Document:

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                                                                    EXHIBIT 10.1

OFFER LETTER, FABIO ANGELILLIS

August 21, 2000

Fabio Angelillis

Dear Fabio,

We are pleased to offer you the position of Executive Vice President,
Engineering for Broadbase Software, Inc., reporting to Chuck Bay, Chief
Executive Officer.

This letter outlines the proposed terms of employment with Broadbase. Your start
date will be determined.

        -       Your annual salary will be $200,000 paid semi-monthly.

        -       There is an incentive (MBO) bonus associated with this position
                allowing you to make an additional $40,000. Your bonus will be
                based on achievement of your objectives and is paid in two
                installments on a semi-annual basis.

I will recommend that you be granted an option to purchase 400,000 shares of
stock. This grant is subject to approval by the Board of Directors after your
employment begins. The option would vest on a monthly basis over four years
subject to a three-month cliff and would be governed by the terms set forth in
the Company's standard form of stock options agreement. The purchase price of
132,000 shares will be at $1.00 per share and the purchase price of the
remaining 268,000 shares covered by the option will be the closing price of the
Company's common stock on the date of the approval of the grant by the Board.

The Company will provide to you the health, holiday, vacation and other benefits
available to all its employees. Enclosed for your review is information related
to some of the benefits.

To indicate your acceptance of this offer of employment, please sign below. Your
employment at Broadbase is subject to your signing the attached Employee
Invention Assignment, Confidentiality and Arbitration Agreement. Your employment
will not be governed by a written or oral contract. You will be an "at-will"
employee, which means that either you or the Company may terminate your
employment at any time, for any or no reason, and with or without notice. This
at-will nature of your employment cannot be modified except by a writing signed
by an executive officer of Broadbase.

Fabio, all of us welcome you in joining Broadbase and we look forward to having
you on our team. Meanwhile, if you have any questions, please do not hesitate to
call me.

Sincerely,

Rusty Thomas
Executive Vice President and Chief Financial Officer

Accepted:

Signature:   /s/     Fabio Angelillis
             ---------------------------------
Name:  Fabio Angelillis

Start Date:
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                                                                    EXHIBIT 10.4

LEASE AGREEMENT DATED AUGUST 11,2000

        This Lease, made this 11th day of August , 2000 between J. Robert S.
Wheatley and Roger A. Fields, d.b.a. R & R Properties, hereinafter called
Landlord, and Broadbase Software, Inc., a Delaware Corporation, hereinafter
called Tenant.

                                   WITNESSETH:

        Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "A",
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:

The entire building, consisting of approximately 32,466 square feet, and the
appurtenant exterior and parking areas comprising the entire parcel commonly
known as 155 Jefferson Drive, Menlo Park, County of San Mateo, California,
94025.

As used herein the Premises shall mean and include all of the land outlined in
red and described in Exhibit "A" and all of the buildings, improvements,
fixtures and equipment now or hereafter situated on said land.

        Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules, zoning, and ordinances for the purposes
of general office, software development, sales and any related legal purposes
and for no other purpose. Tenant shall not do or permit to be done in or about
the Premises nor bring or keep or permit to be brought or kept in or about the
Premises anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Premises or injure or annoy them, or use or
allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. No sale by auction shall be permitted on the
Premises. Tenant shall not place any loads upon the floors, walls, or ceiling,
which endanger the structure, or place any harmful fluids or other materials in
the drainage system of the building, or overload existing electrical or other
mechanical systems. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises or outside of the building in
which the Premises are a part, except in trash containers placed inside exterior
enclosures designated by Landlord for that purpose or inside of the building
proper where designated by Landlord. No materials, supplies, equipment, finished
products or semi-finished products, raw materials or articles of any nature
shall be stored upon or permitted to remain outside the building or on any
portion of the common area of the Premises. No loudspeaker or other devise,
system or apparatus which can be heard outside the Premises shall be used in or
at the Premises without the prior written consent of Landlord. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises. Tenant shall
indemnify, defend and hold Landlord harmless against any loss, expense, damage,
attorney's fees, or liability arising out of failure of Tenant to comply with
any applicable law. Tenant shall comply with any covenant, condition, or
restriction ("CC&R's") affecting the Premises. The provisions of this paragraph
are for the benefit of Landlord only and shall not be construed to be for the
benefit of any tenant or occupant of the Complex.

2.      TERM

        A. The term of this Lease shall be for a period of ten (10) years
(unless sooner terminated as hereinafter provided) and, subject to Paragraphs
2(B) and 3, shall commence on the 1st day of January, 2000 and end on the 31st
day of December, 2010.

        B. Possession of the Premises shall be deemed tendered and the term of
this Lease shall commence when the first of the following occurs:

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        (1) Upon the occupancy of the Premises by any of Tenant's operating
        personnel; or

        (2) January 1, 2001.

3. POSSESSION If Landlord, for any reason whatsoever, cannot deliver possession
of said Premises to Tenant at the commencement of said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant
shall be affected thereby; nor shall Landlord or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom; but in that event the
commencement and termination dates of the Lease, and all other dates affected
thereby shall be revised to conform to the date of Landlord's delivery of
possession, as specified in Paragraph 2 (b), above. The above is, however,
subject to the provision that the period of delay of delivery of the Premises
shall not exceed 90 days from the commencement date herein (except those delays
caused by Acts of God, strikes, war, utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease.

4.  RENT
        A. Basic Rent. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand, and
Landlord agrees to accept as Basic Rent for the leased Premises the total sum of
Twenty-eight Million Sixty-four Thousand Eight Hundred Ninety-eight Dollars and
Sixty Cents ($28,064,898.60) Dollars in lawful money of the United States of
America, payable in monthly installments as follows:

        $ 194,796.00 shall be due and payable on or before the first day of the
        first month through the twelfth month.

        $ 202,587.84 shall be due and payable on or before the first day of the
        thirteenth month through the twenty-fourth month.

        $ 210,691.35 shall be due and payable on or before the first day of the
        twenty-fifth month through the thirty-sixth month.

        $ 219,119.00 shall be due and payable on or before the first day of the
        thirty-seventh month through the forty-eighth month.

        $ 227,883.76 shall be due and payable on or before the first day of the
        forty-ninth month through the sixtieth month.

        $ 236,999.11 shall be due and payable on or before the first day of the
        sixty-first month through the seventy-second month.

        $ 246,479.07 shall be due and payable on or before the first day of the
        seventy-third month through the eighty-fourth month.

        $ 256,338.23 shall be due and payable on or before the first day of the
        eighty-fifth month through the ninety-sixth month.

        $ 266,591.76 shall be due and payable on or before the first day of the
        ninety-seventh month through the one hundred and eight-month.

        $ 277,255.43 shall be due and payable on or before the first day of the
        one hundred and ninth month through the one hundred and twentieth month.

        B. Time for Payment. In the event that the term of this Lease commences
on a date other than the first day of a calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord as rent for the
period from such date of commencement to the first day of the next succeeding
calendar month that proportion of the monthly rent hereunder which the number of
days between such date of commencement and the first day of the next succeeding
calendar month bears to thirty (30). In the event that the term of this Lease
for any reason ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month
to and including the last day of the term hereof that proportion of the monthly
rent hereunder which the number of days between said first day of said last
calendar month and the last day of the term hereof bears to thirty (30).

        C. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rent as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal five (5%) percent of each rental payment so
in default.

        D. Additional Rent. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord in addition to the Basic Rent and as
Additional Rent the following:

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        (1) All taxes relating to the Premises as set forth in Paragraph 12, and

        (2) All insurance premiums relating to the Premises, as set forth in
        Paragraph 15, and

        (3) All expenses for the operation, management, maintenance and repair
        of the Building (including common areas of the building) and Common
        Areas of the Premises and all other areas of the Premises as set forth
        in Paragraph 7, and

        (4) All charges, costs and expenses, which Tenant is required to pay
        hereunder, together with all interest and penalties, costs and expenses
        including attorney's fees and legal expenses, that may accrue thereto in
        the event of Tenant's failure to pay such amounts, and all damages,
        reasonable costs and expenses which Landlord may incur by reason of
        default of Tenant or failure on Tenant's part to comply with the terms
        of this Lease. In the event of nonpayment by Tenant of Additional Rent,
        Landlord shall have all the rights and remedies with respect thereto as
        Landlord has for nonpayment of rent.

The Additional Rent due hereunder shall be paid to Landlord or Landlord's agent
(i) within five days after presentation of invoice from Landlord or Landlord's
agent setting forth such Additional Rent and/or (ii) at the option of Landlord,
Tenant shall pay to Landlord monthly, in advance, the amount estimated by
Landlord to be Landlord's approximate average monthly expenditure for such
Additional Rent items, which estimated amount shall be reconciled at the end of
each calendar year as compared to Landlord's actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, upon demand, any amount
of actual expenses expended by Landlord in excess of said estimated amount, or
Landlord refunding to Tenant (providing Tenant is not then in default in the
performance of any of the terms, covenants and conditions of this Lease) any
amount of estimated payments made by Tenant in excess of Landlord's actual
expenditures for said Additional Rent items.

        The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

        E. Place of Payment of Rent and Additional Rent. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at 3260 Ash Street, Palo Alto, California
94306 , or to such other person or to such other place as Landlord may from time
to time designate in writing.

        F. Security Deposit. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord as more particularly determined in the
addendum, the sum of Two Million Three Hundred Thousand ($2,300,000.00) Dollars.
Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease
to be kept and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of rent and any of the monetary sums due
herewith, Landlord may (but shall not be required to) use, apply or retain all
or any part of this Security Deposit for the payment of any other amount which
Landlord may spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in the amount sufficient to restore the Security Deposit to its original amount.
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such Deposit. If Tenant
fully and faithfully performs every provision of this Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned to Tenant (or
at Landlord's option, to the last assignee of Tenant's interest hereunder) at
the expiration of the Lease term and after Tenant has vacated the Premises. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest whereupon Tenant
agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor.

5. RULES AND REGULATIONS AND COMMON AREA Subject to the terms and conditions of
this Lease and such Rules and Regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees, invitees and customers shall, have the
exclusive right to use the access roads, parking areas, and facilities provided
and designated by Landlord for the general use and convenience of the occupants
of the Premises, which areas and facilities are referred to herein as the
"Common Area". This right shall terminate upon the termination of this Lease.
Landlord reserves the right from time to time to make changes in the shape,
size, location, amount and extent of Common Area. Landlord further reserves the
right to promulgate such reasonable rules and regulations relating to the use of
the Common Area, and any part or parts thereof, as Landlord may deem appropriate
for the best interests of the occupants of the Premises. The Rules and
Regulations shall be binding upon Tenant upon delivery of a copy of them to
Tenant, and Tenant shall abide by them and cooperate in their observance. Such
Rules and Regulations may be amended by Landlord from time to time, with or
without advance notice, and all amendments shall be effective upon delivery of a
copy to Tenant. Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Premises of any of said
Rules and Regulations. Landlord shall operate,

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manage and maintain the Common Area. The manner in which the Common Area shall
be maintained and the expenditures for such maintenance shall be at the
discretion of Landlord.

6. PARKING Tenant shall have the exclusive right to use all parking spaces in
the parking areas of the Premises. Tenant shall not park nor permit to be
parked, any inoperative vehicle or equipment on any portion of the common
parking area or other common areas of the Premises. Tenant agrees to assume
responsibility for compliance by its employees with the parking provision
contained herein.

7. EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS OF THE
PREMISES. As Additional Rent and in accordance with Paragraph 4 D of this Lease,
Tenant shall pay to Landlord all expenses of operation, management (not to
exceed two percent of Basic Rent and Additional Rent payable), maintenance and
repair of the Common Areas of the Premises including, but not limited to,
license, permit and inspection fees; security; utility charges associated with
exterior landscaping and lighting (including water and sewer charges); all
charges incurred in the maintenance of landscaped areas, lakes, parking lots,
sidewalks, driveways; maintenance, repair and replacement of all fixtures and
electrical, mechanical and plumbing systems; structural elements (in the case of
structural elements, Tenant shall pay only where maintenance or repair is needed
due in whole or in part to Tenant's use, request, tenant improvement, act, or
negligence) and exterior surfaces of the buildings; salaries and employee
benefits of personnel and payroll taxes applicable thereto; supplies, materials,
equipment and tools; the cost of capital expenditures which have the effect of
reducing operating expenses, provided, however, that in the event Landlord makes
such capital improvements, Landlord shall amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not a rate
greater than the anticipated savings in the operating expenses.

        "Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.

8. ACCEPTANCE AND SURRENDER OF PREMISES Landlord shall deliver the Premises to
Tenant, and Tenant shall accept the building and improvements included in the
Premises in their present condition as of the date of this Lease, normal wear
and tear excepted, without representation or warranty by Landlord as to the
condition of such building or as to the use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant. Tenant agrees on the last day of the Lease term, or on
the sooner termination of this Lease, to surrender the Premises promptly and
peaceably to Landlord in good condition and repair (damage by Acts of God, fire,
normal wear and tear excepted), with all interior walls painted, or cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all
floors cleaned and waxed; all carpets cleaned and shampooed; the air
conditioning and heating equipment serviced by a reputable and licensed service
firm and in good operating condition (provided the maintenance of such equipment
has been Tenant's responsibility during the term of this Lease) together with
all alterations, additions and improvements which may have been made in, to, or
on the Premises (except movable trade fixtures installed at the expense of
Tenant) except that Tenant shall ascertain from Landlord within thirty (30) days
before the end of the term of this Lease whether Landlord desires to have the
Premises or any part or parts thereof restored to their condition and
configuration as when the Premises were delivered to Tenant and if Landlord
shall so desire, then Tenant shall restore said Premises or such part or parts
thereof before the end of this Lease at Tenant's sole cost and expense. Tenant,
on or before the end of the term or sooner termination of this Lease, shall
remove all of Tenant's personal property and trade fixtures from the Premises,
and all property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to same
shall thereupon pass to Landlord without compensation to Tenant. Landlord may,
upon termination of this Lease, remove all moveable furniture and equipment so
abandoned by Tenant, at Tenant's sole cost, and repair any damage caused by such
removal at Tenant's sole cost. If the Premises be not surrendered at the end of
the term or sooner termination of this Lease, Tenant shall indemnify Landlord
against loss or liability resulting from the delay by Tenant in so surrendering
the Premises including, without limitation, any claims made by any succeeding
tenant founded on such delay. Nothing contained herein shall be construed as an
extension of the term hereof or as a consent of Landlord to any holding over by
Tenant. The voluntary or other surrender of this Lease or the Premises by Tenant
or a mutual cancellation of this Lease shall not work as a merger and, at the
option of Landlord, shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.

9. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant, but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to
Landlord. Landlord reserves the right to approve all contractors and mechanics
proposed by Tenant to make any alterations and additions. Tenant shall retain
title to all moveable furniture and trade fixtures placed in the Premises. All
heating, lighting, electrical, air conditioning, partitioning, drapery,
carpeting and floor installations made by Tenant, together with all property
that has become an integral part of the Premises, shall not be deemed trade
fixtures. Tenant agrees that it will not proceed to make any alterations or

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additions, without having obtained consent from Landlord to do so, and until
five (5) days from the receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant
shall, if required by Landlord, secure at Tenant's own cost and expense, a
completion and lien indemnity bond, satisfactory to Landlord, for such work.
Tenant further covenants and agrees that any mechanic's lien filed against the
Premises or against the Complex for work claimed to have been done for, or
materials claimed to have been furnished to Tenant, will be discharged by
Tenant, by bond or otherwise, within ten (10) days after the filing thereof, at
the cost and expense of Tenant. Any exceptions to the foregoing must be made in
writing and executed by both Landlord and Tenant.

10. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, and in good and sanitary condition. Tenant's
maintenance and repair responsibilities herein referred to include, but are not
limited to, all windows, window frames, plate glass, glazing, truck doors,
plumbing systems (such as water and drain lines, sinks, toilets, faucets,
drains, showers and water fountains), electrical systems (such as panels,
conduits, outlet, lighting fixtures, lamps, bulbs, tubes, ballasts), heating and
air conditioning systems (such as compressors, fans, air handlers, ducts, mixing
boxes, thermostats, time clocks, boilers, heaters, supply and return grills),
store fronts, roofs, down spouts, all interior improvements within the Premises
including but not limited to wall coverings, window coverings, carpet, floor
coverings, partitioning, ceilings, doors (both interior and exterior, including
closing mechanisms, latches, locks), skylights (if any), automatic fire
extinguishing systems, and all other interior improvements of any nature
whatsoever. Tenant agrees to provide carpet shields under all rolling chairs or
to otherwise be responsible for wear and tear of the carpet caused by such
rolling chairs if such wear and tear exceeds that caused by normal foot traffic
in surrounding areas. Areas of excessive wear shall be replaced at Tenant's sole
expense upon Lease termination. Tenant hereby waives all rights under, and
benefits of, subsection 1 of Section 1932 and Section 1941 and 1942 of the
California Civil Code and under any similar law, statute or ordinance now or
hereafter in effect.

11. UTILITIES Tenant shall pay promptly, as the same become due, all charges for
water, gas, electricity, telephone, telex and other electronic communications
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed.

        Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

12. TAXES A. As Additional Rent and in accordance with paragraph 4D of this
Lease, Tenant shall pay to Landlord all Real Property Taxes allocated to the
leases Premises. The term "Real Property Taxes", as used herein, shall mean (i)
all taxes, assessments, levies and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any general or special
assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership of the Premises) now or
hereafter imposed by any government or quasi-governmental authority or special
district having the direct or indirect power to tax or levy assessments, which
are levied or assessed against, or with respect to the value, occupancy or use
of, all or any portion of the Premises (as now constructed or as may at any time
hereafter be constructed, altered, or otherwise changed) or Landlord's interest
therein; any improvements located within the Premises (regardless of ownership);
the fixtures, equipment and other property of Landlord, real or personal, that
are an integral part of and located in the Premises; or parking areas, public
utilities, or energy within the Premises; (ii) all charges, levies or fees
imposed by reason of environmental regulation or other governmental control of
the Premises; and (iii) all costs and fees (including attorney's fees) incurred
by Landlord in contesting any Real Property Tax and in negotiating with public
authorities as to any Real Property Tax. If at any time during the term of this
Lease the taxation or assessment of the Premises prevailing as of the
commencement date of this Lease shall be altered so that in lieu of or in
addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Premises or
Landlord's interest therein or (ii) on or measured by the gross receipts, income
or rentals from the Premises, on Landlord's business of leasing the Premises, or
computed in any manner with respect to the operation of the Premises, then any
such tax or charge, however designated, shall be included within the meaning of
the term "Real Property Taxes" for purposes of this Lease. If any Real Property
Tax is based upon property or rents unrelated to the Premises, then only that
part of such Real Property Tax that is fairly allocable to the Premises shall be
included within the meaning of the term "Real Property Taxes". Notwithstanding
the foregoing, the term "Real Property Taxes" shall not include estate,
inheritance, gift or franchise taxes of Landlord or the federal or state net
income tax imposed on Landlord's income from all sources.

<PAGE>   6
        B.     Taxes on Tenant's Property

(1) Tenant shall be liable for and shall pay ten days before delinquency, taxes
levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant and if Landlord, after
written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand,
as the case may be, repay to Landlord the taxes so levied against Landlord, or
the proportion of such taxes resulting from such increase in the assessment;
provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes so paid under
protest, and any amount so recovered shall belong to Tenant.

(2) If the tenant improvements in the Premises, whether installed and/or paid
for by Landlord or Tenant and whether or not affixed to the real property so as
to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which standard office improvements in
other space in the Complex are assessed, then the real property taxes and
assessments levied against Landlord or the Complex by reason of such excess
assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of 12 A (i), above. If the
records of the County Assessor are available and sufficiently detailed to serve
as a basis for determining whether said tenant improvements are assessed at a
higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

13. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of Commercial General Liability insurance
with limits in the amount of $2,000,000/$2,000,000 combined for injuries to or
death of persons occurring in, on or about the Premises, and property damage
insurance with limits of $500,000. The policy or policies affecting such
insurance, copies of which shall be furnished to Landlord, shall name Landlord
and Property Manager as additional insured, and shall insure any liability of
Landlord and Property Manager, contingent or otherwise, as respects acts or
omissions of Tenant, its agents, employees or invitees or otherwise by any
conduct or transactions of any of said persons in or about or concerning the
Premises, including any failure of Tenant to observe or perform any of its
obligations hereunder; shall be issued by an insurance company admitted to
transact business in the State of California; and shall provide that the
insurance effected thereby shall not be canceled, except upon thirty (30) days'
prior written notice to Landlord. If, during the term of this Lease, in the
considered opinion of Landlord's Lender, insurance advisor or counsel, the
amount of insurance described in this paragraph 13 is not adequate, Tenant
agrees to increase said coverage to such reasonable amount as Landlord's Lender,
insurance advisor or counsel shall deem adequate.

14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKER'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
on a "special form" basis with a sprinkler leakage endorsement insuring the
personal property, inventory, trade fixtures and leasehold improvements within
the leased Premises for the full replacement value thereof. The proceeds from
any of such policies shall be used for the repair or replacement of such items
so insured.

        Tenant shall also maintain a policy or policies of worker's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

15. PROPERTY INSURANCE Landlord shall purchase and keep in force and, as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord all of the cost of policy or policies of insurance covering loss
or damage to the Premises in the amount of the full replacement value thereof,
providing protection against those perils included within the classification of
"special form" insurance and flood and/or earthquake insurance, if available,
plus a policy of rental income insurance in the amount of one hundred (100%)
percent of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If
such insurance costs is increased due to Tenant's use of the Premises, Tenant
agrees to pay to Landlord the full cost of such increase. Tenant shall have no
interest in nor any right to the proceeds of any insurance procured by Landlord.

          Landlord and Tenant do each hereby respectively release the other, to
the extent of insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause
of such fire or casualty; provided, however, that if the insurance policy of
either releasing party prohibits such waiver, then this waiver shall not take
effect until consent to such waiver is obtained. If such waiver is so
prohibited, the insured party affected shall promptly notify the other party
thereof.

16. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the roof, walls, basement or other portion of the
Premises but excluding, however, the negligence of Landlord, its agents,
servants, employees, invitees, or contractors of which negligence
<PAGE>   7

Landlord has knowledge and reasonable time to correct. Except as to injury to
persons or damage to property the principal cause of which is the negligence of
Landlord, Tenant shall hold Landlord harmless from and defend Landlord against
any and all expenses, including reasonable attorney's fees, in connection
therewith, arising out of any injury to or death of any person or damage to or
destruction of property occurring in, on or about the Premises, or any part
thereof, from any cause whatsoever.

17. COMPLIANCE Tenant, as its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgement of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such law, statute, ordinance
or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This paragraph shall not
be interpreted as requiring Tenant to make structural changes or improvements,
except to the extent such changes or improvements are required as a result of
Tenant's use of the Premises. Tenant shall, at its sole cost and expense, comply
with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and
public liability insurance covering the Premises.

18. LIENS Tenant shall keep the Premises free from any liens arising out of any
work performed, materials furnished or obligation incurred by Tenant. In the
event that Tenant shall not, within ten (10) days following the imposition of
such lien, cause the same to be released of record, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.

19. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. As a condition to
granting its consent to any subletting that requires Landlord's consent,
Landlord may require that Tenant agrees to pay to Landlord, as additional rent,
fifty (50%) percent of all rents received by Tenant from its subtenants in
excess of the rent payable by Tenant to Landlord hereunder after Tenant first
deducts its reasonable costs of subletting the Premises including the cost of
brokerage commissions, if any, and the cost of tenant improvements made to the
Premises at Tenant's expense, amortized over the term of this Lease. Tenant
shall, by sixty (60) days written notice, advise Landlord of its intent to
sublet the Premises or any portion thereof for any part of the term, and Tenant
shall deliver to Landlord copies of the proposed assignment or sublease
documents, financial statements of the proposed assignee or subtenant, and such
other related documents as Landlord reasonably requests. Upon receipt of said
notice as to any subletting requiring Landlord's consent, Landlord may, in its
sole discretion, elect to terminate this Lease as to the portion of the Premises
described in Tenant's notice on the date specified in Tenant's notice, for the
commencement of the term of the sublease, except for any sublease of less than
fifty (50%) percent of the Premises (unless said sublease results in a
cumulative subleasing of more than fifty (50%) percent of the Premises), any
sublease for a term of two (2) years or less (except for a sublease which
includes in its term any part of the last year of the Lease), or any sublease to
Risk Management Solutions, Inc. which commences effective January 1, 2001. If,
however, this Lease shall terminate pursuant to the foregoing with respect to
less than all the Premises, the rent, as defined and reserved hereinabove shall
be adjusted on a pro-rata basis to the number of square feet retained by Tenant,
and this Lease as so amended shall continue in full force and effect. In the
event Tenant is allowed to assign, transfer or sublet the whole or any part of
the Premises, with the prior written consent of Landlord, no assignee,
transferee or subtenant shall assign or transfer this Lease, either in whole or
in part, or sublet the whole or any part of the premises, without also having
obtained the prior written consent of Landlord. A consent of Landlord to one
assignment, transfer, hypothecation, subletting, occupation or use by any other
person shall not release Tenant from any of Tenant's obligations hereunder or be
deemed to be a consent to any subsequent similar or dissimilar assignment,
transfer, hypothecation, subletting, occupation or use by any other person. Any
such assignment, transfer, hypothecation, subletting, occupation or use without
such consent shall be void and shall constitute a breach of this Lease by Tenant
and shall, at the option of Landlord exercised by written notice to Tenant,
terminate this Lease. The leasehold estate under this Lease shall not, nor shall
any interest therein, be assignable for any purpose by operation of law without
the written consent of Landlord. As a condition to its consent, Landlord may
require Tenant to pay all reasonable expenses (not to exceed two thousand
($2,000.00) dollars) in connection with the assignment, and Landlord may require
Tenant's assignee or transferee (or other assignees or transferees) to assume in
writing all of the obligations under this Lease. Notwithstanding anything to the
contrary contained herein, with notice to Landlord and delivery of relevant
documents, but without the necessity of Landlord's consent, Tenant shall have
the right to assign this Lease in connection with any merger, consolidation or
sale of all or substantially all of the assets of Tenant; and to assign this
Lease or sublet the Premises or any part thereof to any corporation or other
entity which controls, is controlled by or is under common control with Tenant.

<PAGE>   8
For the purposes hereof, "control" shall mean the power to direct the management
of an entity through voting rights, ownership or contractual obligations.

20. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. In such event, Tenant shall be provided with a nondisturbance agreement
in form reasonably satisfactory to Tenant executed by Lender. Tenant hereby
irrevocably appoints Landlord the attorney in fact of Tenant to execute, deliver
and record any such instrument or instruments for and in the name and on behalf
of Tenant. Notwithstanding any such subordination, Tenant's possession under
this Lease shall not be disturbed if Tenant is not then in default and so long
as Tenant shall pay all rent and observe and perform all of the provisions set
forth in this Lease.

21. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have
the right to enter the Premises upon reasonable prior notice to Tenant to
inspect them; to perform any services to be provided by Landlord hereunder; to
submit the Premises to prospective purchasers, mortgagers or tenants; to post
notices of nonresponsibility; and to alter, improve or repair the Premises, all
without abatement of rent; and may erect scaffolding and other necessary
structures in or through the Premises where reasonably required by the character
of the work to be performed; provided, however, that the business of Tenant
shall be interfered with to the least extent that is reasonably practical. For
each of the foregoing purposes, Landlord shall at all times have and retain a
key with which to unlock all of the doors in an emergency in order to obtain
entry to the Premises, and any entry to the Premises obtained by Landlord by any
of said means, or otherwise, shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into or a detainer of the Premises or
an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. Landlord shall also have the right at any time to change the
arrangement or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, toilets or other public parts of the Premises and
to change the name, number or designation by which the Premises is commonly
known, and none of the foregoing shall be deemed and actual or constructive
eviction of Tenant, or shall entitle Tenant to any reduction of rent hereunder.

22. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.

   Within thirty (30) days after court approval of the assumption of this Lease,
the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.

   Nothing contained in this section shall affect the existing right of Landlord
to refuse to accept an assignment upon commencement of or in connection with a
bankruptcy, liquidation, reorganization or insolvency action or an assignment of
Tenant for the benefit of creditors or other similar act. Nothing contained in
this Lease shall be construed as giving or granting or creating an equity in the
demised Premises to Tenant. In no event shall the leasehold estate under this
Lease, or any interest therein, be assigned by voluntary or involuntary
bankruptcy proceeding without the prior written consent of Landlord. In no event
shall this Lease or any rights or privileges hereunder be an asset of Tenant
under any bankruptcy, insolvency or reorganization proceedings.

   The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustments
thereto. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any other default under this Lease.
Upon an uncured default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:

        (a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of rental loss for the same period
that Tenant proves could be reasonably avoided, as computed pursuant to
subsection (b) of said Section 1951.2. Any proof by Tenant under subparagraphs
(2) and (3) of Section 1951.2 of the California Civil Code of the amount of
rental loss

<PAGE>   9

that could be reasonably avoided shall be made in the following manner: Landlord
and Tenant shall each select a licensed real estate broker in the business of
renting property of the same type and use as the Premises and in the same
geographic vicinity. Such two real estate brokers shall select a third licensed
real estate broker, and the three licensed real estate brokers so selected shall
determine the amount of the rental loss that could be reasonably avoided from
the balance of the term of this Lease after the time of award. The decision of
the majority of said licensed real estate brokers shall be final and binding
upon the parties hereto.

        (b) The rights and remedies provided by California Civil Code which
allows Landlord to continue the Lease in effect and to enforce all of its rights
and remedies under this Lease, including the right to recover rent as it becomes
due, for so long as Landlord does not terminate Tenant's right to possession;
acts of maintenance or preservation, efforts to relet the Premises, or the
appointment of a receiver upon Landlord's initiative to protect its interest
under this Lease shall not constitute a termination of Tenant's right to
possession.

        (c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.

        (d) The right and power, as attorney-in-fact for Tenant, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant,
and to sell such property and apply such proceeds therefrom pursuant to
applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its sole discretion may be deem advisable, with the right
to make alterations and repairs to the Premises. Upon each subletting, (i)
Tenant shall be immediately liable to pay Landlord, in addition to indebtedness
other than rent due hereunder, the cost of such subletting, including, but not
limited to, reasonable attorney's fees, and any real estate commissions actually
paid, and the cost of such alterations and repairs incurred by Landlord and the
amount, if any, by which the rent hereunder for the period of such subletting
(to the extent such period does not exceed the term hereof) exceeds the amount
to be paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment
of indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the payment of any costs of such subletting and of such alterations and
repairs; third to payment of rent due and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future rent as the same
becomes due hereunder. If Tenant has been credited with any rent to be received
by such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such subletting
under option (ii) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord.
Such deficiency shall be calculated and paid monthly. For all purposes set forth
in this subparagraph (d), Landlord is hereby irrevocably appointed
attorney-in-fact for Tenant, with power of substitution. No taking possession of
the Premises by Landlord, as attorney-in-fact for Tenant, shall be construed as
an election on its part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such subletting without
termination, Landlord may at any time hereafter elect to terminate this Lease
for such previous breach.

        (e) The right to have a receiver appointed for Tenant upon application
by Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subparagraph (d)
above.

23. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate, or surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.

24. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, except for routine maintenance and repairs and incidental damage and
destruction caused from vandalism and accidents for which Tenant is responsible
for under Paragraph 10, Landlord may, at its option:

        (a) Rebuild or restore the Premises to their condition prior to the
        damage or destruction, or

        (b)  Terminate this Lease.

        If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any

<PAGE>   10

improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.

        Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4
of the California Civil Code.

        In the event that the building is damaged or destroyed to the extent of
not less than 33 1/3% of the replacement cost thereof, Landlord may elect to
terminate this Lease, whether the Premises be injured or not. In the event the
destruction of the Premises is caused by Tenant, Tenant shall pay the deductible
portion of Landlord's insurance proceeds.

25. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.

        If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any portion thereof, or (ii) any of the forgoing events occur
with respect to the taking of any space in the Premises not leased hereby, or if
any such spaces so taken or conveyed in lieu of such taking and Landlord shall
decide to discontinue the use and operation of the Premises, or decide to
demolish, alter or rebuild the Premises, then in any of such events Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice, or
commencement of said action or proceeding, or taking conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.

        In the event of such a partial taking or conveyance of the Premises, if
the portion of the Premises taken or conveyed is so substantial that the Tenant
can no longer reasonably conduct its business, Tenant shall have the privilege
of terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the rent from the date of such taking or conveyance to the date of
termination.

        If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.

26. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then
constituting Landlord, upon the written assumption of the obligations of the
Landlord arising under this Lease from and after the date of the sale or
conveyance, the transferor shall thereby be released from any further liability
upon any of the terms, covenants or conditions (express or implied) herein
contained in favor of Tenant, and in such event, insofar as such transfer is
concerned, Tenant agrees to look solely to the responsibility of the successor
in interest of such transferor in and to the Premises and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor as of the date of
transfer.

27. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in
the leased Premises (whether such interest of Landlord is a fee title interest
or a leasehold interest) is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by
exercise of a power of sale at private trustee's foreclosure sale, Tenant hereby
agrees to attorn to the purchaser at any such foreclosure sale and to recognize
such purchaser as the Landlord under this Lease. In the event the lien of the
deed of trust securing the loan from a Lender to Landlord is prior and paramount
to the Lease, this Lease shall nonetheless continue in full force and effect for
the remainder of the unexpired term hereof, at the same rental herein reserved
and upon all the other terms, conditions and covenants herein contained.

28. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of the
term of this lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.

<PAGE>   11

29. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten (10)
days' prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modifications
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that no more than one month's rent has been paid in
advance.

30. CONSTRUCTION CHANGES It is understood that the description of the Premises
and the location of the ductwork, plumbing and other facilities therein are
subject to such minor changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises, and no such changes,
or any changes in plans for any other portions of the Premises shall affect this
Lease or entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.

31. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for five (5) days
after written notice thereof by Landlord. Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obligated
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment of performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord or demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of non payment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.

32.     ATTORNEYS FEES

        (A) In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorney's
fees, incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgement.

        (B) Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.

33. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.

34. NOTICES All notices, demands, requests, advices or designations which may be
or are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at 3260 Ash Street, Palo Alto, California
94306.

Each notice, request, demand advice or designation referred to in this paragraph
shall be deemed to be given on the date of actual receipt by or on behalf of
Tenant, or refusal to accept. Any such notice, request, demand, advice or
designation may also be sent by a nationally recognized private courier (i.e.
Federal Express, DHL, UPS, etc.).

35. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant. Landlord and Tenant mutually intend
that neither shall have any binding contractual obligations to the other with

<PAGE>   12

respect to the matters referred to herein unless and until this instrument has
been fully executed by both parties.

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

37. CORPORATE AUTHORITY Each individual executing this Lease on behalf of Tenant
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of Tenant in accordance with the by-laws of Tenant. Tenant
represents that this Lease is binding upon Tenant in accordance with its terms.

38.     (deleted)

39. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:

        (i)     the sole and exclusive remedy shall be against Landlord's
                interest in the Premises;

        (ii)    no partner of Landlord shall be sued or named as a party in any
                suit or action (except as may be necessary to secure
                jurisdiction of the partnership);

        (iii)   no service of process shall be made against any partner of
                Landlord (except as may be necessary to secure jurisdiction of
                the partnership);

        (iv)    no partner of Landlord shall be required to answer or otherwise
                plead to any service of process;

        (v)     no judgement will be taken against any partner of Landlord;

        (vi)    any judgement taken against any partner of Landlord may be
                vacated and set aside at any time without hearing;

        (vii)   no writ of execution will ever be levied against the assets of
                any partner of Landlord;

        (viii)  these covenants and agreements are enforceable both by Landlord
                and also by any partner of Landlord.

        (ix)    The term, "Landlord", as used in this section, shall mean only
                the owner or owners from time to time of the fee title or the
                tenant's interest under a ground lease of the Premises described
                in Exhibit "A", and in the event of any transfer of such title
                or interest, Landlord herein named (and in case of any
                subsequent transfers the then grantor) shall be relieved from
                and after the date of such transfer of all liability as respects
                Landlord's obligations thereafter to be performed, provided that
                any funds in the hands of Landlord or the then grantor at the
                time of such transfer, in which Tenant has an interest, shall be
                delivered to the grantee. Similarly, the obligations contained
                in this Lease to be performed by Landlord shall be binding on
                Landlord's successors and assigns only during their respective
                periods of ownership. Tenant agrees that each of the foregoing
                covenants and agreements shall be applicable to any covenant or
                agreement either expressly contained in this Lease or imposed by
                statute or at common law.

40. BROKERS Tenant warrants that it had dealing with only of the following real
estate brokers or agents in connection with the negotiation of this Lease:
Cornish and Carey Commercial (Tenant) agrees to pay all commissions due C&C and
that it knows of no other real estate broker or agent who is entitled to a
commission in connection with this Lease.

41. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside of the
Premises or any exterior windows of the Premises without the written consent of
Landlord first had and obtained and Landlord shall have the right to remove any
such sign, placard, picture, advertisement, name or notice without notice to and
at the expense of Tenant. If Tenant is allowed to print or affix or in any way
place a sign in, on, or about the Premises, then upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such manner as to restore all aspects
of the appearance of the Premises to the condition prior to the placement of
said sign.

        All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

42. FINANCIAL STATEMENTS In the event Tenant tenders to Landlord any information
on the financial stability, creditworthiness or ability of the Tenant to pay the
rent due and owing under the Lease, then Landlord shall be entitled to rely upon
the information provided in determining whether or not to enter into this Lease
Agreement with Tenant and Tenant hereby represents and warrants to Landlord the
following: (i) That all documents provided by Tenant to Landlord are true and
correct copies of the original; and (ii) Tenant has not withheld any information
from Landlord which is material to Tenant's creditworthiness, financial
condition or ability

<PAGE>   13
to pay the rent; and (iii) all information supplied by Tenant to Landlord is
true, correct and accurate; and (iv) no part of the information supplied by
Tenant to Landlord contains misleading or fraudulent statements.

        A default under this paragraph shall be a non-curable default on behalf
of Tenant and Landlord shall be entitled to pursue any right or remedy available
to Landlord under the terms of this Lease or available to Landlord under the
laws of the State of California.

43.     HAZARDOUS MATERIALS

        A. As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property including all of those materials and substances designated or
defined as "hazardous" or "toxic" by (i) the Environmental Protection Agency,
the California Water Quality Control Board, the Department of Labor, the
California Department of Industrial Relations, the Department of Transportation,
the Department of Agriculture, the Consumer Product Safety Commission, the
Department of Health and Human Services, the Food and Drug Agency or any other
governmental agency now or hereafter authorized to regulate materials and
substances in the environment, or by (ii) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., as
amended; the Hazardous Materials Transportation Act, 49 U.S.C. 1801, et seq., as
amended; the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., as
amended; the Hazardous Waste Control Law, California Health & Safety Code 25100
et seq., as amended; Sections 66680 through 66685 of Title 22 of the California
Administration Code, Division 4, Chapter 30, as amended; and in the regulations
adopted and publications promulgated pursuant to said laws.

        B. Tenant shall not cause or permit any Hazardous Material to be
improperly or illegally used, stored, discharged, released or disposed of in,
from, under or about the Premises, or any other land or improvements in the
vicinity of the Premises. Without limiting the generality of the foregoing,
Tenant, at its sole cost, shall comply with all laws relating to Hazardous
Materials. If the presence of Hazardous Materials on the Premises caused or
permitted by Tenant results in contamination of the Premises or any soil in or
about the Premises, Tenant, at its expense shall promptly take all actions
necessary to return the Premises to the condition existing prior to the
appearance of such Hazardous Material. The termination of this Lease shall not
terminate or reduce the liability or obligation of Tenant under this Section, or
as may be required by law, to clean up, monitor or remove any Hazardous
Materials from the Premises.

        Tenant shall defend, hold harmless and indemnify Landlord and its agents
and employees with respect to all claims, damages and liabilities arising out of
or in connection with any Hazardous Material used, stored, discharged, released
or disposed of in, from, under or about the Premises, where said Hazardous
Material is or was attributable to the activities of Tenant, its agents or
contractors during the Lease term and whether or not Tenant had knowledge of
such Hazardous Material, including, without limitation, any cost of monitoring
or removal, any reduction in the fair market value or fair rental value of the
Premises and any loss, claim or demand by any third person or entirely relating
to bodily injury or damage to real or personal property.

        Tenant shall not suffer any lien to be recorded against the Premises as
a consequence of a Hazardous Material, including any so called state, federal or
local "super fund" lien related to the "clean up" of a Hazardous Material in or
about the Premises, where said Hazardous Material is or was attributable to the
activities of Tenant.

        C. In the event Hazardous Materials are discovered in or about the
Premises, and Landlord has substantial reason to believe that Tenant was
responsible for the presence of the Hazardous Material, then Landlord shall have
the right to appoint a consultant, at Tenant's expense, to conduct an
investigation to determine whether Hazardous Materials are located in or about
the Premises and to determine the corrective measures, if any, required to
remove such Hazardous Materials. Tenant, at its expense, shall comply with all
recommendations of the consultant, as required by law. To the extent it is
determined that Tenant was not responsible for the presence of the Hazardous
Materials, then Landlord shall reimburse Tenant for any costs incurred by
Landlord and paid by Tenant under the terms of this paragraph 45.C.

        Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant or the Premises
concerning a Hazardous Material. Tenant acknowledges that Landlord, as the owner
of the Property, at its election, shall have the sole right, at Tenant's
expense, to negotiate, defend, approve and appeal any action taken or order
issued with regard to a Hazardous Material by an applicable governmental
authority. Provided Tenant is not in default under the terms of this Lease,
Tenant shall likewise have the right to participate in any negotiations,
approvals or appeals of any actions taken or orders issued with regard to the
Hazardous Material and Landlord shall not have the right to bind Tenant in said
actions or orders.

        D. It shall not be unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if (i) the proposed assignee's or
subtenant's anticipated use of the Premises involves the storage, use or
disposal of Hazardous Material; (ii) if the proposed assignee or subtenant has
been required by any prior landlord, lender, or governmental authority to "clean
up" Hazardous Material"; (iii) if the proposed assignee or subtenant is subject
to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material.
<PAGE>   14

        E. Tenant shall surrender the Premises to Landlord, upon the expiration
or earlier termination of the Lease, free of Hazardous Materials which are or
were attributable to Tenant. If Tenant fails to so surrender the Premises,
Tenant shall indemnify and hold Landlord harmless from all damages resulting
from Tenant's failure to surrender the Premises as required by this paragraph,
including, without limitation, any claims or damages in connection with the
condition of the Premises including, without limitation, damages occasioned by
the inability to relet the Premises or a reduction in the fair market and/or
rental value of the Premises by reason of the existence of any Hazardous
Materials, which are or were attributable to the activities of Tenant, in or
around the Premises.

        Notwithstanding any provision to the contrary in this Lease, if any
action is required to be taken by a governmental authority to clean-up, monitor
or remove any Hazardous Materials, which are or were attributable to the
activities of Tenant, from the Premises and such action is not completed prior
to the expiration or earlier termination of the Lease, then at Landlord's
election (i) this Lease shall be deemed renewed for a term commencing on the
expiration date of this Lease and ending on the date the clean-up, monitoring or
removal procedure is completed (provided, however, that the total term of this
Lease shall not be longer than 34 years and 11 months); or (ii) Tenant shall be
deemed to have impermissibly held over and Landlord shall be entitled to all
damages directly or indirectly incurred in connection with such holding over,
including without limitation damages occasioned by the inability to relet the
Premises or a reduction in the fair market and/or fair rental value of the
Premises by reason of the existence of the Hazardous Material.

        F. Upon the Lease Commencement Date, Tenant shall provide to Landlord a
complete list of all chemicals, toxic waste or Hazardous Materials employed by
Tenant within the Premises. Throughout the terms of the Lease, Tenant shall
continue to update this list of chemicals, contaminants and Hazardous Materials.

        G. To the best of Landlord's knowledge, the Premises are free of
Hazardous Material. Tenant will not be held liable for the presence, clean-up,
or removal of Hazardous Material existing in the Building prior to the time of
Tenant's Lease commencement.

44.     MISCELLANEOUS AND GENERAL PROVISIONS

        a.      Tenant shall not, without the written consent of Landlord, use
                the name of the building for any purpose other than as the
                address of the business conducted by Tenant in the Premises.

        b.      This Lease shall in all respects be governed by and construed in
                accordance with the laws of the State of California. If any
                provision of this Lease shall be invalid, unenforceable or
                ineffective for any reason whatsoever, all other provisions
                hereof shall be and remain in full force and effect.

        c.      The term "Premises" includes the space leased hereby and any
                improvements now or hereafter installed therein or attached
                thereto. The term "Landlord" or any pronoun used in place
                thereof includes the plural as well as the singular and the
                successors and assigns of Landlord. The term "Tenant" or any
                pronoun used in place thereof includes the plural as well as the
                singular and individuals, firms, associations, partnerships and
                corporations, and their and each of their respective heirs,
                executors, administrators, successors and permitted assigns,
                according to the context hereof, and the provisions of this
                Lease shall inure to the benefit of and bind such heirs,
                executors, administrators, successors and permitted assigns. The
                term "person" includes the plural as well as the singular and
                individuals, firms, associations, partnerships and corporations.
                Words used in any gender include other genders. If there be more
                than one Tenant the obligations of Tenant hereunder are joint
                and several. The paragraph headings of this Lease are for
                convenience of reference only and shall have no effect upon the
                construction or interpretation of any provision hereof.

        d.      Time is of the essence of this Lease and of each and all of its
                provisions.

        e.      At the expiration or earlier termination of this Lease, Tenant
                shall execute, acknowledge and deliver to Landlord, within ten
                (10) days after written demand from Landlord to Tenant, any
                quitclaim deed or other document required by any reputable title
                company, licensed to operate in the State of California, to
                remove the cloud or encumbrance created by this Lease from the
                real property of which Tenant's Premises are a part.

        f.      This instrument along with any exhibits and attachments hereto
                constitutes the entire agreement between Landlord and Tenant
                relative to the Premises and this agreement and the exhibits and
                attachments may be altered, amended or revoked only by an
                instrument in writing signed by both Landlord and Tenant.
                Landlord and Tenant hereby agree that all prior or
                contemporaneous oral agreements between and among themselves and
                the agents or representatives relative to the leasing of the
                Premises are merged in or revoked by this agreement.

        g.      Neither Landlord nor Tenant shall record this Lease or a short
                form memorandum hereof without the consent of the other.

<PAGE>   15

        h.      Tenant further agrees to execute any amendments required by a
                lender to enable Landlord to obtain financing, so long as
                Tenant's rights hereunder are not substantially affected.

        i.      deleted

        j.      Clauses, plats and riders, if any, signed by Landlord and Tenant
                and endorsed on or affixed to this Lease are a part hereof.

        k.      Tenant covenants and agrees that no diminution or shutting off
                of light, air or view by any structure which may be hereafter
                erected (whether or not by Landlord) shall in any way affect
                this Lease, entitle Tenant to any reduction of rent hereunder or
                result in any liability of Landlord to Tenant.

        l.      In addition to any applicable late charges, any payment due
                Landlord under the Lease which is not received within ten (10)
                days of its due date shall accrue interest from the due date at
                the rate of ten (10) percent per annum.

45. OPTION TO EXTEND Tenant is given a one-time option to extend the initial
term on all the provisions, covenants, rights and obligations contained in this
Lease, except with respect to Basic rent payable, for one (1) five (5)-year
period beginning immediately following the initial Lease term, by giving written
notice of the exercise of the option (the "Option Notice") to Landlord not less
than one (1) year prior to the expiration of the original Lease term.

        A.     If Tenant is in default on the date of giving the Option Notice,
               and Tenant does not cure such default as provided for in
               Paragraph 22 of the Lease, the Option Notice shall be void and of
               no effect. If Tenant is in default on the date the Option Term is
               to commence, and Tenant does not cure such default as provided
               for in Paragraph 22 of the Lease, then, at the sole election of
               Landlord, such term shall not commence and this Lease shall
               expire at the end of the initial term.

        B.     The Basic rent payable during the Option term shall be equal to
               the then prevailing fair market rental value of the Premises as
               determined with reference to comparable buildings in the area, as
               Landlord and Tenant may agree, in no event, however, shall basic
               rent payable during the option term be less than the last month's
               basic rent for the initial term of the lease.

        C.     Following Landlord's receipt of the Option Notice, Landlord and
               Tenant shall in good faith proceed to determine the appropriate
               Basic Rent rate applicable, as outlined in Paragraph 46B. If
               Landlord and Tenant do not agree on the fair market rental value
               within a 60-day period, then the fair market value shall be
               determined by a local, licensed commercial real estate agent or
               appraiser acceptable to both Landlord and Tenant within an
               additional 30 day period.

        D.     If the parties hereto fail to agree on a fair market rate, as
               specified in Paragraph 46C above, then, within an additional 10
               day period, Landlord and Tenant shall each select an additional
               licensed commercial real estate agent or appraiser and the
               determination of the three together, made within 30 days of their
               selection, shall be binding upon both Landlord and Tenant as to
               the fair market rate.

46. FIRST MONTH'S RENT AND SECURITY DEPOSIT - The first month's Basic Rent shall
be due upon execution of the Lease in the amount of $194,796.00. A Security
Deposit equal to 10 months of Basic Rent (a rounded average over the lease term
of $230,000 per month) held by Landlord as follows: two (2) months in cash
($460,000.00) due upon execution of the Lease, and eight (8) months
($1,840,000.00) in the form of a letter of credit acceptable to Landlord,
executed and delivered to Landlord within ten (10) days of Lease execution. So
long as Tenant is not in default and Tenant has a cash bank balance in excess of
$100,000,000.00 (more specifically that the average over the preceding twelve
(12) month period has been greater than $100,000,000.00 and that the actual
balance on the anniversary date of the Lease is greater than the same amount),
the value of the letter of credit portion of the Security Deposit will decline
by ten (10) percent of the total value of the Security Deposit each year on the
anniversary date of the Lease until the value of the letter of credit is zero.
The cash portion of the Security Deposit will be held by Landlord throughout the
term of the lease according to the terms of paragraph 4.F.

47. COMPLIANCE - The Tenant is aware that a tenant of real property may be
subject to the Americans With Disabilities Act (the ADA), a Federal law codified
at 42 USC Section 12101 et seq. Among other requirements of the ADA that could
apply to the leased Premises, Title lll of the ADA requires owners and tenants
of "public accommodations" to remove barriers to access by disabled persons

<PAGE>   16

and provide auxiliary aids and services for hearing, vision or speech impaired
persons by January 26, 1992. The regulations under Title lll of the ADA are
codified at 28 CFR Part 36.

Landlord makes no representation or warranty as to the physical condition of the
premises nor its compliance with any laws or regulations of any government
agency having authority regarding the ADA or other compliance issues.

48. TENANT IMPROVEMENTS - Tenant agrees to lease the Premises in an "as-is"
condition, and any alteration or modifications to the Premises shall be made in
accordance with paragraphs 8 & 9 of the Lease and shall not delay the
commencement of the Lease nor delay the payment of rent and such modifications
shall be at Tenant's sole cost and expense.

49. PROPERTY, PREMISES, COMPLEX - The words "Property", "Premises", and
"Complex" in the text of the Lease and Addendum shall be interchangeable by
definition.

50. STOCK OPTIONS - Prior to November 30, 2000, Tenant shall issue to Landlord
20,000 options for shares of common stock in Broadbase Software, Inc. at a price
below the current market price on the date the lease is dated. Options shall be
issued one-half in the name of J. Robert S. Wheatley and one-half in the name of
Roger A. Fields.

  IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease
as of the day and year first above written.

<TABLE>
<S>                                    <C>
LANDLORD:                              TENANT:
J. Robert S. Wheatley and              Broadbase Software, Inc.
Roger A. Fields d.b.a                  A Delaware Corporation
R & R Properties
</TABLE>

By:  J. Robert S. Wheatley, Owner
Signature:   /s/     J. Robert S. Wheatley
             ----------------------------------

By:  Roger A. Fields, Owner
Signature:   /s/     Roger A. Fields
             ----------------------------------

Date: August 11, 2000

<PAGE>   17

                                   EXHIBIT "A"

                              (outline of Premises)

<PAGE>   18

                      RULES AND REGULATIONS OF THE BUILDING

                                       1.

No sign, placard, picture, advertisement, name or notice shall be inscribed,
displayed or printed or affixed on or to any part of the outside of the Premises
or any exterior windows of the Premises without the written consent of Landlord
first had and obtained and Landlord shall have the right to remove any such
sign, placard, picture, advertisement, name or notice without notice and at the
expense of Tenant.

All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.

Tenant shall not place anything or allow anything to be placed near the glass of
any window, door partition or wall which may appear unsightly from outside the
Premises.

                                       2.

Tenant shall not occupy or permit any portion of the Premises to be occupied for
the manufacture or sale of liquor, narcotics or tobacco in any form.

                                       3.

The bulletin board or directory of the Premises will be provided for the display
of the number and location of Tenant, and Landlord will provide directory
service to a reasonable extent for Tenant at initial occupancy. Charges
thereafter shall be at Tenant's expense.

                                       4.

The sidewalks, passages, exits, entrances, elevators and stairways shall not be
obstructed by Tenant or used by it for any purpose other than ingress to and
egress from its Premises. The passages, exits, entrances, stairways, balconies
and roof are not for the use of the general public and Landlord shall in all
cases retain the right to control and prevent access thereto by all persons
whose presence in the judgement of Landlord shall be prejudicial to the safety,
character, reputation and interests of the Premises and its tenants, provided
that nothing herein contained shall be construed to prevent such access to
persons with whom Tenant normally deals in the ordinary course of Tenant's
business unless such persons are engaged in illegal activities. Tenant,
employees or invitees of Tenant shall not go upon the roof of the Premises.

                                        5

The toilet rooms, urinals, wash bowls and other apparatus shall not be used for
any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein and the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by Tenant who, or whose employees or invitees, shall have caused it.

                                       6.

Tenant shall not overload the floor of the Premises or in any way deface the
Premises or any part thereof.

                                       7.

Landlord shall have the right to prescribe the weight, size and position of all
safes and other heavy equipment brought into the Premises and also the times and
manner of moving the same in and out of the Premises. Safes and other heavy
objects shall, if considered necessary by Landlord, stand on wood strips of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or any damage to any such safe or property from any
cause and all damage done to the Premises by moving or maintaining any such safe
or other property shall be repaired at the expense of Tenant.

                                       8.

Tenant shall not employ any persons other than the janitor of Landlord or
Tenant's personnel for the purpose of cleaning the Premises unless otherwise
agreed to by Landlord. Tenant shall not cause any unnecessary labor by reason of
Tenant's carelessness or indifference

<PAGE>   19

in the preservation of good order and cleanliness.

                                       9.

Tenant shall not use, keep or permit to be used or kept any foul or noxious gas
or substance in the Premises, or permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants of
the Premises by reason of noise, odors and/or vibrations, or interfere in any
way with other tenants or those having business therein, nor shall any animals
or birds with the exception of Dog Guides for the blind, be brought in or kept
about the Premises.

                                       10.

No cooking shall be done or permitted by Tenant on the Premises, nor shall the
Premises be used for the storage of merchandise for washing clothes, for
lodging, or for any improper, objectionable or immoral purposes.

                                       11.

Landlord will direct electricians as to where and how telephone and telegraph
wires are to be introduced. No boring or cutting for wires will be allowed
without the consent of Landlord. The location of telephones, call boxes and
other office equipment affixed to the Premises shall be subject to the approval
of Landlord.

                                       12.

Tenant, upon the termination of the tenancy, shall deliver to Landlord the keys
of offices, rooms and toilet rooms which have been furnished the Tenant or which
the Tenant shall have had made, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.

                                       13.

Tenant shall see that the doors of the Premises are closed and securely locked
before leaving the Premises and must observe strict care and caution that all
water faucets or water apparatus within the Premises are entirely shut off
before Tenant or Tenant's employees leave the Premises, and that all electricity
shall likewise be carefully cut off, so as to prevent waste or damage.

                                       14.

Landlord reserves the right to exclude or expel from the Premises any person
who, in the judgement of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Premises.

                                       15.

The requirements of Tenant will be attended to only upon application to Landlord
at 3260 Ash Street, Palo Alto, California 94306. Employees of Landlord shall not
perform any work or do anything outside of the regular duties unless under
special instructions from Landlord.

                                       16.

Landlord shall have the right, exercisable without notice and without liability
to Tenant, to change the name and the street address of the Premises and/or the
Complex.

                                       17.

Tenant shall not disturb, solicit or canvass any occupant of the Premises and
shall cooperate to prevent same.

                                       18.

Tenant and its employees shall park their vehicles only in those portions of the
parking areas so designated by Landlord. Tenant shall

<PAGE>   20

furnish Landlord with a list of its and its employees' vehicle license numbers
within fifteen (15) days after taking possession of the Premises and Tenant
shall thereafter notify Landlord of any change in such list within five (5) days
after such change occurs. Tenant agrees to assume responsibility for compliance
by its employees with the parking provision contained herein. If Tenant or its
employees park in other than such designated parking areas then Landlord may
charge Tenant, as an additional charge, and Tenant agrees to pay, Ten Dollars
($10.00) per day for each day or partial day each such vehicle is parked in any
area other than that designated. Tenant hereby authorizes Landlord at Tenant's
sole expense to tow away from the Complex any vehicle belonging to Tenant or
Tenant's employees parked in violation of these provisions, or to attach
violation stickers or notices to such vehicle. Tenant shall use the parking
areas for vehicle parking only, and shall not use the parking areas for storage.

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

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