Document:

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                                                                  Exhibit 10.2.3

                            THIRD AMENDMENT TO LEASE

THIS THIRD AMENDMENT TO LEASE (hereinafter called the "Third Amendment") is made
and entered into this 8th day of June, 1999 by and between PRINCIPAL LIFE
INSURANCE COMPANY f/k/a Principal Mutual Life Insurance Company (the
"Landlord"), an Iowa corporation, and SEQUOIA SOFTWARE, Corporation, a Maryland
Corporation (successor in interest to Sequoia Imaging, L.L.C.) (the "Tenant").

                               W I T N E S E T H:

       WHEREAS, Landlord and Tenant entered into a lease dated August 18, 1995,
a First Amendment to Lease dated October 24, 1997, and a Second Amendment to
Lease dated November 9, 1998 (collectively referred to as the "Lease") pursuant
to which the Tenant agreed to lease and the Landlord agreed to rent certain
premises consisting of approximately 20,512 rentable square feet of floor area
(referred to in the Lease as "the Premises" and hereinafter referred to as the
"Original Premises") and located in a building ("the Building") at 5457 Twin
Knolls Road, Suites 310 and 201 in Columbia, Maryland 21045.

       WHEREAS, the parties hereto wish to amend the Lease in order to expand
the Premises, modify the rental amount payable, and otherwise to amend the Lease
as hereinafter set forth.

       NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

       1.     Landlord and Tenant hereby agree that Tenant shall expand the
Premises by 1,123 rentable square feet of space located on the third floor of
the Building (hereinafter referred to as the "Expansion Premises") as shown on
Exhibit A-1 attached hereto. From the Third Amendment Effective Date (defined in
Paragraph 2, herein) the term "Premises" as used herein and under the Lease
shall refer to the Premises so expanded.

       2.     The effective date of this Third Amendment (the "Third Amendment
Effective Date") shall be August 1, 1999. If Landlord is unable to deliver
possession of the Expansion Premises to tenant on the Effective Date, the terms
of this Third Amendment and the Lease shall not be void or voidable, nor shall
Landlord be Liable to Tenant for any loss or damage resulting therefrom. If such
delay in delivery of the Premises results from a cause other than Tenant Delay
(as defined in the Lease), the Third Amendment Effective Date shall be extended
to the date on which Landlord delivers possession of the Expansion Premises to
Tenant with all of the improvements set forth in Section 6 below completed.

       3.     As of the Third Amendment Effective Date, Section 1.2 of the Lease
is hereby amended by inserting 21,635 rentable square feet as the new increased
area of the Premises, and inserting 31.37% as Tenant's new percentage of the
building.

       4.     As of the Third Amendment Effective Date, Section 1.4 of the
Lease is hereby deleted and the following language inserted in lieu thereof:

       "1.4 Rent. The basic rent ("Rent") shall be as follows:

<TABLE>
<CAPTION>
                Time Period                             Monthly Rent
                -----------                             ------------
       <S>                                              <C>
       August, 1999 - September, 1999                    $32,724.53
       October, 1999                                     $33,720.55
       November, 1999 - July, 2000                       $33,867.58
       August, 2000 - September, 2000                    $33,905.01
       October, 2000                                     $34,746.68
       November, 2000 - July, 2001                       $35,717.68
       August, 2001 - July 31, 2002                      $36,760.19
</TABLE>

<PAGE>   2

       In addition to the Rent, Tenant shall pay as additional rent increases
       in Operating Costs as described in Section 9 of the Lease, increases in
       Property Taxes as described in Section 10 of the Lease, all of which
       shall be deemed additional rent due under the Lease."

       5.     Landlord and Tenant hereby agree that the "Base Services Year" as
defined in Section 9.1.3 of the Lease and "Base Tax Year" as defined in
Section 10.1.3 of the Lease shall remain unchanged for Suite 310; however, for
Suite 201, the "Base Services Year" shall be determined as the Calendar Year
this Third Amendment commences and the "Base Tax Year" shall be the 1999-2000
Tax Year.

       6.     Landlord, at Landlord's sole cost and expense, shall make the
following improvements to the Expansion Premises:

   -   Landlord shall make the wall modifications as shown on the attached
       Exhibit A-2;

   -   replace the existing carpet in the Expansion Premises with building
       standard thirty ounce (30 oz.) cut pile carpet;

   -   repaint the walls, doors and door frames of the Expansion Premises with
       two (2) coats of building standard paint;

   -   remove drywall ceiling as shown on the attached Exhibit A-2 and install
       new ceiling grid and ceiling tile in lieu thereof; and

   -   Landlord shall install two (2) new duplex outlets in all new offices.

The Original Premises shall continue to be leased to Tenant in its existing
"as-is" configuration and condition.

       7.     Except as expressly amended by this Third Amendment, the Agreement
of the Lease shall remain in full force and effect.

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

WITNESS:                           PRINCIPAL LIFE INSURANCE COMPANY,
                                   f/k/a PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

/s/ MARIE MILLER                   BY: /s/ VANCE VOSS
----------------------------          ------------------------------------------
                                      Vance Voss
                                      Assistant Director
                                      Commercial Real Estate

                                   BY: /s/ MICHAEL J. LARA
                                      ------------------------------------------
                                      Michael J. Lara
                                      Assistant Director
                                      C.R.E. - Equity
                                      Appraisal Services

WITNESS:                           SEQUOIA SOFTWARE CORPORATION

[SIG]                              BY: /s/ MARC RUBIN
----------------------------          ------------------------------------------
                                      Name: Marc Rubin
                                      Title: Treasurer, Chief Financial Officer

<PAGE>   3

                                  EXHIBIT A-1

                                   [GRAPHIC]

<PAGE>   4

                                  EXHIBIT A-2

                                   [GRAPHIC]

Suite 312 -- OVERLOOK CENTER                     Trammell Crow NE, Inc.
1,087 Sq. Ft.                                    Tel: (410) 381-9500
1/16" Scale<PAGE>   1
                                                                    EXHIBIT 10.3

                         DATED                     , 19

                       LERNOUT & HAUSPIE (IRELAND) LIMITED
                                    LICENSOR

                         REDWOOD SOFTWARE EUROPE LIMITED
                                    LICENSEE

                                     LICENCE

                          FOR TEMPORARY SHORT TERM USE

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

                               PART OF FIRST FLOOR
                                  COLLEGE HOUSE
                                 71/73 ROCK ROAD
                                    BLACKROCK
                                   CO. DUBLIN

                                 A & L Goodbody
                                   Solicitors
                                  FBLC2701.07c

<PAGE>   2

THIS LICENCE is dated the      day of        19   and made between LERNOUT &
HAUSPIE (IRELAND) LIMITED of 71/73 Rock Road, Blackrock, Co. Dublin, a limited
liability company (hereinafter called "the Licensor") of the one part and
REDWOOD SOFTWARE EUROPE LIMITED having its registered office at Block 1,
Harcourt Centre, Harcourt Street, Dublin 2 (hereinafter called "the Licensee")
of the other part.

1    In this Licence the following expressions shall have the following
     meanings:-

        "THE PREMISES"      means College House, 71/73 Rock Road, Blackrock,
                            Co. Dublin.

        "THE COMMON AREAS"  means those parts of the Premises designated and
                            allocated for the time for the common use and
                            benefit of occupiers of the Premises their invitees
                            and licensees within the Premises and for persons
                            using or visiting the Premises.

        "THE LEASE"         means a Lease dated 25th August 1998 between David
                            l'Estrange and Patrick Finn of the one part and the
                            Licensor of the other part.

        "THE LICENCE FEES"  means the fees paid by the Licensee to the Licensor
                            for the use of the Licensed Unit and more
                            particularly set out in this Licence.

        "THE LICENSED
        PERIOD"             means the period during which the Licensee shall
                            occupy the Licensed Unit under the terms of this
                            Licence from the 1st day of October 1999 for a
                            period of one year or until same is terminated in
                            accordance with the provisions in that regard set
                            out herein.

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        "THE LICENSED
        UNIT"               means the part of the First Floor of the Premises as
                            more particularly delineated and edged red on the
                            plan attached hereto

        "THE LICENSED
        USE"                means offices.

        "THE LANDLORD"      means the person entitled from time to time to the
                            Landlords interest in the Lease.

        "THE SERVICES"      means the Services listed in the Schedule hereto.

2    NOW IT IS HEREBY AGREED as follows:-

2.1  The Licensor HEREBY LICENSES AND AUTHORISES the Licensee to use the
     Licensed Unit for the purposes only of the Licensed Use throughout the
     Licensed Period together with the right (i) in common with the
     Licensor and all other persons entitled or authorised at all times
     during the Licensed Period to use the Common Areas for the purposes
     for which they are intended and in particular to pass and re-pass over
     the Common Areas for the purposes of gaining access to and egress from
     the Licensed Unit; (ii) to use the furniture listed in the Inventory
     attached hereto; and (iii) to use two car spaces for the parking of
     private motor vehicles and for no other purpose, the position of such
     spaces to be designated by the Licensor in its absolute discretion
     from time to time.

3    THE LICENSEE UNDERTAKES WITH THE LICENSOR as follows:-

3.1  To pay monthly in advance in such manner as the Licensor may from time to
     time direct the Licence Fee of IRPound2,415 together with such Valued Added
     Tax which is now or may become payable at any time during the Licensed
     Period in respect of this Licence or the Licence Fees payable hereunder.

3.2  To pay to the Licensor a deposit of IRPound2,500 plus VAT to be held by
     the Licensor during the Licensed Period as security for payment of any sums
     payable, hereunder and performance of

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     the agreements herein contained, such deposit to be returned to the
     Licensee within seven days of the expiration of the Licensed Period less
     any sums to be properly retained for loss or damage caused as a result of
     any breach of this agreement by the Licensee.

3.3  To use the Licensed Unit for the purposes only of the Licensed Use and for
     no other purpose whatsoever.

3.4  Not to assign, sub-license or transfer in any manner or permit any other
     party to occupy all or part of the Licensed Unit.

3.5  To keep the Licensed Unit in good repair, order and condition and clean and
     tidy and free from any refuse and not to interfere with the interior
     decoration construction or arrangements of the Licensed Unit without the
     Licensor's consent in writing which the Licensor may at its absolute
     discretion withhold.

3.6  To indemnify and keep indemnified the Licensor against any liabilities,
     proceedings, costs, claims, actions or demands of whatsoever nature in
     respect of any injury to or the death of any person or damage to any
     property moveable or immovable by reason of or arising directly or
     indirectly out of the Licensee's use of the Licensed Unit, or from the
     Licensed Unit.

3.7  To take out and maintain at all times during the Licensed Period a public
     liability policy in respect of and covering the liability of the Licensee
     against any such claim arising under the foregoing clause and to extend
     such policy or policies of insurance so that the Licensor is indemnified by
     the insurers in the same manner as the Licensee in an amount of not less
     than IRPound1,000,000 to be adjusted from time to time as the Licensor
     deems reasonably necessary and to notify the Licensor immediately of any
     such claim arising thereunder or any injury damage or occurrence which may
     give rise to any such claim AND whenever required so to do by the Licensor
     to produce to the Licensor the said policy or policies of insurance
     together with satisfactory evidence that same is or are valid and
     subsisting and that all premiums due thereon have been paid in full. The
     insurance policy or policies shall provide that it or they may not be
     cancelled or terminated and shall not expire without notice in writing to
     the Licensor.

3.8  The Licensee shall not do or permit to be done anything in the Licensed
     Unit which would make void or voidable any insurance on the Premises or
     would cause the insurance

                                       3
<PAGE>   5

     premium payable thereon to be increased or which may be a nuisance damage
     or annoyance to the Licensor or the occupiers of the Premises or adjoining
     or neighbouring premises.

3.9  To pay and discharge to the Licensor on demand all charges in respect of
     electricity, telephone and other utilities used or consumed upon the
     Licensed Unit plus 5% of such charges.

3.10 To comply with the provisions of any statute, rule or order for the time
     being in force and to do and execute or cause to be done and executed all
     such works, acts, deeds, matters and things as under or by virtue of any
     statute, rule or order or by any competent authority are or shall be
     properly directed or necessary to be done or executed in respect of the
     Licensed Unit, the Licensed Use or rights the subject of this Licence
     whether by the owner, Licensor, Licensee or occupier.

3.11 To comply fully at all times with such reasonable rules, regulations,
     directions or controls as may be made or issued from time to time by the
     Licensor in relation to the Licensed Unit, the Licensed Use or for the good
     management of the Premises and not to erect or display any posters,
     advertisements, notices or placards so as to be visible from outside the
     Licensed Unit nor to keep any animals or any combustible or offensive
     goods, provisions or materials in the Licensed Unit.

3.12 Not to install or operate in the Licensed Unit any computers, electrical or
     other equipment which in the opinion of the Licensor requires a separate
     electrical or other circuit or which is heat producing or can be construed
     as a fire hazard if not properly monitored without the prior written
     consent of the Licensor which the Licensor may in its absolute discretion
     withhold.

3.13 To permit the Licensor, the Landlord and their respective servants and
     agents with or without workmen and others at all reasonable times on prior
     notice (save for emergency) to enter the Licensed Unit for the purpose of
     inspecting or repairing same or the Premises or in order to carry out their
     respective obligations under the Lease or to exercise their respective
     rights thereunder.

3.14 To permit the Licensor with or without workmen access at all reasonable
     times to the Licensed Unit for the provision of security, cleaning and
     other facilities.

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3.15 To conduct its business in such manner as to be compatible with and so as
     not to interfere with the business of the Licensor and the work of the
     Licensor's employees.

3.16 The Licensee shall at the expiration or sooner determination of the
     Licensed Period peacefully and quietly yield up the Licensed Unit together
     with all additions and improvements made thereto in the meantime and in
     such state and condition as shall in all respects be consistent with the
     full and due performance by the Licensee of the agreements contained
     herein.

4    THE LICENSOR COVENANTS WITH THE LICENSEE as follows:-

4.1  The Licensee paying the aforesaid Licence Fees and performing and observing
     the agreements hereinbefore contained may peacefully use the Licensed Unit
     during the Licensed Period until determined in manner hereinafter
     appearing.

4.2  To use its reasonable endeavours to provide the Services PROVIDED that the
     Licensor shall not be liable for failure to provide the Services due to any
     act or omission of the Licensee, its servants or agents whether negligent
     or not, or due to some cause beyond the Licensor's control.

4.3  To pay all municipal and other rates levied or charged on the Licensed Unit
     together with the Service Charge, insurance contribution and other sums
     payable under the Lease.

5    PROVIDED ALWAYS and this Licence is conditional upon the following:-

5.1  If the Licence Fee or any part thereof or any other sum required to be paid
     by the Licensee hereunder shall be unpaid for a period of seven days after
     same shall fall due for payment, or

5.2  If any agreement on the Licensee's part herein contained shall not be
     performed or observed or if the Licensee shall become bankrupt or shall
     call a meeting of or enter into any composition with creditors or suffer
     any distress or execution to be levied on the goods of the Licensee,

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     then and in any such case it shall be lawful for the Licensor at any time
     immediately to determine this Licence (but without prejudice to any claim
     by the Licensor in respect of any antecedent breach of any agreement or
     provision herein contained) whereupon the Licensee shall forthwith vacate
     the Licensed Unit.

6    IT IS HEREBY FURTHER AGREED as follows:-

6.1  The Licensee shall be a licensee only and accordingly this Licence is not
     intended nor shall it operate or be deemed to operate either at law or in
     equity as a demise of any property the subject matter of this Licence or
     any alternative property that may be substituted therefor nor shall the
     relationship of landlord and tenant exist or arise or be deemed to exist or
     arise between the parties hereto, nor shall the Licensee have any exclusive
     right to the Licensed Unit.

6.2  If at any time during the Licensed Period the Licensed Unit is damaged or
     rendered unfit for use by any of the risks which the Landlord shall have
     insured against there shall be an abatement of all or part of the License
     Fees proportionate to the extent and duration of the damage until the
     Licensed Unit is again fit for use and any dispute relating to such
     abatement shall be referred arbitration under the provisions of the
     Arbitration Acts 1954 - 1980 or any statutory modifications or re-enactment
     thereof for the time being in force.

6.3  This Licence shall be personal to the Licensee and shall not be assignable
     or otherwise transferable in any manner.

6.4  The Licensor shall not in any circumstances incur any liability in respect
     of loss or damage howsoever caused in respect of any property of the
     Licensee in the Licensed Unit.

6.5  The Licensor may exercise a lien over goods and property left in the
     Licensed Unit in respect of any unpaid License Fees or other sums due under
     the terms of this agreement.

IN WITNESS whereof the parties hereto have executed this Licence the day and
year first herein WRITTEN.

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                                    SCHEDULE
                                 "THE SERVICES"

1    The provision of a Reception Service in the Premises during the hours of
     8.30 a.m. to 5.30 p.m. from Monday to Friday inclusive excluding Bank
     Holidays and public holidays.

2    Subject to payment by the Licensee of all charges pursuant to clause 3.9
     hereof, the provision of heating and lighting to the Licensed Unit as
     reasonably necessary in the opinion of the Licensor for the enjoyment of
     same.

                                       7
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PRESENT when the Common Seal
of THE LICENSOR was affixed
hereto:

PRESENT when the Common Seal
of THE LICENSEE was affixed
hereto:

                                                       (SEAL OF REDWOOD)

                                                       X
                                                        --------------------

                                                       X
                                                        --------------------

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