITED, a CALIFORNIA LIMITED PARTNERSHIP ("LANDLORD"), AND NUANCE
COMMUNICATIONS, INC., A CALIFORNIA CORPORATION ("TENANT"), with reference to the
following facts.

                                   RECITALS

A.   Landlord and Tenant have entered into that certain Lease Agreement dated
     May 29, 1997 (the "Lease"), for the leasing of certain premises containing
     approximately 33,792 rentable square feet of space located at 1380 Willow
     Road, Menlo Park, California (the "Premises") as such Premises are more
     fully described in the Lease.

B.   Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

     1.   Recitals: Landlord and Tenant agree that the above recitals are true
          --------
          and correct.

     2.   Commencement Date: The Commencement Date of the Lease shall be
          -----------------
          September 15, 1997

     3.   Expiration Date: The last day of the Term of the Lease (the
          ---------------
          "Expiration Date") shall be September 14, 2004.

     4.   Early Occupancy Period: Tenant shall have the right to occupy the
          ----------------------
          Premises on August 15, 1997 ("Occupancy Date") through September 14,
          2004 ("Early Occupancy Period"), subject to the terms and conditions
          of the Early Occupancy Agreement dated May 29, 1997 (Addendum 2 of the
          Lease), except that Landlord shall not be required to complete the
          construction Work described in Exhibit B of the Lease prior to the
          Occupancy Date or the commencement of the Early Occupancy Period.

     5.   Base Rent: The dates on which the Base Rent will be adjusted are:
          ---------
          for the period September 15, 1997 to September 14, 1998 the monthly
          Base Rent shall be $62,515.20,
          for the period September 15, 1998 to September 14, 1999 the monthly
          Base Rent shall be $64,204.80,
          for the period September 15, 1999 to September 14, 2000 the monthly
          Base Rent shall be $65,894.40,
          for the period September 15, 2000 to September 14, 2001 the monthly
          Base Rent shall be $67,584.00,
          for the period September 15, 2001 to September 14, 2002 the monthly
          Base Rent shall be $69,273.60,
          for the period September 15, 2002 to September 14, 2003 the monthly
          Base Rent shall be $70,963.20; and
          for the period September 15, 2003 to September 14, 2004 the monthly
          Base Rent shall be $72,652.80

     6.   Effect of Amendment: Except as modified herein, the terms and
          -------------------
          conditions of the Lease shall remain unmodified and continue in full
          force and effect. In the event of any conflict between the terms and
          conditions of the Lease and this Amendment, the terms and conditions
          of this Amendment shall prevail.

     7.   Definitions: Unless otherwise defined in this Amendment, all terms not
          -----------
          defined in this Amendment shall have the meaning set forth in the
          Lease.

     8.   Authority: Subject to the provisions of the Lease, this Amendment
          ---------
          shall be binding upon and inure to the benefit of the parties hereto,
          their respective heirs, legal representatives, successors and assigns.
          Each party hereto and the persons signing below warrant that the
          person signing below on such party's behalf is authorized to do so and
          to bind such party to the terms of this Amendment.

                                       1
<PAGE>

     9    The terms and provisions of the Lease are hereby incorporated in this
          Amendment.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

TENANT:

Nuance Communications, Inc.,
a California corporation

By:   /s/ Signature Illegible

Its:  PRESIDENT

Date: _____________________________

LANDLORD:

LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership

By:  Lincoln Property Company Management Services, Inc.,
     As Manager and Agent for Landlord

     By:  _________________________
          Vice President

     Date: ________________________

                                       2
<PAGE>

                                LEASE AGREEMENT
                                     (NNN)
                            BASIC LEASE INFORMATION

LEASE DATE:              May 29, 1997

LANDLORD:                LINCOLN MENLO IV & V ASSOCIATES LIMITED,
                         a California limited partnership

LANDLORD'S ADDRESS:      c/o Lincoln Property Company Management Services, Inc.
                         101 Lincoln Centre Drive, Fourth Floor
                         Foster City, California 94404-1167

TENANT:                  Nuance Communications, Inc.,
                         a California corporation

TENANT'S ADDRESS:        1380 Willow Road
                         Menlo Park, CA 94025

PREMISES:                Approximately 33,792 rentable square feet as shown on
                         Exhibit A
                         ---------

PREMISES ADDRESS:        1380 Willow Road
                         Menlo Park, CA 94025

                         BUILDING Q:                   Approximately 33,792
                                                       rentable square feet
                         LOT (BUILDING'S TAX PARCEL):  (055-440-300) APN
                         PARK: WILLOW PARK:            Approximately 984,954
                                                       rentable square feet
                         PHASE V OF THE PARK:          Approximately 60,192
                                                       rentable square feet

TERM:                    August 15, 1997 ("Commencement Date"), through
                         August 14, 2004 ("Expiration Date"), for a total of 84
                         months

BASE RENT (PARAGRAPH3):  Sixty-two thousand five hundred fifteen and 20/100
                         Dollars ($62,515.20) per month

ADJUSTMENTS TO BASE
RENT:                    August 15, 1998           $64,204.80
                         August 15, 1999           $65,894.40
                         August 15, 2000           $67,584.00
                         August 15, 2001           $69,273.60
                         August 15, 2002           $70,963.20
                         August 15, 2003           $72,652.80

SECURITY DEPOSIT
(PARAGRAPH4):            Sixty-two thousand two hundred nineteen and 00/100
                         Dollars ($62,219.00), plus a stand-by Letter of Credit
                         (Second Security Deposit) in the initial amount of four
                         hundred thousand and 00/100 Dollars ($400,000.00).

*TENANT'S SHARE OF OPERATING EXPENSES (PARAGRAPH6.1):       56.14% of the Phase
                                                            V
*TENANT'S SHARE OF TAX EXPENSES (PARAGRAPH6.2):             100% of the Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (PARAGRAPH7):  56.14% of the Phase
                                                            V
*TENANT'S SHARE OF UTILITY EXPENSES (PARAGRAPH7):           100% of the Building
                                                            Q
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

PERMITTED USES (PARAGRAPH9):  Administrative offices, sales, research and
                         development, shipping and receiving for speech
                         recognition and language understanding software, but
                         only to the extent permitted by the City of Menlo Park
                         and all agencies and governmental authorities having
                         jurisdiction thereof

UNRESERVED
PARKING SPACES:          One hundred one (101) non-exclusive and non-designated
                         spaces

BROKER (PARAGRAPH38):    Catalyst Real Estate Group for Tenant Cornish and Carey
                         Commercial for Landlord.

EXHIBITS:                Exhibit A - Premises, Building, Lot and/or Park
                         Exhibit B - Tenant Improvements
                         Exhibit C - Rules and Regulations
                         Exhibit D - Covenants, Conditions and Restrictions
                         Exhibit E - Hazardous Materials Disclosure Certificate
                                     - Example
                         Exhibit F - Change of Commencement Date - Example
                         Exhibit G - Tenant's Initial Hazardous Materials
                                     Disclosure Certificate
                         Exhibit H - Sign Criteria (Intentionally omitted)
                         Exhibit I - Subordination, Non Disturbance, and
                                     Attornment Agreement and Tenant Estoppel
                                     Certificate
                         Exhibit J - Improvements by Tenant

ADDENDA:                 Addendum 1: Option to Extend Lease
                         Addendum 2: Early Occupancy agreement

                                       1
<PAGE>

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

<TABLE>
<CAPTION>
SECTION                                                               PAGE
-------                                                               ----
<S>                                                                   <C>
1.  PREMISES                                                             3
2.  ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES           3
3.  RENT                                                                 3
4.  SECURITY DEPOSIT                                                     4
5.  TENANT IMPROVEMENTS                                                  5
6.  ADDITIONAL RENT                                                      5
7.  UTILITIES                                                            8
8.  LATE CHARGES                                                         8
9.  USE OF PREMISES                                                      9
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES                10
11. REPAIRS AND MAINTENANCE                                             11
12. INSURANCE                                                           12
13. WAIVER OF SUBROGATION                                               13
14. LIMITATION OF LIABILITY AND INDEMNITY                               13
15. ASSIGNMENT AND SUBLEASING                                           14
16. AD VALOREM TAXES                                                    15
17. SUBORDINATION                                                       15
18. RIGHT OF ENTRY                                                      16
19. ESTOPPEL CERTIFICATE                                                16
20. TENANT'S DEFAULT                                                    17
21. REMEDIES FOR TENANT'S DEFAULT                                       17
22. HOLDING OVER                                                        18
23. LANDLORD'S DEFAULT                                                  19
24. PARKING                                                             19
25. SALE OF PREMISES                                                    19
26. WAIVER                                                              19
27. CASUALTY DAMAGE                                                      ?
28. CONDEMNATION                                                        20
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS                           20
30. FINANCIAL STATEMENTS                                                23
31. GENERAL PROVISIONS                                                  23
32. SIGNS                                                               25
33. MORTGAGEE PROTECTION                                                25
34. QUITCLAIM                                                           25
35. MODIFICATIONS FOR LENDER                                            25
36. WARRANTIES OF TENANT                                                25
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT                     26
38. BROKERAGE COMMISSION                                                26
39. QUIET ENJOYMENT                                                     26
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS      27
</TABLE>

                                       2
<PAGE>

                                LEASE AGREEMENT

DATE:     This Lease is made and entered into as of the Lease Date set forth on
          Page 1. The Basic Lease Information set forth on Page 1 and this Lease
          are and shall be construed as a single instrument.

1.   PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
     --------
conditions contained herein. Landlord hereby grants to Tenant a license for the
right to use, on a non-exclusive basis, parking areas and ancillary facilities
located within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1 Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all occupants of the Building and/or the Park
(for example an electrical room or telephone room). Tenant further agrees that
the number of rentable square feet of the Building, the Lot and the Park may
subsequently change after the Lease Date commensurate with any modifications to
any of the foregoing by Landlord, and Tenant's Share shall accordingly change.

2.   ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES:
     ----------------------------------------------------------

     2.1  Notwithstanding anything to the contrary contained in this Lease, the
Commencement Date (and the date upon which tenant's obligation to pay Rent
hereunder commences) shall be the later to occur of (i) August 15, 1997; or (ii)
substantial completion of the Tenant Improvements as defined in Exhibit B,
                                                                ---------
attached hereto and incorporated by reference herein. If Landlord cannot deliver
possession of the Premises on the Commencement Date, Landlord shall not be
subject to any liability nor shall the validity of the Lease be affected;
provided, the Lease Term and the obligation to pay Rent shall commence on the
date possession is tendered and the Expiration Date shall be extended
commensurately. In the event the commencement date and/or the expiration date of
this Lease is other than the Commencement Date and/or Expiration Date specified
in the Basic Lease Information, as the case may be, Landlord and Tenant shall
execute a written amendment to this Lease, substantially in the form of Exhibit
                                                                        -------
F hereto, wherein the parties shall specify the actual commencement date,
-
expiration date and the date on which Tenant is to commence paying Rent. The
word "Term" whenever used herein refers to the initial term of this Lease and
any extension thereof. By taking possession of the Premises, Tenant shall be
deemed to have accepted the Premises in good condition and state of repair.
Tenant hereby acknowledges and agrees that neither Landlord nor Landlord's
agents or representatives has made any representations or warranties as to the
suitability, safety or fitness of the Premises for the conduct of Tenant's
business, Tenant's intended use of the Premises or for any other purpose.

     2.2  In the event Landlord permits Tenant to occupy the Premises prior to
the Commencement Date, such occupancy shall be at Tenant's sole risk and subject
to all the provisions of this Lease, including, but not limited to, the
requirement to pay Rent and the Security Deposit, and to obtain the insurance
required pursuant to this Lease and to deliver insurance certificates as
required herein. In addition to the foregoing, Landlord shall have the right to
impose such additional conditions on Tenant's early entry as Landlord shall deem
appropriate. If, at any time, Tenant is in default of any term, condition or
provision of this Lease, any such waiver by Landlord of Tenant's requirement to
pay rental payments shall be null and void and Tenant shall immediately pay to
Landlord all rental payments so waived by Landlord.

3.   RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
     ----
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent described in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of the Lease. In, addition to
the Base Rent set forth in the Basic Lease Information, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, as well as the Administrative Expenses.
Tenant shall also pay to Landlord as Additional Rent hereunder, immediately on
Landlord's demand therefor, any and all costs and expenses incurred by Landlord
to enforce the provisions of this Lease, including, but not limited to, costs
associated with the delivery of notices, delivery and recordation of notice(s)
of default, reasonable attorneys' fees, expert fees, court

                                       3
<PAGE>

costs and filing fees (collectively, the "Enforcement Expenses"). The term
"Rent" whenever used herein refers to the aggregate of all these amounts. If
Landlord permits Tenant to occupy the Premises without requiring Tenant to pay
rental payments for a period of time, the waiver of the requirement to pay
rental payments shall only apply to waiver of the Base Rent and Additional Rent
and Tenant shall otherwise perform all other obligations of Tenant required
hereunder. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date and the first day of the calendar
month in which the date of termination occurs, as the case may be.

4.   SECURITY DEPOSIT:
     ----------------

     4.1  SECURITY DEPOSIT: Upon Tenant's execution of this Lease, Tenant shall
          ----------------
deliver to Landlord, as a Security Deposit for the performance by Tenant of its
obligations under this Lease, the amount specified in the Basic Lease
Information. If Tenant is in default beyond applicable cure periods, Landlord
may, but without obligation to do so, use the Security Deposit, or any portion
thereof, to cure the default or to compensate Landlord for all damages sustained
by Landlord resulting from Tenant's default, including, but not limited to the
Enforcement Expenses. Tenant shall, immediately on demand, pay to Landlord a sum
equal to the portion of the Security Deposit so applied or used so as to
replenish the amount of the Security Deposit held to increase such deposit to
the amount initially deposited with Landlord. At any time after Tenant has
defaulted hereunder, Landlord may require an increase in the amount of the
Security Deposit required hereunder, not to exceed the sum equal to six (6)
month's Base rent payable during the last year of the Lease Term, and Tenant
shall, immediately on demand, pay to Landlord additional sums in the amount of
such increase As soon as practicable after the termination of this Lease,
Landlord shall return the Security Deposit to Tenant, less such amounts as are
reasonably necessary, as determined solely but reasonably by Landlord, to remedy
Tenant's default(s) hereunder or to otherwise restore the Premises to a clean
and safe condition, reasonable wear and tear excepted, except as otherwise
provided in the Lease. If the cost to restore the Premises exceeds the amount of
the Security Deposit, Tenant shall promptly deliver to Landlord any and all of
such excess sums as reasonably determined by Landlord shall not be required to
keep the Security Deposit separate from other funds, and, unless otherwise
required by law, Tenant shall not be entitled to interest on the Security
Deposit. In no event or circumstance shall Tenant have the right to any use of
the Security Deposit and, specifically, Tenant may not use the Security Deposit
as a credit or to otherwise offset any payments required hereunder, including,
but not limited to, Rent or any portion thereof.

     4.2  SECOND SECURITY DEPOSIT: On or before occupancy, Tenant shall deliver
          -----------------------
to Landlord, as a second security deposit (the "Second Security Deposit") for
the full and faithful performance by Tenant of all of its obligations under this
Lease, an irrevocable negotiable letter of credit, in the form and containing
the terms required herein, payable in the City of Foster City, California
running in favor of Landlord issued by a solvent bank under the supervision of
the Superintendent of Banks of the State of California, or a National Banking
Association, in the amount of four hundred thousand and 00/100 dollars
($400,000.00) (the "Letter of Credit"). The Letter of Credit shall be (a) at
sight and irrevocable (b) maintained in declining amounts stated below, whether
through replacement, renewal or extension, until the sixth anniversary of the
Lease. Provided, however if Tenant is or has been in default, beyond applicable
cure periods, of any provision of the Lease at the fifth anniversary of the
Lease, the Second Security Deposit shall be maintained as described herein
throughout the Term of the Lease. (the "Letter of Credit Expiration Date") and
Tenant shall deliver a new Letter of Credit or certificate of renewal or
extension to Landlord at least thirty (30) days prior to the expiration of the
Letter of Credit, without any action whatsoever on the part of Landlord, (c)
subject to the Uniform Customs and Practices for Documentary Credits (1983-Rev)
International Chamber of Commerce Publication #400, and (d) acceptable to
Landlord in its sole but reasonable discretion. The Letter of Credit amount
shall decline and be renewed or extended as follows:

<TABLE>
<CAPTION>
          Origination or
          Renewal/Extension Date                  Expiration Date               Amount
          ----------------------                  ---------------              ---------
          <S>                           <C>                                   <C>
          Lease Execution               August 14, 1998 (First Anniversary)   $400,000.00
          August 15, 1998               August 14, 1999 (Second Anniversary)  $320,000.00
          August 15, 1999               August 14, 2000 (Third Anniversary)   $240,000.00
          August 15, 2000               August 14, 2001 (Fourth Anniversary)  $160,000.00
          August 15, 2001               August 14, 2002 (Fifth Anniversary)   $ 80,000.00
</TABLE>

In addition to the foregoing, the form and terms of the Letter of Credit (and
the bank issuing the same) shall be acceptable to Landlord, in Landlord's sole
discretion, and shall provide, among other things, in effect that: (1) Landlord,
or its then managing agent, shall have the right to draw down an amount up

                                       4
<PAGE>

to the face amount of the Letter of Credit upon the presentation to the issuing
bank of Landlord's (or Landlord's then managing agent's) statement that such
amount is due to Landlord under the terms and conditions of this Lease, it being
understood that if Landlord or its managing agent be a corporation, partnership
or other entity, then such statement shall be signed by an officer (if a
corporation), a general partner (if a partnership), or any authorized party (if
another entity); (2) the Letter of Credit will be honored by the issuing bank
without inquiry as to the accuracy thereof and regardless of whether the Tenant
disputes the content of such statement; (3) in the event of a transfer of
Landlord's interest in any of the Buildings of which the Premises are a part,
Landlord shall have the right to transfer the Letter of Credit, in whole or in
part (or cause a substitute letter of credit to be delivered, as applicable), to
the transferee and thereupon the Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor, and it
is agreed that the provisions hereof shall apply to every transfer or assignment
of the whole or any portion of said Letter of Credit to a new Landlord. If, as a
result of any such application of all or any part of such security, the amount
secured by the Letter of Credit shall be less than four hundred thousand and
00/100 dollars ($400,000.00) or the required Letter of Credit amount for the
corresponding dates above, Tenant shall forthwith provide Landlord with
additional letter(s) of credit or cash in an amount equal to the deficiency and
each such additional letter of credit shall comply with all of the provisions of
this Section 4.2. Tenant further covenants and warrants that it will not assign
nor encumber the Letter of Credit or any part thereof and that neither Landlord
nor its successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. Without limiting the generality
of the foregoing, if the Letter of Credit expires earlier than the Letter of
Credit Expiration Date, Landlord will accept a renewal thereof or substitute
letter of credit (such renewal or substitute letter of credit to be in effect
not later than thirty (30) days prior to the expiration thereof), irrevocable
and automatically renewable as above provided through the Letter of Credit
Expiration Date upon the same terms as the expiring letter of credit. However,
if the Letter of Credit is not timely renewed or a substitute letter of credit
or cash is not timely received, or if Tenant fails to maintain the Letter of
Credit in the amount and terms set forth in this Section 4.2, Tenant, at least
thirty (30) days prior to the expiration of the Letter of Credit, or immediately
upon its failure to comply with each and every term of this Section 4.2, must
deposit with Landlord cash security in the amounts required by, and to be held
subject to and in accordance with, all of the terms and conditions set forth
this Section 4.2 and all other applicable provisions of this Lease, failing
which the Landlord may present such Letter of Credit to the bank in accordance
with the terms of this Section 4.2, and the entire sum secured thereby shall be
paid to Landlord, to be held by Landlord as provided in this Section 4.2. If
Tenant is in default beyond applicable cure periods, Landlord may, but without
obligation to do so, use the Second Security Deposit, or any portion thereof, to
cure the default or to compensate Landlord for all damages sustained by Landlord
resulting from Tenant's default, including, but not limited to the Enforcement
Expenses. Tenant shall, immediately on demand, pay to Landlord a sum equal to
the portion of the Second Security Deposit so applied or used so as to replenish
the amount of the Second Security Deposit held to increase such deposit to the
amount initially deposited with Landlord.

5.   TENANT IMPROVEMENTS: Tenant hereby accepts the Premises as suitable for
     -------------------
Tenant's intended use and as being in good operating order, condition and
repair, "AS IS", except as specified in Exhibit B attached hereto. Landlord or
                                        ---------
Tenant, as the case may be, shall install and construct the Tenant Improvements
(as such term is defined in Exhibit B hereto) in accordance with the terms,
                            ---------
conditions, criteria and provisions set forth in Exhibit B. Landlord and Tenant
                                                 ---------
hereby agree to and shall be bound by the terms, conditions and provisions of
Exhibit B. Tenant acknowledges and agrees that neither Landlord nor any of
---------
Landlord's agents, representatives or employees has made any representations as
to the suitability, fitness or condition of the Premises for the conduct of
Tenant's business or for any other purpose, including without limitation, any
storage incidental thereto. Any exception to the foregoing provisions must be
made by express written agreement by both parties. Notwithstanding anything to
the contrary contained in this Lease, on the Commencement Date the roof and the
heating, ventilating and air conditioning ("HVAC") system, and the electrical,
plumbing, sewer, life safety and, if applicable, security systems (collectively,
"Building Systems") serving the Premises shall be in good working order and
repair. If, during the first thirty (30) days of the Term, the roof or any
Building System is not in the condition required by the foregoing sentence,
Tenant shall notify Landlord of the need for repair, and the repair shall be
completed at no cost to Tenant.

6.   ADDITIONAL RENT: It is intended by Landlord and Tenant that this Lease
     ---------------
be a "triple net lease." The costs and expenses described in this Section 6 and
all other sums, charges, costs and expenses specified in this Lease other than
Base Rent are to be paid by Tenant to Landlord as additional rent (collectively,
"Additional Rent").

     6.1  OPERATING EXPENSES: In addition to the Base Rent set forth in Section
3, Tenant shall pay Tenant's Share, which is specified in the Basic Lease
Information, of all Operating Expenses as Additional Rent. The term "Operating
Expenses" as used herein shall mean the total amounts paid or

                                       5
<PAGE>

payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to in the Basic Lease Information. The amount of Tenant's
Share of Operating Expenses shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord if there is a change in the
rentable square footage of the Premises, the Building and/or the Park. These
Operating Expenses may include, but are not limited to:

                  6.1.1   Landlord's cost of repairs to, and maintenance of, the
         roof, the roof membrane and the exterior walls of the Building,

                  6.1.2   Landlord's cost of maintaining the outside paved area,
         landscaping and other common areas for the Park. The term "Common
         Areas" shall mean all areas and facilities within the Park exclusive of
         the Premises and the other portions of the Park leasable exclusively to
         other tenants. The Common Areas include, but are not limited to,
         interior lobbies, mezzanines, parking areas, access and perimeter
         roads, sidewalks, rail spurs, landscaped areas and similar areas and
         facilities;

                  6.1.3   Landlord's annual cost of insurance insuring against
         fire and extended coverage (including, if Landlord elects, "all risk"
         or "special purpose" coverage) and all other insurance, including, but
         not limited to, earthquake, flood and/or surface water endorsements for
         the Building, the Lot and the Park (including the Common Areas), rental
         value insurance against loss of Rent in an amount equal to the amount
         of Rent for a period of at least six (6) months commencing on the date
         of loss, and subject to the provisions of Section 27 below, any
         deductible;

                  6.1.4   Landlord's cost of: (i) modifications and/or new
         improvements to the Building, the Common Areas and/or the Park
         occasioned by any rules, laws or regulations effective subsequent to
         the date on which the Building was originally constructed, (ii)
         reasonably necessary replacement improvements to the Building, the
         Common Areas and/or the Park after the Lease Date; and (iii) new
         improvements to the Building, the Common Areas and/or the Park that
         reduce operating costs or improve life/safety conditions, all as
         reasonably determined by Landlord, in its sole but reasonable
         discretion; provided, however, that the cost for such items deemed to
         be capital items in accordance with typical commercial real estate
         accounting practices shall be amortized over the useful life of the
         item in accordance with generally accepted real estate accounting
         principles, and Tenant shall pay to landlord on a monthly basis
         Tenant's Share of such costs falling due during the Term.

                  6.1.5   If Landlord elects to so procure, Landlord's cost of
         preventative maintenance, and repair contracts including, but not
         limited to, contracts for elevator systems and heating, ventilation and
         air conditioning systems, lifts for disabled persons, and trash or
         refuse collection;

                  6.1.6   Landlord's cost of security and fire protection
         services for the Building and/or the Park, as the case may be, if in
         Landlord's sole discretion such services are provided;

                  6.1.7   Landlord's establishment of reasonable reserves for
         replacements and/or repairs of Common Area improvements, equipment and
         supplies;

                  6.1.8   Landlord's cost for the maintenance and repair of any
         rail spur and rail crossing, and for the creation and negotiation of,
         and pursuant to, any rail spur or track agreements, licenses, easements
         or other similar undertakings;

                  6.1.9   Landlord's cost of supplies, equipment, rental
         equipment and other similar items used in the operation and/or
         maintenance of the Park; and

                  6.1.10  Landlord's cost for the repairs and maintenance items
         set forth in Section 11.2 below.

                  Notwithstanding anything to the contrary contained in this
         Lease, Operating Expenses shall not include. (i) costs occasioned by
         the act, omission or violation of law by Landlord, any other occupant
         of the Project, or their respective agents, employees or contractors,
         or costs to correct any construction defect in the Premises or the
         Building; (ii) costs occasioned by fire, acts of God or other
         casualties, or by the exercise of the power of eminent domain; (iii)
         costs which Tenant pays directly to a third person or for which
         Landlord has a right of reimbursement from others; (iv) costs (A)
         arising from the disproportionate use of any utility or service
         supplied by Landlord to any other occupant of the Project, or (B)
         associated with utilities with utilities and services of a type not
         provided to Tenant; (v) costs incurred in connection with negotiations
         or disputes with other occupant(s) of the Project, and costs arising
         from the violation by Landlord or any occupant of the Project (other
         than Tenant) of the terms and conditions of any lease or

                                       6

<PAGE>

         other agreement; (vi) depreciation, amortization or other expense
         reserves, or mortgage or ground lease payments.

         6.2   TAX EXPENSES:  In addition to the Base Rent set forth in Section
3, Tenant shall pay its share, which is specified in the Basic Lease
Information, of all real property taxes applicable to the land and improvements
included within the Lot on which the Premises are situated and one hundred
percent (100%) of all personal property taxes now or hereafter assessed or
levied against the Premises or Tenant's personal property. The amount of
Tenant's Share of Tax Expenses shall be reviewed from time to time by Landlord
and shall be subject to modification by Landlord if there is a change in the
rentable square footage of the Premises, the Building and/or the Park. Tenant
shall also pay one hundred percent (100%) of any increase in real property taxes
attributable, in Landlord's sole but reasonable discretion, to any and all
alterations, Tenant Improvements or other improvements of any kind, which are
above standard improvements customarily installed for similar buildings located
within the Building or the Park (as applicable), whatsoever placed in, on or
about the Premises for the benefit of, at the request of, or by Tenant. The term
"Tax Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license
fees, license tax, business license fee, rental tax, transaction tax, levy, or
penalty imposed by authority having the direct or indirect power of tax
(including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof) as
against any legal or equitable interest of Landlord in the Premises, the
Building, the Lot or the Park, as against Landlord's right to rent or as against
Landlord's business of leasing the Premises or the occupancy of Tenant or any
other tax, fee, or excise, however described, including, but not limited to, any
value added tax, or any tax imposed in substitution (partially or totally) of
any tax previously included within the definition of real property taxes, or any
additional tax the nature of which was previously included within the definition
of real property taxes. The term "Tax Expenses" shall not include any franchise,
estate, inheritance, net income, gift or excess profits tax imposed upon
Landlord.

         6.3   ADMINISTRATIVE EXPENSES: The Administrative Expenses set forth in
this Section 6.3 are considered part of Additional Rent. In addition to the Base
Rent set forth in Section 3 hereof, Tenant shall pay Landlord, without prior
notice or demand, commencing on the Commencement Date and continuing thereafter
on the first (1st) day of each month throughout the balance of the Term of this
Lease, as compensation to Landlord for accounting and management services
rendered on behalf of the Building and/or the Park, one-twelfth (1/12th) of an
amount equal to ten percent (10%) of the estimated amount of the aggregate of
the Tenant's Share of (i) the total Operating Expenses and Tax Expenses as
described in Sections 6.1 and 6.2 above, respectively, and (ii) all Common Area
Utility Costs for the Park and Utility Expenses for the Premises as described in
Section 7 below (collectively, the "Administrative Expenses"). Any
reconciliation of the Administrative Expenses shall be substantially in the same
manner as specified in Section 6.5 below, to the extent such provisions are
applicable. Tenant's obligation to pay such Administrative Expenses shall
survive the expiration or earlier termination of this Lease.

         6.4   PAYMENT OF EXPENSES:  Landlord shall estimate Tenant's Share of
the Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant's obligation to
pay Tenant's Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.

         6.5   ANNUAL  RECONCILIATION:  By June 30th of each calendar year, or
as soon thereafter as reasonably possible Landlord shall endeavor to furnish
Tenant with an accounting of actual Operating Expenses and Tax Expenses Within
thirty (30) days of Landlord's delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date shall not constitute a waiver
by Landlord of its right to collect any of Tenant's underpayment at any time.
Landlord shall credit the amount of any overpayment by Tenant toward the next
estimated monthly installment(s) falling due, or where the Term of the Lease has
expired, refund the amount of overpayment to Tenant. If the Term of the Lease
expires prior to the annual reconciliation of expenses Landlord shall have the
right to reasonably estimate Tenant's Share of such expenses, and if Landlord
determines that an underpayment is due, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's Share of such expenses or to otherwise perform such

                                       7

<PAGE>

reconciliation of expenses, including without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the Term of the Lease or at any time after the expiration or
earlier termination of this Lease.

         6.6   AUDIT:  After delivery to Landlord of at least thirty (30) days
prior written notice. Tenant, at its sole cost and expense through any
accountant designated by it, shall have the right to examine and/or audit the
books and records evidencing such costs and expenses for the previous one (1)
calendar year, during Landlord's reasonable business hours but not more
frequently than once during any calendar year. Any such accounting firm
designated by Tenant may not be compensated on a contingency fee basis. The
results of any such audit (and any negotiations between the parties related
thereto) shall be maintained strictly confidential by Tenant and its accounting
firm and shall not be disclosed, published or otherwise disseminated to any
other party other than to Landlord and its authorized agents. Landlord and
Tenant shall use their best efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant in the accounting
of such costs and expenses.

7.       UTILITIES:  Utility Expenses, Common Area Utility Costs and all other
         ---------
sums or charges set forth in this Section 7 are considered part of Additional
Rent. In addition to the Base Rent set forth in Section 3 hereof, Tenant shall
pay the cost of all water, sewer use, sewer discharge fees and sewer connection
fees, gas, heat, electricity, refuse pickup, janitorial service, telephone and
other utilities billed or metered separately to the Premises and/or Tenant.
Tenant shall also pay Tenant's Share of any assessments or charges for utility
or similar purposes included within any tax bill for the Lot on which the
Premises are situated, including, without limitation, entitlement fees,
allocation unit fees, and/or any similar fees or charges, and any penalties
related thereto. For any such utility fees or use charges that are not billed or
metered separately to Tenant, including without limitation, water and refuse
pick up charges, Tenant shall pay to Landlord, as Additional Rent, without prior
notice or demand, on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of this Lease the amount which
is attributable to Tenant's use of the utilities or similar services, as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such utilities and similar services ("Utility Expenses"). If Tenant
disputes any such estimate or determination, then Tenant shall either pay the
estimated amount or cause the Premises to be separately metered at Tenant's sole
expense. In addition, Tenant shall pay to Landlord Tenant's Share of any Common
Area utility costs, fees, charges or expenses ("Common Area Utility Costs").
Tenant shall pay to Landlord one-twelfth (1/12th) of the estimated amount of
Tenant's Share of the Common Area Utility Costs on the Commencement Date and
thereafter on the first (1st) day of each month throughout the balance of the
Term of this Lease and any reconciliation thereof shall be substantially in the
same manner as specified in Section 6.5 above. The amount of Tenant's Share of
Common Area Utility Costs shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord if there is a change in the
rentable square footage of the Premises, the Building and/or the Park Tenant
acknowledges that the Premises may become subject to the rationing of utility
services or restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof. Notwithstanding
anything to the contrary contained herein, if permitted by applicable Laws,
Landlord shall have the right at any time and from time to time during the Term
of this Lease to either contract for service from a different company or
companies (each such company shall be referred to herein as an "Alternate
Service Provider") other than the company or companies presently providing
electricity service for the Building or the Park (the "Electric Service
Provider") or continue to contract for service from the Electric Service
Provider, at Landlord's sole discretion. Tenant hereby agrees to cooperate with
Landlord, the Electric Service Provider, and any Alternate Service Provider at
all times and, as reasonably necessary, shall allow Landlord, the Electric
Service Provider, and any Alternate Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises.

8.       LATE CHARGES: Any and all sums or charges set forth in this Section 8
         ------------
are considered part of Additional Rent. Tenant acknowledges that late payment
(the fifth day of each month or any time thereafter) by Tenant to Landlord of
Base Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and

                                       8
<PAGE>

accounting charges, and late charges that may be imposed on Landlord by the
terms of any note secured by any encumbrance against the Premises, and late
charges and penalties due to the late payment of real property taxes on the
Premises. Therefore, if any installment of Rent or any other sum due from Tenant
is not received by Landlord when due, Tenant shall promptly pay to Landlord all
of the following, as applicable: (a) an additional sum equal to ten percent
(10%) of such delinquent amount plus interest on such delinquent amount at the
rate equal to the prime rate plus three percent (3%) for the time period such
payments are delinquent as a late charge for every month or portion thereof that
such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for each
three-day notice prepared for, or served on, Tenant, (c) the amount of fifty
dollars ($50) relating to checks for which there are not sufficient funds. If
Tenant delivers to Landlord a check for which there are not sufficient funds,
Landlord may, at its sole option, require Tenant to replace such check with a
cashier's check for the amount of such check and all other charges payable
hereunder. The parties agree that this late charge and the other charges
referenced above represent a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant. Acceptance of any late
charge or other charges shall not constitute a waiver by Landlord of Tenant's
default with respect to the delinquent amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord for any
other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.

9.       USE OF PREMISES:
         ---------------

         9.1   COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND
REGULATIONS: The Premises are to be used solely for the purposes and uses
specified in the Basic Lease Information and for no other uses or purposes
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed so long as the proposed use (i) does not
involve the use of Hazardous Materials other than as expressly permitted under
the provisions of Section 29 below, (ii) does not require any additional parking
in excess of the parking spaces already licensed to Tenant pursuant to the
provisions of Section 24 of this Lease, and (iii) is compatible and consistent
with the other uses then being made in the Park and in other similar types of
buildings in the vicinity of the Park, as reasonably determined by Landlord. The
use of the Premises by Tenant and its employees, representatives, agents,
invitees, licensees, subtenants, customers or contractors (collectively,
"Tenant's Representatives") shall be subject to, and at all times in compliance
with, (a) any and all applicable laws, ordinances, statutes, orders and
regulations as same exist from time to time (collectively, the "Laws"), (b) any
and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has been or hereafter is recorded in any official or
public records with respect to the Premises, the Building, the Lot and/or the
Park, or any portion thereof (collectively, the "Recorded Matters"), and (c) any
and all rules and regulations set forth in Exhibit C, attached to and made a
                                           ---------
part of this Lease, and any other reasonable rules and regulations promulgated
by Landlord now or hereafter enacted relating to parking and the operation of
the Premises, the Building and the Park (collectively, the "Rules and
Regulations"). Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not be required to comply with any rule or regulation unless the
same applies non-discriminatorily to all occupants of the Project, and does not
unreasonably interfere with tenant's use of the Premises or Tenant's parking
rights. Tenant agrees to, and does hereby, assume full and complete
responsibility to ensure that the Premises are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises, and Tenant's use of the Premises and that same are in compliance with
all applicable Laws throughout the Term of this Lease. Additionally, Tenant
shall be solely responsible for the payment of all costs, fees and expenses
associated with any modifications, improvements or alterations to the Premises,
Building, the Common Areas and/or the Park occasioned by the enactment of, or
changes to, any Laws arising from Tenant's particular use of the Premises or
alterations, improvements or additions made to the Premises regardless of when
such Laws became effective.

         9.2   PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public

                                       9
<PAGE>

nuisance in, on or about the Premises, Building, Park and/or the Common Areas,
including, but not limited to, any offensive odors, noises, fumes or vibrations.
Tenant shall not damage or deface or otherwise commit or suffer to be committed
any waste in, upon or about the Premises. Tenant shall not place or store, nor
permit any other person or entity to place or store, any property, equipment,
materials, supplies, personal property or any other items or goods outside of
the Premises for any period of time. Tenant shall not permit any animals,
including, but not limited to, any household pets, to be brought or kept in or
about the Premises. Tenant shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside areas; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such to remain outside the
Building area, except for any non-hazardous or non-harmful materials which may
be stored in refuse dumpsters or in any enclosed trash areas provided. Tenant
shall honor the terms of all Recorded Matters relating to the Premises, the
Building, the Lot and/or the Park. Tenant shall honor the Rules and Regulations.
If Tenant fails to comply with such Laws, Recorded Matters, Rules and
Regulations or the provisions of this Lease, Landlord shall have the right to
collect from Tenant a reasonable sum as a penalty, in addition to all rights and
remedies of Landlord hereunder including, but not limited to, the payment by
Tenant to Landlord of all Enforcement Expenses and Landlord's costs and
expenses, if any, to cure any of such failures of Tenant, if Landlord, at its
sole option, elects to undertake such cure.

10.      ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
         ----------------------------------------------------

         10.1  ALTERATIONS AND ADDITIONS:  Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed. If any such alteration or addition is
expressly permitted by Landlord, Tenant shall deliver at least twenty (20) days
prior notice to Landlord, from the date Tenant intends to commence construction,
sufficient to enable Landlord to post a Notice of Non-Responsibility. In all
events, Tenant shall obtain all permits or other governmental approvals prior to
commencing any of such work and deliver a copy of same to Landlord. All
alterations and additions shall be installed by a licensed contractor reasonably
approved by Landlord, at Tenant's sole expense in compliance with all applicable
Laws (including, but not limited to, the ADA as defined herein), Recorded
Matters, and Rules and Regulations. At the time of Landlord's approval of such
alteration or addition, if requested in writing by Tenant, Landlord shall notify
Tenant if Landlord will require Tenant to remove such alterations or additions
upon termination of this Lease. Tenant shall keep the Premises and the property
on which the Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by or on behalf of
Tenant. As a condition to Landlord's consent to the installation of any
fixtures, additions or other improvements, Landlord may require Tenant to post
and obtain a completion and indemnity bond for up to one hundred twenty-five
percent (125%) of the cost of the work.

         Notwithstanding anything to the contrary contained herein, Tenant may
install, make and permit to be made improvements, alterations and additions to
the Premises without first obtaining Landlord's written consent thereto,
provided that such improvements, alterations or additions to the Premises (a)
are not structural and do not affect the structural integrity of the Premises
and/or the Building, and/or (b) do not requires the issuance of a building
permit by the City of Menlo Park, and/or (c) do not involve electrical and/or
plumbing improvements, additions or alterations, and/or (d) do not require
penetrations to the roof of the Building, and provided further that the
cumulative cost of all such improvements, alterations and additions does not
exceed fifteen thousand and 00/100 dollars ($15,000.00) in the aggregate over
each twelve month period of the Term ("Permitted Improvements") In all events,
Tenant shall be required to submit to Landlord, at least ten (10) business days
prior to commencement of any improvements, written notification of Tenant's
intention to complete improvements along with all plans, specifications, or
construction drawings of such improvements or alterations, Tenant shall cause
all Permitted Improvements to be installed by a licensed contractor and Tenant
shall keep the Premises and the property on which the Premises are situated free
from any liens arising out of any work performed, materials furnished or
obligations incurred by or on behalf of Tenant. Upon Landlord's request, at
Tenant's sole expense, all such Permitted Improvements installed by Tenant shall
be removed and the Premises shall be restored to its original condition at the
expiration or earlier termination of this Lease

         10.2  SURRENDER OF PREMISES: Upon the termination of this Lease,
whether by forfeiture, lapse of time or otherwise, or upon the termination of
Tenant's right to possession of the Premises, Tenant will at once surrender and
deliver up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in good condition and
repair (including, but not limited to, replacing all light bulbs and ballasts
not in good working condition) and in the condition in which the Premises
existed as of the Commencement Date, except for reasonable wear and tear.
Reasonable wear and tear shall not include any damage or deterioration to the
floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the

                                      10
<PAGE>

floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements, excluding the improvements
installed by Tenant in Exhibit J, unless Landlord requests, in writing, that
Tenant not remove some or all of such fixtures (other than trade fixtures),
additions or improvements installed by, or on behalf of Tenant or situated in or
about the Premises. By the date which is twenty (20) days prior to such
termination of this Lease, Landlord shall notify Tenant in writing of those
fixtures (other than trade fixtures), alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises. Tenant shall repair any damage caused by the installation or removal
of such signs, trade fixtures, furniture, furnishings, fixtures, additions and
improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord fails to so notify Tenant at least twenty (20) days prior to such
termination of this Lease, then Tenant shall remove all tenant signage,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements (other than the Tenant Improvements) installed in or about the
Premises by, or on behalf of Tenant. Tenant shall ensure that the removal of
such items and the repair of the Premises will be completed prior to such
termination of this Lease.

11.      REPAIRS AND MAINTENANCE:
         -----------------------

         11.1  TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and the adjacent dock and staging areas in good, clean and
safe condition and repair to the reasonable satisfaction of Landlord including,
but not limited to, repairing any damage caused by Tenant or Tenant's
Representatives and replacing any property so damaged by Tenant or Tenant's
Representatives. Without limiting the generality of the foregoing, Tenant shall
be solely responsible for maintaining, repairing and replacing (a) all
mechanical systems, heating, ventilation and air conditioning systems
exclusively serving the Premises, (b) all plumbing, electrical wiring and
equipment serving the Premises, (c) all interior lighting (including, without
limitation, light bulbs and/or ballasts) and exterior lighting serving the
Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment, including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems
serving the Premises, (i) all partitions, fixtures, equipment, interior
painting, and interior walls and floors of the Premises and every part thereof
(including, without limitation, any demising walls contiguous to any portion of
the Premises). Notwithstanding the foregoing sentence, Tenant shall be
responsible for the cost of replacement of capital expenditures described in
this subparagraph 11.1 only on a pro-rata basis corresponding to the portion of
the useful life of the capital expenditure that will be exhausted during the
remainder of the Term.

         11.2  REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, (ii) the obligations of Landlord set
forth in Section 11.3 below, and (iii) the repairs rendered necessary by the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors/entrances and door closers,
exterior window casements, exterior painting of the Building (exclusive of the
Premises), and underground utility and sewer pipes outside the exterior walls of
the Building. For purposes of this Section 11.2, the term "exterior" shall mean
outside of and not exclusively serving the Premises. Unless otherwise notified
by Landlord, in writing, that Landlord has elected to procure and maintain the
following described contract(s), Tenant shall procure and maintain (a) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s); such contract(s) to be on a bi-monthly or quarterly basis,
as reasonably determined by Landlord, and (b) the fire and sprinkler protection
services and preventative maintenance and repair contract(s) (including, without
limitation, monitoring services); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord. Landlord reserves the
right, but without the obligation to do so, to procure and maintain (i) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s), and/or (ii) the fire and sprinkler protection services and
preventative maintenance and repair contract(s) (including, without limitation,
monitoring services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above. If Tenant procures and maintains any of
such contract(s), Tenant will promptly deliver to Landlord a true and complete
copy of each such contract and any and all renewals or extensions thereof, and
each service report or other summary received by Tenant pursuant to or in
connection with such contract(s).

                                      11
<PAGE>

         11.3  LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for
repairs rendered necessary by the intentional or negligent acts or omissions of
Tenant or any of Tenant's Representatives, Landlord agrees, at Landlord's sole
cost and expense, to (a) keep in good repair the structural portions of the
floors, foundations and exterior perimeter walls of the Building (exclusive of
glass and exterior doors), and (b) replace the structural portions of the roof
of the Building (excluding the roof membrane) as, and when, Landlord determines
such replacement to be necessary in Landlord's sole discretion.

         11.4  TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above. Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord. If Tenant refuses or neglects to
repair and maintain the Premises and the adjacent areas properly as required
herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs and/or maintenance without
Landlord having any liability to Tenant for any loss or damage that may accrue
to Tenant's merchandise, fixtures or other property, or to Tenant's business by
reason thereof, except to the extent any damage is caused by the willful
misconduct or gross negligence of Landlord or its authorized agents and
representatives. In the event Landlord makes such repairs and/or maintenance,
upon completion thereof Tenant shall pay to Landlord, as additional rent, the
Landlord's costs for making such repairs and/or maintenance, plus twenty percent
(20%) for overhead, upon presentation of a bill therefor, plus any Enforcement
Expenses. The obligations of Tenant hereunder shall survive the expiration of
the Term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or
hereafter in effect respecting the Premises.

12.      INSURANCE:
         ---------

         12.1  TYPES OF INSURANCE: Tenant shall maintain in full force and
effect at all times during the Term of this Lease, at Tenant's sole cost and
expense, for the protection of Tenant and Landlord, as their interests may
appear, policies of insurance issued by a carrier or carriers reasonably
acceptable to Landlord and its lender(s) which afford the following coverages:
(i) worker's compensation, statutory limits, (ii) employer's liability, as
required by law, with a minimum limit of $100,000 per employee and $500,000 per
occurrence, (iii) commercial general liability insurance (occurrence form)
providing coverage against any and all claims for bodily injury and property
damage occurring in, on or about the Premises arising out of Tenant's and
Tenant's Representatives' use and/or occupancy of the Premises. Such insurance
shall include coverage for blanket contractual liability, fire damage, premises,
personal injury, completed operations, products liability, personal and
advertising, and a plate-glass rider to provide coverage for all glass in, on or
about the Premises including, without limitation, skylights. Such insurance
shall have a combined single limit of not less than One Million Dollars
($1,000,000) per occurrence with a Two Million Dollar ($2,000,000) aggregate
limit and excess/umbrella insurance in the amount of Two Million Dollars
($2,000,000). If Tenant has other locations which it owns or leases, the policy
shall include an aggregate limit per location endorsement. If necessary, as
reasonably determined by Landlord, Tenant shall provide for restoration of the
aggregate limit; comprehensive automobile liability insurance: a combined single
limit of not less than $2,000,000 per occurrence and insuring Tenant against
liability for claims arising out of the ownership, maintenance, or use of any
owned, hired or non-owned automobiles; "all risk" or "special purpose" property
insurance, including without limitation, sprinkler leakage, boiler and machinery
comprehensive form, if applicable, covering damage to or loss of any personal
property, trade fixtures, inventory, fixtures and equipment located in, on or
about the Premises, and in addition, coverage for flood, and business
interruption of Tenant, together with, if the property of Tenant's invitees is
to be kept in the Premises, warehouser's legal liability or bailee customers
insurance for the full replacement cost of the property belonging to invitees
and located in the Premises. Such insurance shall be written on a replacement
cost basis (without deduction for depreciation) in an amount equal to one
hundred percent (100%) of the full replacement value of the aggregate of the
items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord reasonably deems necessary and prudent or as may otherwise be required
by any of Landlord's lenders or joint venture partners.

         12.2  INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder shall not exceed One Thousand
Dollars ($1,000). Tenant shall deliver to Landlord certificates of insurance and
true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be

                                      12
<PAGE>

cancelable or otherwise subject to modification except after thirty (30) days
prior written notice to the parties named as additional insureds as required in
this Lease (except for cancellation for nonpayment of premium, in which event
cancellation shall not take effect until at least ten (10) days' notice has been
given to Landlord). Tenant shall have the right to provide insurance coverage
which it is obligated to carry pursuant to the terms of this Lease under a
blanket insurance policy, provided such blanket policy expressly affords
coverage for the Premises and for Landlord as required by this Lease.

         12.3  ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property
management company and/or agent of Landlord for the Premises, the Building, the
Lot or the Park, and any lender(s) of Landlord having a lien against the
Premises, the Building, the Lot or the Park shall be named as additional
insureds under all of the policies required in Section 12.1(iii) above.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella/excess liability policy (which
shall be in "following form") shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits
of insurance maintained by Tenant shall not limit Tenant's liability under this
Lease. It is the parties' intention that the insurance to be procured and
maintained by Tenant as required herein shall provide coverage for any and all
damage or injury arising from or related to Tenant's operations of its business
and/or Tenant's or Tenant's Representatives' use of the Premises and/or any of
the areas within the Park, whether such events occur within the Premises (as
described in Exhibit A hereto) or in any other areas of the Park. It is not
             ---------
contemplated or anticipated by the parties that the aforementioned risks of loss
be borne by Landlord's insurance carriers, rather it is contemplated and
anticipated by Landlord and Tenant that such risks of loss be borne by Tenant's
insurance carriers pursuant to the insurance policies procured and maintained by
Tenant as required herein.

         12.4  FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the
event Tenant does not purchase the insurance required in this Lease or keep the
same in full force and effect throughout the Term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall promptly pay to Landlord as Additional
Rent, the amount so paid by Landlord, upon Landlord's demand therefor In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.

13.      WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
         ---------------------
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.

14.      LIMITATION OF LIABILITY AND INDEMNITY: Except to the extent of damage
         -------------------------------------
resulting from the active gross negligence or willful misconduct of Landlord or
its authorized representatives, Tenant agrees to protect, defend (with counsel
reasonably acceptable to landlord) and hold Landlord and Landlord's lenders,
partners, members, property management company (if other than Landlord), agents,
directors, officers, employees, representatives, contractors, shareholders,
successors and assigns and each of their respective partners, members,
directors, employees, representatives, agents, contractors, shareholders,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from or in any way related
to, directly or indirectly, (i) Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, (ii) the conduct of Tenant's business, (iii)
from any activity, work or thing done, permitted or suffered by Tenant in or
about the Premises, (iv) in any way connected with the Premises or with the
improvements or personal property therein, including, but not limited to, any
liability for injury to person or property of Tenant, Tenant's Representatives,
or third party persons, and/or (v) Tenant's failure to perform any covenant or
obligation of Tenant under this Lease Tenant agrees that the obligations of
Tenant herein shall survive the expiration or earlier termination of this Lease.

                                      13
<PAGE>

     Except to the extent of damage resulting from the active gross negligence
or willful misconduct of Landlord or its authorized representatives, to the
fullest extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, members, employees, representatives, legal
representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or the Park. Tenant shall
not, in any event or circumstance, be permitted to offset or otherwise credit
against any payments of Rent required herein for matters for which Landlord may
be liable hereunder. Landlord and its authorized representatives shall not be
liable for any interference with light or air, or for any latent defect in the
Premises or the Building.

15.  ASSIGNMENT AND SUBLEASING:
     -------------------------

     15.1 PROHIBITION: Except as expressly set forth herein with respect to a
Related Entity, Tenant shall not assign, mortgage, hypothecate, encumber, grant
any license or concession, pledge or otherwise transfer this Lease
(collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. Tenant hereby agrees that Landlord may
withhold its consent to any proposed sublease or assignment if the proposed
sublessee or assignee or its business is subject to compliance with additional
requirements of the ADA (defined below) and/or Environmental Laws (defined
below) beyond those requirements which are applicable to Tenant, unless the
proposed sublessee or assignee shall (a) first deliver plans and specifications
for complying with such additional requirements and obtain Landlord's written
consent thereto, and (b) comply with all Landlord's conditions for or contained
in such consent, including without limitation, requirements for security to
assure the lien-free completion of such improvements. If Tenant seeks to sublet
or assign all or any portion of the Premises, Tenant shall deliver to Landlord
at least thirty (30) days prior to the proposed commencement of the sublease or
assignment (the "Proposed Effective Date") the following: (i) the name of the
proposed assignee or sublessee; (ii) such information as to such assignee's or
sublessee's financial responsibility and standing as Landlord may reasonably
require; and (iii) the aforementioned plans and specifications, if any. Within
ten (10) days after Landlord's receipt of a written request from Tenant that
Tenant seeks to sublet or assign all or any portion of the Premises, Landlord
shall deliver to Tenant a copy of Landlord's standard form of sublease or
assignment agreement (as applicable) or a form provided by Tenant and reasonably
acceptable to Landlord, which instrument shall be utilized for each proposed
sublease or assignment (as applicable), and such instrument shall include a
provision whereby the assignee or sublessee assumes all of Tenant's obligations
hereunder and agrees to be bound by the terms hereof. As Additional Rent
hereunder, Tenant shall pay to Landlord a fee in the amount of five hundred
dollars ($500) plus Tenant shall reimburse Landlord for actual and reasonable
legal and other expenses incurred by Landlord in connection with any actual or
proposed assignment or subletting. In the event the sublease or assignment (1)
by itself or taken together with prior sublease(s) or partial assignment(s)
covers or totals, as the case may be, more than twenty-five percent (25%) of the
rentable square feet of the Premises excluding Tenant's initial potential
sublease of all or a portion of the first floor of the Premises or a sublease or
assignment to a Related Entity (2) is for a term which by itself or taken
together with prior or other subleases or partial assignments is greater than
fifty percent (50%) of the period remaining in the Term of this Lease as of the
time of the Proposed Effective Date, then Landlord shall have the right, to be
exercised by giving written notice to Tenant, to recapture the space described
in the sublease or assignment. If such recapture notice is given, it shall serve
to terminate this Lease with respect to the proposed sublease or assignment
space, or, if the proposed sublease or assignment space covers all the Premises,
it shall serve to terminate the entire term of this Lease in either case, as of
the Proposed Effective Date. However, no termination of this Lease with respect
to part or all of the Premises shall become effective without the prior written
consent, where necessary, of the holder of each deed of trust encumbering the
Premises or any part thereof. If this Lease is terminated pursuant to the
foregoing with respect to less than the entire Premises, the Rent shall be
adjusted on the basis of the proportion of square feet retained by Tenant to the
square feet originally demised and this Lease as so amended shall continue
thereafter in full force and effect. Each permitted assignee or sublessee,
including without limitation, a Related Entity, shall assume and be deemed to
assume this Lease and shall be and remain liable jointly and severally with
Tenant for payment of Rent and for the due performance of, and compliance with
all the terms, covenants, conditions and agreements herein contained on Tenant's
part to be performed or complied with, for the term of this Lease. No assignment
or subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease. Tenant hereby acknowledges and agrees that it understands that
Landlord's accounting department may process and accept Rent payments without
verifying that such payments are being made by Tenant, a permitted sublessee or
a permitted assignee in accordance with the provisions of this Lease. Although

                                       14
<PAGE>

such payments may be processed and accepted by such accounting department
personnel, any and all actions or omissions by the personnel of Landlord's
accounting department shall not be considered as acceptance by Landlord of any
proposed assignee or sublessee nor shall such actions or omissions be deemed to
be a substitute for the requirement that Tenant obtain Landlord's prior written
consent to any such subletting or assignment, and any such actions or omissions
by the personnel of Landlord's accounting department shall not be considered as
a voluntary relinquishment by Landlord of any of its rights hereunder nor shall
any voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, and except with respect to a Related Entity, in the event Tenant is a
corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers) which results in a change of more
than fifty percent (50%) in the direct or indirect ownership of Tenant shall be
deemed to be an assignment within the meaning of this Section 15 and shall be
subject to all the provisions hereof. Except for a permissible assignment to a
Related Entity, any and all options, first rights of refusal, tenant improvement
allowances and other similar rights granted to Tenant in this Lease, if any,
shall not be assignable by Tenant unless expressly authorized in writing by
Landlord. Notwithstanding anything to the contrary contained herein, so long as
Tenant delivers to Landlord (1) at least fifteen (15) business days prior
written notice of its intention to assign or sublease the Premises to any
Related Entity, which notice shall set forth the name of the Related Entity, (2)
a copy of the proposed agreement pursuant to which such assignment or sublease
shall be effectuated, and (3) such other information concerning the Related
Entity as Landlord may reasonably require, including without limitation,
information regarding any change in the proposed use of any portion of the
Premises and any financial information with respect to such Related Entity, and
so long as Landlord approves, in writing, of any change in the proposed use of
the subject portion of the Premises, then Tenant may assign this Lease or
sublease any portion of the Premises (X) to any Related Entity, or (Y) in
connection with any merger, consolidation or sale of substantially all of the
assets of Tenant, without having to obtain the prior written consent of Landlord
thereto. For purposes of this Lease the term "Related Entity" shall mean and
refer to any corporation or entity which controls, is controlled by or is under
common control with Tenant, as all of such terms are customarily used in the
industry, and with an equal or greater net worth as Tenant has as of the Lease
commencement date.

     15.2  EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, seventy-five
percent (75%) of the excess of each such payment of rent or other consideration
in excess of the Rent called for hereunder, after deducting therefrom Tenant's
reasonable costs to effect the assignment or sublet, including, without
limitation, brokerage commissions, legal fees and refurbishment costs.

     15.3  WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.

     For purposes of this Lease, a sale of Tenant's capital stock through any
public exchange shall not be deemed an assignment, subletting or other transfer
of this Lease or the Premises requiring Landlord's consent.

16.  AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
     ----------------
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes are not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.

17.  SUBORDINATION: Without the necessity of any additional document being
     -------------
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and this Lease shall be subject and subordinate at all times to: (i)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in

                                       15
<PAGE>

any amount for which the Building, the Lot, ground leases or underlying leases,
or Landlord's interest or estate in any of said items is specified as security.
Notwithstanding the foregoing, Landlord or any such ground lessor, mortgagee, or
any beneficiary shall have the right to subordinate or cause to be subordinated
any such ground leases or underlying leases or any such liens to this Lease. If
any ground lease or underlying lease terminates for any reason or any mortgage
or deed of trust is foreclosed or a conveyance in lieu of foreclosure is made
for any reason, Tenant shall, notwithstanding any subordination and upon the
request of such successor to Landlord, attorn to and become the Tenant of the
successor in interest to Landlord, and provided such successor in interest will
not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long
as Tenant is not in default, beyond applicable cure periods, of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership, (b) subject to any offsets or defenses which Tenant
might have against any prior lessor, (c) bound by prepayment of more than one
(1) month's Rent, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof, then not more than three months' Rent; or
(d) liable to Tenant for any Security Deposit not actually received by such
successor in interest to the extent any portion or all of such Security Deposit
has not already been forfeited by, or refunded to, Tenant. Landlord shall be
liable to Tenant for all or any portion of the Security Deposit not forfeited
by, or refunded to Tenant, until and unless Landlord transfers such Security
Deposit to the successor in interest. Tenant convenants and agrees to execute
(and acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within five (5) business days of receipt of demand or request by
Landlord and in the form requested by Landlord, ground lessor, mortgagee or
beneficiary, any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. Tenant's failure to timely execute
and deliver such additional documents shall, at Landlord's option, constitute a
material default hereunder. It is further agreed that Tenant shall be liable to
Landlord, and shall indemnify Landlord from and against any loss, cost, damage
or expense, incidental or consequential, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.
Notwithstanding the foregoing to the contrary, Landlord shall obtain the
signature of Aetna Casualty and Surety Company to the Subordination, Non-
Disturbance and attornment Agreement attached hereto as Exhibit I.

18.  RIGHT OF ENTRY: Upon twenty-four (24) hours' prior notice when possible,
     --------------
and otherwise upon reasonable prior notice, except in the case of emergency,
Tenant grants Landlord or its agents the right to enter the Premises at all
reasonable times for purposes of inspection, exhibition, posting of notices,
repair or alteration. At Landlord's option, Landlord shall at all times have and
retain a key with which to unlock all the doors in, upon and about the Premises,
excluding Tenant's vaults and safes. It is further agreed that Landlord shall
have the right to use any and all means Landlord deems necessary to enter the
Premises in an emergency. Landlord shall have the right to place "for rent" or
"for lease" signs on the outside of the Premises, the Building and in the Common
Areas during the last nine (9) months of the Term. Landlord shall also have the
right to place "for sale" signs on the outside of the Building and in the Common
Areas. Tenant hereby waives any claim from damages or for any injury or
inconvenience to or interference with Tenant's business, or any other loss
occasioned thereby except for any claim for any of the foregoing arising out of
the sole active gross negligence or willful misconduct of Landlord or its
authorized representatives.

19.  ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
     --------------------
any lender or ground lessor) and deliver to Landlord, within five (5) business
days after Landlord provides such to Tenant, a statement in writing certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification), the date to which the Rent and other
charges are paid in advance, if any, acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder or
specifying such defaults as are claimed, and such other matters as Landlord may
reasonably require. Any such statement may be conclusively relied upon by
Landlord and any prospective purchaser or encumbrancer of the Premises. Tenant's
failure to deliver such statement within such time shall be conclusive upon the
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance; and (c) not more than one month's Rent has been paid in
advance, except in those instances when Tenant pays Rent quarterly in advance
pursuant to Section 8 hereof, then not more than three month's Rent has been
paid in advance. Failure by Tenant to so deliver such certified estoppel
certificate shall be a material default of the provisions of this Lease. Tenant
shall be liable to Landlord, and shall indemnify Landlord from and against any
loss, cost, damage or expense, incidental or consequential, arising or accruing
directly or indirectly, from any failure of Tenant to execute or deliver to
Landlord any such certified estoppel certificate, together with any and all
Enforcement Expenses.

                                      16
<PAGE>

20.  TENANT'S DEFAULT: The occurrence of any one or more of the following events
     ----------------
shall, at Landlord's option, constitute a material default by Tenant of the
provisions of this Lease:

     20.1  The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;

     20.2  The failure by Tenant to make any payment of Rent. Additional Rent or
any other payment required within three (3) days after receipt of written notice
from Landlord that hereunder on the date said payment is due. Tenant agrees to
notice and service of notice as provided for in this Lease and waives any right
to any other or further notice or service of notice which Tenant may have under
any statute or law now or hereafter in effect;

     20.3  The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within the
time period required under the provisions of this Lease, or, if no time period
is required, within fifteen (15) days. If such failure is susceptible of cure
but cannot reasonably be cured within the aforementioned time period (if any),
as determined solely but reasonably by Landlord, Tenant shall promptly commence
the cure of such failure and thereafter diligently prosecute such cure to
completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion), unless the nature of such cure shall require more than fifteen
(15) days and Tenant commences the cure within the fifteen (15) day period and
thereafter diligently prosecutes the cure to completion.

     20.4  The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

     20.5  Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or

     20.6  The making of any material misrepresentation or omission by Tenant in
any materials delivered by or on behalf of Tenant to Landlord pursuant to this
Lease.

21.  REMEDIES FOR TENANT'S DEFAULT:
     -----------------------------

     21.1  LANDLORD'S RIGHTS: In the event of Tenant's material default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of
cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from such reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, and Utility
Expenses; second, all costs including maintenance, incurred by Landlord in
reletting; and, third, Base Rent, Operating Expenses, Tax Expenses,
Administrative Expenses, Common Area Utility Costs, Utility Expenses, and all
other sums due under this Lease. Any and all of the Reletting Costs shall

                                       17
<PAGE>

be fully chargeable to Tenant and shall not be prorated or otherwise amortized
in relation to any new lease for the Premises or any portion thereof. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.

     21.2 DAMAGES RECOVERABLE:  If Tenant breaches this Lease and abandons the
Premises before the end of the Term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default under this Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any Tenant Improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
                                      ---------
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the Term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease Term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder, provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951 4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.

     21.3 RIGHTS AND REMEDIES CUMULATIVE:  The foregoing rights and remedies of
Landlord are not exclusive, they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under
this Lease, any and all Base Rent waived by Landlord under Section 3 above shall
be immediately due and payable to Landlord and all options granted to Tenant
hereunder shall automatically terminate, unless otherwise expressly agreed to in
writing by Landlord.

     21.4 WAIVER OF A DEFAULT:  The waiver by Landlord of any default of any
provision of this Lease shall not be deemed or construed a waiver of any other
default by Tenant hereunder or of any subsequent default of this Lease, except
for the default specified in the waiver.

22.  HOLDING OVER: If Tenant holds possession of the Premises after the
     ------------
expiration of the Term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease Term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time.
Such month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as

                                      18
<PAGE>

Landlord's permission for Tenant to hold over. Acceptance of Base Rent by
Landlord following expiration or termination of this Lease shall not constitute
a renewal of this Lease.

23.  LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
     ------------------
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall not be less than thirty (30) days after
receipt by Landlord of written notice specifying the nature of the obligation
Landlord has not performed; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days, after receipt of written
notice, is reasonably necessary for its performance, then Landlord shall not be
in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.

24.  PARKING: Tenant shall have a license to use the number of non-designated
     -------
and non-exclusive parking spaces specified in the Basic Lease Information.
Landlord shall exercise reasonable efforts to insure that such spaces are
available to Tenant for its use, but Landlord shall not be required to enforce
Tenant's right to use the same.

25.  SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
     ----------------
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease, to the extent such obligations arose from and
after the date of such sale, and from all liability hereunder accruing from or
after the date of such sale; and the purchaser, at such sale or any subsequent
sale of the Premises shall be deemed, without any further agreement between the
parties or their successors in interest or between the parties and any such
purchaser, to have assumed and agreed to carry out any and all of the covenants
and obligations of the Landlord under this Lease. For purposes of this Section
25, the term "Landlord" means only the owner and/or agent of the owner as such
parties exist as of the date on which Tenant executes this Lease. A ground lease
or similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default, beyond applicable cure periods, of any of the
provisions of this Lease.

26.  WAIVER: No delay or omission in the exercise of any right or remedy of
     ------
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
default by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such default, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

27.  CASUALTY DAMAGE.
     ---------------

     27.1  CASUALTY.  If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.

           27.1.1 MINOR INSURED DAMAGE.  If the Premises are damaged only to
such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, except Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are

                                      19
<PAGE>

received by Landlord and the Premises are unfit for occupancy and/or the
operation of Tenant's business, in Landlord's and Tenant's reasonable
estimation.

          27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR. If the
Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date Tenant vacates the Premises, or (b)
electing to repair the Premises to substantially the same condition that existed
prior to the occurrence of such casualty, provided insurance proceeds are
available to fully repair the damage (except that Landlord shall not be required
to rebuild, repair, or replace any alterations or improvements installed by or
for the benefit of Tenant or any part of Tenant's furniture, furnishings or
fixtures and equipment removable by Tenant). The Rent payable hereunder shall be
abated proportionately from the date Tenant vacates the Premises only to the
extent rental abatement insurance proceeds are received by Landlord and the
Premises are unfit for occupancy and/or the operation of Tenant's business in
Landlord's and Tenant's reasonable estimation. If Landlord should fail to
substantially complete such repairs within one hundred eighty (180) days after
the date on which Landlord is notified by Tenant of the occurrence of such
casualty (such 180-day period to be extended for delays caused by Tenant or any
force majeure events), Tenant may within twenty (20) days after expiration of
such one hundred eighty (180) day period (as same may be extended), terminate
this Lease by delivering written notice to Landlord as Tenant's exclusive
remedy, whereupon all rights of Tenant hereunder shall cease and terminate
twenty (20) days after Landlord's receipt of such notice.

          27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to such
extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). During the time when Landlord is prosecuting such repairs to
completion, the Rent payable hereunder shall be abated proportionately from the
date Tenant vacates the Premises only to the extent rental abatement insurance
proceeds are received by Landlord and only during the time period that the
Premises are unfit for occupancy and/or the operation of Tenant's business in
Landlord's and Tenant's reasonable estimation.

          27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to the
contrary contained in this Lease, if the damage or destruction occurs during the
last twelve (12) months of the Term, during the first thirty (30) days following
such damage or destruction, upon ten (10) days' prior written notice to the
other party, Tenant or Landlord shall have the right to terminate this Lease,
and all rights hereunder shall cease and terminate ten (10) days after receipt
of the other parties such notice.

28.  CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
     ------------
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant. Notwithstanding anything to the contrary
contained in this Lease, Tenant shall entitled to any separate award made to it
by the condemning authority, including, without limitation, an award for moving
expenses, relocation costs, loss of goodwill and the unamortized cost of any
improvements installed by or at the cost of Tenant. If neither party elects to
terminate this Lease, Landlord shall, if necessary, promptly proceed to restore
the Premises or the Building to substantially its same condition prior to such
partial condemnation, allowing for the reasonable effects of such partial
condemnation, and a proportionate allowance shall be made to Tenant, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemnation and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.

29.  ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
     -----------------------------------------

     29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord Tenant's initial
Hazardous Materials Disclosure Certificate

                                      20
<PAGE>

(the "Initial HazMat Certificate"), a copy of which is attached hereto as
Exhibit G and incorporated herein by this reference. Tenant covenants,
---------
represents and warrants to Landlord that the information on the Initial HazMat
Certificate is true and correct and accurately describes the use(s) of Hazardous
Materials which will be made and/or used on the Premises by Tenant. Tenant shall
commencing with the date which is one year from the Commencement Date and
continuing every year thereafter, complete, execute, and deliver to Landlord, a
Hazardous Materials Disclosure Certificate ("the "HazMat Certificate")
describing Tenant's present use of Hazardous Materials on the Premises, and any
other reasonably necessary documents as requested by Landlord. The HazMat
Certificate required hereunder shall be in substantially the form as that which
is attached hereto as Exhibit E.
                      ---------

     29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.

     29.3 PROHIBITION; ENVIRONMENTAL LAWS: Tenant shall not be entitled to use
nor store any Hazardous Materials on, in, or about the Premises, the Building,
the Lot and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord's prior written consent thereto Notwithstanding
anything to the contrary contained in this Lease, landlord hereby consents to
the use by Tenant of ordinary office and cleaning products in amounts customary
for Tenant's permitted use of the Premises. If Landlord consents to any such
usage or storage, then Tenant shall be permitted to use and/or store only those
Hazardous Materials that are necessary for Tenant's business and to the extent
disclosed in the HazMat Certificate and as expressly approved by Landlord in
writing, provided that such usage and storage is only to the extent of the
quantities of Hazardous Materials as specified in the then applicable HazMat
Certificate as expressly approved by Landlord and provided further that such
usage and storage is in full compliance with any and all local, state and
federal environmental, health and/or safety-related laws, statutes, orders,
standards, courts' decisions, ordinances, rules and regulations (as interpreted
by judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted, issued
or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the "Environmental Laws"). Tenant agrees
that any changes to the type and/or quantities of Hazardous Materials specified
in the most recent HazMat Certificate may be implemented only with the prior
written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Tenant shall not be entitled nor permitted to
install any tanks under, on or about the Premises for the storage of Hazardous
Materials without the express written consent of Landlord, which may be given or
withheld in Landlord's sole discretion. Landlord shall have the right at all
times during the Term of this Lease, upon reasonable prior notice, to (i)
inspect the Premises, (ii) conduct tests and investigations to determine whether
Tenant is in compliance with the provisions of this Section 29, and (iii)
request lists of all Hazardous Materials used, stored or otherwise located on,
under or about any portion of the Premises and/or the Common Areas. The cost of
all such inspections, tests and investigations shall be borne solely by Tenant,
if Landlord finds a violation of Environmental Law by Tenant or Tenant's
representatives, or existence or use by Tenant or Tenant's representative of any
Hazardous Materials not included on Tenant's Hazardous Materials Disclosure
Certificate. The aforementioned rights granted herein to Landlord and its
representatives shall not create (a) a duty on Landlord's part to inspect, test,
investigate, monitor or otherwise observe the Premises or the activities of
Tenant and Tenant's Representatives with respect to Hazardous Materials,
including without limitation, Tenant's operation, use and any remediation
related thereto, or (b) liability on the part of Landlord and its
representatives for Tenant's use, storage, disposal or remediation of Hazardous
Materials, it being understood that Tenant shall be solely responsible for all
liability in connection therewith.

         29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and

                                      21
<PAGE>

other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on any portion of the Premises, the Building, the Lot or the
Park. Notwithstanding the foregoing, Tenant shall be entitled to respond
immediately to an emergency without first obtaining Landlord's prior written
consent. Tenant, at its sole cost and expense, shall conduct and perform, or
cause to be conducted and performed, all closures as required by any
Environmental Laws or any agencies or other governmental authorities having
jurisdiction thereof with respect to the use, storage, disposal or remediation
of Hazardous Materials by Tenant or Tenant's Representatives. If Tenant fails to
so promptly investigate, clean up, remove, restore, provide closure or otherwise
so remediate, Landlord may, but without obligation to do so, take any and all
steps necessary to rectify the same and Tenant shall promptly reimburse
Landlord, upon demand, for all costs and expenses to Landlord of performing
investigation, clean up, removal, restoration, closure and remediation work. All
such work undertaken by Tenant, as required herein, shall be performed in such a
manner so as to enable Landlord to make full economic use of the Premises, the
Building, the Lot and the Park after the satisfactory completion of such work.

     29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel reasonable acceptable to
Landlord) and hold Landlord and the other Indemnitees harmless from and against
any and all claims, judgments, damages, penalties, fines, liabilities, losses
(including, without limitation, diminution in value of any portion of the
Premises, the Building, the Lot or the Park, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, reasonable
attorneys' and consultant fees and court costs) arising at any time during or
after the Term of this Lease in connection with or related to, directly or
indirectly, the use, presence, transportation, storage, disposal, migration,
removal, spill, release or discharge of Hazardous Materials on, in or about any
portion of the Premises, the Common Areas, the Building, the Lot or the Park as
a result (directly or indirectly) of the intentional or negligent acts or
omissions of Tenant or any of Tenant's Representatives. Neither the written
consent of Landlord to the presence, use or storage of Hazardous Materials in,
on, under or about any portion of the Premises, the Building, the Lot and/or the
Park, nor the strict compliance by Tenant with all Environmental Laws shall
excuse Tenant and Tenant's officers and directors from its obligations of
indemnification pursuant hereto. Tenant shall not be relieved of its
indemnification obligations under the provisions of this Section 29.5 due to
Landlord's status as either an "owner" or "operator" under any Environmental
Laws.

     Tenant shall not be liable for nor otherwise obligated to Landlord under
any provision of the Lease with respect to (i) any claim, remediation
obligation, investigation obligation, liability, cause of action, attorney's
fees, consultants' cost, expense or damage resulting from any Hazardous Material
present in, on or about the Premises or any of the Buildings in Phase V to the
extent not caused nor otherwise permitted, directly or indirectly, by Tenant or
Tenant's Representatives, including without limitation, any residual Hazardous
Materials which are present in, on or about the Premises, the Building or the
Lot as of the Lease Date including any residual hazardous substances referred to
in section 29.7 below; or (ii) the removal, investigation, monitoring or
remediation of any Hazardous Material present in, on or about the Premises or
the Building caused by any source, including third parties other than Tenant and
Tenant's Representatives, as a result of or in connection with the acts or
omissions of persons other than Tenant or Tenant's Representatives, provided,
however, Tenant shall be fully liable for and otherwise obligated to Landlord
under the provisions of this Lease for all liabilities, costs, damages,
penalties, claims, judgments, expenses (including without limitation, attorneys'
and experts' fees and costs) and losses to the extent Tenant or any of Tenant's
Representatives contributes to the presence of such Hazardous Materials or
Tenant and/or any of Tenant's Representatives exacerbates the conditions caused
by such Hazardous Materials. At Tenant's written request, Landlord shall make
available for review by Tenant in Landlord's offices any environmental reports,
evaluations or information bearing on the environmental condition of the
Premises, any of the Buildings in Phase I or the Park to the extent same is in
Landlord's possession at Landlord's offices and to the extent not otherwise
treated as confidential or otherwise protected under any attorney-client
privilege, attorney work-product privilege or similar laws.

     29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord's environmental
consultants in concurrence with Tenant's environmental consultants (both
environmental consultants to act reasonably and in good faith) that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease due to the acts
or omissions of Tenant or any of Tenant's Representatives with respect to
Hazardous Materials, including without limitation any violation of applicable
Environmental Laws at the expiration or earlier termination of this Lease, then
in Landlord's sole discretion, Landlord may require Tenant to hold over
possession of the Premises until Tenant can surrender the Premises to Landlord
in the condition in which the Premises existed as of the Commencement Date and
prior to the appearance of such Hazardous

                                      22
<PAGE>

Materials except for reasonable wear and tear, including without limitation, the
conduct or performance of any closures as required by any Environmental Laws.
The burden of proof hereunder shall be upon Tenant. For purposes hereof, the
term "reasonable wear and tear" shall not include any deterioration in the
condition or diminution of the value of any portion of the Premises, the
Building, the Lot and/or the Park in any manner whatsoever related to directly,
or indirectly, Hazardous Materials. Any such holdover by Tenant will be with
Landlord's consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.

     29.7 DISCLOSURE: The land described herein contains residual hazardous
          ----------
substances such condition renders the land and the owner, Tenant or other
possessor of the land subject to requirements, restrictions, provisions, and
liabilities contained in Chapter 6.5 and Chapter 6.8 of division 20 of the
Health and Safety Code, as same may be amended from time, and any successor
statutes thereof. This statement is not a declaration that a hazard to public
health, safety and welfare exists.

30.  FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any lender
     --------------------
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) days after receipt of Landlord's
request therefor, but not more often than once annually so long as Tenant is not
in default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant If
Landlord so requests, Tenant shall deliver to Landlord an opinion of a certified
public accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied. Any and all options granted to
Tenant hereunder shall be subject to and conditioned upon Landlord's reasonable
approval of Tenant's financial condition at the time of Tenant's exercise of any
such option.

31.  GENERAL PROVISIONS:
     ------------------

     31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor

     31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein contained,
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of the parties hereto.

     31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.

     31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which, for
purposes of this Lease, shall include Landlord and the owner of the Building if
other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Premises or the Building or the Project,
and Tenant agrees to look solely to the Premises, Building or Project for
satisfaction of any liability and shall not look to other assets of Landlord nor
seek any recourse against the assets of the individual partners, members,
directors, officers, shareholders, agents or employees of Landlord (including
without limitation, any property management company of Landlord); it being
intended that Landlord and the individual partners, members, directors,
officers, shareholders, agents and employees of Landlord (including without
limitation, any property management company of Landlord) shall not be personally
liable in any manner whatsoever for any judgment or deficiency. The liability of
Landlord under this Lease is limited to its actual period of ownership of title
to the Building, and Landlord shall be automatically released from further
performance under this Lease upon transfer of Landlord's interest in the
Premises or the Building.

     31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.

     31.6 CHOICE OF LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.

                                      23
<PAGE>

     31.7  ATTORNEYS' FEES. In the event any dispute between the parties results
in litigation or other proceeding, the prevailing party shall be reimbursed by
the party not prevailing for all reasonable costs and expenses, including,
without limitation, reasonable attorneys' and experts' fees and costs incurred
by the prevailing party in connection with such litigation or other proceeding,
and any appeal thereof. Such costs, expenses and fees shall be included in and
made a part of the judgment recovered by the prevailing party, if any

     31.8  ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.

     31.9  WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant Each person executing this Lease on behalf of a party
represents and warrants that (1) such person is duly and validly authorized to
do so on behalf of the entity it purports to so bind, and (2) if such party is a
partnership, corporation or trustee, that such partnership, corporation or
trustee has full right and authority to enter into this Lease and perform all of
its obligations hereunder. Tenant hereby warrants that this Lease is valid and
binding upon Tenant and enforceable against Tenant in accordance with its terms.

     31.10 NOTICES. Any and all notices and demands required or permitted to be
given hereunder to Landlord shall be in writing and shall be sent (a) by United
States mail, certified and postage prepaid; or (b) by personal delivery; or (c)
by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive, Fourth
Floor, Foster City, California 94404-1167. Any and all notices and demands
required or permitted to be given hereunder to Tenant shall be in writing and
shall be sent: (i) by United States mail, certified and postage prepaid, or (ii)
by personal delivery to any employee or agent of Tenant over the age of eighteen
(18) years of age, or (iii) by overnight courier, all of which shall be
addressed to Tenant at the Premises. Notice and/or demand shall be deemed given
upon the earlier of actual receipt or the third day following deposit in the
United States mail. Except as expressly set forth in this Lease, any notice or
requirement of service required by any statute or law now or hereafter in
effect, including, but not limited to, California Code of Civil Procedure
Sections 1161, 1161.1, and 1162 (including any amendments, supplements or
substitutions thereof), is hereby waived by Tenant.

     31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

     31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.

     31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage

     31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Rent, Additional Rent, or any other sums or amounts due hereunder,
Tenant shall not interpose any counterclaim of whatever nature or description in
any such proceedings, provided, however, nothing contained herein shall be
deemed or construed as a waiver of the Tenant's right to assert such claims in
any separate action brought by Tenant or the right to offset the amount of any
final judgment owed by Landlord to Tenant.

     31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

     31.16 MERGER. The voluntary or other surrender of this Lease by Tenant, the
mutual termination or cancellation hereof by Landlord and Tenant, or a
termination or this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord's election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

                                      24
<PAGE>

32.  SIGNS: All signs and graphics of every kind visible in or from public view
     -----
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval which shall not be unreasonably withheld, but, will be
based on the signage guidelines and practices within the Park, and shall be
subject to any applicable governmental laws, ordinances, and regulations and in
compliance with Landlord's sign criteria as same may exist from time to time or
as set forth in Exhibit H hereto and made a part hereof. Notwithstanding
                ---------
anything to the contrary contained in this Lease, Tenant shall have the right to
display its corporate name and logo on the existing Building monument sign,
Building entrance glass door (but only one corporate name may appear on the
Building entrance glass door if Tenant subleases a portion of the Premises)
Tenant shall remove all such signs and graphics prior to the termination of this
Lease. Such installations and removals shall be made in a manner as to avoid
damage or defacement of the Premises; and Tenant shall repair any damage or
defacement, including without limitation, discoloration caused by such
installation or removal. Landlord shall have the right, at its option, to deduct
from the Security Deposit such sums as are reasonably necessary to remove such
signs, including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which shall
interfere with the visibility of any sign, awning, canopy, advertising matter,
or decoration of any kind of any other business or occupant of the Building or
the Park be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.

33.  MORTGAGEE PROTECTION: Upon any default on the part of Landlord, Tenant will
     --------------------
give written notice by registered or certified mail to any beneficiary of a deed
of trust or mortgagee of a mortgage covering the Premises who has provided
Tenant with notice of their interest together with an address for receiving
notice, and shall offer such beneficiary or mortgagee a reasonable opportunity
to cure the default (which, in no event shall be less than ninety (90) days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary to effect a cure. If such
default cannot be cured within such time period, then such additional time as
may be necessary will be given to such beneficiary or mortgagee to effect such
cure so long as such beneficiary or mortgagee has commenced the cure within the
original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being
diligently pursued. Tenant agrees that each lender to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof Tenant shall
not make any prepayment of Rent more than one (1) month in advance without the
prior written consent of each such lender, except if Tenant is required to make
quarterly payments of Rent in advance pursuant to the provisions of Section 8
above. Tenant waives the collection of any deposit from such lender(s) or any
purchaser at a foreclosure sale of such lender(s)' deed of trust unless the
lender(s) or such purchaser shall have actually received and not refunded the
deposit Tenant agrees to make all payments under this Lease to the lender with
the most senior encumbrance upon receiving a direction, in writing, to pay said
amounts to such lender. Tenant shall comply with such written direction to pay
without any obligation to determine whether an event of default exists under
such lender's loan to Landlord

34.  QUITCLAIM: Upon any termination of this Lease, Tenant shall, at Landlord's
     ---------
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.

35.  MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for
     ------------------------
the Premises or any portion thereof, Landlord's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Tenant's rights, materially
increase Tenant's obligations or require Tenant to pay additional sums hereunder
or adversely affect the use, occupancy or quiet enjoyment of Tenant hereunder.

36.  WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord,
     --------------------
for the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto, except as otherwise expressly
provided in this Lease. Tenant hereby further warrants and represents to
Landlord, for the express benefit of Landlord, that in entering into this Lease,
Tenant has not relied upon any statement, fact, promise or representation
(whether express or implied, written or oral) not specifically set forth herein
in writing and that any statement,

                                      25
<PAGE>

fact, promise or representation (whether express or implied, written or oral)
made at any time to Tenant, which is not expressly incorporated herein in
writing, is hereby waived by Tenant.

37.  COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant
     -----------------------------------------------
hereby agree and acknowledge that the Premises, the Building and/or the Park may
be subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant Improvements strictly comply with all
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Areas or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building, any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys' fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' violation or alleged
violation of the ADA. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.

38.  BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
     --------------------
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall be paid by Landlord
and shall only be payable and applicable to the extent of the initial Term of
the Lease and to the extent of the Premises as same exist as of the date on
which Tenant executes this Lease. Unless expressly agreed to in writing by
Landlord and Broker(s), no real estate brokerage commission or finder's fee
shall be owed to, or otherwise payable to, the Broker(s) for any renewals or
other extensions of the initial Term of this Lease or for any additional space
leased by Tenant other than the Premises as same exists as of the date on which
Tenant executes this Lease. In no event shall Tenant be responsible for payment
of a brokerage commission to Landlord's broker for any renewal or extension of
the initial Term. Tenant further represents and warrants to Landlord that Tenant
will not receive (i) any portion of any brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease or (ii) any other form of
compensation or incentive from the Broker(s) with respect to this Lease.

39.  QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent
     ---------------
and observing and keeping the covenants, agreements and conditions of this Lease
on its part to be kept, and during the periods that Tenant is not otherwise in
default, beyond applicable cure periods, of any of the terms or provisions of
this Lease, and subject to the rights of any of Landlord's lenders, (i) that
Tenant shall and may peaceably and quietly hold, occupy and enjoy the Premises
and the Common Areas during the Term

                                      26
<PAGE>

of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.

40.  LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
     --------------------------------------------------------------
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.

     IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease
Date referenced on Page 1 of this Lease.

TENANT:

Nuance Communications, Inc.,
a California corporation

By:   /s/ Signature Illegible
      ------------------------------
Its:  PRESIDENT

Date: 6/9/97

LANDLORD:

LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership

By:    Lincoln Property Company Management Services, Inc.,
       As Manager and Agent for Landlord

       By:      /s/ Signature Illegible
                ---------------------------
                Vice President

       Date:    ___________________________

                                      27
<PAGE>

                             EXHIBIT A - PREMISES

This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain Lease Agreement dated May 29, 1997 (the "Lease"), by and between LINCOLN
MENLO IV & V ASSOCIATES LIMITED, a California limited partnership ("Landlord")
and Nuance Communications, Inc., a California corporation ("Tenant") for the
leasing of certain premises located in the Willow Park at Building Q. 1380
Willow Road, Menlo Park, California (the "Premises").

The Premises consist of the rentable square footage of space specified in the
Base Lease Information and has the address specified in the Base Lease
Information. The Premises are a part of and are contained in the Building
specified in the Base Lease Information. The cross-hatched area depicts the
Premises within the Project.

                                [CHART OMITTED]

INITIALS:
--------

TENANT:        /s/ Signature Illegible

LANDLORD:      /s/ Signature Illegible
<PAGE>

                         EXHIBIT B TO LEASE AGREEMENT
                              TENANT IMPROVEMENTS

This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated May 29, 1997 (the "Lease"), by and between
LINCOLN MENLO IV & V ASSOCIATES LIMITED, a California limited partnership
("Landlord") and Nuance Communications, Inc., a California corporation
("Tenant") for the leasing of certain premises located in the Willow Park at
Building Q, 1380 Willow Road, Menlo Park, California (the "Premises"). The
terms, conditions and provisions of this EXHIBIT B are hereby incorporated into
and are made a part of the Lease. Any capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms as set
forth in the Lease.

1.   Tenant Improvements. Subject to the conditions set forth below, Landlord
     -------------------
agrees to construct and install certain improvements ("Tenant Improvements") in
the Building of which the Premises are a part in accordance with Section 2 below
and pursuant to the terms of this EXHIBIT B.
                                  ---------

2.   Definition. "Tenant Improvements" as used in this Lease shall include only
     ----------
those interior portions of the Building which are described below. "Tenant
Improvements" shall specifically not include any alterations, additions or
improvements installed or constructed by Tenant, and any of Tenant's trade
fixtures, equipment, furniture, furnishings, telephone equipment or other
personal property (collectively, "Personal Property"). The Tenant Improvements
shall include only those interior improvements to be made to the Premises as
specified in this Section 2 below. Such work, as set forth below shall be
hereinafter referred to as the "Work". Landlord shall not be obligated to pay
for any improvements which are not expressly set forth herein below. The Tenant
Improvements shall consist of the following Work:

     (a)  Painting interior of Premises
     (b)  Install building standard base board and carpet
     (c)  Professionally clean the interior of the Premises

3.   Tenant Improvement Costs. The Tenant Improvements' cost (Tenant Improvement
     ------------------------
Costs") shall mean and include any and all costs and expenses of the Work,
including, without limitation, all of the following:

     (a)  All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans and the Final Drawings)
for the Tenant Improvements, and architectural fees, engineering costs and fees,
and other costs associated with completion of said plans;

     (b)  All costs of obtaining building permits and other necessary
authorizations and approvals from the City of Menlo Park and other applicable
jurisdictions,

     (c)  All costs of interior design and finish schedule plans and
specifications including as-built drawings;

     (d)  All direct and indirect costs of procuring, constructing and
installing the Tenant Improvement in the Premises, including, but not limited
to, the construction fee for overhead and profit, the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by Landlord's consultants and the General Contractor in connection with
construction of the Tenant Improvements, and all labor (including overtime) and
materials constituting the Work;

     (e)  All fees payable to the General Contractor, architect and Landlord's
engineering firm if they are required by Tenant to redesign any portion of the
Tenant Improvements following Tenant's approval of the Final Drawings; and

     (f)  A construction management fee payable to Landlord in the amount of
five percent (5%) of all direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises and the Building.

4.   Building Standard Work. Landlord shall provide that the Tenant Improvements
     ----------------------
be at least equal, in quality, ??o Landlord's building standard materials,
quantities and procedures then in use by Landlord ("Building Standards")
attached hereto as Exhibit B-1, and shall consist of improvements which are
generic in nature. Tenant shall have the right to select the color of the carpet
and paint from among Landlord's Building Standard colors.

                                       1
<PAGE>

5.   Landlord shall not be obligated to pay for any Tenant Improvements which
are not specifically set forth in Section 2 above.

6.   Completion. The Commencement Date of the Lease shall not occur, and Tenant
     ----------
shall not be obligated to pay Rent under the Lease, until substantial completion
of the Tenant Improvements. "Substantial completion" shall be the date by which
all of the following have occurred: (i) Landlord has substantially completed the
Work as provided herein; (ii) there remains no incomplete or defective item of
Work that would adversely affect Tenant's intended use of the Premises; (iii)
Landlord has delivered legal possession of the Premises to Tenant; and (iv)
Landlord has obtained all approvals and permits, if any, from the appropriate
governmental authorities required for the legal occupancy of the Premises and
the completion of the Work.

     At Landlord's sole cost and expense, Landlord shall construct the Work in
accordance with all rules, regulations, statutes, ordinances, laws and building
codes (including, without limitation, the ADA) applicable thereto, in a good and
workmanlike manner, free of defects and using new materials and equipment of
good quality.

     Within thirty (30) days after the Commencement Date, Tenant shall have the
right to submit a written "punch list" to Landlord, setting forth any defective
item of construction, and Landlord shall promptly cause such items to be
corrected. Notwithstanding anything to the contrary contained in this Exhibit,
Tenant's acceptance of the Premises or submission of a "punch list" shall not be
deemed a waiver of Tenant's right to have defects in the Tenant Improvements
repaired at no cost to Tenant.

7.   Lease Provisions, Conflict. The terms and provisions of the Lease, insofar
     --------------------------
as they are applicable, in whole or in part, to this EXHIBIT B, are hereby
                                                     ---------
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
                            ---------                    ---------
prevail.

INITIALS:
--------

TENANT.   /s/ Signature Illegible

LANDLORD: /s/ Signature Illegible

                                       2
<PAGE>

                                   EXHIBIT B-1
                               BUILDING STANDARDS

OFFICE AREA

DEMISING PARTITION AND CORRIDOR WALLS:

     A.   6" 20-gauge metal studs at 24" O.C. (or as required by code for span)
          framed full height from finish floor to structure above

     B.   One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped
          only

INTERIOR PARTITIONS:

     A.   3 5/8" 25-gauge metal studs at 24" O.C. to bottom of T-bar ceiling
          grid approximately 9' - 0' high

     B.   Top track to be pre-formed slotted aluminum taped in

     C.   One (1) layer 5/8" drywall both sides of wall, taped texture ready
          for paint

     D.   3 5/8" metal studs including all lateral bracing as required by code

PERIMETER DRYWALL (AT OFFICE AREAS):

     A.   One (1) layer 5/8" Type "X" drywall taped texture ready for paint

     B.   Provide alternate to texture concrete in lieu of furring walls

COLUMN FURRING:

     A.   Furring channel all sides

     B.   One (1) layer 5/8" drywall taped texture and ready for paint

     C.   Provide deductive alternate for texturing columns where there are no
          pipes to furred out

ACOUSTICAL CEILINGS:

     A.   2' x 4' standard white T-bar grid system as manufactured by Chicago
          Metallic or equal

     B.   2' x 4' x 5/8" white, fissured, non-directional acoustical title to be
          Cortega as manufactured by Armstrong or equal

PAINTING:

     A.   Sheetrock walls to receive two (2) coats of interior latex paint as
          manufactured by Kelly Moore or equal. Some portions of second coat to
          be single accent color.

     B.   Provide a deductive alternate for not painting warehouse walls

WINDOW COVERING:

     A.   1" aluminum mmi-blinds as manufactured by Levelor or equal, color to
          be selected by Lincoln Property Company

     B.   Blinds to be sized to fit window module

VCT:

     VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series or
     equal

LIGHT FIXTURES:

     2' x 4' T-bar lay in 3-tube energy efficient fixture with cool white
     fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
     or equal

LIGHT SWITCHES:

     A.   Double switching as required by Title 24

     B.   Switch assembly to be Leviton, color - Ivory

ELECTRICAL OUTLET:

                                       1
<PAGE>

     A.   110-V duplex outlet in demising or interior partitions only, as
          manufactured by Leviton, color to be Ivory

     B.   Eight (8) outlets per circuit, spacing to meet code (2 per office)

     C.   Transformers to be a minimum of 20% or over required capacity

     D.   Contractors to inspect electric room and to include all necessary
          metering costs

     E.   No aluminum wiring is acceptable

TELEPHONE OUTLET:

     A.   One (1) single outlet box in wall with pullwire from outlet box to
          area above T-bar ceiling per office

     B.   Cover plate for phone outlets to be included

FIRE SPRINKLERS:

     As required by fire codes

TOPSET BASE:

     A.   4" rubber base as manufactured by Burke or equal, standard colors only

     B.   4" rubber base at VCT areas

TOILET AREAS:

     Wet walls to receive marlite up to 48". Floors to receive sheetvinyl and
     cove base as required by code

CARPET:

     Minimum 30 ounce, commercial grade, level loop, UM44-C. Type 1 Class 1.
     100% continuous filament. 5-year wear guarantee. Glue down, no pad.

WOOD DOORS:

     Shall be 3'-0" x 7'-0" x 1 3/4" (unless otherwise specified) solid core,
     prefinished birch "Cal-Wood" B-3 or equal if approved by owner

DOOR FRAMES:

     Shall be ACI or equal, 3 3/4" or 4 7/8" throat, aluminum, dark bronze
     anodized, snap-on trim

HARDWARE:

     Shall be "Schlage", a lever type "Levon" D series, dark bronze 613 finish,
     2 3/4" backset. Closers (where required) shall be Duro X PA X SN-1

INSULATION:

     By Title 24 insulation

PLUMBING:

     A.   Shall comply with all local codes and handicapped code requirements.
          Fixtures shall be either "American Standard", "Koher" or "Norris". All
          toilet accessories and grab bars shall be "Bobrick" or equal and
          approved by owner

     B.   Plumbing bid shall include 5 gallon minimum, or insta hot with mixer
          valve electric water heater

TOILET PARTITIONS:

     Shall be as manufactured by Fiat, global or equal if approved by owner.
     Color shall be chosen by tenant

                                       2
<PAGE>

HVAC:

     Five (5) year warranty provided on all HVAC compressor units. All
     penetrations and sleeper supports to be hot mopped to LPC standard. Provide
     alternate price for electric heat pumps at conditioned spaces. Provide time
     overlay switch at compressors.

WAREHOUSE AREAS:

Floor - sealed concrete
Fire Extinguishers - 2A 10 BC surface mount by code x by S.F.
Lighting - 1x8 strip lighting single tube chain hung 25ft.
Draft stops - by code UBC 198 Edition
Service electrical outlets - HVAC or heaters at tenant cost
(400 W metal halide lighting are acceptable in lieu of strip lighting at
warehouse minimum 15 F.C.)1

INITIALS.
--------

TENANT:   /s/ signature Illegible

LANDLORD: /s/ signature Illegible

                                       3
<PAGE>

                                  EXHIBIT B-1
                              BUILDING STANDARDS
                           OUTLINE SPECIFICATION FOR
                 NEW OFFICE BUILD-OUT IN INDUSTRIAL BUILDINGS

OFFICE AREA

DEMISING PARTITION AND CORRIDOR WALLS:

     Note: One hr. rated walls where required based on occupancy group.

A.   6" 20-gage metal studs at 24" O.C. (or as required by code based on roof
     height) framed full height from finish floor to surface above.

B.   One (1) LAYER 5/8" drywall Type "X" both sides of wall, fire taped only.

INTERIOR PARTITIONS:

A.   3 5/8" 25 gage metal studs at 24" O.C. to bottom of T-Bar ceiling grid
     approximately 9' 0' high.

B.   One (1) layer 5/8" drywall both sides of wall, smooth ready for paint.

C.   3 5/8" metal studs including all lateral bracing as required by code.

PERIMETER DRYWALL (AT OFFICE AREAS):

A.   3 5/8" metal studs @ 24" O.C. to 12'0" above finished floor. (or as
     required by Title-24 for full height envelope then use demising wall spec.)

B.   One (1) layer 5/8" Type "X" drywall taped smooth and ready for paint.

COLUMN FURRING:

A.   Furring channel all sides of 2 1/2" metal studs per details.

B.   One (1) layer 5/8" drywall taped smooth and ready for paint.

C.   Columns within walls shall be furred-out.

ACOUSTICAL CEILINGS:

     Note: Gyp. Bd ceiling at all restrooms Typ.

A.   2' X 4" standard white T-Bar grid system as manufactured by Chicago
     Metallic of equal.

B.   2' X 4' X 5/8" white, fissured, no-directional acoustical tile to be
     Cortega as manufactured by Armstrong or equal.

PAINTING:

A.   Sheetrock walls within office to receive two (2) coats of interior latex
     paint as manufactured by Kelly Moore or equal. Some portions of second coat
     to be single accent color.

B.   Semigloss paint all restrooms and lunch rooms.

WINDOW COVERING:

A.   1 "aluminum mini-blinds as manufactured by Levelor, Bali or equal, color to
     be selected by Lincoln Property Company.

B.   Blinds to be sized to fit window module.

VCT:

A.   VCT to be 1/8" x 12" x 12" as manufactured by Armstrong -Excelon Series or
     equal.

B.   Slabs shall be water proofed per manufacturer recommendations, at sheet
     vinyl or VCT areas.

LIGHT FIXTURES:

A.   2" X 4" T-bar lay in 3-tube energy efficient fixture with cool white
     fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
     or equal. (Approximately 50 F.C.)

                                       1
<PAGE>

                         EXHIBIT C TO LEASE AGREEMENT

                              RULES & REGULATIONS

This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated May 29, 1997 (the "Lease"), by and between
LINCOLN MENLO IV & V ASSOCIATES LIMITED, a California limited partnership
("Landlord") and Nuance Communications, Inc., a California corporation
("Tenant") for the leasing of certain premises located in the Willow Park at
Building Q, 1380 Willow Road, Menlo Park, California (the "Premises"). The
terms, conditions and provisions of this EXHIBIT C are hereby incorporated into
and are made a part of the Lease. Any capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms as set
forth in the Lease:

1.   No advertisement, picture or sign of any sort shall be displayed on or
     outside the Premises or the Building without the prior written consent of
     Landlord. Landlord shall have the right to remove any such unapproved item
     without notice and at Tenant's expense.

2.   Tenant shall not regularly park motor vehicles in designated parking areas
     after the conclusion of normal daily business activity.

3.   Tenant shall not use any method of heating or air conditioning other than
     that supplied by Landlord without the prior written consent of Landlord.

4.   All window coverings installed by Tenant and visible from the outside of
     the Building require the prior written approval of Landlord.

5.   Tenant shall not use, keep or permit to be used or kept any foul or noxious
     gas or substance or any flammable or combustible materials on or around the
     Premises, the Building or the Park.

6.   Tenant shall not alter any lock or install any new locks or bolts on any
     door at the Premises without the prior consent of Landlord.

7.   Tenant shall park motor vehicles in those general parking areas as
     designated by Landlord except for loading and unloading. During those
     periods of loading and unloading. Tenant shall not unreasonably interfere
     with traffic flow within the Park and loading and unloading areas of other
     tenants.

8.   Tenant shall not disturb, solicit or canvas any occupant of the Building or
     Park and shall cooperate to prevent same.

9.   No person shall go on the roof without Landlord's permission.

10.  Business machines and mechanical equipment belonging to Tenant which cause
     noise or vibration that may be transmitted to the structure of the
     Building, to such a degree as to be objectionable to Landlord or other
     Tenants, shall be placed and maintained by Tenant, at Tenant's expense, on
     vibration eliminators or other devices sufficient to eliminate noise or
     vibration.

11.  All goods, including material used to store goods, delivered to the
     Premises of Tenant shall be immediately moved into the Premises and shall
     not be left in parking or receiving areas overnight.

12.  Tractor trailers which must be unhooked or parked with dollary wheels
     beyond the concrete loading areas must use steel plates or wood blocks
     under the dolly wheels to prevent damage to the asphalt paving surfaces. No
     parking or storing of such trailers will be permitted in the auto parking
     areas of the Park or on streets adjacent thereto

13.  Forklifts which operate on asphalt paving areas shall not have solid rubber
     tires and shall only use tires that do not damage the asphalt

14.  Tenant is responsible for the storage and removal of all trash and refuse.
     All such trash and refuse shall be contained in suitable receptacles stored
     behind screened enclosures at locations approved by Landlord.

15.  Tenant shall not store or permit the storage or placement of goods, or
     merchandise or pallets or equipment of any sort in or around the Premises,
     the Building, the Park or any of the Common Areas of the foregoing. No
     displays or sales of merchandise shall be allowed in the parking lots or
     other Common Areas.

16.  Tenant shall not permit any animals, including, but not limited to, any
     household pets, to be brought or kept in or about the Premises, the
     Building, the Park or any of the Common Areas of the foregoing.

17.  Tenant shall not permit any motor vehicles to be washed on any portion of
     the Premises or in the Common Areas of the Park, nor shall Tenant permit
     mechanical work or maintenance of motor vehicles to be performed on any
     portion of the Premises or in the Common Areas of the Park.

INITIALS:
--------

TENANT:   /s/ Signature Illegible

LANDLORD: /s/ Signature Illegible

                                       1
<PAGE>

                                   EXHIBIT E

                  HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:      _________________________________________________________________
               _________________________________________________________________
               c/o Lincoln Property Company Management Services, Inc.
               101 Lincoln Centre Drive, Fourth Floor
               Foster City, California 94404
               Attn: ________________________________
               Phone: (415) 571-2200

Name of (Prospective) Tenant:
________________________________________________________________________________

Mailing Address:
________________________________________________________________________________
________________________________________________________________________________

Contact Person, Title and Telephone Number(s):
________________________________________________________________________________

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
________________________________________________________________________________

________________________________________________________________________________

Address of (Prospective) Premises:
__________________________________________________________

Length of (Prospective) initial Term:
_______________________________________________________
________________________________________________________________________________

1.   GENERAL INFORMATION:

     Describe the initial proposed operations to take place in, on, or about the
     Premises, including, without limitation, principal products processed,
     manufactured or assembled services and activities to be provided or
     otherwise conducted. Existing tenants should describe any proposed changes
     to on-going operations
     ___________________________________________________________________________

     ___________________________________________________________________________

2.   USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

     2.1  Will any Hazardous Materials be used, generated, stored or disposed of
          in, on or about the Premises? Existing tenants should describe any
          Hazardous Materials which continue to be used, generated, stored or
          disposed of in, on or about the Premises.

          Wastes                            Yes [ ]     No [ ]
          Chemical Products                 Yes [ ]     No [ ]
          Other                             Yes [ ]     No [ ]

          If Yes is marked, please explain.
          _______________________________________________
          ______________________________________________________________________

          ______________________________________________________________________

     2.2  If Yes is marked in Section 2.1, attach a list of any Hazardous
          Materials to be used, generated, stored or disposed of in, on or about
          the Premises, including the applicable hazard class and an estimate of
          the quantities of such Hazardous Materials at any given time,
          estimated annual throughput; the proposed location(s) and method of
          storage (excluding nominal amounts of ordinary household cleaners and
          janitorial supplies

                                       1
<PAGE>

          which are not regulated by any Environmental Laws); and the proposed
          location(s) and method of disposal for each Hazardous Material,
          including, the estimated frequency, and the proposed contractors or
          subcontractors. Existing tenants should attach a list setting forth
          the information requested above and such list should include actual
          data from on-going operations and the identification of any variations
          in such information from the prior year's certificate

3.   STORAGE TANKS AND SUMPS

     3.1  Is any above or below ground storage of gasoline, diesel, petroleum,
          or other Hazardous Materials in tanks or sumps proposed in, on or
          about the Premises? Existing tenants should describe any such actual
          or proposed activities.

          Yes [ ]  No [ ]

          If yes, please explain:
          _________________________________________________________
          ______________________________________________________________________

          ______________________________________________________________________

4.   WASTE MANAGEMENT

     4.1  Has your company been issued an EPA Hazardous Waste Generator I.D.
          Number? Existing tenants should describe any additional identification
          numbers issued since the previous certificate.

          Yes [ ]  No [ ]

     4.2  Has your company filed a biennial or quarterly reports as a hazardous
          waste generator? Existing tenants should describe any new reports
          filed.

          Yes [ ]  No [ ]

          If yes, attach a copy of the most recent report filed.

5.   WASTEWATER TREATMENT AND DISCHARGE

     5.1  Will your company discharge wastewater or other wastes to:

          ________ storm drain?              ________ sewer?
          ________ surface water?            ________ no wastewater or other
                                                      wastes discharged.

          Existing tenants should indicate any actual discharges. If so,
          describe the nature of any proposed or actual discharge(s)

     ___________________________________________________________________________

     ___________________________________________________________________________

     5.2  Will any such wastewater or waste be treated before discharge?

          Yes [ ]  No [ ]

          If yes, describe the type of treatment proposed to be conducted.
          Existing tenants should describe the actual treatment conducted.

     ___________________________________________________________________________

     ___________________________________________________________________________

6.   AIR DISCHARGES

     6.1  Do you plan for any air filtration systems or stacks to be used in
          your company's operations in, on or about the Premises that will
          discharge into the air; and will such air emissions be monitored?
          Existing tenants should indicate whether or not there are any such air
          filtration systems or stacks in use in, on or about the Premises which
          discharge into the air and whether such air emissions are being
          monitored.

          Yes [ ]  No [ ]

          If yes, please describe:
          ________________________________________________________
          ______________________________________________________________________

          ______________________________________________________________________

     6.2  Do you propose to operate any of the following types of equipment, or
          any other equipment requiring an air emissions permit? Existing
          tenants should specify any such equipment being operated in, on or
          about the Premises.

                                       2
<PAGE>

          If yes, please describe. Existing tenants should describe any such
          problems or complaints not already disclosed to Landlord under the
          provisions of the signed Lease Agreement.
     ___________________________________________________________________________
     ___________________________________________________________________________

9    PERMITS AND LICENSES

     9.1  Attach copies of all Hazardous Materials permits and licenses
          including a Transporter Permit number issued to your company with
          respect to its proposed operations in, on or about the Premises,
          including, without limitation, any wastewater discharge permits, air
          emissions permits, and use permits or approvals. Existing tenants
          should attach copies of any new permits and licenses as well as any
          renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws, (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name)____________________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.

(PROSPECTIVE) TENANT:

By:    _____________________________________

Title: _____________________________________

Date:  _____________________________________

INITIALS:

TENANT:   /s/ Signature Illegible

LANDLORD: ______________________

                                       4
<PAGE>

                                   EXHIBIT F
                      FIRST AMENDMENT TO LEASE AGREEMENT
                          CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________________, by and between ________________________
("LANDLORD"), and _________________________ ("TENANT"), with reference to the
following facts:

                                   RECITALS

A.   Landlord and Tenant have entered into that certain Lease Agreement dated
     _______________________ (the "Lease"), for the leasing of certain premises
     containing approximately _________________________ rentable square feet of
     space located at _______________________________, California (the
     "Premises") as such Premises are more fully described in the Lease.

B.   Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

     1.   Recitals: Landlord and Tenant agree that the above recitals are true
          --------
          and correct.

     2.   The Commencement Date of the Lease shall be ________________________.

     3.   The last day of the Term of the Lease (the "Expiration Date") shall be
          _________.

     4.   The dates on which the Base Rent will be adjusted are:

          for the period ___________ to __________ the monthly Base Rent shall
          be $ _________;
          for the period ___________ to __________ the monthly Base Rent shall
          be $ _________; and
          for the period ___________ to __________ the monthly Base Rent shall
          be $ _________

     5.   Effect of Amendment: Except as modified herein, the terms and
          -------------------
          conditions of the Lease shall remain unmodified and continue in full
          force and effect. In the event of any conflict between the terms and
          conditions of the Lease and this Amendment, the terms and conditions
          of this Amendment shall prevail.

     6.   Definitions: Unless otherwise defined in this Amendment, all terms not
          -----------
          defined in this Amendment shall have the meaning set forth in the
          Lease.

     7.   Authority: Subject to the provisions of the Lease, this Amendment
          ---------
          shall be binding upon and inure to the benefit of the parties hereto,
          their respective heirs, legal representatives, successors and assigns.
          Each party hereto and the persons signing below warrant that the
          person signing below on such party's behalf is authorized to do so and
          to bind such party to the terms of this Amendment.

     8.   The terms and provisions of the Lease are hereby incorporated in this
          Amendment.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

[PROPERTY MANAGER: PLEASE PROVIDE TENANT INFORMATION AND WORD PROCESSING WILL
COMPLETE THE SIGNATURE BLOCK]

INITIALS:
--------

TENANT:   /s/ Signature Illegible

LANDLORD: _______________________
<PAGE>

                                   EXHIBIT I
           SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT
                        AND TENANT ESTOPPEL CERTIFICATE

THIS AGREEMENT is dated the 29th day of May, 1997, and is made between AETNA
CASUALTY AND SURETY COMPANY or one or more of its affiliates or designees,
("Mortgagee"), and Nuance Communications, Inc. ("Tenant").

                                   RECITALS

     (a)  Tenant has entered into a certain lease ("Lease") dated May 29, 1997
with Lincoln Menlo IV and V Associates Limited as lessor ("Landlord"), covering
certain premises known as ________________, California.

     (b)  Mortgagee has agreed to make a mortgage loan in the amount of
_______________ (the "Mortgage") to the Landlord, secured by the Demised
Premises, and the parties desire to set forth their agreement herein.

     NOW, THEREFORE, in consideration of the Demised Premises and of the sum of
one and 00/100 dollar ($1.00) by each party in hand paid to the other, the
receipt of which is hereby acknowledged, the parties hereby agree as follows:

     1.   Said Lease is and shall be subject and subordinate to the Mortgage
insofar as it affects the real property of which the Demised Premises form a
part, and to all renewals, modifications, consolidations, replacements and
extensions thereof, to the full extent of amounts secured thereby and interest
thereon.

     2.   Tenant agrees that it will attorn to and recognize any purchaser at a
foreclosure sale under the Mortgage, any transferee who acquires the Demised
Premises by deed in lieu of foreclosure, and the successors and assigns of such
purchaser(s), as its landlord for the unexpired balance (and any extensions, if
exercised) of the term of said Lease upon the same terms and conditions set
forth in said Lease.

     3.   If it becomes necessary to foreclose the Mortgage, Mortgagee will not
terminate said Lease nor join Tenant in summary or foreclosure proceedings so
long as Tenant is not in default under any of the terms, covenants, or
conditions of said Lease

     4.   If Mortgagee succeeds to the interest of Landlord under the Lease,
Mortgagee shall not be:

          a.   liable for any act or omissions of any prior landlord (including
               Landlord); or

          b.   liable for the return of any security deposit unless actually
               received by Mortgagee; or

          c.   subject to any offsets or defenses which Tenant might have
               against any prior landlord (including Landlord), or

          d.   bound by any rent or additional rent which Tenant might have paid
               for more than the current month to any prior landlord (including
               Landlord); or

          e.   bound by any amendment or modification of the Lease made without
               its consent; or

          f.   bound by any representation or warranty made by any prior
               landlord (including Landlord).

     5.   This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their successors and assigns.

     6.   Tenant agrees to give Mortgagee, by registered mail, a copy of any
notice of default served upon the Landlord, to be sent to the address of such
Mortgagee indicated following Mortgagee's signature line below. Tenant further
agrees that if Landlord shall have failed to cure such defaults within the time
provided for in this Lease, then the Mortgagee shall have an additional sixty
(60) days within which to cure such defaults or if such default cannot be cured
within that time, then such additional time as may be necessary to cure such
default shall be granted if within such sixty (60) days Mortgagee has commenced
and is diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings, if
necessary to
<PAGE>

effect such cure), in which event the Lease shall not be terminated while such
remedies are being so diligently pursued.

     IN WITNESS WHEREOF, the parties hereto have executed these presents as of
the day and year first above written.

_____________________                   MORTGAGEE
Date
                                        AETNA CASUALTY AND SURETY COMPANY

                                        By:  _______________________________

                                        Its: _______________________________

                                        Address.  c/o AETNA INVESTMENT GROUP
                                                  151 Farmington Avenue, 1G4J
                                                  Hartford, CT 06156

_____________________                   TENANT:
Date
                                        Nuance communications, Inc.,
                                        a California corporation

                                        By: /s/ Signature Illegible

                                        Its: PRESIDENT

                                       1
<PAGE>

     with the terms of the Lease unless and until the Tenant is notified
     otherwise in writing by /Etna or its successors or assigns.

     It is particularly noted that:

     (a)  Under the provisions of this assignment, the Lease cannot be
          terminated (either directly or by the exercise of any option which
          could lead to termination) or modified in any of its terms, or consent
          be given to the release of any party having liability thereon, without
          the prior written consent of /Etna or its successors or assigns, and
          without such consent, no rent may be collected or accepted more than
          two (2) months in advance

     (b)  The interest of the Landlord in the Lease has been assigned to /Etna
          for the purposes specified in the assignment. /Etna, or its successors
          or assigns, assumes no duty, liability or obligation whatever under
          the Lease or any extension or renewal thereof.

     (c)  Any notices sent to /Etna or its affiliates should be sent by
          registered mail and addressed to 242 Trumbull Street (IG4H), Hartford,
          Connecticut 06103, Attention: /Etna Real Estate Investment Group.

16.  Tenant agrees to give any Mortgagee and/or Trust Deed Holders
     ("Mortgagee"), by registered mail, a copy of any notice of default served
     upon the Landlord, to be sent to such Mortgagee addressed to 242 Trumbull
     Street, Hartford, Connecticut 06156, Attention: Real Estate Investments.
     Tenant further agrees that if Landlord shall have failed to cure such
     default within the time provided for in this Lease, then the Mortgagee
     shall have an additional sixty (60) days within which to cure such default
     or if such default cannot be cured within that time, then such additional
     time as may be necessary to cure such default shall be granted if within
     such sixty (60) days Mortgagee has commenced and is diligently pursuing the
     remedies necessary to cure such default (including, but not limited to,
     commencement of foreclosure proceedings, if necessary to effect such cure),
     in which event the Lease shall not be terminated while such remedies are
     being so diligently pursued

17.  This certificate is made to induce /Etna to make certain fundings, knowing
     that /Etna relies upon the truth of this certification in disbursing said
     funds.

18.  The undersigned is authorized to execute this Tenant Estoppel Certificate
     on behalf of the Tenant

Dated this _________ day of ________, 19_____

                                   /s/ Signature Illegible (TENANT)

                                   By: /s/ Signature Illegible

Date: _________                    Its: PRESIDENT

The undersigned hereby certifies that the certifications set forth above are
true as of the date hereof.

                                   __________________________ (OWNER) (LANDLORD)

                                   By: ______________________

Date: __________                   Its: _____________________

                                       3
<PAGE>

                                   EXHIBIT J
                            IMPROVEMENTS BY TENANT

This exhibit, entitled "Improvements", is and shall constitute EXHIBIT J to that
certain Lease Agreement dated May 29, 1997 (the "Lease"), by and between LINCOLN
MENLO IV & V ASSOCIATES LIMITED, a California limited partnership ("Landlord"),
and Nuance Communications, Inc., a California corporation ("Tenant"), for the
leasing of certain premises located at 1380 Willow Road, Menlo Park, California
(the "Premises"). The terms, conditions and provisions of this EXHIBIT B are
hereby incorporated into and are made a part of the Lease. Any capitalized terms
used herein and not otherwise defined herein shall have the meaning ascribed to
such terms as set forth in the Lease:

1.   TENANT TO CONSTRUCT IMPROVEMENTS. Subject to the provisions below, Tenant
     --------------------------------
shall be solely responsible for the planning, construction and completion of the
interior improvements ("Work") to the Premises in accordance with the terms and
conditions of this Exhibit J. The Work shall not include any of Tenant's
personal property, trade fixtures, furnishings, equipment or similar items, and
shall be similar to the initial plans attached as Exhibit J-3.

2.   TENANT IMPROVEMENT PLANS.
     -------------------------

     A.   PRELIMINARY PLANS AND SPECIFICATIONS. Tenant shall retain a licensed,
          ------------------------------------
insured (if reasonably required by Landlord) architect ("Architect") to prepare
preliminary working architectural and engineering plans and specifications
("Preliminary Plans and Specifications") for the Work. Tenant shall deliver the
Preliminary Plans and Specifications to Landlord. The Preliminary Plans and
Specifications shall be in sufficient detail to show locations, types and
requirements for all heat loads, people loads, floor loads, power and plumbing,
regular and special HVAC needs, telephone communications, telephone and
electrical outlets, lighting, lighting fixtures and related power, and
electrical and telephone switches. Landlord shall reasonably approve or
disapprove the Preliminary Plans and Specifications within five (5) days after
Landlord receives the Preliminary Plans and Specifications and, if disapproved,
Landlord shall return the Preliminary Plans and Specifications to Tenant, who
shall make all necessary revisions within ten (10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves the
Preliminary Plans and Specifications. The approved Preliminary Plans and
Specifications, as modified, shall be deemed the "Final Preliminary Plans and
Specifications"

     B.   FINAL PLANS AND SPECIFICATIONS. After the Final Preliminary Plans and
          ------------------------------
Specifications are approved by Landlord and are deemed to be the Final
Preliminary Plans and Specifications, Tenant shall cause the Architect to
prepare in twenty (20) days following Landlord's approval of the Final
Preliminary Plans and Specifications the final working architectural and
engineering plans, specifications and drawings, ("Final Plans and
Specifications") for the Work. Tenant shall then deliver the Final Plans and
Specifications to Landlord. Landlord shall reasonably approve or disapprove the
Final Plans and Specifications within five (5) days after Landlord receives the
Final Plans and Specifications and, if disapproved, Landlord shall return the
Final Plans and Specifications to Tenant who shall make all necessary revisions
within ten (10) days after Tenant's receipt thereof. This procedure shall be
repeated until Landlord approves, in writing, the Final Plans and
Specifications. The approved Final Plans and Specifications, as modified, shall
be deemed the "Construction Documents".

     C.   MISCELLANEOUS. All deliveries of the Preliminary Plans and
          -------------
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents shall be delivered by
messenger service, by personal hand delivery or by overnight parcel service.
While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents, Landlord's interest in doing
so is to protect the Premises, the Building and Landlord's interest.
Accordingly, Tenant shall not rely upon Landlord's approvals and Landlord shall
not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of granting such
approvals.

     D.   BUILDING STANDARD WORK. The Construction Documents shall provide that
          ----------------------
the Work to be constructed in accordance therewith must be at least equal, in
quality, to Landlord's building standard materials, quantities and procedures
then in use by Landlord ("Building Standards") attached hereto as Exhibit J-2,
and shall consist of improvements which are generic in nature.

3.   PERMITS. Tenant at its sole cost and expense (subject to the provisions of
     -------
Paragraph 5 below) shall obtain all governmental approvals of the Construction
Documents to the full extent necessary for the issuance of a building permit for
the Tenant Improvements based upon such Construction Documents. Tenant at its
sole cost and expense shall also cause to be obtained all other necessary
approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Work in accordance with
the approved Construction Documents. Tenant at its sole cost and expense shall
undertake all steps necessary to insure that the construction of the Work is
accomplished in strict compliance with all statutes, laws, ordinances, codes,
rules, and regulations applicable to the construction

                                       1
<PAGE>

     I.   Landlord reserves the right to establish reasonable rules and
regulations for the use of the Building during the course of construction of the
Work, including, but not limited to, construction parking, storage of materials,
hours of work, use of elevators, and clean-up of construction related debris.

     J.   Upon completion of the Work, Tenant shall deliver to Landlord the
following, all of which shall be to Landlord's reasonable satisfaction:

          (i)   Any certificates required for occupancy, including a permanent
and complete Certificate of Occupancy issued by the City of Menlo Park.

          (ii)  A Certificate of Completion signed by the Architect who prepared
the Construction Documents, reasonably approved by Landlord.

          (iii) A cost breakdown itemizing all expenses for the Work, together
with invoices and receipts for the same or other evidence of payment.

          (iv)  Final and unconditional mechanic's lien waivers for all the
Work.

          (v)   A Notice of Completion for execution by Landlord, which
certificate once executed by Landlord shall be recorded by Tenant in the
official records of the county of San Mateo, and Tenant shall then deliver to
Landlord a true and correct copy of the recorded Notice of Completion.

          (vi)  Redline version of the Construction Documents.

          (vii) A true and complete copy of all as-built plans and drawings for
the Work.

5.   Termination. If the Lease is terminated prior to the date on which the Work
     -----------
are completed, for any reason due to the default of Tenant hereunder, in
addition to any other remedies available to Landlord under the Lease, Tenant
shall pay to Landlord as Additional Rent under the Lease, within five (5) days
of receipt of a statement therefor, any and all costs incurred by Landlord and
not reimbursed or otherwise paid by Tenant through the date of termination in
connection with the Work to the extent planned, installed and/or constructed as
of such date of termination, including, but not limited to, any costs related to
the removal of all or any portion of the Work and restoration costs related
thereto. Upon the expiration or earlier termination of the Lease, Tenant shall
not be required to remove the Work it being the intention of the parties that
the Work is to be considered incorporated into the Building.

6.   Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
     --------------------------
as they are applicable, in whole or in part, to this EXHIBIT J, are hereby
                                                     ---------
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT J, the terms of this EXHIBIT J shall
                            ---------                    ---------
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.

                                       3
<PAGE>

                                  EXHIBIT J-1
                      CONSTRUCTION INSURANCE REQUIREMENTS

Before commencing work, the contractor shall procure and maintain at its sole
cost and expense until completion and final acceptance of the work, at least the
following minimum levels of insurance.

A.   Workers' Compensation in statutory amounts and Employers Liability
     Insurance in the minimum amounts of $100,000 each accident for bodily
     injury by accident and $100,000 each employee for bodily injury by disease
     with a $500,000 policy limit, covering each and every worker used in
     connection with the contract work.

B.   Comprehensive General Liability Insurance on an occurrence basis including,
     but not limited to, protection for Premises/Operations Liability, Broad
     Form Contractual Liability, Owner's and Contractor's Protective, and
     Products/Completed Operations Liability*, in the following minimum limits
     of liability.

     Bodily Injury, Property Damage, and
     Personal Injury Liability             $2,000,000/each occurrence
                                           $3,000,000/aggregate

     *  Products/Completed Operations Liability Insurance is to be provided for
     a period of at least one (1) year after completion of work.

     Coverage should include protection for Explosion, Collapse and Underground
     Damage.

C.   Comprehensive Automobile Liability Insurance with the following minimum
     limits of liability.

     Bodily Injury and Property            $1,000,000/each occurrence
     Damage Liability                      $2,000,000/aggregate

     This insurance will apply to all owned, non-owned or hired automobiles to
     be used by the Contractor in the completion of the work.

D.   Umbrella Liability Insurance in a minimum amount of five million dollars
     ($5,000,000), providing excess coverage on a following-form basis over the
     Employer's Liability limit in Paragraph A and the liability coverages
     outlined in Paragraphs B and C.

E.   Equipment and Installation coverages in the broadest form available
     covering Contractor's tools and equipment and material not accepted by
     Tenant.

All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of any work and
shall name Landlord, and its partners and lenders as additional insureds as
their interests may appear. All insurance policies shall (1) be issued by a
company or companies licensed to be business in the state of California, (2)
provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) days prior written notice provided to Landlord,
(3) provide no deductible greater than $ 15,000 per occurrence, (4) contain a
waiver to subrogation clause in favor of Landlord, and its partners and lenders,
and (5) comply with the requirements of Sections 12.2, 12.3 and 12.4 of the
Lease to the extent such requirements are applicable.
<PAGE>

     A.   110-v duplex outlet in demising or interior partitious only, as
          manufactured by Leviton, color to be Ivory.

     B.   Eight (8) outlets per circuit, spacing to meet code (2 per office)

     C.   Transformers to be a minimum of 20% or over required capacity

     D.   Contractors to inspect electric room and to include all necessary
          metering costs

     E.   No aluminum wiring is acceptable

TELEPHONE OUTLET:

     A.   One (1) single outlet box in wall with pullwire from outlet box to
          area above T-bar ceiling per office

     B.   Cover plate for phone outlets to be included

FIRE SPRINKLERS:

     As required by fire codes

TOPSET BASE:

     A.   4" rubber base as manufactured by Burke or equal, standard colors only

     B    4" rubber base at VCT areas

TOILET AREAS:

     Wet walls to receive marlite up to 48" Floors to receive sheetvinyl and
     cove base as required by code

CARPET:

     Minimum 30 ounce, commercial grade, level loop, UM44-C. Type 1 Class 1.
     100% continuous filament. 5-year wear guarantee. Glue down, no pad.

WOOD DOORS:

     Shall be 3'-0" x 7'-0" x 1 3/4" (unless otherwise specified) solid core,
     prefinished birch "Cal-Wood" B-3 or equal if approved by owner

DOOR FRAMES:

     Shall be ACI or equal, 3 3/4" or 4 7/8" throat, aluminum, dark bronze
     anodized, snap-on trim

HARDWARE:

     Shall be "Schlage", a lever type "Levon" D series, dark bronze 613 finish,
     2 3/4" backset. Closers (where required) shall be Duro X PA X SN-1

INSULATION:

     By Title 24 insulation

PLUMBING:

     A.   Shall comply with all local codes and handicapped code requirements.
          Fixtures shall be either "American Standard", "Koher" or "Norris". All
          toilet accessories and grab bars shall be "Bobrick" or equal and
          approved by owner

     B.   Plumbing bid shall include 5 gallon minimum, or insta hot with mixer
          value electric water heater

TOILET PARTITIONS:

     Shall be as manufactured by Fiat, global or equal if approved by owner.
     Color shall be chosen by tenant

                                       2
<PAGE>

                                  EXHIBIT J-2
                              BUILDING STANDARDS

OFFICE AREA

DEMISING PARTITION AND CORRIDOR WALLS:

     A.   6" 20-gauge metal studs at 24" O C. (or as required by code for span)
          framed full height from finish floor to structure above

     B    One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped
          only

INTERIOR PARTITIONS:

     A.   3 5/8" 25-gauge metal studs at 24" O C. to bottom of T-bar ceiling
          grid approximately 9' - 0' high

     B    Top track to be pre-formed slotted aluminum taped in

     C.   One (1) layer 5/8" drywall both sides of wall, taped texture ready for
          paint

     D    3 5/8" metal studs including all lateral bracing as required by code

PERIMETER DRYWALL (A1 OFFICE AREAS):

     A.   One (1) layer 5/8" Type "X" drywall taped texture ready for paint

     B    Provide alternate to texture concrete in lieu of furring walls

COLUMN FURRING:

     A.   Furring channel all sides

     B.   One (1) layer 5/8" drywall taped texture and ready for paint

     C.   Provide deductive alternate for texturing columns where there are no
          pipes to furred out

ACOUSTICAL CEILINGS:

     A.   2' x 4' standard white T-bar grid system as manufactured by Chicago
          Metallic or equal

     B.   2' x 4' x 5/8" white, fissured, non-directional acoustical tile to be
          Cortega as manufactured by Armstrong or equal

PAINTING:

     A.   Sheetrock walls to receive two (2) coats of interior latex paint as
          manufactured by Kelly Moore or equal. Some portions of second coat to
          be single accent color.

     B.   Provide a deductive alternate for not painting warehouse walls

WINDOW COVERING:

     A.   1" aluminum mini-blinds as manufactured by Levelor or equal, color to
          be selected by Lincoln Property Company

     B.   Blinds to be sized to fit window module

VCT:

     VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series or
     equal

LIGHT FIXTURES:

     2' x 4' T-bar lay in 3-tube energy efficient fixture with cool white
     fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
     or equal

LIGHT SWITCHES:

     A.   Double switching as required by Title 24

     B.   Switch assembly to be Leviton, color - Ivory

ELECTRICAL OUTLET:

                                       1
<PAGE>

                                  EXHIBIT J-3
                           INITIAL IMPROVEMENT PLAN

                                [CHART OMITTED]

INITIALS:
---------

TENANT:    /s/ Signature Illegible

LANDLORD:  /s/ Signature Illegible

                                       1
<PAGE>

                                  ADDENDUM 1
                          OPTION TO EXTEND THE LEASE

This Addendum 1 is incorporated as a part of that certain Lease Agreement dated
May 29, 1997 (the "Lease"), by and between Nuance Communications, Inc., a
California corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership ("Landlord"), for the leasing of those certain
premises located at 1380 Willow Road, Menlo Park, California 94025 as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
                          ---------
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.

1.   GRANT OF EXTENSION OPTION. Subject to the provisions, limitations and
     -------------------------
conditions set forth in Paragraph 5 below, Tenant shall have an Option
("Option") to extend the term of the Lease for five (5) years (the "Extended
Term")

2.   TENANT'S OPTION NOTICE. If Landlord does not receive written notice from
     ----------------------
Tenant of its exercise of this Option on a date which is not more than three
hundred sixty (360) days nor less than three hundred (300) days prior to the end
of the initial term of the Lease (the "Option Notice"), all rights under this
Option shall automatically terminate and shall be of no further force or effect.

3.   ESTABLISHING THE INITIAL MONTHLY BASE RENT FOR THE EXTENDED TERM. The
     ----------------------------------------------------------------
initial monthly Base Rent for the Extended Term shall be the then current market
rent for the highest and best use for similar space within the competitive
market area of the Premises (the "Fair Rental Value"). "Fair Rental Value" of
the Premises means the fair market rental value of the Premises as of the
commencement of the Extended Term, taking into consideration all relevant
factors, including length of term, the uses permitted under the Lease, the
quality, size, design and location of the Premises, including the condition and
value of existing tenant improvements, and the monthly base rent paid by tenants
for premises comparable to the Premises, and located within the competitive
market area of the Premises as reasonably determined by Landlord.

Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within thirty
(30) days of receipt by Landlord of the Option Notice, Landlord and Tenant being
obligated only to act in good faith, this Option shall automatically terminate
and the Lease shall terminate at the end of its initial term.

In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the initial monthly Base Rent for the Extended Term
in accordance with the terms outlined above, Landlord and Tenant shall
immediately execute, at Landlord's sole option, either the standard lease
agreement then in use by Landlord, or an Amendment to this Lease. Such new lease
agreement or amendment, as the case may be, shall set forth among other things,
the initial monthly Base Rent for the Extended Term and the actual commencement
date and expiration date of the Extended Term. Tenant shall have no other right
to extend the term of the Lease under this Addendum 1 unless Landlord and Tenant
otherwise agree in writing.

4.   CONDITION OF PREMISES AND BROKERAGE COMMISSIONS FOR THE EXTENDED TERM. If
     ---------------------------------------------------------------------
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then "As-Is"
condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises, and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder's
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant ("Tenant's
Broker") in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant's Broker.

5.   LIMITATIONS ON, AND CONDITIONS TO, EXTENSION OPTION. This Option is
     ---------------------------------------------------
personal to Tenant and may not be assigned, voluntarily or involuntarily, except
in the case of a Related Entity separate from or as part of the Lease. At
Landlord's option, all rights of Tenant under this Option shall terminate and be
of no force or effect if any of the following individual events occur or any
combination thereof occur: (1) Tenant has been in default at any time during the
initial term of the Lease, or is currently in default of any provision of the
Lease; and/or (2) Tenant has assigned its rights and obligations under all or
part of the Lease or Tenant has subleased all or part of the Premises; except
for the Initial Sublease, unless the Initial Sublease is still occupying a
portion of the Premises, in which case all rights of Tenant shall terminate
and/or (3) Tenant's financial condition is unacceptable to Landlord at the time
the Option Notice is delivered to Landlord: and/or (4) Tenant has failed to
properly exercise this Option in a timely manner in strict accordance with the
provisions of this Addendum 1; and/or (5) Tenant no longer has possession of all
or any part of the Premises under the Lease, or if the Lease has been terminated
earlier, pursuant to the terms of the Lease.

                                       1
<PAGE>

                                  ADDENDUM 2

                           EARLY OCCUPANCY AGREEMENT

                                  PAGE 1 OF 1

                  LEASE AGREEMENT DATED MAY 29, 1997, BETWEEN

                         NUANCE COMMUNICATIONS, INC.,
                           A CALIFORNIA CORPORATION
                                  ("TENANT"),
                                      AND
                   LINCOLN MENLO IV & V ASSOCIATES LIMITED,
                       A CALIFORNIA LIMITED PARTNERSHIP,
                                 ("LANDLORD")

This Addendum No. 2 ("Addendum") is incorporated as a part of that certain Lease
Agreement dated May 29, 1997 (the "Lease"), by and between Nuance
Communications, Inc., a California corporation ("Tenant"), and LINCOLN MENLO IV
& V ASSOCIATES LIMITED, a California limited partnership ("Landlord"), of the
premises located at 1380 Willow Road, Menio Park, California 94025 (the
"Premises") All defined terms used in this Addendum not defined herein shall
have the same meaning and definition given them in the Lease.

Notwithstanding anything in the Lease to the contrary, Tenant shall have the
right to occupy the Premises (i) after this Lease has been fully executed; and
(ii) after Landlord's construction of the Work described in Exhibit B of the
Lease, but prior to the Commencement Date, on July 15, 1997 ("Occupancy Date")
through August 15, 1997 ("Early Occupancy Period").

All terms and conditions of the Lease shall be in full force and effect during
the Early Occupancy Period except the obligation to pay the Base Rent referenced
in Paragraph 3 of the Lease. Tenant shall be responsible for the payment of all
Utilities during the Early Occupancy Period.

Tenant's right, as granted herein, to occupy the Premises on the Occupancy Date,
is subject to the following:

     1.   Landlord shall receive from Tenant a certificate of general liability
          insurance as specified in the Lease, naming Landlord as additional
          insured;

     2.   By entry, Tenant accepts the Premises as being in good order,
          condition and repair subject to Paragraph 5 of the Lease and Exhibit B
          thereof; and

     3.   The monthly Base Rent waived during the Early Occupancy Period shall
          be payable at the rate of sixty-two thousand five hundred fifteen and
          20/100 dollars ($62,515.20) per month if an event of default beyond
          applicable cure periods under the Lease occurs at any time during the
          term of the Lease or the Early Occupancy Period. Such an event of
          default shall cause all Base Rent for the Early Occupancy Period to
          become immediately due and payable by Tenant to Landlord.

If for any reason whatsoever, Landlord cannot deliver occupancy of the Premises
to Tenant on the Occupancy Date, the Lease shall not be void or voidable, nor
shall Landlord, or Landlord's agents, be liable to Tenant for any loss or damage
resulting therefrom; provided, however, Tenant shall not be obligated to pay
monthly Base Rent for the Premises for thirty (30) days after Landlord delivers
possession and occupancy of the Premises to Tenant. In this event, Tenant and
Landlord shall execute a written amendment to this Lease wherein the parties
shall specify the actual Occupancy Date, Commencement Date, Expiration Date and
the date on which Tenant is to commence paying Base Rent.

INITIALS:
--------

TENANT:     /s/ Signature Illegible

LANDLORD:   /s/ Signature Illegible

                                       1
<PAGE>

     for each Hazardous Material, including, the estimated frequency, and the
     proposed contractors or subcontractors. Existing tenants should attach a
     list setting forth the information requested above and such list should
     include actual data from on-going operations and the identification of any
     variations in such information from the prior year's certificate.

3.   STORAGE TANKS AND SUMPS

     3.1  Is any above or below ground storage of gasoline, diesel, petroleum,
          or other Hazardous Materials in tanks or sumps proposed in, on or
          about the Premises? Existing tenants should describe any such actual
          or proposed activities.

          Yes [ ]  No [ ]

          If yes, please explain:
          ______________________________________________________________________
          ______________________________________________________________________
          ______________________________________________________________________

4.   WASTE MANAGEMENT

     4.1  Has your company been issued an EPA Hazardous Waste Generator I.D.
          Number? Existing tenants should describe any additional identification
          numbers issued since the previous certificate.

          Yes [ ]  No [ ]

          If yes, attach a copy of the most recent report filed.

5.   WASTEWATER TREATMENT AND DISCHARGE

     5.1  Will your company discharge wastewater or other wastes to:

          ________ storm drain?     ________ sewer?
          ________ surface water?   ________ no wastewater or other wastes
                                             discharged.

          Existing tenants should indicate any actual discharges. If so,
          describe the nature of any proposed or actual discharge(s).
     ___________________________________________________________________________

     ___________________________________________________________________________

     5.2  Will any such wastewater or waste be treated before discharge?

          Yes [ ]  No [ ]

          If yes, describe the type of treatment proposed to be conducted.
          Existing tenants should describe the actual treatment conducted.
     ___________________________________________________________________________

     ___________________________________________________________________________

6.   AIR DISCHARGES

     6.1  Do you plan for any air filtration systems or stacks to be used in
          your company's operations in, on or about the Premises that will
          discharge into the air; and will such air emissions be monitored?
          Existing tenants should indicate whether or not there are any such air
          filtration systems or stacks in use in, on or about the Premises which
          discharge into the air and whether such air emissions are being
          monitored.

          Yes [ ]  No [ ]

          If yes, please describe:
          ______________________________________________________________________
          ______________________________________________________________________
          ______________________________________________________________________

     6.2  Do you propose to operate any of the following types of equipment, or
          any other equipment requiring an air emissions permit? Existing
          tenants should specify any such equipment being operated in, on or
          about the Premises.

          ______ Spray booth(s)    ________ Incinerator(s)

                                       2
<PAGE>

          ______ Dip tank(s)       ________ Other (Please describe)
          ______ Drying oven(s)    ________ No Equipment Requiring Air Permits

          If yes, please describe:
          ______________________________________________________________________
          ______________________________________________________________________
          ______________________________________________________________________

7.   HAZARDOUS MATERIALS DISCLOSURES

     7.1  Has your company prepared or will it be required to prepare a
          Hazardous Materials management plan ("Management Plan") pursuant to
          Fire Department or other governmental or regulatory agencies'
          requirements? Existing tenants should indicate whether or not a
          Management Plan is required and has been prepared.

          Yes [ ]  No [ ]

          If yes, attach a copy of the Management Plan. Existing tenants should
          attach a copy of any required updates to the Management Plan.

     7.2  Are any of the Hazardous Materials, and in particular chemicals,
          proposed to be used in your operations in, on or about the Premises
          regulated under Proposition 65? Existing tenants should indicate
          whether or not there are any new Hazardous Materials being so used
          which are regulated under Proposition 65.

          Yes [ ]  No [ ]

          If yes, please explain:
          ______________________________________________________________________
          ______________________________________________________________________
          ______________________________________________________________________

8.   ENFORCEMENT ACTIONS AND COMPLAINTS

     8.1  With respect to Hazardous Materials or Environmental Laws, has your
          company ever been subject to any agency enforcement actions,
          administrative orders, or consent decrees or has your company received
          requests for information, notice or demand letters, or any other
          inquiries regarding its operations? Existing tenants should indicate
          whether or not any such actions, orders or decrees have been, or are
          in the process of being, undertaken or if any such requests have been
          received.

          Yes [ ]  No [ ]

          If yes, describe the actions, orders or decrees and any continuing
          compliance obligations imposed as a result of these actions, orders or
          decrees and also describe any requests, notices or demands, and attach
          a copy of all such documents. Existing tenants should describe and
          attach a copy of any new actions, orders, decrees, requests, notices
          or demands not already delivered to Landlord pursuant to the
          provisions of Section 29 of the signed Lease Agreement.

          ______________________________________________________________________
          ______________________________________________________________________
          ______________________________________________________________________

     8.2  Have there ever been, or are there now pending, any lawsuits against
          your company regarding any environmental or health and safety
          concerns?

          Yes [ ]  No [ ]

          If yes, describe any such lawsuits and attach copies of the
          complaint(s), cross-complaint(s), pleadings and all other documents
          related thereto as requested by Landlord. Existing tenants should
          describe and attach a copy of any new complaint(s), cross-
          complaint(s), pleadings and other related documents not already
          delivered to Landlord pursuant to the provisions of Section 29 of the
          signed Lease Agreement.

          ______________________________________________________________________

          ______________________________________________________________________

          ______________________________________________________________________

     8.3  Have there been any problems or complaints from adjacent tenants,
          owners or other neighbors at your company's current facility with
          regard to environmental or health and safety concerns? Existing
          tenants should indicate whether or not there have been any such
          problems or complaints from adjacent tenants, owners or other
          neighbors at, about or near the Premises.

          Yes [ ]  No [ ]

                                       3
<PAGE>

          If yes, please describe. Existing tenants should describe any such
          problems or complaints not already disclosed to Landlord under the
          provisions of the signed Lease Agreement.

     ___________________________________________________________________________

     ___________________________________________________________________________

9.   PERMITS AND LICENSES

     9.1  Attach copies of all Hazardous Materials permits and licenses
          including a Transporter Permit number issued to your company with
          respect to its proposed operations in, on or about the Premises,
          including, without limitation, any wastewater discharge permits, air
          emissions permits, and use permits or approvals. Existing tenants
          should attach copies of any new permits and licenses as well as any
          renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name)___________, acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.

(PROSPECTIVE) TENANT:

By:   _____________________________

Title:_____________________________

Date: _____________________________

                                       4
<PAGE>

                                   ADDENDUM 1
                           OPTION TO EXTEND THE LEASE

This Addendum 1 ("Addendum") is incorporated as a part of that certain Lease
Agreement dated September 30, 1998 (the "Lease"), by and between AMB Property,
L.P., a Delaware limited partnership ("Landlord") and Nuance Communications,
Inc., a California corporation ("Tenant"), for the leasing of those certain
premises located at 961 Hamilton Avenue, Menlo Park, California 94025 as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
                                                       --------
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.

1.   GRANT OF EXTENSION OPTION. Subject to the provisions, limitations and
     -------------------------
conditions set forth in Paragraph 5 below, Tenant shall have an Option
("Option") to extend the term of the Lease for approximately an additional three
(3) years expiring on September 14, 2004 (the "Extended Term").

2.   TENANT'S OPTION NOTICE. If Landlord does not receive written notice from
     ----------------------
Tenant of its exercise of this Option on a date which is not more than two
hundred seventy (270) days nor less than two hundred forty (240) days prior to
the end of the initial term of the Lease (the "Option Notice"), all rights under
this Option shall automatically terminate and shall be of no further force or
effect.

3.   ESTABLISHING THE INITIAL MONTHLY BASE RENT FOR THE EXTENDED TERM. The
     ----------------------------------------------------------------
initial monthly Base Rent for the Extended Term shall be the then current market
rent for similar space within the competitive market area of the Premises (the
"Fair Rental Value"). "Fair Rental Value" of the Premises means the fair market
rental value of the Premises as of the commencement of the Extended Term, taking
into consideration all relevant factors, including length of term, the uses
permitted under the Lease, the quality, size, design and location of the
Premises, including the condition and value of existing tenant improvements, and
the monthly base rent paid by tenants for premises comparable to the Premises,
and located within the competitive market area of the Premises as reasonably
determined by Landlord.

Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within twenty
(20) days of receipt by Landlord of the Option Notice, Landlord and Tenant being
obligated only to act in good faith, this Option shall automatically terminate
and the Lease shall terminate at the end of its initial term.

In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the initial monthly Base Rent for the Extended Term
in accordance with the terms outlined above, Landlord and Tenant shall
immediately execute, at Landlord's sole option, either the standard lease
agreement then in use by Landlord, or an amendment to this Lease. Such new lease
agreement or amendment, as the case may be, shall set forth among other things,
the initial monthly Base Rent for the Extended Term and the actual commencement
date and expiration date of the Extended Term. Tenant shall have no other right
to extend the term of the Lease under this Addendum 1 unless Landlord and Tenant
otherwise agree in writing.

4.   CONDITION OF PREMISES AND BROKERAGE COMMISSIONS FOR THE EXTENDED TERM. If
     ---------------------------------------------------------------------
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then "As-Is"
condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder's
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant ("Tenant's
Broker") in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant's Broker.

5.   LIMITATIONS ON, AND CONDITIONS TO, EXTENSION OPTION. This Option is
     ---------------------------------------------------
personal to Tenant and may not be assigned, voluntarily or involuntarily, except
to a Related Entity, as defined in the Lease, separate from or as part of the
Lease. At Landlord's option, all rights of Tenant under this Option shall
terminate and be of no force or effect if any of the following individual events
occur or any combination thereof occur. (1) Tenant has been in default at any
time during the initial term of the Lease, or is currently in default of any
provision of the Lease; and/or (2) Tenant has assigned its rights and
obligations under all or part of the Lease or Tenant has subleased all or part
of the Premises; and/or (3) Tenant's financial condition is unacceptable to
Landlord at the time the Option Notice is delivered to Landlord, and/or (4)
Tenant has failed to properly exercise this Option in a timely manner in strict
accordance with the provisions of this Addendum 1; and/or (5) Tenant no longer
has possession of all or any part of the Premises under the Lease, or if the
Lease has been terminated earlier, pursuant to the terms of the Lease.

6.    TIME IS OF THE ESSENCE. Time is of the essence with respect to each and
      ----------------------
every time period described in this Addendum.

                                       5<PAGE>

                                                                    EXHIBIT 10.8

                      ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF LEASE ("Agreement") is made and entered into
to be effective as of July 1, 1999 ("Assignment Date"), by and between CBT
Systems USA, Ltd., a Delaware corporation ("Assignor") and Nuance
Communications, Inc., a California corporation (Assignee"), with reference to
the following facts:

                                   RECITALS
                                   --------

     A.   Willow Park Holding Co. II, LLC succession in interest to ??
Assignor is the existing tenant under that certain Lease Agreement dated March
4, 1996 by and between Lincoln Menlo VIII Limited Partnership, a California
Limited Partnership, as landlord ("Landlord") and Assignor, as tenant, (the
"Lease") pursuant to which Landlord leased to Assignor, and Assignor leased from
Landlord, those certain premises located at 1005 Hamilton Court, Menlo Park,
California, 94025, as more particularly described in the Lease ("Premises")

     B.   Assignor desires to assign all of its right, title and interest in,
and obligations under, the Lease to Assignee, and Assignee desires to accept
such assignment and assume such obligations, all on the terms and conditions set
forth below.

     C.   Landlord agrees to consent to the proposed assignment on the
conditions set forth below.

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

     1.   RECITALS. Assignor and Assignee hereby agree that each of such parties
          --------
are informed and believe that the recitals set forth hereinabove are the true
and correct and are incorporated into this Agreement.

     2.   ASSIGNMENT AND ASSUMPTION. Effective as of the Assignment Date,
          -------------------------
Assignor hereby grants, transfers, assigns and delegates to Assignee all of its
right, title and interest and obligations of Assignor under the Lease, and
Assignee accepts such assignment and delegation above, assumes the Lease, agrees
to pay all rent and other charges accruing under the Lease from and after the
Assignment date and agrees to observe and perform directly to Landlord, all of
the other covenants, agreements and obligations to be observed and/or performed
by the tenant under the Lease from and after the Assignment date. Assignee has
inspected the Premises and knows the present condition thereof and confirms that
neither Landlord nor any officer, director, employee, agent or beneficiary of
Landlord has made any representation or warranty to Assignee concerning the
Premises, or otherwise, expressed or implied, and that Assignee does not accept
the Premises in reliance upon any such representation or warranty.
Notwithstanding anything to the contrary contained in this Agreement, on the
Assignment Date the heating, ventilating and air conditioning ("HVAC") system,
and the electrical, plumbing, sewer, life safety and, if applicable, security
systems (collectively, "Building Systems") serving the Premises for which
Assignor has maintenance and repair responsibility under the Lease shall be in
good working order and repair. If, during the first thirty (30) days after the
Assignment Date, any Building System is not in the condition required by the
foregoing sentence, Assignee shall notify Assignor of the need for repair, and
the repair promptly shall be completed at no cost to Assignee.

     3.   REPRESENTATIONS AND WARRANTIES. Assignor represents and warrants for
          ------------------------------
the benefit of Assignee and to Landlord that:
<PAGE>

          a.   Attached hereto as Exhibit A is a true, correct and complete copy
                                  ---------
of the Lease and all amendments and assignments thereto and there are no further
modifications, amendments, supplements or understandings, oral or written,
amending, supplementing or changing the terms of the Lease.

          b.   The Lease is in full force and effect, has been duly executed and
delivered by Assignor and is a valid, legal and binding obligation of Assignor
and Assignee, as assignee of Assignor, enforceable against Assignor in
accordance with its express terms;

          c.   To the best of Assignor's knowledge, there exists no default,
breach, failure of condition or event of default under the Lease, nor any event
or condition which, with notice or the passage of time or both, would constitute
a default, breach, failure of condition or event of default thereunder, and
Assignor has, as of the date hereof, complied with all of the terms and
conditions of the Lease.

          d.   There exists no liability or obligation of Assignor or any other
person which Assignor could offset against or otherwise use to reduce the rental
payments due thereunder; and

          e.   Neither Assignor nor Assignee has entered into any sublease,
assignment or other agreement transferring any of its interest in the Lease
except as provided herein.

     4.   ASSIGNMENT CONSIDERATION. As additional consideration for Assignor
          ------------------------
assigning the Lease to Assignee, Assignee in addition to performing the tenant's
obligations under the Lease (such as the payment of Base Rent to Landlord) shall
pay $331,372.16 payable in 23 monthly installments, consisting of: (a) 12 equal
monthly payments of $14,106.40 commencing on July 1, 1999, and continuing on the
1st of each month thereafter for the next 11 months, (b) 10 equal monthly
payments of $15,388.80 commencing on July 1, 2000, and continuing on the 1st of
each month thereafter for the next 9 months and (c) 1 installment of $8,207.36
on May 1, 2001. Assignor shall pay Landlord its share of net assignment
considerations as required by the lease.

     5.   SECURITY DEPOSIT. The parties acknowledge that Landlord now holds the
          ----------------
sum of $36,000.00 as a Security Deposit under the Lease. Landlord may retain
such deposit until the end of the initial Lease term in accordance with the
provisions of the Lease to secure Assignor's performance of its obligations
thereunder. Assignee (Nuance Communications) hereby assigns all of its rights,
title and interest to the Security Deposit upon termination of the Lease to
Assignor (CBT). Assignee shall instruct the Landlord to pay such amount directly
to the Assignor and shall sign any documents reasonably necessary to effect the
same. Upon Assignee's execution of this Assignment, Assignee shall deliver to
Assignor, as a security deposit for the performance by Assignor of its
obligations under this Assignment, the sum of $150,040.80 in cash to be held by
Assignor for its benefit and to secure Assignee's performance of its obligations
to Assignor hereunder (the Assignor/Assignee Deposit). If Assignee shall pay all
rent and otherwise observe and perform all of the terms, covenants, and
conditions of the Lease from and after the Assignment date, Assignor shall
return the Assignor/Assignee Deposit to Assignee, or so much of such deposit as
is not required to cure any default of Assignee, within thirty (30) days after
the expiration or earlier termination of the Lease.

     6.   INDEMNIFICATION BY ASSIGNOR. Assignor agrees to protect, hold
          ---------------------------
harmless, defend and indemnify Assignee from and against any and all claims,
judgments, damages, liabilities, costs and expenses, including, without
limitation, reasonable attorney's fees and costs, accruing under the Lease prior
to the Assignment Date in connection with the obligations of Assignor
thereunder.

     7.   INDEMNIFICATION BY ASSIGNEE. Assignee agrees to protect, hold
          ---------------------------
harmless, defend and indemnify Assignor from and against any and all claims,
judgments, damages, liabilities, costs and
<PAGE>

expenses, including, without limitation, reasonable attorneys' fees and costs,
accruing under the Lease on or after the Assignment Date in connection with the
obligations of Assignee thereunder.

     8.   ASSIGNOR'S AND ASSIGNEE'S CONTINUING OBLIGATIONS TO LANDLORD. Assignor
          ------------------------------------------------------------
hereby covenants, warrants and agrees for the benefit of Landlord that
notwithstanding the assignment made herein, Assignor shall in all events and
circumstances remain liable to Landlord for and not be released or discharged
from the performance of the tenant's obligations under the Lease (whether past,
present or future), all of which liabilities and obligations Assignor agrees to
pay and perform promptly, and Assignor and Assignee hereby covenant and warrant
to Landlord that after the Assignment Date Assignor and Assignee shall be
jointly and severally liable under the Lease for all of the tenant's obligations
under the Lease. Assignor and Assignee hereby further covenant and warrant that
Landlord's consent to this assignment shall not in any manner affect Landlord's
ability to proceed against Assignor and Assignee, both jointly and severally,
for any failure by Assignee or Assignor to perform any of its obligations under
the Lease, nor shall any such consent be construed as a waiver by Landlord of
any of its rights or remedies under the Lease. In the event of any conflict or
dispute between Assignor and Assignee with respect to each of their obligations
under the Lease, Landlord shall not be affected, impaired or otherwise adversely
affected thereby, and Assignor and Assignee, jointly and severally, shall
protect, hold harmless, defend and indemnify Landlord from and against any and
all claims, damages, judgements, liabilities, losses, costs and expenses,
including, without limitation, reasonable attorneys' fees and costs, arising
from or related to this Agreement, any brokerage commissions or fees asserted
against or incurred by Assignor and/or Assignee, and any disputes or conflicts
between Assignor and Assignee with respect to the Lease, this Agreement, the
Premises or any other matters affecting Landlord.

     9.   ATTORNEY'S FEES COUNTERPARTS. If Assignor or Assignee bring any action
          ----------------------------
against the other for the enforcement or interpretation of this Agreement, the
losing party shall pay to the prevailing party a reasonable sum for attorneys'
fees and costs. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which shall together be deemed one
document.

     10.  GENERAL PROVISIONS.
          ------------------

     a.   Time is of the essence in the performance of the parties' respective
obligations set forth in this Agreement.

     b.   Assignee's and Assignor's addresses for notices shall be as follows
unless changed in accordance with the Lease:

     Assignee:
     Nuance Communications, Inc.
     1005 Hamilton Court
     Menlo Park, CA 94025
     Attn: Chief Financial Officer
     Assignor:
     CBT Systems USA, Ltd.
     900 Chesapeake Drive
     Redwood City, CA 94063
     Attention: Vice President of Operations

     With a copy to:
     CBT Systems USA, Ltd.
     900 Chesapeak Drive
     Redwood City, CA 94063
<PAGE>

     Attention: Corporate Counsel

     c.   Assignor and Assignee hereby ratify and affirm the terms and
provisions of the Lease and further agree that the Lease is in full force and
effect, and that the terms and provisions of the Lease shall remain unchanged
except as specifically set forth in this Agreement. Assignor and Assignee intend
that Landlord shall benefit as a third party from the terms of this Agreement
and that Landlord shall be a third party beneficiary of this Agreement.

     d.   In the event of any conflict or inconsistency between the terms and
provisions of the Lease and the terms and provisions of this Agreement, the
terms and provisions of this Agreement shall prevail.

     e.   This Agreement shall inure to the benefit of and be binding upon the
parties to this Agreement and their respective successors and assigns.

     f.   If for any reason, any provision of this Agreement shall be held to be
unenforceable, it shall not affect the validity or enforceability of any other
provision of this Agreement and to the extent any provision of this Agreement is
not determined to be unenforceable, such provision, or portion thereof, shall
be, and remain, in full force and effect.

     g.   This Agreement shall be governed by and construed in accordance with
the laws of the State of California.

     h.   This Agreement, including addends, if any, expresses the entire
agreement of the parties and supersedes any and all previous agreements between
the parties with regard to the subject terms, and there are no warranties or
representations of any kind or nature whatsoever, either expressed or implied,
except as may be set forth herein. Any and al future modifications of this
Agreement or the Lease will be effective only if they are in writing and signed
by the parties hereto. The terms and conditions of any and all future
modifications of this Agreement shall supersede and replace any inconsistent
provisions of this Agreement.

     i.   Assignor agrees to deliver the Premises to Assignee in "broom clean"
condition. Assignor shall have the right to enter the Premises during normal
business hours upon twenty-four (24) hours prior notice to Assignee for the
purposes of inspecting the Premises and removing any of Assignor's property;
provided that, in the case of an emergency, CBT may enter with lesser notice or
after regular business hours after making reasonable attempts to contact
Assignee.

     j.   Not withstanding anything to the contrary contained in this Agreement,
with respect Section 10.2 of the Lease regarding the surrender of the Premises,
Assignee shall only have responsibility for removing those fixtures,
alterations, furniture, furnishings, trade fixtures additions or other
improvements installed by Assignee from and after the Assignment Date and
required to be removed by Landlord.

     k.   Counterparts/Facsimile. This Assignment may be executed by facsimile
and in one or more counterparts, which taken together shall constitute one and
the same instrument, enforceable in accordance with its terms.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Assignment Date.
<PAGE>

ASSIGNOR:

CBT SYSTEMS USA, LTD., A
DELAWARE CORPORATION

By:  /s/ Signature Illegible
     Lyn Jenson
     Vice President of Operations

ASIGNEE:

NUANCE COMMUNICATIONS, INC.,
A CALIFORNIA CORPORATION

By: /s/ Signature Illegible
Its: VPL CFO
<PAGE>

CONSENT OF LANDLORD TO ASSIGNMENT AND ASSUMPTION AGREEMENT:

Landlord hereby consents to the Agreement and assignment, acceptance and
assumption made therein: provided, that notwithstanding such consent:

               (i)  Assignor is not and shall not be released or discharged from
               any liability or obligation of the tenant under the Lease,
               whether past, present or future arising or accruing during the
               initial term of the Lease ending May 16, 2001 (but expressly not
               including liabilities and obligations arising or accruing during
               any renewal or extended term of the Lease which renewal option by
               the term of the ?? is not assignment ?? or with respect to any
               expansion space hereafter included in the Premises, or with
               respect to any amendments or modifications made to the Lease
               after the date hereof without the consent of Assignor).

     (ii)  Landlord does not waive any claims, rights, suits or actions against
           Assignor under the Lease;

     (iii) No addition, alteration or improvement shall be made to the Premises
           by Assignor or Assignee without the prior written consent of Landlord
           and any such addition, alteration or improvement shall be made
           subject to Section 10 of the Lease, except for matters consented to
           in writing by the Landlord; and

     (iv)  Such consent is limited to the assignment and assumption herein made
           and shall not relieve Assignor and Assignee from their obligation to
           obtain the consent of Landlord to (x) any future assignment, in whole
           or in part, of the interest of the tenant under the Lease, (y) any
           future sublease of the Premises, or any part thereof, or (z) any
           amendment, modification or change to the Agreement.

LANDLORD:

LINCOLN MENLO VIII LIMITED PARTNERSHIP
A CALIFORNIA LIMITED PARTNERSHIP

By: /s/ Signature Illegible

        By:

        Its:
<PAGE>

                                LEASE AGREEMENT
                                     (Net)
                            Basic Lease Information

LEASE DATE:               March 4, 1996

LANDLORD:                 LINCOLN MENLO VIII LIMITED PARTNERSHIP
                          A CALIFORNIA LIMITED PARTNERSHIP

LANDLORD'S ADDRESS:       c/o Lincoln Property Company Management Services, Inc.
                          101 Lincoln Centre Drive, Fourth Floor
                          Foster City, California 94404-1167

TENANT:                   CBT Systems USA, Ltd.,
                          a Maryland corporation
                          Attention: Chief Financial Officer/Greg Priest

TENANT'S ADDRESS:         1005 Hamilton Court
                          Menlo Park, CA 94025

PREMISES:                 Approximately 25,648 rentable square feet as shown on
                          Exhibit A
                          ---------

PREMISES ADDRESS:         1005 Hamilton Court
                          Menlo Park, CA 94025

                          Building E: (Phase VIII)          54,586 square feet
                          Lot (Building's tax parcel):      APN 055-440-050
                          Park: Willow Park                 984,954 square feet

TERM:                     May 17, 1996 ("Commencement Date"), through
                          ------------
                          May 16, 2001 ("Expiration Date")
                          ------------

BASE RENT (3):            Thirty thousand seven hundred seventy-seven and 60/100
                          dollars ($30,777.60) per month

ADJUSTMENTS TO BASE RENT: Effective as of November 17, 1998, and through the
                                          -----------------
                          balance of the Term the monthly Base Rent shall be
                          thirty-five thousand nine hundred seven and 20/100
                          dollars ($35,907.20).

SECURITY DEPOSIT (4.1):   Thirty-six thousand and 00/100 dollars ($36,000.00)

*TENANT'S SHARE OF OPERATING EXPENSES (6.1):         47% OF THE PHASE VIII
*TENANT'S SHARE OF TAX EXPENSES (6.2):               47% OF THE BUILDING/LOT
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (7):    47% OF THE PHASE VIII
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

PERMITTED USES:           General office, administration, training, sales and
                          distribution of for interactive software, but only to
                          the extent permitted by the City of Menlo Park and any
                          and all entities having jurisdiction.

UNRESERVED
PARKING SPACES:           One hundred two (102) nonexclusive and undesignated
                          spaces

BROKER (38):              The Galbreath Company (Tenant's Broker)
                          Cornish & Carey Commercial (Landlord's Broker)

EXHIBITS:                 Exhibit A - Premises, Building, Lot and/or Park
                          Exhibit B - Tenant Improvements
                          Exhibit C - Rules and Regulations
                          Exhibit D - Covenants, Conditions and Restrictions
                          Exhibit E - Hazardous Materials Disclosure Certificate
                          Exhibit F - Change of Commencement Date - Example
                          Exhibit G - Sign Criteria (Intentionally Omitted)
                          Exhibit H - Subordination, Non-Disturbance and
                                      Attornment Agreement

ADDENDA:                  Addendum 1: Early Occupancy Agreement
                          Addendum 2: Option to Extent the Lease

                                       1
<PAGE>

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

<TABLE>
<CAPTION>
SECTION                                                                  PAGE
-------                                                                  ----
<S>                                                                      <C>
1.   PREMISES                                                             3
2.   ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES           3
3.   RENT                                                                 4
4.   SECURITY DEPOSIT                                                     5
5.   TENANT IMPROVEMENTS                                                  5
6.   ADDITIONAL RENT                                                      5
7.   UTILITIES                                                            8
8.   LATE CHARGES                                                         9
9.   USE OF PREMISES                                                      9
10.  ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES                10
11.  REPAIRS AND MAINTENANCE                                             11
12.  INSURANCE                                                           12
13.  WAIVER OF SUBROGATION                                               13
14.  LIMITATION OF LIABILITY AND INDEMNITY                               13
15.  ASSIGNMENT AND SUBLEASING                                           14
16.  AD VALOREM TAXES                                                    15
17.  SUBORDINATION                                                       15
18.  RIGHT OF ENTRY                                                      16
19.  ESTOPPEL CERTIFICATE                                                17
20.  TENANT'S DEFAULT                                                    17
21.  REMEDIES FOR TENANT'S DEFAULT                                       18
22.  HOLDING OVER                                                        19
23.  LANDLORD'S DEFAULT                                                  19
24.  PARKING                                                             19
25.  SALE OF PREMISES                                                    19
26.  WAIVER                                                              20
27.  CASUALTY DAMAGE                                                     20
28.  CONDEMNATION                                                        20
29.  ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS                           21
30.  FINANCIAL STATEMENTS                                                23
31.  GENERAL PROVISIONS                                                  23
32.  SIGNS                                                               24
33.  MORTGAGEE PROTECTION                                                25
34.  QUITCLAIM                                                           25
35.  MODIFICATIONS FOR LENDER                                            25
36.  WARRANTIES OF TENANT                                                25
37.  COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT                     26
38.  BROKERAGE COMMISSION                                                26
39.  QUIET ENJOYMENT                                                     26
40.  LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS      27
</TABLE>

                                       2
<PAGE>

                                LEASE AGREEMENT

DATE: This Lease is made and entered into as of the Lease Date defined on Page
1. The Basic Lease Information set forth on Page 1 and this Lease are and shall
be construed as a single instrument.

1.   PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
     --------
conditions contained herein. Landlord hereby grants to Tenant a an irrevocable
license (except if Tenant is in material default beyond applicable cure periods,
in which event the license may be revoked until such time as the default is
cured) for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.

2.   ADJUSTMENT OF COMMENCEMENT DATE: CONDITION OF THE PREMISES: If Landlord
     ----------------------------------------------------------
cannot deliver possession of the Premises on the Commencement Date, Landlord
shall not be subject to any liability nor shall the validity of the Lease be
affected; provided the Lease term and the obligation to pay Rent shall commence
on the date possession is tendered in the condition required by this Lease and
the Expiration Date shall be extended by a period of time equal to the period
computed from the Commencement Date to the date possession is tendered by
Landlord to Tenant. In the event the commencement date and/or the expiration
date of this Lease is other than the Commencement Date and/or Expiration Date
provided on Page 1, as the case may be, Landlord and Tenant shall execute a
written amendment to this Lease, substantially in the form of Exhibit F hereto,
                                                              ------- -
wherein the parties shall specify the actual commencement date, expiration date
and the date on which Tenant is to commence paying Rent. In the event that
Landlord permits Tenant to occupy the Premises prior to the Commencement Date,
such occupancy shall be subject to the provisions of Addendum 1 of this Lease,
By taking possession of the Premises, Tenant shall be deemed to have accepted
the Premises in a good, clean and completed condition and state of repair, in
compliance with all applicable laws, codes, regulations, administrative orders
and ordinances, and subject to all matters of record. Notwithstanding the
foregoing to the contrary, Tenant's acceptance of the Premises and preparation
of a "punch-list" shall not be deemed a waiver of Tenant's right to have defects
in the Tenant Improvements or Building Improvements repaired at Landlord's
expense or relieve Landlord of its responsibilities to construct the Tenant
Improvements and the Building Improvements (as such term is defined in Exhibit
                                                                       -------
B) in accordance with Exhibit B, so long as the defects are discovered within
-                     ------- -
the first twelve (12) months after the Commencement Date of the Lease and are
submitted in writing by Tenant to Landlord. Tenant hereby acknowledges and
agrees that neither Landlord nor Landlord's agents or representatives has made
any representations or warranties as to the suitability, safety or fitness of
the Premises for the conduct of Tenant's business, Tenant's intended use of the
Premises or for any other purpose, and that neither Landlord nor Landlord's
agents or representatives has agreed to undertake any alterations or construct
any Tenant Improvements to the Premises except as expressly provided in this
Lease.

     Notwithstanding the foregoing to the contrary. (A) in the event that
for reasons other than the occurrence of a Force Majeure Delay (as hereinafter
defined) or a Tenant Delay (as hereinafter defined) the Commencement Date has
not occurred by the date which is one hundred twenty (120) days after the date
that Landlord has obtained the last permit necessary to construct the Tenant
Improvements, (as that term is defined in Exhibit B ("Last Occupancy Date"), or
                                          ------- -
(B) in the event the Commencement Date has not occurred by the date which is two
hundred ten (210) days after the Last Occupancy Date for reason of Force Majeure
Delay, Tenant may elect to terminate the Lease. Termination of the Lease by
Tenant as provided for herein shall be the sole and exclusive remedy of Tenant
for Landlord's failure to deliver the Premises. Tenant shall exercise the right
to terminate provided for herein by giving Landlord written notice of its intent
to so terminate ("Termination Notice"). The Termination Notice shall be given,
if at all, on or before the date which is five (5) days after the Last Occupancy
Date. Termination of the Lease shall be effective sixty (60) days after
Landlord's receipt of the Termination Notice. In the event that Tenant gives the
Termination Notice, and in the further event that during such sixty (60) day
period, the

                                       3
<PAGE>

Commencement Date occurs, the Tenant shall not be entitled to terminate the
Lease as provided for herein. For purposes of this paragraph the term "Force
Majeure Delay" shall mean any actual delay beyond the reasonable control of
Landlord in completion of the Tenant Improvements which is not a Tenant Delay
and which is caused by, with limitation, any one or more of the following: (a)
wars; (b) fire; (c) earthquake, flood or other natural disaster, (d) unusual and
unforeseeable delay not within the reasonable control of Landlord; (e)
casualties; (f) other acts of God; or (g) governmental action or inaction
(including failure, refusal or delay in issuing permits, approvals and/or
authorizations), or injunction, permit appeal or court order requiring cessation
of construction taking place in the Premises. The Term "Tenant Delay" shall mean
any delay in completion of the Tenant Improvements resulting from any or all of
the following: (i) Tenant's failure to timely perform any of its obligations
under the Lease, including any failure to complete on or before the date due
thereof, any actual item which is Tenant's responsibility to complete or
perform; (ii) Tenant's delay in approving plans, specifications, drawings, and
any other documents setting forth and/or describing the Tenant Improvements,
including, without limitation, the Final Drawings, beyond those periods of time
permitted by the terms of the Lease; (iii) Tenant's changes to Landlord and
Tenant approved plans, specifications, drawings or any other documents
describing and/or depicting the Tenant Improvements; (iv) Tenant's request for
materials, finishes, or installations which are not readily available or which
are incompatible with Landlord's standard materials, finishes or installations
for the Premises; (v) Tenant's use or occupancy of the Premises during the
construction of the Tenant Improvements or any act or failure to act by Tenant
in connection with its use or occupancy of the Premises during the construction
of the Tenant Improvements, Upon termination of the Lease by Tenant pursuant to
the terms of this paragraph, Landlord shall promptly return the Security Deposit
to Tenant.

3.       RENT: On the date that Tenant executes this Lease, Tenant shall deliver
         ----
to Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent described on Page 1, payable in
advance at Landlord's address shown on Page 1 on the first day of each month
throughout the term of the Lease. In addition to the Base Rent set forth on Page
1, Tenant shall pay Landlord in advance and on the first (1st) day of each month
throughout the term of this Lease (including any extensions of such term), as
Additional Rent Tenant's share, as set forth on Page 1, of Operating Expenses,
Tax Expenses, Common Area Utility Costs, and Utility Expenses, and
Administrative Expenses all in the manner as specified in Sections 6.1, 6.2,
6.3, 6.4 and 7 of this Lease, respectively. Additionally, Tenant shall pay to
Landlord as Additional Rent hereunder, immediately on Landlord's demand
therefor, any and all reasonable and actual costs and expenses incurred by
Landlord to enforce the provisions of this Lease, including, but not limited to,
costs associated with any proposed assignment or subletting of all or any
portion of the Premises by Tenant, costs associated with the delivery of
notices, delivery and recordation of notice(s) of default, attorneys' fees,
expert fees, court costs and filing fees (collectively, the "Enforcement
Expenses"). The term "Rent" whenever used herein refers to the aggregate of all
these amounts. Except as otherwise provided in Addendum 1. If Landlord permits
Tenant to occupy the Premises without requiring Tenant to pay rental payments
for a period of time, the waiver of the requirement to pay rental payments shall
only apply to waiver of the Base Rent and Tenant shall otherwise perform all
other obligations of Tenant hereunder, including, but not limited to paying to
Landlord any and all amounts considered additional rent, such as Tenant's share
of Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses. If, at any time, Tenant is in default of
or otherwise breaches any term, condition or provision of this Lease, any such
waiver by Landlord of Tenant's requirement to pay rental payments shall be null
and void and Tenant shall immediately pay to Landlord all rental payments waived
by Landlord. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date and the first day of the calendar
month in which the date of termination occurs, as the case may be.

4.       SECURITY DEPOSIT:
         ----------------

         4.1 Security Deposit: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount described on Page 1. If Tenant
is in default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord.

                                       4
<PAGE>

As soon as practicable after the termination of this Lease, Landlord shall
return the Security Deposit to Tenant, less such amounts as are reasonably
necessary, as determined solely by Landlord, to remedy Tenant's default(s)
hereunder or to otherwise restore the Premises to the condition required by
Section 10.2 hereof reasonable wear and tear excepted. If the cost to restore
the Premises exceeds the amount of the Security Deposit, Tenant shall promptly
deliver to Landlord any and all of such excess sums as reasonably determined by
Landlord. Landlord shall not be required to keep the Security Deposit separate
from other funds, and, unless otherwise required by law, Tenant shall not be
entitled to interest on the Security Deposit. In no event or circumstance shall
Tenant have the right to any use of the Security Deposit and, specifically,
Tenant may not use the Security Deposit as a credit or to otherwise offset any
payments required hereunder, including, but not limited to, Rent or any portion
thereof.

5.       TENANT IMPROVEMENTS: Landlord shall construct the Building and Tenant
         -------------------
Improvements as described and in accordance with the terms, conditions, criteria
and provisions set forth in Exhibit B, attached and incorporated herein by this
                            ------- -
reference. Tenant acknowledges that neither Landlord nor any of Landlord's
agents, representatives or employees has made any representations as to the
suitability or fitness of the Premises for the conduct of Tenant's business,
including, without limitation, any storage incidental thereto, or for any other
purpose, and that neither Landlord nor any of Landlord's agents, representatives
or employees has agreed to undertake any alterations or construct any Tenant
Improvements to the Premises except as expressly provided in Exhibit B to this
                                                             ------- -
Lease.

6.       ADDITIONAL RENT: The costs and expenses described in this Section 6 and
         ---------------
all other sums, charges, costs and expenses specified in this Lease to be paid
by Tenant other than Base Rent, including, but not limited to, Utility Expenses,
Tenant's share of Common Area Utility Costs, Late Charges and Enforcement
Expenses are to be paid by Tenant to Landlord as additional rent (collectively,
"Additional Rent"). 6.1 Operating Expenses: In addition to the Base Rent set
forth in Section 3, Tenant shall pay its share, which is defined on Page 1, of
all Operating Expenses as Additional Rent. The term "Operating Expenses" as used
herein shall mean the total amounts paid or payable by Landlord in connection
with the ownership, maintenance, repair and operation of the Premises, the
Building and the Lot, and where applicable, of the Park referred to on Page 1.
The amount of Tenant's share of Operating Expenses shall be reviewed from time
to time by Landlord and shall be subject to modification by Landlord as
reasonably determined by Landlord. Tenant's Share of Operating Expense relating
to the Building, Lot and Park shall be a fraction, the numerator of which shall
be the rentable square feet in the

                                       5
<PAGE>

Premises and the denominator of which shall be the number of rentable square
feet in the Building, the Lot and the Park, respectively. These Operating
Expenses may include, but are not limited to:

               6.1.1 Landlord's cost of repairs to, and maintenance of, the
         roof, the roof membrane and the exterior walls of the Building
         (excluding structural portions of the roof);

               6.1.2 Landlord's cost of maintaining the outside paved area,
         landscaping and other common areas for the Park. The term "Common Area"
         shall mean all areas and facilities within the Park exclusive of the
         Premises and the other portions of the Park leased exclusively to other
         tenants. The Common Area includes, but is not limited to, interior
         lobbies, mezzanines, parking areas, access and perimeter roads,
         sidewalks, landscaped areas and similar areas and facilities;

               6.1.3 Landlord's annual cost of insurance insuring against fire
         and extended coverage (including, if Landlord elects, "all risk"
         coverage) and all other insurance, including, but not limited to,
         earthquake, flood and/or surface water endorsements for the Building,
         the Lot and the Park (including the Common Area), rental value
         insurance against loss of Rent in an amount equal to the amount of Rent
         for a period of at least six (6) months commencing on the date of loss,
         and subject to the provisions of Section 27 below, any commercially
         reasonable deductible provided, however, any deductible applicable to
         earthquake coverage shall be amortized over the then remaining balance
         of -the term of this lease and the Extended Term (at an interest rate
         reasonably determined by Landlord) and Tenant shall pay its pro rata
         share of the monthly amortized portion of such costs (including
         interest charges) as part of Operating Expenses. If Tenant elects not
         to exercise its option, then the amortization of the deductible
         applicable to the Extended Term shall be paid by Tenant in one lump sum
         upon the expiration of this Lease;

               6.1.4 Landlord's cost of modifications to the Building, the
         Common Area and/or the Park occasioned by any rules, laws or
         regulations effective subsequent to the date on which the Building was
         originally constructed; provided, however if there are modifications
         necessitated by any such rules, laws or regulations or there are
         replacement improvements which are required to be made to the Building,
         the Common Area and/or the Park which are in the nature of capital
         improvements whether or not required by any such rules, laws or
         regulations then the costs of such modifications and replacement
         improvements shall be amortized over a reasonable period which shall
         not be less than the lesser of fifteen (15) years or the reasonably
         estimated useful life of the modifications or replacement improvements
         in question (at an interest rate as reasonably determined by Landlord)
         and Tenant shall pay its pro rata share of the monthly amortized
         portion of such costs (including interest charges) as part of the
         Operating Expenses;

               6.1.5 Landlord's cost of modifications to the Building, the
          Common Area and/or the Park occasioned by any rules, laws or
          regulations arising from Tenant's particular use of the Premises
          regardless of when such rules, laws or regulations became effective;

               6.1.6 If Landlord elects to so procure, Landlord's cost of
          preventative maintenance, and repair contracts including, but not
          limited to, contracts for elevator systems and heating, ventilation
          and air conditioning systems, lifts for disabled persons, and trash or
          refuse collection;

               6.1.7 Landlord's cost of security and fire protection services
          for the Building and/or the Park, as the case may be, if in Landlord's
          sole discretion such services are provided;

               6.1.10 Landlord's cost of supplies, equipment, rental equipment
          and other similar items used in the operation and/or maintenance of
          the Park; and

               6.1.11 Landlord's cost for the repairs and maintenance items set
          forth in Section 11.2 below.

               Notwithstanding the foregoing, for purposes of this Lease, the
          term "Operating Expenses" shall not include the following:

               (a)  Leasing commissions, cost disbursements, and other expenses
          incurred for leasing, renovating, or improving space for tenants other
          than Tenant;

                                       6
<PAGE>

          (b)  Depreciation and amortization except on materials, tools,
supplies and vendor-type equipment purchased by Landlord to supply services for
which Landlord might otherwise contract with third parties or such depreciation
and amortization which otherwise have already been included in the charge for
such third party services;

          (c)  Interest on debt or amortization payments on mortgages or deeds
of trust or any other debts for borrowed money;

          (d)  Costs for which Landlord has received reimbursement from others,
or costs and services which Tenant reimburses Landlord or pays third parties or
that Landlord provided selectively to one or more tenants of the Building, other
than Tenant, without reimbursement;

          (e)  Legal fees, brokerage commissions, advertising costs or other
related expenses incurred by Landlord in connection with leasing of space to
other tenants and for the financing of the Building. Lot, or Premises, except as
required pursuant to the provisions of Paragraph 21 hereof;

          (f)  Subject to the provisions of Section 27 below, costs of repairs
or other work necessitated by fire, windstorm or other casualty to the extent
such casualties are covered by insurance required to be maintained by Landlord
hereunder;

          (g)  Ground lease rental; and

          (h)  Those costs incurred by Landlord for the matters set forth in
Section 11.3 below

          6.2  TAX EXPENSES: In addition to the Base Rent set forth in Section
3, Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the Lease Term and land and improvements included within the
Lot on which the Premises are situated and one hundred percent (100%) of all
personal property taxes now or hereafter assessed or levied against the Premises
or Tenant's personal property. The amount of Tenant's $ Share of Tax Expenses
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant shall also
pay one hundred percent (100%) of any increase in real property taxes
attributable, in Landlord's reasonable discretion, to any and all alterations,
Tenant Improvements or other improvements of any kind, which are above standard
improvements customarily installed for similar buildings located within the
Building or the Park (as applicable), whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. The term "Tax
Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, and the Lot, as against Landlord's right to rent or
other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord.

With respect to any assessments or taxes for which Landlord has the right to
elect to make a lump sum payment or cause such assessment or tax to be amortized
and paid over a period of time at a reasonably acceptable interest rate.
Landlord shall only include in the definition of Tax Expense the amortized
portion of such taxes and assessments (including any applicable interest
charges) for purposes of this Lease.

          6.3  ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth
in Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand,
on the first (1st) day of each month throughout the term of this Lease
(including any extensions of such term), as compensation to Landlord for
accounting and management services rendered on behalf of the Building and/or the
Park, one-twelfth (1/12th) of an amount equal to fifteen percent (15%) of the
estimated amount of the aggregate of the Tenant's s-Share of (i) the total
Operating-Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below; as such amounts are estimated by
Landlord in accordance with the provisions of Section 6.4 below (collectively,
the "Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.

                                       7
<PAGE>

          6.4 PAYMENT OF EXPENSES: Landlord shall estimate Tenant's share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, on the
first (1st) day of each month and throughout the remaining months of such
calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, including the calendar year after the calendar year in which this
Lease terminates or the term expires, Landlord shall endeavor to furnish Tenant
with an accounting of actual Operating Expenses and Tax Expenses. Within thirty
(30) days of Landlord's delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date shall not constitute a waiver
by Landlord of its right to collect any of Tenant's underpayment at any time.
Landlord shall credit the amount of any overpayment by Tenant toward the next
estimated monthly installment(s) falling due, or where the term of the Lease has
expired, refund the amount of overpayment to Tenant. Tenant, at its sole cost
and expense through any certified public accountant designated by it, shall have
the right to examine and/or audit the books and records evidencing such costs
and expenses for the previous one (1) calendar year, during Landlord's
reasonable business hours and not more frequently than once during any calendar
year. Tenant's obligations to pay its share of Operating Expenses and Tax
Expenses shall survive the expiration or earlier termination of this Lease.

          6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to
the annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord reasonably
determines that an underpayment is due, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's share of such expenses or to otherwise perform such
reconciliation of expenses, including, without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the term of the Lease or at any time after the expiration or
earlier termination of this Lease.

7.        UTILITIES: Utility Expenses, Common Area Utility Costs and all other
          ---------
sums or charges set forth in this Section 7 are considered part of Additional
Rent. Tenant shall pay the cost of all water, sewer use, sewer discharge fees
and sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its share of any assessments or
charges for utility or similar purposes included within any tax bill for the Lot
on which the Premises are situated, including, without limitation, entitlement
fees, allocation unit fees, and/or any similar fees or charges, and any
penalties related thereto. For any such utility fees or use charges that are not
billed or metered separately to Tenant, Tenant shall pay to Landlord, as
Additional Rent, without prior notice or demand, on the first (1st) day of each
month throughout the term of this Lease the amount which is attributable to
Tenant's use of the utilities or similar services, as reasonably estimated and
determined by Landlord based upon factors such as size of the Premises and
intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord its share, which is described on Page 1,
as Additional Rent, without prior notice or demand, on the first (1st) day of
each month throughout the term of this Lease, of any Common Area utility costs,
fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay to
Landlord one-twelfth (1/12th) of the estimated amount of Tenant's share of the
Common Area Utility Costs in the same manner and time periods as specified in
Section 6.4 above and any reconciliation thereof shall also be in the same
manner as specified in Sections 6.4 and 6.5 above. The amount of Tenant's share
of Common Area Utility Costs shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord as reasonably determined by
Landlord. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on use
of any such utility services, Tenant acknowledges and agrees that its tenancy
and occupancy hereunder shall be subject to such rationing restrictions as may
be imposed upon Landlord, Tenant, the Premises, the Building or the Park, and
Tenant shall in no event be excused or relieved from any covenant or obligation
to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further agrees to timely and faithfully pay, prior to
delinquency, any amount, tax, charge, surcharge, assessment or imposition
levied, assessed or imposed upon the Premises,

                                       8
<PAGE>

or Tenant's use and occupancy thereof, or as a result directly or indirectly of
any such rationing or restrictions.

8.       LATE CHARGES: Any and all sums or charges set forth in this Section 8
         ------------
are considered part of Additional Rent. Tenant acknowledges that late payment
(the fifth day of each month or anytime thereafter) by Tenant to Landlord of
Base Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment of real property taxes on the Premises. Therefore, if
any installment of Rent or any other sum due from Tenant is not received by
Landlord within five (5) days of when due, Tenant shall promptly pay to Landlord
all of the following, as applicable: (a) an additional sum equal to seven
percent (7%) of such delinquent amount plus interest on such delinquent amount
at the rate equal to the prime rate plus three-percent (3%) for the time period
such payments are delinquent as a late charge for every month or portion thereof
that such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for
each three-day notice prepared for, or served on, Tenant, (c) the amount of
fifty dollars ($50) relating to checks for which there are not sufficient funds.
If Tenant delivers to Landlord a check for which there are not sufficient funds,
Landlord may, at its sole option, require Tenant to replace such check with a
cashier's check for the amount of such check and all other charges payable
hereunder. The parties agree that this late charge and the other charges
referenced above represent a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant. Acceptance of any late
charge or other charges shall not constitute a waiver by Landlord of Tenant's
default with respect to the delinquent amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord for any
other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.

9.       USE OF PREMISES:
         ---------------

         9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the uses stated on Page 1 and for no
other uses or purposes without Landlord's prior written consent, which consent
may be given or withheld in Landlord's sole discretion. The use of the Premises
by Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's Representatives")
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the "Laws"), (b) any and all documents, matters or
instruments, including without limitation, any declarations of convenants,
conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
                         ---------
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations"). Tenant agrees
to, and does hereby, assume full and complete responsibility to ensure that the
Premises are adequate to fully meet the needs and requirements of Tenant's
intended operations of its business within the Premises, and Tenant's use of the
Premises and that same are in compliance with all applicable Laws.
Notwithstanding anything to the contrary in this Lease. Landlord shall be
responsible for any capital repairs to the Premises required in order to comply
with any Laws applicable to the Premises as of the Commencement Date and, in the
event that there are changes in any Laws after the Commencement Date which
require any capital repairs to be made to the Premises. Landlord shall be
responsible for compliance with such Laws and the cost thereof shall be included
in Operating Expenses as provided in paragraph 6 hereof.

         9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to

                                       9
<PAGE>

to the contrary in this Lease. Tenant shall have the right to remove any
fixtures, furniture, furnishings, trade fixtures and other personal property
belonging to Tenant

11.      REPAIRS AND MAINTENANCE:
         -----------------------

         11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below and subject to the provisions of Section 27 below, Tenant shall, at
                                            ----------
Tenant's sole cost and expense , keep and maintain the Premises and the adjacent
areas (including, without limitation, any portion of the Common Area used by
Tenant or Tenant's Representatives) in good, clean and safe condition and repair
to the reasonable satisfaction of Landlord including, but not limited to,
repairing any damage caused by Tenant or Tenant's Representatives and replacing
any property so damaged by Tenant or Tenant's Representatives. Without limiting
the generality of the foregoing, Tenant shall be solely responsible for
maintaining, repairing and replacing (a) all mechanical systems, heating,
ventilation and air conditioning systems exclusively serving the Premises, (b)
all plumbing, electrical wiring and equipment exclusively serving the Premises,
(c) all interior lighting (including, without limitation, light bulbs and/or
ballasts) and exterior lighting serving the Premises or adjacent to the
Premises, (d) all glass, windows, window frames, window casements, skylights,
interior and exterior doors, door frames and door closers, (e) all roll-up
doors, ramps and dock equipment including without limitation, dock bumpers, dock
plates, dock seals, dock levelers and dock lights exclusively serving the
Premises, (f) all tenant signage, (g) lifts for disabled persons exclusively
serving the Premises, (h) sprinkler systems, fire protection systems and
security systems exclusively serving the Premises, (i) all partitions, fixtures,
equipment, interior painting, and interior walls and floors of the Premises and
every part thereof (including, without limitation, any demising walls contiguous
to any portion of the Premises).

         11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems not exclusively serving the Premises, any rail spur and
rail crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and electrical wiring and equipment not
exclusively serving the Premises, exterior lighting, exterior glass, exterior
doors and entrances, exterior window casements, exterior doors and door closers,
exterior painting of the Building (exclusive of the Premises), and underground
utility and sewer pipes outside the exterior walls of the Building. For purposes
of this Section 11.2, the term "exterior" shall mean exterior to, and not
exclusively serving the Premises. Unless otherwise notified by Landlord, in
writing, that Landlord has elected to procure and maintain the following
described contract(s), Tenant shall procure and maintain (a) the heating,
ventilation and air conditioning systems preventative maintenance and repair
contract(s); such contract(s) to be on a bi-monthly or quarterly basis, as
reasonably determined by Landlord, and (b) the fire and sprinkler protection
services and preventative maintenance and repair contract(s) (including, without
limitation, monitoring services); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord. Landlord reserves the
right, but without the obligation to do so, to procure and maintain (i) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s), and/or (ii) the fire and sprinkler protection services and
preventative maintenance and repair contract(s) (including, without limitation,
monitoring services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above. If Tenant procures and maintains any of
such contract(s), Tenant will promptly deliver to Landlord a true and complete
copy of (x) each such contract and any and all renewals or extensions thereof,
and (y) each service report or other summary received by Tenant pursuant to or
in connection with such contract(s).

         11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.

         11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building

                                      11
<PAGE>

Landlord shall be named as additional insureds under all of the policies
required in Section 12.1(iii) above. Additionally, such policies shall provide
for severability of interest. All insurance to be maintained by Tenant shall,
except for workers' compensation and employer's liability insurance, be primary,
without right of contribution from insurance maintained by Landlord. Any
umbrella liability policy or excess liability policy (which shall be in
"following form") shall provide that if the underlying aggregate is exhausted,
the excess coverage will drop down as primary insurance. The limits of insurance
maintained by Tenant shall not limit Tenant's liability under this Lease. It is
the parties' intention that the insurance to be procured and maintained by
Tenant as required herein shall provide coverage for any and all damage or
injury arising from or related to Tenant's operations of its business and/or
Tenant's or Tenant's Representatives' use of the Premises and/or any of the
areas within the Park, whether such events occur within the Premises (as
described in Exhibit A hereto) or in any other areas of the Park. It is not
             ---------
contemplated or anticipated by the parties that the aforementioned risks of loss
be borne by Landlord's insurance carriers, rather it is contemplated and
anticipated by Landlord and Tenant that such risks of loss be borne by Tenant's
insurance carriers pursuant to the insurance policies procured and maintained by
Tenant as required herein.

         12.4 FAILURE TO TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.

         12.5 LANDLORD'S INSURANCE: LANDLORD SHALL OBTAIN AND KEEP IN FORCE
DURING THE TERM OF THIS LEASE A POLICY OF COMBINED SINGLE LIMIT BODILY INJURY
AND PROPERTY DAMAGE INSURANCE, INSURING LANDLORD, AGAINST LIABILITY FOR BODILY
INJURY AND PROPERTY DAMAGE WITH A LIMIT OF LIABILITY OF AT LEAST $2,000,000 PER
OCCURRENCE AND IN THE AGGREGATE. LANDLORD SHALL OBTAIN AND KEEP IN FORCE DURING
THE TERM OF THIS LEASE A POLICY OR POLICIES OF INSURANCE COVERING LOSS OR DAMAGE
TO THE BUILDING, AND THE TENANT IMPROVEMENTS TO THE EXTENT OF LANDLORD'S ACTUAL
INTEREST THEREIN, BUT NOT INCLUDING TENANT'S PROPERTY OR ALTERATIONS OR
IMPROVEMENTS MADE TO THE PREMISES BY OR ON BEHALF OF TENANT (EXCLUDING THE
TENANT IMPROVEMENTS AS LIMITED ABOVE), IN AN AMOUNT OF EIGHTY PERCENT (80%) OF
THE FULL REPLACEMENT VALUE THEREOF EXCLUDING LAND COSTS, EXCAVATION COSTS,
FOOTINGS AND FOUNDATIONS. THE FOREGOING INSURANCE SHALL PROVIDE PROTECTION
AGAINST ALL PERILS WITHIN THE CLASSIFICATION OF FIRE, EXTENDED COVERAGE (AS SUCH
TERM IS USED IN THE INSURANCE INDUSTRY), VANDALISM, MALICIOUS MISCHIEF, AND TO
THE EXTENT AVAILABLE AT COMMERCIALLY REASONABLE RATES (AS SOLELY DETERMINED BY
LANDLORD), FLOOD AND/OR EARTHQUAKE INSURANCE. THE FOREGOING INSURANCE POLICIES
MAY BE PROCURED AND CARRIED PURSUANT TO A BLANKET POLICY OF INSURANCE COVERING
ADDITIONAL PROPERTIES OTHER THAN THE BUILDING. LANDLORD'S COST OF OBTAINING AND
MAINTAINING SUCH INSURANCE POLICIES ARE INCLUDED AS ONE OF THE ITEMS COMPRISING
THE OPERATING EXPENSES.

13.      WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive
         ---------------------
their respective rights of recovery against each other for any loss of, or
damage to, either parties' property to the extent that such loss or damage is
insured by an insurance policy required to be in effect at the time of such loss
or damage, or would have been insured had the waiving party carried the type of
insurance required to be carried by such party under this Lease. Each party
shall obtain any special endorsements, if required by its insurer whereby the
insurer waives its rights of subrogation against the other party. This provision
is intended to waive fully, and for the benefit of the parties hereto, any
rights and/or claims which might give rise to a right of subrogation in favor of
any insurance carrier. The coverage obtained by Tenant pursuant to Section 12 of
this Lease shall include, without limitation, a waiver of subrogation
endorsement attached to the certificate of insurance. The provisions of this
Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.

14.      LIMITATION OF LIABILITY AND INDEMNIFY: Except to the extent of damage
         -------------------------------------
resulting from the gross negligence or willful misconduct of Landlord or its
authorized representatives, Tenant agrees to protect, defend (with counsel
reasonably acceptable to Landlord) and hold Landlord and Landlord's lender(s),
partners, employees, representatives, legal representatives, successors and
assigns (collectively, the "Indemnitees") harmless and indemnify the Indemnitees
from and against all liabilities, damages, claims, losses, judgments, charges
and expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' use of the Premises,
Building and/or the Park, or the conduct of Tenant's business, or

                                      13
<PAGE>

the continuing primary liability of Tenant (which, following assignment, shall
be joint and several with the assignee), and Tenant shall not be released from
performing any of the terms, covenants and conditions of this Lease. Tenant
hereby acknowledges and agrees that it understands that Landlord's accounting
department may process and accept Rent payments without verifying that such
payments are being made by Tenant, a permitted sublessee or a permitted assignee
in accordance with the provisions of this Lease. Although such payments may be
processed and accepted by such accounting department personnel, any and all
actions or omissions by the personnel of Landlord's accounting department shall
not be considered as acceptance by Landlord of any proposed assignee or
sublessee nor shall such actions or omissions be deemed to be a substitute for
the requirement that Tenant obtain Landlord's prior written consent to any such
subletting or assignment, and any such actions or omissions by the personnel of
Landlord's accounting department shall not be considered as a voluntary
relinquishment by Landlord of any of its rights hereunder nor shall any
voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers) which
results in a change of more than fifty percent (50%) in the direct or indirect
ownership of Tenant shall be deemed to be an assignment within the meaning of
this Section 15 and shall be subject to all the provisions hereof. Except for a
permissible assignment in connection with a Permitted Transfer, any and all
options, first rights of refusal, tenant improvement allowances and other
similar rights granted to Tenant in this Lease, if any, shall not be assignable
by Tenant unless expressly authorized in writing by Landlord. Notwithstanding
anything to the contrary contained herein, so long as Tenant delivers to
Landlord (1) at least thirty (30) days prior written notice of its intention to
assign or sublease the Premises to any Related Entity, which notice shall set
forth the name of the Related Entity, (2) a copy of the proposed agreement
pursuant to which such assignment or sublease shall be effectuated, and (3) such
other information concerning the Related Entity as Landlord may reasonably
require, including without limitation, information regarding any change in the
proposed use of any portion of the Premises and any financial information with
respect to such Related Entity, and so long as Landlord approves, in writing, of
any change in the proposed use of the subject portion of the Premises, then
Tenant may assign this Lease or sublease any portion of the Premises (X) to any
Related Entity, or (Y) in connection with any merger, consolidation or sale of
substantially all of the assets of Tenant whereby such new entity has an equal
or greater net worth of Tenant as of the date on which any merger, consolidation
or sale is effectuated, without having to obtain the prior written consent of
Landlord thereto (the transactions described in (X) and (Y) above are referred
to herein as a "Permitted Transfers"). For purposes of this Lease the term
"Related Entity" shall mean and refer to any corporation or entity which
controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry, and with an equal or greater
net worth as Tenant has as of the proposed transfer date. Any assignment to a
Related Entity shall in no way relieve Tenant of any liability Tenant may have
under this Lease and such assignee or sublessee shall be jointly and severally
liable with Tenant hereunder.

         15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event
of any sublease or assignment of all or any portion of the Premises where the
rent or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, as and when
received, fifty percent (50%) of the excess of each such payment of rent or
other consideration in excess of the Rent called for hereunder.

         15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.

16.      AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes
         ----------------
and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and personal property located and/or installed on or
in the Premises by, or on behalf of, Tenant; and if requested by Landlord,
Tenant shall promptly deliver to Landlord copies of receipts for payment of all
such taxes and assessments. To the extent any such taxes ar not separately
assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced by
Landlord.

17.      SUBORDINATION: Without the necessity of any additional document being
         -------------
by Tenant for the purpose of effecting a subordination, and at the election of
Landlord or any bona fide mortgagee or deed of trust beneficiary with a lien on
all or any portion of the Premises or any ground lessor with respect to the land
of which the Premises are a part, the rights of Tenant under this Lease and this
Lease

                                      15
<PAGE>

shall be subject and subordinate at all times to: (1) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, the Lot, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent; or (d) liable to Tenant for any Security Deposit not actually
received by such successor in interest to the extent any portion or all of such
Security Deposit has not already been forfeited by, or refunded to, Tenant.
Landlord shall be liable to Tenant for all or any portion of the Security
Deposit not forfeited by, or refunded to Tenant, until and unless Landlord
transfers such Security Deposit to the successor in interest. Tenant covenants
and agrees to execute (and acknowledge if required by Landlord, any lender or
ground lessor) and deliver, within ten (10) days of a demand or request by
Landlord and in the form requested by Landlord, ground lessor, mortgagee or
beneficiary, any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. Tenant's failure to timely execute
and deliver such additional documents shall, at Landlord's option, constitute a
material default hereunder. It is further agreed that Tenant shall be liable to
Landlord, and shall indemnify Landlord from and against any loss, cost, damage
or expense, incidental, consequential, or otherwise, arising or accruing
directly or indirectly, from any failure of Tenant to execute or deliver to
Landlord any such additional documents, together with any and all Enforcement
Expenses.

         Landlord hereby represents that as of the date on which Landlord and
Tenant execute this Lease there are no deeds of trust, mortgages or ground
leases encumbering, or in force against, any portion of the Premises, the
Building or the Lot other than a Deed of Trust in favor of Mid-Peninsula Bank
(the "Construction Lender") which is currently encumbering and in force against
the Lot. Within forty-five (45) days after the date on which Landlord and Tenant
execute this Lease, Landlord shall use commercially reasonable efforts to cause
the Construction Lender to execute, acknowledge and record in the Official
Records of San Mateo County, California a nondisturbance and attornment
agreement substantially in the form of Exhibit E attached hereto (the "Original
                                       ---------
SNDA"). Tenant hereby agrees to also execute, have acknowledged and deliver to
Landlord the Original SNDA within ten (10) business days after the date on which
Landlord and Tenant execute this Lease, Landlord has advised Tenant that at
sometime after the date on which this Lease is executed by the parties Landlord
will obtain a permanent loan which will be secured by a lien of a deed of trust
against the Premises, the Building and/or the Lot. Landlord and Tenant agree
that if Landlord at any time during the term of the Lease causes the Premises,
the Building and/or the Lot to be encumbered by a mortgage, deed of trust or
similar security instrument and the beneficiary thereof requires this Lease and
Tenant's rights and interests in this Lease to be subordinated to such
encumbrance or lien, Landlord will provide to Tenant a subordination,
nondisturbance and attornment agreement in form reasonably acceptable to
Landlord, the subject beneficiary and Tenant.

18.      RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to
         --------------
enter the Premises at all reasonable times following reasonable prior notice
(except in the event of an emergency) for purposes of inspection, exhibition,
posting of notices, repair or alteration. At Landlord's option, Landlord shall
at all times have and retain a key with which to unlock all the doors in, upon
and about the Premises, excluding Tenant's vaults and safes. It is further
agreed that Landlord shall have the right to use any and all means Landlord
deems necessary to enter the Premises in an emergency. Landlord shall also have
the right to place "for rent" signs during the last nine (9) months of the Term
of this Lease, and ,at any time during the Term of this Lease "for sale" signs
on the outside of the Premises. Tenant hereby waives any claim from damages or
for any injury or inconvenience to or interference with Tenant's business, or
any other loss occasioned thereby except for any claim for any of the foregoing
arising out of the sole active gross negligence or willful misconduct of
Landlord or its authorized representatives. Landlord shall use commercially
reasonable efforts to abide by security precautions of Tenant to the extent
Landlord actually receives such safety or security regulations, except in the
event of an emergency.

                                      16
<PAGE>

19.      Estoppel Certificate: Tenant shall execute (and acknowledge if
         --------------------
required by any lender or ground lessor) and deliver to Landlord, within not
less than ten (10) days after Landlord provides such to Tenant, a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification), the date to which
the Rent and other charges are paid in advance, If any, acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder or specifying such defaults as are claimed, and such other matters as
Landlord may reasonably require. Any such statement may be conclusively relied
upon by Landlord and any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon the Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's performance; and (c) not more than one month's Rent has
been paid in advance, except in those instances when Tenant pays Rent quarterly
in advance pursuant to Section 8 hereof, then not more than three month's Rent
has been paid in advance. Failure by Tenant to so deliver such certified
estoppel certificate shall be a default of the provisions of this Lease. Tenant
shall be liable to Landlord, and shall indemnify Landlord from and against any
loss, cost, damage or expense, incidental, consequential, or otherwise, arising
or accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.

20.      TENANT'S DEFAULT: The occurrence of any one or more of the following
         ----------------
events shall, at Landlord's option, constitute a default and breach of this
Lease by Tenant:

         20.1  The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;

         20.2  The failure by Tenant to make any payment of Rent, Additional
Rent or any other payment required hereunder within three (3) days after
Tenant's receipt (in the manner set forth in Section 31.10 below) of written
notice from Landlord that said payment is past due. Tenant agrees that such
written notice by Landlord shall serve as the statutorily required notice under
the law and that Tenant further agrees to notice and service of notice as
provided for in this Lease and waives any right to any other or further notice
or service of notice which Tenant may have under any statute or law now or
hereafter in effect;

         20.3  The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;

         20.4  The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability

                                      17
<PAGE>

to pay Tenant's debts or failure generally to pay Tenant's debts when due, any
court entering a decree or order directing the winding up or liquidation of
Tenant or of substantially all of Tenant's assets, Tenant taking any action
toward the dissolution or winding up of Tenant's affairs, the cessation or
suspension of Tenant's use of the Premises, or the attachment, execution or
other judicial seizure of substantially all of Tenant's assets or this
leasehold;

         20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;

         20.6 Tenant knowingly making any material misrepresentation or omission
by Tenant in any materials delivered by or on behalf of Tenant to Landlord
pursuant to this Lease; or

21.      REMEDIES FOR TENANT'S DEFAULT:
         -----------------------------

         21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of
cleaning, and redecorating, (collectively, the "Reletting Costs"), and (ii) the
rent received by Landlord from such reletting shall be applied to the payment
of, first, any indebtedness from Tenant to Landlord other than Base Rent,
Operating Expenses, Tax Expenses, Administrative Expenses, Common Area Utility
Costs, and Utility Expenses; second, all costs including maintenance, incurred
by Landlord in reletting; and, third, Base Rent, Operating Expenses, Tax
Expenses, Administrative Expenses, Common Area Utility Costs, Utility Expenses,
and all other sums due under this Lease. Any and all of the Reletting Costs
shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.

         21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons
the Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any unamortized tenant improvements
constructed by or on behalf of Tenant pursuant to Exhibit B hereto, the portion
                                                  ---------
of any broker's or leasing agent's commission incurred with respect to the
leasing of the Premises to Tenant for the balance of the term of the Lease
remaining after the date on which Tenant is in default of its obligations
hereunder, and all Reletting Costs, and the worth at the time of the award
(computed in accordance with paragraph (3) of Subdivision (a) of Section 1951.2
of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease term exceeds the amount of such loss of
Rent for the same period which Tenant proves could be reasonably avoided by
Landlord and in such case, Landlord prior to the award, may relet the Premises
for the purpose of mitigating damages suffered by Landlord because of Tenant's
failure to perform its obligations hereunder; provided, however, that even
though Tenant has abandoned the Premises following such breach, this Lease shall
nevertheless continue in full force and effect for as long as Landlord does

                                      18
<PAGE>

not terminate Tenant's right of possession, and until such termination, Landlord
shall have the remedy described in Section 1951.4 of the California Civil Code
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations) and may enforce all
its rights and remedies under this Lease, including the right to recover the
Rent from Tenant as it becomes due hereunder. The "worth at the time of the
award" within the meaning of Subparagraphs (a)(1) and (a)(2) of Section 1951.2
of the California Civil Code shall be computed by allowing interest at the rate
of ten percent (10%) per annum. Tenant waives redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of any default of Tenant
hereunder.

         21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant defaults or otherwise
breaches this Lease, any and all Base Rent waived by Landlord under Section 3
above shall be immediately due and payable to Landlord and all options granted
to Tenant hereunder shall automatically terminate, unless otherwise expressly
agreed to in writing by Landlord.

         21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.

22.      HOLDING OVER: If Tenant holds possession of the Premises after the
         ------------
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.

23.      LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default
         ------------------
of this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.

24.      PARKING: Tenant shall have a license to use the number of undesignated
         -------
and nonexclusive parking spaces set forth on Page 1. Landlord shall exercise
reasonable efforts to insure that such spaces are available to Tenant for its
use, but Landlord shall not be required to enforce Tenant's right to use the
same. Landlord shall not oversubscribe parking.

25.      SALE OF PREMISES: In the event of any sale of the Premises by
         ----------------
Landlord or the cessation otherwise of Landlord's interest therein, Landlord
shall be and is hereby entirely released from any and all of its obligations to
perform or further perform under this Lease and from all liability hereunder
occurring after the date of such sale provided that the Security Deposit is
transferred to such purchaser; and the purchaser, at such sale or any subsequent
sale of the Premises shall be deemed, without any further agreement between the
parties or their successors in interest or between the parties and any such
purchaser, to have assumed and agreed to carry out any and all of the covenants
and obligations of the Landlord under this Lease. For purposes of this Section
25 only, the term "Landlord" means only the owner and/or agent of the owner as
such parties exist as of the date on which Tenant executes this Lease.

                                      19
<PAGE>

A ground lease or similar long term lease by Landlord of the entire Building, of
which the Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new owner
does not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so
long as Tenant is not in default of any of the provisions of this Lease.

26.      WAIVER: No delay or omission in the exercise of any right or remedy
         ------
of Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

27.      CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged
         ---------------
by fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's reasonable opinion, be required (whether or not the Premises shall
have been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If the Premises shall be so damaged by
fire or other such that, in Landlord's reasonable opinion, restoration or
repairs would require a period of time greater than one hundred eighty (180)
days (excluding any Force Majeure Delays) to substantially complete, then either
Landlord or Tenant may terminate this Lease by delivering written notice thereof
within ten (10) days after Landlord has made such determination. If Landlord or
Tenant, as the case may be, does not elect to terminate this Lease and provided
insurance proceeds and any contributions from Tenant, if necessary, are
available to fully repair the damage, Landlord shall within ninety (90) days
after the date of such damage or as soon as reasonably practicable commence to
repair and restore the Building and shall proceed with reasonable diligence to
restore the Building (except that Landlord shall not be responsible for delays
outside its control) to substantially the same condition in which it was
immediately prior to the happening of the casualty; provided, Landlord shall not
be required to rebuild, repair, or replace any part of Tenant's furniture,
furnishings or fixtures and equipment removable by Tenant or any improvements,
alterations or additions installed by or for the benefit of Tenant, other than
the Tenant Improvements, under the provisions of this Lease. Landlord shall not
in any event be required to spend for such work an amount in excess of the
insurance proceeds (excluding any deductible) and any contributions from Tenant,
if necessary, actually received by Landlord as a result of the fire or other
casualty. Landlord shall not be liable for any inconvenience or annoyance to
Tenant, injury to the business of Tenant, loss of use of any part of the
Premises by the Tenant or loss of Tenant's personal property resulting in any
way from such damage or the repair thereof, except that, subject to the
provisions of the next sentence, Landlord shall allow Tenant a fair diminution
of Rent during the time and to the extent the Premises are unfit for occupancy.
If the Premises or any other portion of the Building be damaged by fire or other
casualty resulting from the intentional or negligent acts or omissions of Tenant
or any of Tenant's Representatives, the Rent shall not be diminished during the
repair of such damage to the extent Landlord does not receive insurance proceeds
for lost rentals and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of all or any portion of the Building caused
thereby (including, without limitation, any deductible) to the extent such cost
and expense is not covered by insurance proceeds. In the event the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within thirty
(30) days after the date of notice to Tenant of any such event, whereupon all
rights and obligations shall cease and terminate hereunder. Except as otherwise
provided in this Section 27, Tenant hereby waives the provisions of Sections
1932(2.), 1933(4.), 1941 and 1942 of the California Civil Code.

28.      CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
         ------------
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of

                                      20
<PAGE>

Interest or other Interest of Tenant, provided, however, Tenant shall be
                                      ----------------------------------
entitled to attempt to recover from the condemning authority, a separate award
------------------------------------------------------------------------------
for Tenant's moving expenses and relocation costs. If a substantial portion of
-------------------------------------------------
the Premises, Building or the Lot is so Condemned, Landlord at its option may
terminate this Lease. If Landlord does not elect to terminate this Lease,
Landlord shall, if necessary, promptly proceed to restore the Premises or the
Building to substantially its same condition prior to such partial condemnation,
allowing for the reasonable effects of such partial condemnation, and a
proportionate allowance shall be made to Tenant, as reasonably determined by
Landlord, for the Rent corresponding to the time during which, and to the part
of the Premises of which, Tenant is deprived on account of such partial
condemnation and restoration. Landlord shall not be required to spend funds for
restoration in excess of the amount received by Landlord as compensation
awarded.

29.       ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
          -----------------------------------------

          29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord the
Hazardous Materials Disclosure Certificate (the "HazMat Certificate"), a copy of
which is attached hereto as Exhibit E and incorporated herein by this reference.
                            ---------
Tenant covenants, represents and warrants to Landlord that the information on
the HazMat Certificate is true and correct and accurately describes the use(s)
of Hazardous Materials which will be made and/or used on the Premises by Tenant.
Tenant shall commencing with the date which is one year from the Commencement
Date and continuing every year thereafter, complete, execute, and deliver to
Landlord, a HazMat Certificate describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E.
                                                           ---------

          29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which are
or become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause of threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.

          29.3 PROHIBITION; ENVIRONMENTAL LAWS: Tenant shall not be entitled to
use nor store any Hazardous Materials on, in, or about the Premises, the
Building, the Lot and the Park, or any portion of the foregoing, without, in
each instance, obtaining Landlord's prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant's
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,
statutes, orders, standards, courts' decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
"Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion. Tenant
shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. Landlord shall have the right at all times during the term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about the Premises, the Common Areas and/or the parking
lots (to the extent the Common Areas and/or the parking lots are not considered
part of the Premises). The costs of all such inspections, tests and
investigations shall be borne solely by Tenant, if Landlord in its reasonable
                                                            -----------------
discretion, determines that Tenant or any of Tenant's representatives are
-------------------------------------------------------------------------
responsible for any contamination revealed by such inspections, tests and
-------------------------------------------------------------------------
investigations. The aforementioned rights granted herein to Landlord and its
--------------
representatives shall not create (a) a duty on Landlord's part to inspect, test,
investigate, monitor or otherwise observe the Premises or the activities of
Tenant and Tenant's Representatives with respect to Hazardous Materials,
including without limitation,

                                      21
<PAGE>

Tenant's operation, use and any remediation related thereto, or (b) liability on
the part of Landlord and its representatives for Tenant's use, storage, disposal
or remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith.

          29.4 TENANT'S  ENVIRONMENTAL  OBLIGATIONS: Tenant shall give to
Landlord immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises)
of which Tenant has knowledge. Tenant, at its sole cost and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials by Tenant or Tenant's representatives whether or not arising from or
related to the intentional or negligent acts the Park and any adjacent property
are returned to the condition existing prior to the appearance of such Hazardous
Materials. Any such investigation, clean up, removal, restoration and other
remediation shall only be performed after Tenant has obtained Landlord's prior
written consent, which consent shall not be unreasonably withheld so long as
such actions would not potentially have a material adverse long-term or short-
term effect on the Premises, the Building, the Lot or the Park, or any portion
of any of the foregoing. Notwithstanding the foregoing, Tenant shall be entitled
to respond immediately to an emergency without first obtaining Landlord's prior
written consent. Tenant, at its sole cost and expense, shall conduct and
perform, or cause to be conducted and performed, all closures as required by any
Environmental Laws or any agencies or other governmental authorities having
jurisdiction thereof. If Tenant fails to so promptly investigate, clean up,
remove, restore, provide closure or otherwise so remediate, Landlord may, but
without obligation to do so, take any and all steps necessary to rectify the
same and Tenant shall promptly reimburse Landlord, upon demand, for all costs
and expenses to Landlord of performing investigation, clean up, removal,
restoration, closure and remediation work. All such work undertaken by Tenant,
as required herein, shall be performed in such a manner so as to enable Landlord
to make full economic use of the Premises, the Building, the Lot and the Park
after the satisfactory completion of such work.

          29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as
set forth hereinabove, Tenant agrees to, and shall, protect, indemnify, defend
(with counsel acceptable to Landlord) and hold Landlord and Landlord's lenders,
partners, property management company (if other than Landlord), agents,
directors, officers, employees, representatives, contractors, shareholders,
successors and assigns and each of their respective partners, directors,
employees representatives, agents, contractors, shareholders, successors and
assigns harmless from and against any and all claims, judgments, damages,
penalties, fines, liabilities, losses (including, without limitation, diminution
in value of the Premises, the Building, the Lot, the Park, or any portion of any
of the foregoing, damages for the loss of or restriction on the use of rentable
or usable space, and from any adverse impact of Landlord's marketing of any
space within the Building and/or Park), suits, administrative proceedings and
costs (including, but not limited to, attorneys' and consultant fees and court
costs) arising at any time during or after the term of this Lease in connection
with or related to, directly or indirectly, the use, presence, transportation,
storage, disposal, migration, removal, spill, release or discharge of Hazardous
Materials by Tenant or Tenant's Representatives on, in or about the Premises, or
in any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. The foregoing
indemnity shall not include any claims, judgments, damages, penalties, fines,
liabilities or losses related in any way to the residual hazardous substances
described in Section 29.7 below. Neither the written consent of Landlord to the
presence, use or storage of Hazardous Materials in, on, under or about any
portion of the Premises, the Building, the Lot and the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant from its
obligations of indemnification pursuant hereto. Tenant's obligations to Landlord
under this Section 29 and the indemnity contained herein shall be without regard
to negligence on Tenant's part with respect to the violation of any
Environmental Law by Tenant or Tenant's Representatives which results in
liability to any of the aforementioned indemnities. Tenant's obligations and
liabilities in connection with the presence of Hazardous Materials on the
Premises, the Building, the Lot , the Park, or any portion of any of the
foregoing shall be limited to the express provisions of this Section 29.

          29.6 Survival: Tenant's and Landlord's obligations and liabilities
pursuant to the provisions of this Section 29 shall survive the expiration or
earlier termination of this Lease. If it is determined by Landlord's
environmental consultants (acting reasonably and in good faith.) that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease with respect to
Hazardous Materials for which Tenant is responsible pursuant to Section 29.5
hereof, including without limitation all Environmental Laws at the expiration or
earlier termination of this Lease, then at Landlord's sole option, Landlord may
require Tenant to hold over possession of the Premises until Tenant can
surrender the Premises to Landlord in the condition in which

                                      22
<PAGE>

the Premises existed as of the Commencement Date and prior to the appearance of
such Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. For purposes hereof, the term "reasonable wear and tear"
shall not include any deterioration in the condition or diminution of the value
of any portion of the Premises, the Building, the Lot and/or the Park in any
manner whatsoever related to directly, or indirectly, Hazardous Materials. Any
such holdover by Tenant will be with Landlord's consent, will not be terminable
by Tenant in any event or circumstance and will otherwise be subject to the
provisions of Section 22 of this Lease.

          29.7 DISCLOSURE: The land described herein contains residual hazardous
substances. Such condition renders the land and the owner. Tenant or other
possessor of the land subject to requirements, restrictions, provisions, and
liabilities contained in chapter 6.5 and Chapter 6.8 of division 20 of the
Health and Safety Code, as same may be amended from time, and any successor
statutes thereof. This statement is not a declaration that a hazard to public
health, safety and welfare exists.

30.       FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any
lender holding or anticipated to acquire a lien upon the Premises, the Building
or the Park or any portion thereof, or any prospective purchaser of the Building
or the Park or any portion thereof, within ten (10) days after Landlord's
request therefor, but not more often than once annually so long as Tenant is not
in default of this Lease, shall deliver to Landlord the then current and
publicly available audited financial statements of Tenant (including
interim periods following the end of the last fiscal year for which annual
statements are publicly available) which statements shall be prepared or
compiled by a certified public accountant and shall present fairly the financial
condition of Tenant at such dates and the result of its operations and changes
in its financial positions for the periods ended on such dates. If an audited
financial statement has not been prepared, Tenant shall provide Landlord with an
unaudited financial statement and/or such other information, the type and form
of which are acceptable to Landlord in Landlord's reasonable discretion, which
reflects the financial condition of Tenant. If Landlord so requests, Tenant
shall deliver to Landlord an opinion of a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied. Any and all options granted to Tenant hereunder shall be
subject to and conditioned upon Landlord's reasonable approval of Tenant's
financial condition at the time of Tenant's exercise of any such option.

31.       GENERAL PROVISIONS:

          31.1 TIME. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.

          31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

          31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.

          31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord or the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises and the Building and Tenant agrees to look
solely to the Premises and the Building for of any liability and shall not look
to other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.

          31.5 SEPARABILITY. Any provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.

          31.6 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.

                                      23
<PAGE>

          31.7  ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.

          31.8  ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.

          31.9  WARRANTY OF AUTHORITY. On the date that Tenant executes this
Lease, Tenant shall deliver to Landlord an original certificate of status for
Tenant issued by the California Secretary of State or statement of partnership
for Tenant recorded in the county in which the Premises are located, as
applicable, and such other documents as Landlord may reasonably request with
regard to the lawful existence of Tenant. Each person executing this Lease on
behalf of a party represents and warrants that (1) such person is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder.

          31.10 NOTICES. Any and all notices and demands required or permitted
to be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises; or (iv) by facsimile at the
facsimile number at the Premises, if any, as provided by Tenant on Page 1 of
this Lease or otherwise provided to Landlord. Notice and/or demand shall be
deemed given upon the earlier of actual receipt, or the date on which
such receipt is refused. Notice and/or demand by facsimile shall be complete
upon transmission over the telephone line. Any notice or requirement of service
required by any statute or law now or hereafter in effect, including, but not
limited to, California Code of Civil Procedure Sections 1161, 1161.1, and 1162,
is hereby waived by Tenant.

          31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

          31.12 COVENANTS AND CONDITIONS. Each provision to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.

          31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever arising
out of or in any way related to this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, the Building or the Park,
and/or any claim of injury, loss or damage.

          31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings
for nonpayment of Base Rent, due hereunder, Tenant shall not interpose any non-
compulsory counterclaim of whatever nature or description in any such
proceedings, provided, however, nothing contained herein shall be deemed or
construed as a waiver of the Tenant's right to assert such claims in any
separate action brought by Tenant or the right to offset the amount of any final
judgment owed by Landlord to Tenant.

          31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

32.       SIGNS: All signs and graphics of every kind visible in or from public
view or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's Sign

                                      24
<PAGE>

Criteria as same may exist from time to time Tenant shall remove all such signs
and graphics prior to the termination of this Lease. Such installations and
removals shall be made in a manner as to avoid damage or defacement of the
Premises; and Tenant shall repair any damage or defacement, including without
limitation, discoloration caused by such installation or removal. Landlord shall
have the right, at its option, to deduct from the Security Deposit such sums as
are reasonably necessary to remove such signs, including, but not limited to,
the costs and expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any; (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any such sign, awning, canopy, advertising matter,
lettering, decoration or other thing as may be approved in good condition and
repair at all times. Tenant shall be permitted to install, at its sole cost and
expense, its corporate name on the Building. The size, style, location and
method of installation shall be reasonably determined and approved by Landlord.

33.       MORTGAGEE PROTECTION: Upon any breach or default on the part of
          --------------------
Landlord, Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit, provided, however, Landlord
                                                --------  -------
shall remain responsible for any deposits not so-transferred. Tenant agrees to
make all payments under this Lease to the lender with the most senior
encumbrance upon receiving a direction, in writing, to pay said amounts to such
lender. Tenant shall comply with such written direction to pay without
determining whether an event of default exists under such lender's loan to
Landlord.

34.       QUITCLAIM: Upon any termination of this Lease, Tenant shall, at
          ---------
Landlord's request, execute, have acknowledged and deliver to Landlord a
quitclaim deed of Tenant's interest in and to the Premises. If Tenant fails to
so deliver to Landlord such a quitclaim deed, Tenant hereby agrees that Landlord
shall have the full authority and right to record such a quitclaim deed signed
only by Landlord and such quitclaim deed shall be deemed conclusive and binding
upon Tenant.

35.       MODIFICATIONS FOR LENDER: If, in connection with obtaining financing
          ------------------------
for the Premises or any portion thereof, Landlord's lender shall request
reasonable modification(s) to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not adversely affect Tenant's rights or
obligations hereunder or the use, occupancy or quiet enjoyment of Tenant
hereunder. If the foregoing occurs, Landlord shall reimburse Tenant for any
reasonable out -of-pocket costs and expenses incurred by Tenant in connection
with such modifications.

36.       WARRANTIES OF TENANT: Tenant hereby warrants and represents to
          --------------------
Landlord, for the express benefit of Landlord, that Tenant has undertaken a
complete and independent evaluation of the risks inherent in the execution of
this Lease and the operation of the Premises for the use permitted hereby, and
that, based upon said independent evaluation, Tenant has elected to enter into
this Lease and hereby assumes all risks with respect thereto except as
otherwise expressly provided herein. Tenant hereby further warrants and
represents to Landlord, for the express benefit of Landlord, that in entering
into this Lease, Tenant has not relied upon any statement, fact, promise or
representation (whether express or implied, written or oral) not specifically
set forth herein in writing and that any statement, fact, promise or
representation (whether express or implied, written or oral) made at any time to
Tenant, which is not expressly incorporated herein in writing, is hereby waived
by Tenant.

                                      25
<PAGE>

37.      COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant
         -----------------------------------------------
hereby agree and acknowledge that the Premises, the Building and/or the Park may
be subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter with
respect to the condition of the Building, Tenant's use of the Premises and for
all improvements to be made to the Premises after the actual Commencement Date
(other than the Tenant Improvements): provided, however, with respect to the
                                      --------  -------
Tenant Improvements Landlord shall be solely responsible for ensuring that the
design of all Tenant Improvements are not in violation of the then applicable
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's particular use of the Premises or any work or alteration
made to the Premises by or on behalf of Tenant, then such work shall be
performed by Landlord at the sole cost and expense of Tenant. Except as
otherwise expressly provided in this provision, Tenant shall be responsible at
its sole cost and expense for fully and faithfully complying with all applicable
requirements of the ADA, including without limitation, not discriminating
against any disabled persons in the operation of Tenant's business in or about
the Premises, and offering or otherwise providing auxiliary aids and services
as, and when, required by the ADA. Within ten (10) days after receipt, Landlord
and Tenant shall advise the other party in writing, and provide the other with
copies of (as applicable), any notices alleging violation of the ADA relating to
any portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.

38.       BROKERAGE COMMISSION: Landlord and Tenant each represents and
          --------------------
warrants for the benefit of the other that it has had no dealings with any real
estate broker, agent or finder in connection with the Premises and/or the
negotiation of this Lease, except for the Broker(s) (as set forth on Page 1),
and that it knows of no other real estate broker, agent or finder who is or
might be entitled to a real estate brokerage commission or finder's fee in
connection with this Lease or otherwise based upon contacts between the claimant
and Tenant. Each party shall indemnify and hold harmless the other from and
against any and all liabilities or expenses arising out of claims made for a fee
or commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exist as of the date on which Tenant executes this Lease. All brokerage
commissions payable to the Brokers in connection with the initial term of this
Lease shall be paid by Landlord pursuant to a separate agreement between
Landlord and the Brokers.

39.       QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of
          ---------------
Rent and observing and keeping the covenants, agreements and conditions of this
Lease on its part to be kept and during the periods that Tenant is not otherwise
in default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders, (i) that Tenant shall and may peaceably and
quietly hold, occupy and enjoy the Premises and the Common Areas during the term
of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.

                                      26
<PAGE>

40.      LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
         --------------------------------------------------------------
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owning by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.

         IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.

TENANT:

CBT Systems USA, Ltd.,
a Maryland corporation

By:   /s/ Signature Illegible
      Rune Eliasen
      Vice President of Operations

By:   /s/ Signature Illegible
      Greg Priest
      Chief Financial Officer

Date: 3-7-96

LANDLORD:

LINCOLN MENLO VIII LIMITED PARTNERSHIP
A CALIFORNIA LIMITED PARTNERSHIP

By:   Lincoln Property Company Management Services Inc.,
      As Manager and Agent for Owner

      By: /s/ Signature Illegible
          Vice President
      Date: _____________________

                                      27
<PAGE>

                             EXHIBIT A - PREMISES

                                  PAGE 1 OF 1

                   LEASE DATED MARCH 4 1996, BY AND BETWEEN

                            CBT SYSTEMS USA, LTD.,
                            A MARYLAND CORPORATION
                                  ("TENANT"),
                                      AND
                    LINCOLN MENLO VIII LIMITED PARTNERSHIP
                       A CALIFORNIA LIMITED PARTNERSHIP
                                 ("LANDLORD")

                                [CHART OMITTED]

INITIALS:
--------

TENANT: /s/ Signature Illegible

LANDLORD: ______
<PAGE>

                         EXHIBIT B TO LEASE AGREEMENT
                              TENANT IMPROVEMENTS

This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
                                                                      ------- -
to that certain Lease Agreement dated March 4, 1996 (the "Lease"), by and
between LINCOLN MENLO VIII LIMITED PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP
("Landlord") and CBT Systems USA, Ltd., a Maryland corporation ("Tenant") for
the leasing of certain premises located in the Willow Park at Building E, 1005
Hamilton Court, Menlo Park, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT B are hereby incorporated into and are made a
                       ------- -
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:

1.A. Building Improvements, Landlord and Tenant hereby acknowledge and agree
that as of the Lease Date, the Building and, thus, the Premises, have not been
fully constructed. Landlord has commenced the construction of the Building and
certain improvements and additions to the Park related to the construction of
the Building (the "Building Improvements"), which construction is scheduled for
completion on or about April 1, 1996, excluding any Force Majeure Delays.
"Building Improvements" as used in this Lease shall specifically include the
following: (i) the building structure, including foundations, slab on grade,
roof framing, roofing, exterior walls of the building, including exterior doors,
concrete wall panels and glazing; (ii) utilities brought to a central location
within the building, including electrical power, water and sewer; and (iii) fire
sprinkler mains and branch lines with sprinkler heads (excluding modification
required for Tenant Improvements. The term "Building Improvements" specifically
excludes, without limitation, the following: (a) underslab plumbing; (b) finish
carpentry: (c) interior doors, windows and hardware: (d) interior finishes: (e)
drywall partitions: (f) acoustic ceiling: (g) floor and window coverings: (h)
casework: (i) dock equipment (j) plumbing: (k) electrical wiring and
distribution: (l) heating, ventilation and air conditioning: (m) fire sprinkler
finish: (n) security systems: (o) phone and data lines: and (p) insulation: (q)
in-rack fire sprinklers: (r) slab treatment.

1.B. Tenant Improvements. Subject to the conditions set forth below, Landlord
     -------------------
agrees to construct and install certain improvements ("Tenant Improvements") in
the Building of which the Premises are a part in accordance with the Final
Drawings (defined below) and pursuant to the terms of this EXHIBIT B.
                                                           ---------
Landlord shall construct the Building Improvements and Tenant Improvements in
accordance with the Final Drawings therefor, in compliance with all applicable
laws, in a good and workmanlike manner and using new materials of good quality.
<PAGE>

2.       Definition. "Tenant Improvements" as used in this Lease shall include
         ----------
only those interior portions of the Building which are described below. "Tenant
                                                                         ------
Improvements" shall specifically not include any Building Improvements as
------------
described above, any alternations, additions or improvements installed or
constructed by Tenant, and any of Tenant's trade fixtures, equipment, furniture,
furnishings, telephone equipment or other personal property (collectively,
"Personal Property"). The Tenant Improvements shall include any and all interior
improvements to be made to the Premises as specified in the Final Drawings
(defined below), as specified and agreed to by Tenant and Landlord.

3.       Tenant's Initial Plans; the Work. Tenant desires Landlord to perform
         --------------------------------
certain Tenant Improvements in the Premises in substantial accordance with the
plan(s) or scope of work (collectively, the "Initial Plans") which shall be
                                             -------------
prepared by Lincoln Property Company Planning Department and approved by Tenant
and Landlord and attached hereto as Schedule 1, and made a part hereof. Such
                                    ----------
work, as shown in the Initial Plans and as more fully detailed in the Final
Drawings (as defined and described in Section 4 below), shall be hereinafter
referred to as the "Work". Not later than March 12, 1996, Tenant and/or Tenant's
                    ----
Representatives shall furnish to Landlord such additional plans, drawings,
specifications and finish details as Landlord may reasonably request to enable
Landlord's architects and engineers, as applicable, to prepare mechanical,
electrical and plumbing plans and to prepare the Final Drawings, including, but
not limited to, a final telephone layout and special electrical connections, if
any. The cost of the working drawings shall be reasonable and competitive. All
plans, drawings, specifications and other details describing the Work which have
been, or are hereafter, furnished by or on behalf of Tenant shall be subject to
Landlord's approval, which approval shall not be unreasonably withheld. Landlord
shall not be deemed to have acted unreasonably if it withholds its approval of
any plans, specifications, drawings or other details or of any Change Request
(hereafter defined in Section 11 below) because, in Landlord's reasonable
opinion, the work as described in any such item, or any Change Request, as the
case may be: (a) is likely to materially adversely affect Building systems, the
structure of the Building or the safety of the Building and/or its occupants;
(b) would impair Landlord's ability to furnish services to Tenant or other
tenants in the Building; (c) would increase the cost of operating the Building
or the Park; (d) would violate any applicable governmental, administrative
body's or agencies' laws, rules, regulations, ordinances, codes or similar
requirements (or interpretations thereof); (e) contains or uses Hazardous
Materials; (f) would adversely

                                       1
<PAGE>

affect the appearance of the Building or the Park; (g) would materially
adversely affect another tenant's premises or such other tenant's use
and enjoyment of such premises; (h) is prohibited by any ground lease affecting
the Building, the Lot and/or the Park, any Recorded Matters or any mortgage,
trust deed or other instrument encumbering the Building, the Lot and/or the
Park; (i) is likely to be substantially delayed because of unavailability or
shortage of labor or materials necessary to perform such work or the
difficulties or unusual nature of such work; (j) is not, at a minimum, in
accordance with Landlord's Building Standards (defined below), or (k) would
increase the Tenant Improvement Costs (defined in Section 9 below) by more than
                                       -------
fifteen percent (15%) from the cost originally estimated and anticipated by the
                -----
parties. The foregoing reasons, however, shall not be the only reasons for which
Landlord may withhold its approval, whether or not such other reasons are
similar or dissimilar to the foregoing. Neither the approval by Landlord of the
Work or the Initial Plans or any other plans, specifications, drawings or other
items associated with the Work not Landlord's performance, supervision or
monitoring of the Work shall constitute any warranty or covenant by Landlord to
Tenant of the adequacy of the design for Tenant's intended use of the Premises.
Tenant agrees to, and does hereby, assume full and complete responsibility to
ensure that the Work and the Final Drawings are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises and Tenant's use of the Premises.

4.       Final Drawings. If necessary for the performance of the Work and to
         --------------
the extent not already included as part of the Initial Plans attached hereto,
Landlord shall prepare or cause to be prepared final working drawings and
specifications for the Work (the "Final Drawings") based on and consistent with
the Initial Plans and the other plans, specifications, drawings, finish details
or other information furnished by Tenant or Tenant's Representatives to Landlord
and approved by Landlord pursuant to Section 3 above. Tenant shall cooperate
diligently with Landlord and Landlord's architect, engineer and other
representatives and Tenant shall furnish within five (5) business days after any
request therefor, all information required by Landlord or Landlord's architect,
engineer or other representatives for completion of the Final Drawings. Tenant
shall approve or disapprove the Final Drawings within three (3) business days
after receipt of same from Landlord. Landlord and Tenant shall indicate their
approval of the Final Drawings by initialing each sheet of the Final Drawings
and delivering to one another a true and complete copy of such initialed Final
Drawings. A true and complete copy of the approved and initialed Final Drawings
shall be attached to the Lease as EXHIBIT B-1 and shall be made a part thereof.
                                  -----------
Tenant's failure to approve or disapprove such Final Drawings within the
foregoing three (3) business day time period, shall be conclusively deemed to be
approval of same by Tenant. If Tenant reasonably disapproves of any matters
included in the Final Drawings because such items are not substantially
consistent with the Initial Plans, Tenant shall, within the aforementioned three
(3) business day period, deliver to Landlord written notice of its disapproval
and Tenant shall specify in such written notice, in sufficient detail as
Landlord may reasonably require, the matters disapproved, the reasons for such
disapproval, and the specific changes or revisions necessary to be made to the
Final Drawings to cause such drawings to substantially conform to the Initial
Plans. Any additional costs associated with such requested changes or revisions
shall be paid for solely by Tenant, as the Excess Tenant Improvement Costs
(defined in Section 10 below), either as part of the Amortized Excess TI Costs
and together with those other sums amortized over the initial term of the Lease,
or in cash upon written demand therefor by Landlord. Any changes or revisions
requested by Tenant must first be approved by Landlord, which approval shall not
be unreasonably withheld, subject to the provisions of Section 3 above. If
Landlord approves such requested changes or revisions, Landlord shall cause the
Final Drawings to be revised accordingly and Landlord and Tenant shall initial
each sheet of the Final Drawings as revised and attach a true and complete copy
thereof to the Lease as EXHIBIT B-1. Landlord and Tenant hereby covenant to each
                        -----------
other to cooperate with each other and to act reasonably in the preparation and
approval of the Final Drawings.

5.       Performance of Work. As soon as practicable after Tenant and Landlord
         -------------------
initial and attach to the Lease as EXHIBIT B-1 a true and complete copy of the
                                   -----------
Final Drawings, Landlord shall submit the Final Drawings to the governmental
authorities having rights of approval over the Work and shall apply for the
necessary approvals and building permits. Subject to the satisfaction of all
conditions precedent and subsequent to its obligations under this EXHIBIT B, and
                                                                  ---------
further subject to the provisions of Section 10 hereof, as soon as practicable
after Landlord or its representatives have received all necessary approvals and
building permits, Landlord will put the Final Drawings out for bid to no less
than three (3) licensed, qualified (in Landlord's discretion) and insured
general contractors. Tenant may designate two (2) general contractors to bid the
Work so long as such contractors meet the qualifications required by Landlord.
The Tenant Improvements shall be constructed by the general contractor which
submits (and provides sufficient support therefor, in writing, if requested to
do so by Landlord) the lowest bid, unless otherwise agreed to by Landlord and
Tenant based upon criteria other than price (the "General Contractor"). Landlord
shall commence construction, or cause the commencement of construction by the
General Contractor, of the Tenant Improvements, as soon as practicable after
selection of the General Contractor. Except as hereinafter expressly provided to
the contrary, Landlord shall cause the performance of the Work using (except as
may be stated or otherwise

                                       2
<PAGE>

shown in the Final Drawings) building standard materials, quantities and
procedures then in use by Landlord ("Building Standards").

6.       Substantial Completion. Landlord and Tenant shall cause the General
         ----------------------
Contractor to Substantially Complete (defined below) the Tenant Improvements in
accordance with the Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (the "Completion Date"), subject to delays due
         ---------
to (a) acts or events beyond its control including, but not limited to, acts of
God, earthquakes, strikes, lockouts, boycotts, casualties, discontinuance of any
utility or other service required for performance of the Work, moratoriums,
governmental agencies and weather, (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the control of Landlord, the General Contractor or any
subcontractors, (d) any changes required by the fire department, building and/or
planning department, building inspectors or any other agency having jurisdiction
over the Building, the Work and/or the Tenant Improvements (except to the extent
such changes are directly attributable to Tenant's use or Tenant's specialized
tenant improvements, in which event such delays are considered Tenant Delays)
(the events and matters set forth in Subsections (a), (b), (c) and (d) are
collectively referred to as "Force Majeure Delays"), or (e) any Tenant Delays
(defined in Section 7 below). The Building Improvements and Tenant Improvements
            ---------
shall be substantially completed on the date that all of the following have
occurred ("Substantial Completion", or "Substantially Completed", or
"Substantially Complete"); (i) if there is a project architect, when the
architect issues a certificate of substantial completion; (ii) Tenant has direct
access to the Premises with all building services and utilities serving the
Premises; (iii) if required, a certificate of occupancy or comparable evidence
of completion has been issued by the appropriate governmental agency for the
Premises; (iv) within two (2) business days of Landlord's request therefor,
Landlord and Tenant have conducted a walk-through of the Premises to describe
all incomplete or defective items; (v) Landlord shall have completed the repair
of all incomplete or defective items found during the walk-through that
materially impair Tenant's use or occupancy of the Premises; and (vi) Landlord
and Tenant shall have prepared a punch-list of all incomplete or defective items
found during the walk-through that do not materially impair Tenant's use or
occupancy of the Premises, the correction of which shall not delay the date on
which the Tenant Improvements shall be considered Substantially Completed. If
the Work is not deemed to be Substantially Completed on or before the scheduled
Completion Date, (i) Landlord agrees to use reasonable efforts to Substantially
Complete the Work as soon as practicable thereafter, (ii) the Lease shall remain
in full force and effect, (iii) Landlord shall not be deemed to be in breach or
default of the Lease or this EXHIBIT B as a result thereof and Landlord shall
                             ---------
have no liability to Tenant as a result of any delay in occupancy (whether for
damages, abatement of all or any portion of the Rent, or otherwise), except as
otherwise provided herein, and (iv) except in the event of any Tenant Delays,
which will not affect the Commencement Date but will extend the Completion Date
without any penalty or liability to Landlord, and notwithstanding anything to
the contrary contained in the Lease, the Commencement Date and the Expiration
Date of the term of the Lease (as defined in Section 2 of the Lease) shall be
                                             ---------
extended commensurately by the amount of time attributable to such Force Majeure
Delays, and Landlord and Tenant shall execute a written amendment to the Lease
evidencing such extensions of time, substantially in the form of Exhibit F to
                                                                 ---------
the Lease. Subject to the provisions of Section 10.2 of the Lease, the Tenant
                                        ------------
Improvements shall belong to Landlord and shall be deemed to be incorporated
into the Premises for all purposes of the Lease, unless Landlord, in writing,
indicates otherwise to Tenant.

7.       Tenant Delays. If the Work has not been Substantially Completed by
         -------------
the scheduled Commencement Date due to any delay attributable to Tenant and/or
Tenant's Representatives or Tenant's intended use of the Premises (collectively,
"Tenant Delays"), including, but not limited to, any of the following described
 -------------
events or occurrences then the Commencement Date shall be that date that the
Tenant Improvements would have been substantially completed but for any such
Tenant Delays and the Expiration Date shall be that date which is sixty (60)
months thereafter: (a) delays actually caused by changes made or requested by
Tenant to the Work and/or the Final Drawings; (b) the failure of Tenant to
furnish all or any plans, drawings, specifications, finish details or other
information required under Sections 3 and 4 above; (c) the failure of Tenant to
                           ----------------
comply with the requirements of Section 10 below that actually causes a delay;
                                ----------
(d) Tenant's requirements for special work or materials, finishes, or
installations other than the Building Standards or Tenant's requirements for
special construction or phasing; (e) any changes required by the fire
department, building or planning department, building inspectors or any other
agency having jurisdiction over the Building, the Work and/or the Tenant
Improvements if such changes are directly attributable to Tenant's use or
Tenant's specialized tenant improvements, if any,; (f) the performance of any
additional work pursuant to a Change Request (defined

                                       3
<PAGE>

below in Section 11) which is requested by Tenant that actually causes a delay;
         ----------
(g) the performance of work in or about the Premises by any person, firm or
corporation employed by or on behalf of Tenant that actually causes a delay,
including, without limitation, any failure to complete or any delay in the
completion of such work; or (h) any and all delays caused by or arising from
acts or omissions of Tenant and/or Tenant's Representatives, in any manner
whatsoever, including, but not limited to, any and all revisions to the Final
Drawings. Any delays in the construction of the Tenant Improvements due to any
of the events described above, shall in no way extend or affect the date on
which Tenant is required to commence paying Rent under the terms of the Lease.
It is the intention of the parties that all of such delays will be considered
Tenant Delays for which Tenant shall be wholly and completely responsible for
any and all consequences related to such delays, including, without limitation,
any costs and expenses attributable to increases in labor or materials.

8.       Tenant Improvement Allowance. Landlord and Tenant hereby acknowledge
         ----------------------------
and agree that the Tenant Improvement Costs (defined in Section 9 below) for the
Tenant Improvements, based upon the Initial Plans approved by Landlord and
Tenant in accordance with the provisions of Section 4 above, will be determined
at a later date (the "Estimated TI Costs"). If the actual Tenant Improvement
                      ------------------
Costs varies from the initial estimate by more than twenty-five percent (25%),
then Landlord may require any of the following, in its sole discretion: (a)
changes be made to the Final Drawings to reduce the cost of the Tenant
Improvements and Landlord may refuse to sign any construction contract or Change
Orders to the construction contract, as the case may be, until such changes are
made to the sole satisfaction of Landlord; (b) Tenant to deposit into a separate
escrow account cash in an amount equal to the Excess Tenant Improvement Costs
(defined in Section 10 below); (c) Tenant to provide to Landlord evidence
satisfactory to Landlord, in its reasonable discretion, that Tenant has adequate
financial resources to pay for the Excess Tenant Improvement Costs, as
reasonably determined by Landlord; and/or (d) Tenant to pay all of the Excess
Tenant Improvement Costs before Landlord's contribution of the Tenant
Improvement Allowance (defined in Section 10 below); provided, however, in no
event or circumstance shall the Tenant Improvement Costs exceed the maximum
amount of seven hundred sixty-nine thousand four hundred forty and 00/100
dollars ($769,440.00), which amount is based on the amount of thirty and 00/100
dollars ($30.00) per rentable square foot for 25,648 square feet of the Premises
which is to be improved, as described in the Initial Plans. Subject to the
foregoing, Landlord shall provide an allowance for the planning and construction
of the Tenant Improvements for the Work to be performed in the Premises, as
described in the Initial Plans and the Final Drawings, in the amount of six
hundred forty-one thousand two hundred and 00/100 dollars ($641,200.00) (the
"Tenant Improvement Allowance") based upon an allowance of twenty-five and
00/100 dollars ($25.00) per rentable square foot for 25,648 square feet of the
Premises which is to be improved, as described in the Initial Plans and the
Final Drawings. Tenant shall not be entitled to any credit, abatement or payment
from Landlord in the event that the amount of the Tenant Improvement Allowance
specified above exceeds the actual Tenant Improvement Costs. The Tenant
Improvement Allowance shall only be used for tenant improvements typically
installed by Landlord in office/R&D and warehouse/distribution buildings. The
Tenant Improvement Allowance shall be the maximum contribution by Landlord for
the Tenant Improvement Costs and shall be subject to the provisions of Section
10 below.

9.       Tenant Improvement Costs. The Tenant Improvements' cost (Tenant
         ------------------------
Improvement Costs") shall mean and include any and all costs and expenses of the
Work, including, without limitation, all of the following:

               (a)  All costs of preliminary space planning and final
               architectural and engineering plans and specifications
               (including, without limitation, the scope of work, all plans and
               specifications, the Initial Plans and the Final Drawings) for the
               Tenant Improvements, and architectural fees, engineering costs
               and fees, and other costs associated with completion of said
               plans;

               (b)  All costs of obtaining building permits and other necessary
               authorizations and approvals from the City of Menlo Park and
               other applicable jurisdictions;

               (c)  All costs of interior design and finish schedule plans and
               specifications including as-built drawings;

               (d)  All direct and indirect costs of procuring, constructing and
               installing the Tenant Improvements in the Premises, including,
               but not limited to, the construction fee for overhead and profit,
               the cost of all on-site supervisory and administrative staff,
               office, equipment and temporary services rendered by Landlord's
               consultants and the General Contractor in connection with
               construction of the Tenant Improvements, and all labor (including
               overtime) and materials constituting the Work;

               (e)  All fees payable to the General Contractor, architect and
               Landlord's engineering firm if they are required by Tenant to
               redesign any portion of the Tenant Improvements following
               Tenant's approval of the Final Drawings; and

                                       4
<PAGE>

               (f)  A construction management fee payable to Landlord in the
               amount of five percent (5%) of all direct and indirect costs of
               procuring, constructing and installing the Tenant Improvements in
               the Premises and the Building.

Notwithstanding anything to the contrary in the Lease or this Exhibit B, the
Tenant Improvement Allowance shall not be used for, the Tenant Improvement Costs
shall not include and, Landlord, at Landlord's sole cost, without reimbursement
from Tenant shall pay for, the following: (i) costs relating to the design or
construction of the Building Improvements, (ii) wages, labor and overhead for
overtime and premium time unless approved by Tenant, (iii) interest and fees for
construction financing, (iv) costs relating to construction or design defects of
the Tenant Improvements and/or Building Improvements.

10.      Excess Tenant Improvement Costs. Prior to commencing the Work,
         -------------------------------
Landlord shall submit to Tenant a written statement of the actual Tenant
Improvement Costs (the "Actual TI Costs") (which shall include the amount of any
overtime projected as necessary to Substantially Complete the Work by the
Completion Date) as then known by Landlord, and such statement shall indicate
the amount, if any, by which the Actual TI Costs exceeds the Tenant Improvement
Allowance (the "Excess Tenant Improvement Costs"). The term "Excess Tenant
Improvement Costs" shall also include the costs related to any and all Change
Orders. Tenant agrees, within three (3) days after submission to it of such
statement, to execute and deliver to Landlord, in the form then in use by
Landlord, an authorization to proceed with the Work, and notice of its election
to either amortize the Excess Tenant Improvement Costs over the initial term of
the Lease or to pay to Landlord such Excess Tenant Improvement Costs in one of
the following described manners:

         (a) A portion of the Excess Tenant Improvement Costs up to a maximum
         amount of fifty-one thousand two hundred ninety-six and 00/100 dollars
         ($51,296.00), based on two and 00/100 dollars ($2.00) per rentable
         square foot for 25,648 square feet of the Premises, shall be amortized
         over the initial term of the Lease at the rate of eleven percent (11%)
         per annum and such amortized amount shall be paid by Tenant with, and
         as part of, the Rent for the Premises in accordance with the provisions
         and requirements of Section 3 of the Lease (the "Amortized Excess TI
         Costs"). The portion of the Excess Tenant Improvement Costs in excess
         of the Amortized Excess TI Costs shall be paid by Tenant, in cash, to
         Landlord concurrently with Tenant's delivery to Landlord of the
         aforementioned signed written authorization to proceed. No Work shall
         be commenced until Tenant has fully complied with the preceding
         provisions of this Section 10. If Tenant fails to remit the sums so
         demanded by Landlord pursuant to Section 8 above and this Section 10
         within the time periods required, Landlord may, at its option, declare
         Tenant in default under the Lease; or

         (b) Tenant shall faithfully pay all of the Excess Tenant Improvement
         Costs to Landlord in cash, concurrently with Tenant's delivery to
         Landlord of the aforementioned signed written authorization to proceed.
         No Work shall be commenced until Tenant has fully complied with the
         preceding provisions of this Section 10. If Tenant fails to remit the
         sums so demanded by Landlord pursuant to Section 8 above and this
         Section 10 within the time periods required, Landlord may, at its
         option, declare Tenant in default under the Lease.

11.      Change Requests. No changes or revisions to the approved Final
         ---------------
Drawings shall be made by either Landlord or Tenant unless approved in writing
by both parties. Upon Tenant's request and submission by Tenant (at Tenant's
sole cost and expense) of the necessary information and/or plans and
specifications for any changes or revisions to the approved Final Drawings
and/or for any work other than the Work described in the approved Final Drawings
("Change Requests") and the approval by Landlord of such Change Request(s),
which approval Landlord agrees shall not be unreasonably withheld, Landlord
shall perform the additional work associated with the approved Change
Request(s), at Tenant's sole cost and expense, subject, however, to the
following provisions of this Section 11. Prior to commencing any additional work
related to the approved Change Request(s), Landlord shall submit to Tenant for
Tenant's approval or disapproval a written statement of the cost of such
additional work and a proposed tenant change order therefor ("Change Order") in
the standard form then in use by Landlord. Tenant shall execute and deliver to
Landlord such Change Order and shall pay the entire cost of such additional work
in the following described manner. Any costs related to such approved Change
Request(s), Change Order and any delays associated therewith, shall be added to
the Tenant Improvement Costs and shall be paid for by Tenant as and with any
Excess Tenant Improvement Costs as set forth in Section 10 above if and to the
extent the cost of such change order causes the Tenant Improvement Costs to
exceed the Tenant Improvement Allowance. The billing for such additional costs
to Tenant shall be accompanied by evidence of the amounts billed as is
customarily used in the business. Costs related to approved Change Requests and
Change Orders shall include, without limitation, any architectural or design
fees, Landlord's construction fee for overhead and profit, the cost of all on-
site supervisory and administrative staff, office, equipment and temporary
services rendered by Landlord and/or Landlord's consultants, and the General
Contractor's price for effecting the change. If Tenant fails to execute or

                                       5
<PAGE>

deliver such Change Order, or to pay the costs related thereto, then Landlord
shall not be obligated to do any additional work related to such approved Change
Request(s) and/or Change Orders, and Landlord may proceed to perform only the
Work, as specified in the Final Drawings.

12.      Termination. If the Lease is terminated prior to the Completion Date,
         -----------
for any reason due to the default of Tenant hereunder, in addition to any other
remedies available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination, including, but not limited to, any costs related to the removal
of all or any portion of the Tenant Improvements and restoration costs related
thereto. Subject to the provisions of Section 10.2 of the Lease, upon the
                                      ------- ----
expiration or earlier termination of the Lease, Tenant shall not be required to
remove the Tenant Improvements it being the intention of the parties that the
Tenant Improvements are to be considered incorporated into the Building.
Notwithstanding anything to the contrary contained herein, Tenant or Landlord
shall have the right to terminate the Lease, upon written notice to the other
party, if Landlord is unable to obtain a building permit for the Tenant
Improvements within one hundred (100) days from the date the Lease is signed by
Tenant.

13.      Tenant Access. Landlord, in Landlord's reasonable discretion and upon
         -------------
receipt of a written request from Tenant, may grant Tenant a license to have
access to the Premises prior to the Completion Date to allow Tenant to do other
work required by Tenant to make the Premises ready for Tenant's use and (the
"Tenant's Pre-Occupancy Work"). It shall be a condition to the grant by Landlord
and continued effectiveness of such license that:

                    (a)  Tenant shall give to Landlord a written request to
                    have such access not less than five (5) business days prior
                    to the date on which such proposed access will commence (the
                    "Access Notice"). The Access Notice shall contain or be
                    accompanied by each of the following items, all in form and
                    substance reasonably acceptable to Landlord: (i) a detailed
                    description of and schedule for Tenant's Pre-Occupancy Work;
                    (ii) the names and addresses of all contractors,
                    subcontractors and material suppliers and all other
                    representatives of Tenant who or which will be entering the
                    Premises on behalf of Tenant to perform Tenant's Pre-
                    Occupancy Work or will be supplying materials for such work,
                    and the approximate number of individuals, itemized by
                    trade, who will be present in the Premises; (iii) copies of
                    all contracts, subcontracts, material purchase orders, plans
                    and specifications pertaining to Tenant's Pre-Occupancy
                    Work; (iv) copies of all licenses and permits required in
                    connection with the performance of Tenant's Pre-Occupancy
                    Work; (v) certificates of insurance (in amounts satisfactory
                    to Landlord and with the parties identified in, or required
                    by, the Lease named as additional insureds) and instruments
                    of indemnification against all claims, costs, expenses,
                    penalties, fines, and damages which may arise in connection
                    with Tenant's Pre-Occupancy Work; and (vi) reasonable
                    assurances of the ability of Tenant to pay for all of
                    Tenant's Pre-Occupancy Work and/or a letter of credit or
                    other security deemed appropriate by Landlord securing
                    Tenant's lien-free completion of Tenant's Pre-Occupancy
                    Work.

                    (b)  Such pre-term access by Tenant and Tenant's employees,
                    agents, contractors, consultants, workmen, mechanics,
                    suppliers and invitees shall be subject to scheduling by
                    Landlord.

                    (c)  Tenant's employees, agents, contractors, consultants,
                    workmen, mechanics, suppliers and invitees shall fully
                    cooperate, work in harmony and not, in any manner, interfere
                    with Landlord or Landlord's agents or representatives in
                    performing the Work and any additional work pursuant to
                    approved Change Orders, Landlord's work in other areas of
                    the Building or the Park, or the general operation of the
                    Building. If at any time any such person representing Tenant
                    shall not be cooperative or shall otherwise cause or
                    threaten to cause any such disharmony or interference,
                    including, without limitation, labor disharmony, and Tenant
                    fails to immediately institute and maintain corrective
                    actions as directed by Landlord, then Landlord may revoke
                    such license upon twenty-four (24) hours' prior written
                    notice to Tenant.

                    (d)  Any such entry into and occupancy of the Premises or
                    any portion thereof by Tenant or any person or entity
                    working for or on behalf of Tenant shall be deemed to be
                    subject to all of the terms, covenants, conditions and
                    provisions of the Lease, excluding only the covenant to pay
                    Rent. Landlord shall not be liable for any injury, loss or
                    damage which may occur to any of Tenant's Pre-Occupancy Work
                    made in or about the Premises or to any property placed
                    therein prior to the commencement of the term of the Lease,
                    the same being at Tenant's sole risk and liability. Tenant
                    shall be liable to Landlord for any damage to any portion of
                    the Premises, the Work or the additional work related to any
                    approved Change Orders caused by Tenant or any of Tenant's
                    employees, agents, contractors, consultants, workmen,
                    mechanics, suppliers and invitees. In the event that the
                    performance of Tenant's Pre-Occupancy Work causes extra
                    costs to be incurred by Landlord or requires the use of
                    other Building services, Tenant shall promptly reimburse
                    Landlord for such extra costs and/or shall pay Landlord for
                    such other Building services at Landlord's standard rates
                    then in effect.

                                       6
<PAGE>

14.      Lease Provisions: Conflict. The terms and provisions of the Lease,
         --------------------------
insofar as they are applicable, in whole or in part, to this EXHIBIT B, are
                                                             ---------
hereby incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
                            ---------                    ---------
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.

INITIALS:
--------

TENANT: /s/ Signature Illegible

LANDLORD:

                                       7
<PAGE>

                         EXHIBIT C TO LEASE AGREEMENT
                               RULES & REGULATIONS

This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
                                                                      ------- -
to that certain Lease Agreement dated March 4, 1996 (the "Lease"), by and
between LINCOLN MENLO VIII LIMITED PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP
("Landlord") and CBT Systems USA, Ltd., a Maryland corporation ("Tenant") for
the leasing of certain premises located in the Willow Park at Building E, 1005
Hamilton Court, Menlo Park, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT C are hereby incorporated into and are made a
                       ------- -
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:

1.   No advertisement, picture or sign of any sort shall be displayed on or
     outside the Premises or the Building without the prior written consent of
     Landlord. Landlord shall have the right to remove any such unapproved item
     without notice and at Tenant's expense.

2.   Tenant shall not regularly park motor vehicles in designated parking areas
     after the conclusion of normal daily business activity.

3.   Tenant shall not use any method of heating or air conditioning other than
     that supplied by Landlord without the prior written consent of Landlord.

4.   All window coverings installed by Tenant and visible from the outside of
     the Building require the prior written approval of Landlord.

5.   Tenant shall not use, keep or permit to be used or kept any foul or noxious
     gas or substance or any flammable or combustible materials on or around the
     Premises, the Building or the Park.

6.   Tenant shall not alter any lock or install any new locks or bolts on any
     door at the Premises without the prior consent of Landlord.

7.   Tenant agrees not to make any duplicate keys without the prior consent of
     Landlord.

8.   Tenant shall park motor vehicles in those general parking areas as
     designated by Landlord except for loading and unloading. During those
     periods of loading and unloading, Tenant shall not unreasonably interfere
     with traffic flow within the Park and loading and unloading areas of other
     tenants.

9.   Tenant shall not disturb, solicit or canvas any occupant of the Building or
     Park and shall cooperate to prevent same.

10.  No person shall go on the roof without Landlord's permission.

11.  Business machines and mechanical equipment belonging to Tenant which cause
     noise or vibration that may be transmitted to the structure of the
     Building, to such a degree as to be objectionable to Landlord or other
     Tenants, shall be placed and maintained by Tenant, at Tenant's expense, on
     vibration eliminators or other devices sufficient to eliminate noise or
     vibration.

12.  All goods, including material used to store goods, delivered to the
     Premises of Tenant shall be immediately moved into the Premises and shall
     not be left in parking or receiving areas overnight.

13.  Tractor trailers which must be unhooked or parked with dolly wheels beyond
     the concrete loading areas must use steel plates or wood blocks under the
     dolly wheels to prevent damage to the asphalt paving surfaces. No parking
     or storing of such trailers will be permitted in the auto parking areas of
     the Park or on streets adjacent thereto.

14.  Forklifts which operate on asphalt paving areas shall not have solid rubber
     tires and shall only use tires that do not damage the asphalt.

15.  Tenant is responsible for the storage and removal of all trash and refuse.
     All such trash and refuse shall be contained in suitable receptacles stored
     behind screened enclosures at locations approved by Landlord.

16.  Tenant shall not store or permit the storage or placement of goods, or
     merchandise or pallets or equipment of any sort in or around the Premises,
     the Building, the Park or any of the Common Areas of the foregoing. No
     displays or sales of merchandise shall be allowed in the parking lots or
     other Common Areas.

17.  Tenant shall not permit any animals, including, but not limited to, any
     household pets, to be brought or kept in or about the Premises, the
     Building, the Park or any of the Common Areas of the foregoing.

18.  Tenant shall not permit any motor vehicles to be washed on any portion of
     the Premises or in the Common Areas of the Park, nor shall Tenant permit
     mechanical work or maintenance of motor vehicles to be performed on any
     portion of the Premises or in the Common Areas of the Park.

INITIALS:
--------

TENANT: /s/ Signature Illegible

LANDLORD: T
          -

                                       8
<PAGE>

                                   EXHIBIT D
                                  WILLOW PARK
             DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
                                  PAGE 1 OF 7

     This Declaration of Covenants, Conditions and Restrictions (hereinafter
called "Declaration") is made this twenty-fifth day of August 1979, by LINCOLN
PROPERTY COMPANY NO. 238, A CALIFORNIA LIMITED PARTNERSHIP (PHASES 1 & 2);
LINCOLN PROPERTY COMPANY NO. 287, LTD., A CALIFORNIA LIMITED PARTNERSHIP (PHASE
3); LINCOLN PROPERTY COMPANY NO. 355, LTD., A CALIFORNIA LIMITED PARTNERSHIP
(PHASE 4); LINCOLN PROPERTY COMPANY NO. 440, LTD., A CALIFORNIA LIMITED
PARTNERSHIP (PHASE 5); LINCOLN PROPERTY COMPANY NO. 1179, A CALIFORNIA LIMITED
PARTNERSHIP (PHASE 6); LINCOLN PROPERTY COMPANY NO. 2036 LIMITED PARTNERSHIP, A
CALIFORNIA LIMITED PARTNERSHIP (PHASE 7) (hereinafter called "Lincoln Property
Company").

                                    RECITALS

               1.   Declarant is, or at the time of recording this Declaration
               will be, the Owner in fee of all that certain real property which
               is situated in the City of Menlo Park, County of San Mateo, State
               of California, described on the map (hereinafter called "Map")
               entitled "Menlo Industrial Center, Menlo Park, California" which
               Map is filed in the office of the Recorder of the County of San
               Mateo, State of California, on October 1, 1979, in Book No. 99 of
               Maps, at pages 81, 82 and 83.

               2. As Owner of the real property described in Paragraph 1 of
               these Recitals, Declarant has executed this Declaration for the
               purpose of imposing upon all portions of said real property
               (other than Parcel E as shown on the Map) a general plan of
               improvement for the benefit of said real property (other than
               said Parcel E) and its present and future owners. Said real
               property (other than Parcel E) is hereinafter called the
               "Property."

               NOW, THEREFORE, Declarant hereby declares that the Property is
               now held, and shall hereafter be held, developed, encumbered,
               hypothecated, transferred, sold, leased, conveyed, improved, used
               and occupied subject to the covenants, conditions, restrictions
               and limitations hereinafter set forth, all of which are declared
               to be in furtherance of a plan for the development and operation
               of a landscaped business and industrial park and are established
               for the purpose of enhancing and protecting the value,
               attractiveness and desirability of the Property and every part
               thereof. Each of the covenants, conditions, restrictions and
               limitations set forth herein shall run with the land, and every
               part thereof, and shall burden as well as inure to the benefit of
               and pass with each and every portion of the Property hereinafter
               developed, encumbered, hypothecated, transferred, sold, leased,
               conveyed, improved, used or occupied and shall apply to and bind
               any and all parties having or acquiring any right, title, license
               or interest in the Property or any part thereof.

                                   ARTICLE I

                                  DEFINITIONS

               Unless the context otherwise specifies or requires, the terms
               defined in this Article I shall, for all purposes of this
               Declaration, have the meanings herein specified.

     1.1  Building. "Building" shall mean the principal structure or
          --------
structures on any Site, including all garages, outside platforms, outbuildings,
docks and the like.

     1.2  Declarant. "Declarant shall mean Lincoln Property Company, its
          ---------
successors and assigns. Declarant's assigns shall be deemed to include any party
whom Declarant designates, by means of a notice recorded in the Official Records
of San Mateo County, as the party who, from and after the date such notice is
recorded, will perform Declarant's functions under this Declaration.

     1.3  Deed of Trust. "Deed of Trust" shall mean, with respect to any
          -------------
portion of the property, a duly recorded Deed of Trust, mortgage or other
instrument which created a lien on the portion of the Property is describes.
<PAGE>

                                   PAGE 2 OF 7

     1.4  Improvements. "Improvements" shall mean and include without
          ------------
limitation buildings, outbuildings, pedestrian and vehicle access facilities,
parking areas, loading areas, fences, walls, hedged mass plantings, landscaping,
poles, signs and any structures of any type or kind.

     1.5  Owner. "Owner" shall mean any person, firm, corporation or other
          -----
legal entity (including Declarant) which owns fee title to a Site, as shown by
the Official Records of the County of San Mateo; provided, however, that the
term "Owner" shall not include a mortgage or beneficiary under a deed of trust
holding a security interest in a Site unless such mortgagee or beneficiary is in
actual physical possession of the Site.

          Whenever this Declaration creates or imposes an obligation with
respect to a Site, the Owner of the Site shall be responsible for the timely and
proper performance of the obligation, notwithstanding any delegation of such
responsibility by lease, contract, or otherwise to another party.

     1.6  Property. "Property" shall mean that certain real property subject
          --------
to the covenants, conditions and restrictions set forth herein, namely, that
real property described on Exhibit A attached hereto and incorporated herein.

     1.7  Site. "Site" shall mean a continuous area of land within the
          ----
Property which is owned of record by the same Owner, whether shown as one parcel
on any recorded map or as a combination of parcels or of portions thereof.

                                  ARTICLE II

                              REGULATION OF USES

     2.1  Permitted Uses. Unless otherwise specifically prohibited herein, or
          --------------
by applicable law, any business/industrial use will be permissible if it does
not constitute a nuisance to adjacent Sites. Permitted uses will include, but
not be limited to, manufacturing, warehousing, distribution, cartage,
processing, storage, wholesaling, office, laboratory, professional and research
and development.

     2.2  Nuisance. No noxious or offensive activity shall be carried on nor
          --------
shall anything be done on any Site which may be or become an annoyance or
nuisance to the Owners or occupants of other Sites, or which will be offensive
to the Owners or occupants of other Sites by reason of odor, fumes, discharge of
any chemical or industrial waste above or below ground, dust, dirt, fly-ash,
smoke, noise, glare or which will be hazardous by reason of danger of fire or
explosion or any other hazard.

     2.3  Right of Entry. During reasonable hours and subject to reasonable
          --------------
security requirements, Declarant or its authorized representative shall have the
right to enter upon and inspect any Building and/or Site and the Improvements
thereon for the purpose of ascertaining whether or not the provisions of this
Declaration have been or are being complied with and shall not be deemed guilty
of trespass by reason of such entry.

                                  ARTICLE III

                          REGULATION OF IMPROVEMENTS

     3.1  Minimum Setback Lines
          ---------------------

          (a)  General. No Improvement and no part thereof shall be placed on
               -------
               any Site closer to a property line than herein provided. The
               following Improvements are specifically excluded from these
               setback provisions:
<PAGE>

                                  PAGE 3 OF 7

               (1)  Roof overhang, subject to the specific approval of Declarant
          in writing.

               (2)  Steps and walks.

               (3)  Paving and associated curbing, except that vehicle parking
         areas shall not be permitted within ten (10) feet of the street
         property line or lines.

               (4)  Fences, except that no fence shall be placed within the
         street setback area unless specific approval is given by Declarant in
         writing.

               (5)  Landscaping.

               (6)  Planters, not to exceed three (3) feet in height.

               (7)  Railroad spur tracks, switches and bumpers, provided that
         the location of such tracks, switches and bumpers is specifically
         approved by Declarant in writing.

               (8)  Displays identifying the Owner, Lessee or occupant, subject
         to the specific approval of Declarant in writing.

         (b)   Setback from interior property lines. No setback is established
     from a rear or side interior property line. The interior lot lines for a
     corner lot shall be considered to have a real property line.

         (c)   Setback Street Property Lines. The setback line is established
               -----------------------------
     as twenty (20) feet from property line on all streets on the property.

     3.2  Completion of Construction. After commencement of construction of any
          --------------------------
Improvement, the Owner shall diligently prosecute the work thereon to the end
that the Improvement shall not remain in a partly finished condition any longer
than reasonably necessary for the completion thereof.

          3.3  No excavation shall be made except in connection with
          construction of an Improvement, and upon completion thereof, exposed
          openings shall be backfilled and disturbed ground shall be graded and
          leveled.

          3.4  Landscaping.
               -----------

               (a)  Every Site on which a Building shall have been placed shall
          be landscaped according to plans approved as specified herein and
          maintained thereafter in a sightly and well-kept condition.

               (b)  An Owner, Lessee or occupant shall landscape and maintain
          unpaved areas between the property lines and the setback lines.

               (c)  An Owner, Lessee or occupant shall provide hose bibs and
          maintenance facilities in the vicinity of the landscaped areas.

               (d)  Landscape as approved by Declarant shall be installed within
          ninety (90) days of occupancy or completion of the Building, whichever
          occurs first.

          3.5  Site Maintenance. All Improvements on each Site including,
               ----------------
without limitation, all walks, driveways, fences, parking areas, landscaping and
the exterior of all structures on each Site, shall be maintained free of litter
and debris and in good condition, order and repair. Landscaping shall be kept in
thriving condition, weed-free and neatly trimmed. All undeveloped Sites shall be
kept clean, mowed and in a condition so as not to be a dust or weed problem.
<PAGE>

                                   PAGE 4 OF 7

     3.6  Signs and Lighting. No signs or displays shall be created on any
          ------------------
Site, other than the following:

          (a)  Signs identifying the name, building and business of any person
     or firm occupying a Site, the size, design and color of which has been
     specifically approved by Declarant in writing; and

          (b)  Offering a Site for sale or lease if Declarant has specifically
     approved said signs in writing.

          All signs and displays shall be located below the roof line of
     the building and shall comply with all applicable laws and ordinances.

          Lighting shall be restricted to parking and security lights, fire
     lighting and low-level sign illumination and floodlighting of buildings or
     landscaping. All lighting shall be shielded and contained within property
     lines.

     3.7  Parking Areas. Adequate parking on a Site shall be provided to
          -------------
accommodate all parking needs for employees, visitors and company vehicles.
There shall also be adequate areas provided for truck loading and unloading. The
intent of this provision is to eliminate the need for any on-street parking. If
parking or loading requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.

     3.8  Building Regulations. Any building erected on a Site shall conform
          --------------------
to the following construction practices:

          (a)  Exterior walls of sheet or corrugated iron, steel, aluminum or
     asbestos will be permitted only upon specific approval in writing by
     Declarant.

          (b)  Exterior walls shall be painted or suitably treated in a
     manner acceptable to Declarant.

                                  ARTICLE IV

                               APPROVAL OF PLANS

               4.1  No Improvement shall be erected, placed, altered, maintained
               or permitted to remain on any land subject to these restrictions
               until plans and specifications showing plot layout, including
               parking and all exterior elevations, with materials and colors,
               have been submitted to and approved in writing by Declarant. Said
               approval shall be in addition to any approvals and/or permits
               required by the City of Menlo Park or any other legal entity
               having jurisdiction. Such plans and specifications shall be
               submitted in writing over the signature of the Owner of Lessee of
               the Site or his authorized agent.

               4.2  Approval shall be based, among other things, on adequacy of
               Site dimensions, adequacy of structural design, conformity and
               harmony of external design with neighboring Improvements, effect
               of location and use of Improvements on neighboring Sites; proper
               facing of main elevation with respect to nearby streets; and
               conformity of the plans and specifications to the purpose and
               general plan and intent of these restrictions. Declarant shall
               not arbitrarily or unreasonably withhold its approval of such
               plans and specifications.

               4.3  If Declarant fails either to approve or to disapprove such
               plans and specifications within thirty (30) days after the same
               have been submitted to it, it shall be conclusively presumed that
               Declarant has approved said plans and specifications, subject,
               however, to the restrictions contained in ARTICLE III hereof.

               4.4  Notwithstanding anything to the contrary herein contained,
               after the expiration of one year from the date of issuance of a
               building permit by municipal or other governmental authority for
               any Improvement, said Improvement shall, in favor of purchasers
               and encumbrancers in good faith and for
<PAGE>

                                  PAGE 5 OF 7

value, be deemed to be in compliance with all provisions of this ARTICLE IV,
unless actual notice of such non-compliance or non-completion executed by
Declarant shall appear of record in the office of the County Recorder of San
Mateo County, California, or unless legal proceedings shall have been instituted
to enforce compliance or completion.

         4.5 Fee. An architectural review fee shall be paid to Declarant at the
             ---
time plans are submitted for approval based upon the following schedule:

                  (a) When the plans submitted are prepared by an architect
         licensed to practice in the State of California, the architectural
         review fee shall be $100.00.

                  (b) In all other cases, the architectural review fee shall be
         $200.00.

                                   ARTICLE V

                     DURATION AND MODIFICATION AND REPEAL

         5.1 Term. This Declaration, every provision hereof and every covenant,
             ----
conditions and restriction contained herein shall continue in full force and
effect for a period of sixty (60) years from the date hereof.

         5.2 Termination and Modification. This Declaration or any provisions
             ----------------------------
thereof or any covenant, condition or restriction contained herein may be
terminated, extended, modified or amended as to the whole of said property or
any portion thereof, with the written consent of the Owners of sixty-five
percent (65%) in area of the Property; provided that so long as Declarant owns
at least twenty percent (20%) in area of the Property, no such termination,
extension, modification or amendment shall be effective without Declarant's
written approval. No termination, extension, modification or amendment hereof
shall be effective until a written instrument embodying the same has been
executed and recorded in the Official Records of San Mateo County.

                                  ARTICLE VI

                                  ENFORCEMENT

         6.1 Abatement and Suit. Violation or breach of any restriction herein
             ------------------
contained shall give to Declarant the right to enter upon the Property upon or
as to which said violation or breach exists and summarily to abate and remove at
the expense of the Owner, Lessee or occupant thereof any structure, thing or
condition that may be or exist thereon contrary to the intent and meaning of the
provisions hereof, or to prosecute a proceeding at law or in equity against the
person or persons who have violated or are attempting to violate any of these
restrictions to enjoin or prevent them from doing so, to cause said violation to
be remedied or to recover damages for said violation. In addition, every Owner
of a Site shall have the right, in the event of violation or breach of any
restriction herein contained, to prosecute a proceeding at law or in equity
against the person or persons who have violated or are attempting to, violate
any of these restrictions to enjoin or to recover damages for said violation.
All remedies provided herein or at law or in equity shall be cumulative and not
exclusive.

         6.2 Deemed to Constitute a Nuisance. The result of every action or
             -------------------------------
omission whereby any restriction herein contained is violated in whole or in
part is hereby declared to be and to constitute a nuisance. Every remedy allowed
by law or equity against an Owner, either public or private, shall be applicable
against every such result and may be exercised by Declarant or by any Owner of
property subject hereto. Any costs or expenses paid or incurred by Declarant or
an Owner (collectively referred to as "Declarant" in this Section 6.2) in
abating such nuisance or prosecuting any such remedy (including all reasonable
attorneys' fees and costs of collection), together with interest thereon at the
rate of ten
<PAGE>

                                   PAGE 6 OF 7

percent (10%) per annum, shall be a charge against the Site on which the
nuisance has occurred or is occurring, shall be a continuing lien thereon until
paid, and shall also be the personal obligation of the Owner of such Site when
such charges became due and who committed such breach or violation. In addition
to any other rights or remedies hereunder, Declarant may deliver to the Owner of
the Site on which the nuisance has occurred or is occurring and record with the
San Mateo County Recorder a certificate of notice of claim of lien. If the
violation recited in such lien claim has not been cured to Declarant's
satisfaction and any recited amounts so charged have not been paid within thirty
(30) days thereafter, Declarant or its authorized representative may foreclose
such lien by a sale conducted pursuant to Sections 2924, 2924b and 2924c of the
California Civil Code, as amended from time to time, or other statues applicable
to the exercise of powers of sales in mortgages or Deeds of Trust, or in any
other manner permitted by law. Declarant, through its authorized
representatives, may bid on and acquire any land subject to such lien at any
such foreclosure sale. If the violations recited in such lien claim are timely
cured and any recited amounts timely paid as provided above, Declarant shall
forthwith record an appropriate release of such lien at Declarant's sole
expense.

     6.3  Attorneys' Fees. In any legal or equitable proceeding for the
          ---------------
enforcement or to restrain the violation of this Declaration or any provision
hereof, the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.

     6.4  Failure to Enforce Not a Waiver of Rights. The failure of  Declarant
          -----------------------------------------
or any Owner to enforce any restriction herein contained shall in no event be
deemed to be a waiver of the right to do so thereafter nor of the right to
enforce any other restriction.

                                  ARTICLE VII

                           MISCELLANEOUS PROVISIONS

7.1  Assignment of Declarant's Rights and Duties. Declarant may assign any and
     -------------------------------------------
all of its rights, powers, reservations and obligations hereunder to any person,
corporation or association. To be effective, any such assignments must be
accepted in writing by the assignee and the acceptance must be recorded in the
Official Records of San Mateo County. To the extent of the assignment, the
assignee shall have the same rights, obligations, duties and powers and be
subject to the same obligations and duties as given to and assumed by Declarant
herein. The term Declarant as used herein includes all such assignees and their
heirs, successors and assigns. Declarant may also resign as Declarant by
recording a written notice of resignation in the Official Records of San Mateo
County and mailing a copy thereof to each then Owner. The resignation shall be
effective on the date it is recorded and Declarant shall thereafter have no
further rights, powers, reservations, obligation or liabilities hereunder. If at
any time Declarant either resigns or ceases to exist without making an
assignment of its authority as Declarant, a successor Declarant may be appointed
in the same manner as this Declaration may be terminated, extended, modified or
amended under Section 2 of ARTICLE IV.

7.2  Constructive Notice and Acceptance. Every person or other entity who now
     ----------------------------------
or hereafter owns or acquires any right, title or interest in or to any portion
of the Property is and shall be conclusively deemed to have consented and agreed
to every covenant, condition and restriction contained herein, whether or not
any reference to this Declaration is contained in the instrument by which such
person or entity acquired an interest in said property.

     7.3  Waiver. Neither Declarant nor its successors or assigns shall be
          ------
liable to any Owner, Lessee, licensee or occupant of land subject to his
Declarant by reason of any mistake in judgment, negligence, nonfeasance, action
or inaction and/or for the enforcement or failure to enforce any provision of
this Declaration. Every Owner, Lessee, licensee or occupant of any of said
property by acquiring his interest therein agrees that he will not bring any
action or suit against Declarant to recover any damages or to seek equitable
relief because of any mistake in judgment, negligence, nonfeasance, action or
inaction and/or the enforcement or failure to enforce any provision of this
Declaration.
<PAGE>

                                  PAGE 7 OF 7

         7.4  Mutuality, Reciprocity, Runs with Land. All covenants,
              --------------------------------------
conditions, restrictions and agreements contained herein are made for the
direct, mutual and reciprocal benefit of each and every part and parcel of the
property now or hereafter made subject to this Declaration, shall create
reciprocal rights and obligations between the respective Owners of all parcels
and privity of contract and estate between all grantees of said parcels, their
heirs, successors and assigns, and shall, as to the Owner of each parcel, his
heirs, successors and assigns, operate as covenants running with the land for
the benefit of all other parcels.

         7.5  Rights of Beneficiaries. No breach of the restrictions and other
              -----------------------
provisions contained herein shall defeat or render invalid the lien of any Deed
of Trust now or hereafter executed upon land subject to these restrictions;
provided, however, that if any portion of said property is sold under a
foreclosure of any mortgage or under the provisions of any deed of trust, any
purchaser at such sale and his successors and assigns shall hold any and all
property so purchased subject to all of the restrictions and other provisions of
this Declaration.

         7.6  Paragraph Headings. Paragraph headings, where used herein, are
              ------------------
inserted for convenience only and are not intended to be a part of this
Declaration or in any way to define, limit or describe the scope and intent to
the particular paragraphs to which they refer.

         7.7  Effect of Invalidation. If any provision of this Declaration is
              ----------------------
held to be invalid by any court, the invalidity of such provision shall not
affect the validity of the remaining provisions hereof.

         7.8  Existing Improvements. Improvements which are completely
              ---------------------
constructed on the date this Declaration is recorded are deemed to satisfy all
the requirements hereof.

         7.9  Estoppel Certificate. At the request of an Owner, Declarant shall
              --------------------
supply to such Owner or any actual or potential encumbrancer or purchaser of a
Site a written certificate stating that there are no violations hereof, or if
there are any such violations, the nature of such violations. Such certificate
shall be delivered within ten (10) working days after such request by an Owner.

INITIALS:

LESSEE: /s/ Signature Illegible

LESSOR: _______________
<PAGE>

                                    EXHIBIT E

                  HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:   LINCOLN MENLO VIII LIMITED PARTNERSHIP,
            A CALIFORNIA LIMITED PARTNERSHIP
            c/o Lincoln Property Company Management Services, Inc.
            101 Lincoln Centre Drive, Fourth Floor
            Foster City, California 94404
            Attn: Eileen Griffin
            Phone: (415) 571-2200

Name of Tenant:   CBT Systems USA, Ltd., a Maryland corporation
                  ---------------------------------------------

Mailing Address:  1005 Hamilton Court, Menlo Park, California 94025
                  -------------------------------------------------
________________________________________________________________________________

Contact Person, Title and Telephone Number(s): RUNE ELIASEN, V.P. OF OPERATIONS
                                              ---------------------------------

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):

________________________________________________________________________________

________________________________________________________________________________

Address of Premises:       1005 Hamilton Court, Menlo Park, California
                           -------------------------------------------

Length of initial Term:    5 years
                           -------

________________________________________________________________________________

1.   GENERAL INFORMATION:

     Describe the initial proposed operations to take place in, on, or about the
     Premises, including, without limitation, principal products processed,
     manufactured or assembled services and activities to be provided or
     otherwise conducted. Existing tenants should describe any proposed changes
     to on-going operations.

     ___________________________________________________________________________

     ___________________________________________________________________________

2.   USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

     2.1  Will any Hazardous Materials be used, generated, stored or disposed of
          in, on or about the Premises? Existing tenants should describe any
          Hazardous Materials which continue to be used, generated, stored or
          disposed of in, on or about the Premises.

          Wastes                    Yes [ ]  No [X]
          Chemical Products         Yes [ ]  No [X]
          Other                     Yes [ ]  No [X]

          If Yes is marked, please explain: ____________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

     2.2  If Yes is marked in Section 2.1, attach a list of any Hazardous
          Materials to be used, generated, stored or disposed of in, on or about
          the Premises, including the applicable hazard class and an estimate of
          the quantities of such Hazardous Materials at any given time;
          estimated annual throughput; the proposed location(s) and method of
          storage

                                       1
<PAGE>

          (excluding nominal amounts of ordinary household cleaners and
          janitorial supplies which are not regulated by any Environmental
          Laws); and the proposed location(s) and method of disposal for each
          Hazardous Material, including, the estimated frequency, and the
          proposed contractors or subcontractors. Existing tenants should attach
          a list setting forth the information requested above and such list
          should include actual data from on-going operations and the
          identification of any variations in such information from the prior
          year's certificate.

3.   STORAGE TANKS AND SUMPS

     3.1  Is any above or below ground storage of gasoline, diesel, petroleum,
          or other Hazardous Materials in tanks or sumps proposed in, on or
          about the Premises? Existing tenants should describe any such actual
          or proposed activities.

          Yes [ ]  No [X]

          If yes, please explain: ______________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

4.   WASTE MANAGEMENT

     4.1  Has your company been issued an EPA Hazardous Waste Generator I.D.
          Number? Existing tenants should describe any additional identification
          numbers issued since the previous certificate.

          Yes [ ]  No [X]

     4.2  Has your company filed a biennial or quarterly reports as a hazardous
          waste generator? Existing tenants should describe any new reports
          filed.

          Yes [ ]  No [X]

          If yes, attach a copy of the most recent report filed.

5.   WASTEWATER TREATMENT AND DISCHARGE

     5.1  Will your company discharge wastewater or other wastes to:

          ________ storm drain? ______ sewer?
          ________ surface water? / no wastewater or other wastes discharged.

          Existing tenants should indicate any actual discharges. If so,
          describe the nature of any proposed or actual discharge(s).

     ___________________________________________________________________________

     ___________________________________________________________________________

     5.2  Will any such wastewater or waste be treated before discharge?

          Yes [ ]  No [X]

          If yes, describe the type of treatment proposed to be conducted.
          Existing tenants should describe the actual treatment conducted.

     ___________________________________________________________________________

     ___________________________________________________________________________

6.   AIR DISCHARGES

     6.1  Do you plan for any air filtration systems or stacks to be used in
          your company's operations in, on or about the Premises that will
          discharge into the air; and will such air emissions be monitored?
          Existing tenants should indicate whether or not there are any such air
          filtration systems or stacks in use in, on or about the Premises which
          discharge into the air and whether such air emissions are being
          monitored.

          Yes [ ]  No [X]

          If yes, please describe:______________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________
<PAGE>

     6.2  Do you propose to operate any of the following types of equipment, or
          any other equipment requiring an air emissions permit? Existing
          tenants should specify any such equipment being operated in, on or
          about the Premises.

          _____ Spray booth(s)         _____ Incinerator(s)
          _____ Dip tank(s)            _____ Other (Please describe)
          _____ Drying oven(s)         /     No Equipment Requiring Air Permits
                                       -
          If yes, please describe: _____________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

7.   HAZARDOUS MATERIALS DISCLOSURES

     7.1  Has your company prepared or will it be required to prepare a
          Hazardous Materials management plan ("Management Plan") pursuant to
          Fire Department or other governmental or regulatory agencies'
          requirements? Existing tenants should indicate whether or not a
          Management Plan is required and has been prepared.

          Yes [ ]  No [/]

     If yes, attach a copy of the Management Plan. Existing tenants should
attach a copy of any required updates to the Management Plan.

     7.2  Are any of the Hazardous Materials, and in particular chemicals,
          proposed to be used in your operations in, on or about the Premises
          regulated under Proposition 65? Existing tenants should indicate
          whether or not there are any new Hazardous Materials being so used
          which are regulated under Proposition 65.

          Yes [ ]  No [/]

          If yes, please explain: ______________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

8.   ENFORCEMENT ACTIONS AND COMPLAINTS

     8.1  With respect to Hazardous Materials or Environmental Laws, has your
          company ever been subject to any agency enforcement actions,
          administrative orders, or consent decrees or has your company received
          requests for information, notice or demand letters, or any other
          inquiries regarding its operations? Existing tenants should indicate
          whether or not any such actions, orders or decrees have been, or are
          in the process of being, undertaken or if any such requests have been
          received.

          Yes [ ]  No [/]

     If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.

     ___________________________________________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

     8.2  Have there ever been, or are there now pending, any lawsuits against
          your company regarding any environmental or health and safety
          concerns?

          Yes [ ]  No [/]

     If yes, describe any such lawsuits and attach copies of the complaint(s),
cross-complaint(s), pleadings and all other documents related thereto as
requested by Landlord. Existing tenants should describe and attach a copy of any
new complaint(s), cross-complaint(s), pleadings and other related documents not
already delivered to Landlord pursuant to the provisions of Section 29 of the
signed Lease Agreement.

     ___________________________________________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

     8.3  Have there been any problems or complaints from adjacent tenants,
          owners or other neighbors at your company's current facility with
          regard to environmental or health and

                                       3
<PAGE>

     safety concerns? Existing tenants should indicate whether or not there have
been any such problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Premises.

          Yes [ ]  No [/]

     If yes, please describe. Existing tenants should describe any such problems
or complaints not already disclosed to Landlord under the provisions of the
signed Lease Agreement.

     ___________________________________________________________________________

     ___________________________________________________________________________

9.   PERMITS AND LICENSES

     9.1  Attach copies of all Hazardous Materials permits and licenses
          including a Transporter Permit number issued to your company with
          respect to its proposed operations in, on or about the Premises,
          including, without limitation, any wastewater discharge permits, air
          emissions permits, and use permits or approvals. Existing tenants
          should attach copies of any new permits and licenses as well as any
          renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name) RUNE ELIASEN, acting with full authority to bind the (proposed)
               ------------
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.

TENANT:

CBT Systems USA, Ltd.,
a Maryland corporation

By: /s/ Signature Illegible

Title: V.P. of Operations
       ------------------

Date: 3-7-96
      ------

INITIALS:
--------

TENANT: /s/ Signature Illegible

LANDLORD: ______

                                       4
<PAGE>

                                   EXHIBIT F
                      FIRST AMENDMENT TO LEASE AGREEMENT
                          CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of _______________, by and between ____________________ ("LANDLORD"),
and ___________________ ("TENANT"), with reference to the following facts:

                                   RECITALS

               A.   Landlord and Tenant have entered into that certain Lease
               Agreement dated ________ (the "Lease"), for the leasing of
               certain premises located at ________________________, California
               (the "Premises") as such Premises are more fully described in the
               Lease.

B.   Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

     1.   The Commencement Date of the Lease shall be _________________.

     2.   The last day of the Term of the Lease (the "Expiration Date") shall
          be _________.

     3.   The dates on which the Base Rent will be adjusted are:

          for the period _______ to ________ the monthly Base Rent shall be
          $ ________;
          for the period _______ to ________ the monthly Base Rent shall be
          $ ________;
          and for the period _______ to ________ the monthly Base Rent shall
          be $ ________.

     4.   Effect of Amendment: Except as modified herein, the terms and
          -------------------
          conditions of the Lease shall remain unmodified and continue in full
          force and effect. In the event of any conflict between the terms and
          conditions of the Lease and this Amendment, the terms and conditions
          of this Amendment shall prevail.

     5.   Definitions: Unless otherwise defined in this Amendment, all terms
          -----------
          not defined in this Amendment shall have the meaning set forth in the
          Lease.

     6.   Authority: Subject to the provisions of the Lease, this Amendment
          ---------
          shall be binding upon and inure to the benefit of the parties hereto,
          their respective heirs, legal representatives, successors and assigns.
          Each party hereto and the persons signing below warrant that the
          person signing below on such party's behalf is authorized to do so and
          to bind such party to the terms of this Amendment.

     7.   The terms and provisions of the Lease are hereby incorporated in
          this Amendment.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

INITIALS:
--------

TENANT: /s/ Signature Illegible

LANDLORD: __________
<PAGE>

                                   EXHIBIT H

            SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

                                  PAGE 1 OF 2
                      LEASE DATED MARCH 4, 1996, BETWEEN

                            CBT SYSTEMS USA, LTD.,
                            A MARYLAND CORPORATION
                                  ("TENANT"),
                                      AND
                    LINCOLN MENLO VIII LIMITED PARTNERSHIP,
                       A CALIFORNIA LIMITED PARTNERSHIP
                                 ("LANDLORD")

     THIS AGREEMENT, made and entered into as of the ___________________, by and
between Mid-Peninsula Bank, a California corporation with its principal office
at 420 Cowper, Palo Alto, California 94301 (hereinafter called "Mortgagee"),
Lincoln Menlo VIII Limited Partnership, a California limited partnership, c/o
Lincoln Property Company Management Services, Inc., As Manager and Agent for
Owner with its principal office at 101 Lincoln Centre Drive, Foster City,
California 94404 (hereinafter called "Landlord") and CBT Systems USA, Ltd., a
Maryland corporation having its principal office at
______________________________________________________ (hereinafter called
"Tenant");

                                  WITNESSETH

     WHEREAS, Tenant has by a written lease dated March 4, 1996, and all future
amendments and extensions approved by Mortgagee (hereinafter called the "Lease")
leased from Landlord all or part of certain real estate and improvements thereon
located in the City of Menlo Park, as more particularly described in Exhibit A
attached hereto (the "Demised Premises"); and

     WHEREAS, Landlord is encumbering the Demised Premises as security for a
loan from Mortgagee to Landlord (the "Mortgage"); and

     WHEREAS, Landlord has previously encumbered the Demised Premises as
security for a loan from Lender to Landlord in the form of a ___________
(hereinafter called the "Mortgage"); and

     WHEREAS, Tenant, Landlord and Mortgagee have agreed to the following with
respect to their mutual rights and obligations pursuant to the Lease and the
Mortgage;

     NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) paid by
each party to the other and the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto do hereby covenant and agree as follows:

     (1)  Tenant's interest in the Lease and all rights of Tenant thereunder,
including any purchase option, if any, shall be and are hereby declared subject
and subordinate to the Mortgage upon the Demised Premises and its terms, and the
term "Mortgage" as used herein shall also include any amendment, supplement,
modification, renewal or replacement thereof.

     (2)  In the event of any foreclosure of the Mortgage or any conveyance
in lieu of foreclosure, provided that the Tenant shall not then be in material
                        --------
default beyond any grace period under the Lease and that the Lease shall then be
in full force and effect, then Mortgagee or the purchasers of the Demised
Premises pursuant to a foreclosure or a deed in lieu thereof, as applicable
("Purchaser") shall neither terminate the Lease nor join Tenant in foreclosure
  ---------
proceedings, nor disturb Tenant's possession, and the Lease shall continue in
full force and effect as a direct lease between Tenant and Mortgagee.

     (3)  After the receipt by Tenant of notice from Mortgagee of any
foreclosure of the Mortgage or any conveyance of the Demised Premises in lieu of
foreclosure, Tenant will thereafter attorn to and recognize Mortgagee or any
purchaser from Mortgagee at any foreclosure sale or otherwise as its substitute
lessor on the terms and conditions set forth in the Lease.

     (4)  Tenant shall not prepay any of the rents under the Lease more than one
month in advance except with the prior written consent of Mortgagee.

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