Document:

<PAGE>
EXHIBIT 10.11
SUBLEASE

                                  STANDARD FORM
                                  -------------

                                    SUBLEASE
                                    --------

         This Sublease is made as of the 30th day of November, 2001, by and
between Acacia Research Corporation, a California corporation (hereinafter
referred to as "Sublandlord") and Jenkens & Gilchrist, a Texas Professional
Corporation (hereinafter collectively referred to as "Subtenant") with regard to
the following facts.

                                R E C I T A L S :
                                - - - - - - - -

         A. Sublandlord is the tenant under that certain Office Lease (the
"Lease"), dated as of April 30, 1998, as amended by a Parking Agreement dated
April 30, 1998, and a First Amendment dated June 26, 2000 (the "First
Amendment") (collectively, the "Master Lease") with EOP-Pasadena Towers, L.L.C.,
a Delaware limited liability company (the "Landlord") (a copy of which Master
Lease is attached hereto as Exhibit A and by this reference made a part hereof)
concerning approximately 7,019 rentable square feet of office space (the
"Premises") located on the 6th floor of the building (the "Building") located at
55 S. Lake Avenue, Pasadena, California.

         B. Subtenant desires to sublease the entire Premises from Sublandlord,
and Sublandlord has agreed to sublease the Premises to Subtenant upon the terms,
covenants and conditions herein set forth. The term "Premises" as used in this
Sublease shall also mean the "Subleased Premises," and vice versa.

                                    AGREEMENT

         In consideration of the mutual covenants contained herein, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows.

         1. SUBLEASE. Sublandlord hereby subleases and demises to Subtenant and
Subtenant hereby hires and takes from Sublandlord the Premises.

         2. TERM. The term of this Sublease shall commence on February 15, 2002
("Commencement Date") and shall end, unless sooner terminated as provided in the
Master Lease on November 30, 2003.

         3. RENT. Subtenant shall pay base rent during the term of this Sublease
in the amount of $14,038.00 per month, payable monthly in advance on the first
day of each month. Furthermore, in the event that the term of this Sublease
shall begin or end on a date which is not the first day of a month, base rent
shall be prorated as of such date. Concurrent with Subtenant's execution of this
Sublease, Subtenant shall deliver to Sublandlord the first month's base rent in
the amount of $14,038.00. Subtenant shall also, prior to the Commencement Date,
pay to Sublandlord an amount equal to the Security Deposit which is currently
being held by Landlord pursuant to the terms of Section VI, Page 15 of the
Lease, and Section III, page 2 of the First Amendment (such amount being

                                      -1-
<PAGE>

$16,876.08), and Sublandlord hereby assigns to Subtenant all of Sublandlord's
rights and interest in such Security Deposit. Sublandlord shall credit Subtenant
with $5,000.00 toward its rent obligation due month 2 of the Sublease Term
(being the month of March 2002) in lieu of shampooing carpet and painting walls.

         4. TAX AND EXPENSE INCREASES. In addition to the rent set forth in
Section 3, Subtenant shall pay to Sublandlord, as additional rent, (a) an amount
equal to Tenant's Pro Rata Share of the increase in Taxes for any calendar year
in excess of the Taxes for the Base Year, and (b) an amount equal to Tenant's
Pro Rata Share of the increase in Expenses for any calendar year in excess of
Expenses for the Base Year, to the extent such Taxes and Expenses for any such
calendar year arise or accrue during the term of this Sublease. Defined terms
used in this Section 4 shall have the same meaning as set forth in the Master
Lease, except that the term "Base Year" shall mean the calendar year 2001. Such
additional rent shall be paid by Subtenant concurrently with the base rent and
may be estimated by Sublandlord, consistent with the estimates of Additional
Base Rental under the Master Lease provided by Landlord, with a reconciliation
made at such time as the reconciliation is made under the Master Lease.

         5. USE. Subtenant covenants and agrees to use the Premises in
accordance with the provisions of the Master Lease and for no other purpose and
otherwise in accordance with the terms and conditions of the Master Lease and
this Sublease.

         6. MASTER LEASE. As applied to this Sublease, the words "Landlord" and
"Tenant" as used in the Master Lease shall be deemed to refer to Sublandlord and
Subtenant hereunder, respectively. Subtenant and this Sublease shall be subject
in all respects to the terms of, and the rights of the Landlord under, the
Master Lease. Except as otherwise expressly provided in Section 8 hereof, the
covenants, agreements, terms, provisions and conditions of the Master Lease
insofar as they relate to the Subleased Premises and insofar as they are not
inconsistent with the terms of this Sublease are made a part of and incorporated
into this Sublease as if recited herein in full, and the rights and obligations
of the Landlord and the Tenant under the Master Lease shall be deemed the rights
and obligations of Sublandlord and Subtenant respectively hereunder and shall be
binding upon and inure to the benefit of Sublandlord and Subtenant respectively.
As between the parties hereto only, in the event of a conflict between the terms
of the Master Lease and the terms of this Sublease, the terms of this Sublease
shall control.

         7. LANDLORD'S PERFORMANCE UNDER MASTER LEASE.

                  7.1 Subtenant recognizes that Sublandlord is not in a position
to render any of the services or to perform certain obligations which relate to
the Premises required of Sublandlord by the terms of this Sublease. Therefore,
notwithstanding anything to the contrary contained in this Sublease, Subtenant
agrees that performance by Sublandlord of its obligations hereunder, to the
extent that performance is beyond Sublandlord's control and within the control
of Landlord, are conditional upon due performance by the Landlord of its
corresponding obligations under the Master Lease and Sublandlord shall not be
liable to Subtenant for any default of the Landlord under the Master Lease.
Subtenant shall not have any claim against Sublandlord by reason of the
Landlord's failure or refusal to comply with any of the provisions of the Master
Lease unless such failure or refusal is a result of Sublandlord's act or failure
to act. This Sublease shall remain in full force and effect notwithstanding the

                                      -2-
<PAGE>

Landlord's failure or refusal to comply with any such provisions of the Master
Lease and Subtenant shall pay the base rent and additional rent and all other
charges provided for herein without any abatement, deduction or setoff
whatsoever. Notwithstanding the foregoing, should the Landlord's failure or
refusal to comply with any provisions of the Master Lease give rise to the right
of Sublandlord to terminate the Master Lease (which right will not be exercised
without the consent of Subtenant), or to have the rent abated thereunder, then,
as applicable, Subtenant shall concurrently terminate the Sublease, or Subtenant
shall have its rent under the Sublease abated in the same proportion as
Sublandlord's rent is abated under the Master Lease. Subtenant covenants and
warrants that it fully understands and agrees to be subject to and bound by all
of the covenants, agreements, terms, provisions and conditions of the Master
Lease, except as otherwise set forth herein. Furthermore, Subtenant and
Sublandlord further covenant not to take any action or do or perform any act or
fail to perform any act which would result in the failure or breach of any of
the covenants, agreements, terms, provisions or conditions of the Master Lease
on the part of the Tenant thereunder.

                  7.2 Whenever the consent of Landlord shall be required by, or
Landlord shall fail to perform its obligations under, the Master Lease,
Sublandlord agrees to use its commercially reasonable efforts to obtain, at
Subtenant's sole cost and expense, such consent and/or performance on behalf of
Subtenant.

                  7.3 Sublandlord represents and warrants to Subtenant that the
Master Lease is in full force and effect, and that it has not been amended or
modified except as described in the recitals and First Amendment, all
obligations of both Landlord and Sublandlord thereunder have been satisfied and
Sublandlord has neither given nor received a notice of default pursuant to the
Master Lease.

                  7.4 Sublandlord covenants as follows: (i) not to voluntarily
terminate the Master Lease and not to take any actions (or fail to take any
actions) which would constitute a default under the Master Lease, (ii) not to
modify the Master Lease so as to adversely affect Subtenant's rights hereunder,
and (iii) to take all actions reasonably necessary to preserve the Master Lease,
including but not limited to, the payment of rent and other sums due to Landlord
thereunder, except to the extent that Subtenant pays same directly to Landlord.

                  7.5 It is understood and agreed that Subtenant's only monetary
obligations under this Sublease are to pay (i) base rent described in Section 3
above, (ii) additional rent described in Section 4 above, and (iii) all other
amounts payable under the Master Lease (except for "Base Rental" payable under
the Master Lease, and Tenant's Pro Rata Share of the increases in Taxes and
Expenses payable under the Master Lease which are in excess of the amounts
payable by Subtenant pursuant to Section 4 above) which arise or accrue during
the term of this Sublease, including, but not limited to, parking charges.

         8. VARIATIONS FROM MASTER LEASE. The following covenants, agreements,
terms, provisions and conditions of the Master Lease are hereby modified or not
incorporated herein:

                  8.1 Notwithstanding anything to the contrary set forth in
Sections I, IV, and VI of the Lease, as amended by the First Amendment, the term
of this Sublease, the base rent payable under Section 3 of this Sublease,
Tenant's Pro Rata Share of increases in Taxes and Expenses payable under Section

                                      -3-
<PAGE>

4 of this Sublease, and the amount of the Security Deposit required of Subtenant
shall be as set forth in this Sublease and not in the Master Lease.

                  8.2 The parties hereto represent and warrant to each other
that neither party dealt with any broker or finder in connection with the
consummation of this Sublease except for Staubach-Los Angeles, Inc., on behalf
of Sublandlord and Insignia/E.S.G. and Staubach-Los Angeles, Inc., as
cooperating brokers on behalf of Subtenant. Each party agrees to indemnify, hold
and save the other party harmless from and against any and all claims for
brokerage commissions or finder's fees arising out of either of their acts in
connection with this Sublease. The provisions of this Section 8.2 shall survive
the expiration or earlier termination of this Sublease. The commission to
Staubach-Los Angeles, Inc. and Insignia/E.S.G. has been memorialized in a
separate agreement.

                  8.3 Notwithstanding anything contained in the Master Lease to
the contrary, as between Sublandlord and Subtenant only, all insurance proceeds
or condemnation awards received by Sublandlord under the Master Lease shall be
deemed to be the property of Sublandlord, but nothing herein shall prohibit
Subtenant from recovery of any such insurance proceeds or condemnation awards
which are specifically for Subtenant's personal property.

                  8.4 Any notice which may or shall be given by either party
hereunder shall be either delivered personally or sent by nationally recognized
overnight courier or certified mail, return receipt requested, addressed to the
party for whom it is intended (i) (on and after the Commencement Date) at the
Subleased Premises and (at any time) to Jenkens & Gilchrist, 1445 Ross Avenue,
Suite 3200, Dallas, Texas 75202-2799 Attn: Roger L. Hayse (if to the Subtenant),
or (ii) (prior to the Commencement Date) at the Subleased Premises, and (at any
time) to Acacia Research Corporation, c/o Allen Matkins Leck Gamble & Mallory
LLP, 1901 Avenue of the Stars, Suite 1800, Los Angeles, California 90067 Attn:
Mark Kelson, Esq. (if to the Sublandlord), or to such other address or to such
additional addressees, as may be designated in a notice given in accordance with
the provisions of this Section 8.4.

                  8.5 All amounts payable hereunder by Subtenant shall be
payable directly to Sublandlord, and Sublandlord shall represent and warrant to
pay its rental obligation to Landlord on a timely basis.

                  8.6 Sublandlord shall deliver the Subleased Premises to
Subtenant in their current "as is" condition, except that all of Sublandlord's
personal property shall be removed from the Premises (and any damage caused by
such removal shall be repaired by Sublandlord), which shall be "broom clean,"
but otherwise in its currently existing "as is" condition.

                  8.7 Sublandlord shall leave the reception desk in place and
does hereby sell and assign all of its rights and title therein to Subtenant,
provided that Subtenant accepts such desk in its "as is" condition.

                  8.8 Subtenant shall have no right to exercise the renewal
option set forth in Exhibit E, Section I, attached to the Lease, unless Landlord
agrees to contract directly with Subtenant and fully release Sublandlord of any
and all obligation, responsibility or reference, in any manner whatsoever, as
related to the Lease.

                                      -4-
<PAGE>

         9. INDEMNITIES. Subtenant hereby agrees to protect, defend, indemnify
and hold Sublandlord harmless from and against any and all liabilities, claims,
expenses, losses and damages, including, without limitation, reasonable
attorneys' fees and disbursements, which may at any time be asserted against
Sublandlord by (a) the Landlord for failure of Subtenant to perform any of the
covenants, agreements, terms, provisions or conditions contained in the Master
Lease which by reason of the provisions of this Sublease Subtenant is obligated
to perform, or (b) any person by reason of Subtenant's use and/or occupancy of
the Subleased Premises. Sublandlord hereby agrees to indemnify, defend, protect,
and hold Subtenant harmless from and against any and all losses, costs, claims,
damages, expenses and liabilities (including, without limitation, reasonable
attorneys' fees and disbursements), arising from any default by Sublandlord in
the performance of any of Sublandlord's obligations under the Master Lease
(subject to Subtenant's performance of its obligations as set forth in this
Sublease). The provisions of this Section 9 shall survive the expiration or
earlier termination of the Master Lease and/or this Sublease.

         10. CANCELLATION OF MASTER LEASE. In the event of the cancellation or
termination of the Master Lease for any reason whatsoever or of the involuntary
surrender of the Master Lease by operation of law prior to the expiration date
of this Sublease, Subtenant agrees to make full and complete attornment to the
Landlord under the Master Lease for the balance of the term of this Sublease and
upon the then executory terms hereof at the option of the Landlord at any time
during Subtenant's occupancy of the Premises, which attornment shall be
evidenced by an agreement in form and substance reasonably satisfactory to the
Landlord. Subtenant agrees to execute and deliver such an agreement at any time
within ten (10) business days after request of the Landlord, and Subtenant
waives the provisions of any law now or hereafter in effect which may give
Subtenant any right of election to terminate this Sublease or to surrender
possession of the Subleased Premises in the event any proceeding is brought by
the Landlord under the Master Lease to terminate the Master Lease.

         11. CERTIFICATES. Each party hereto shall at any time and from time to
time as requested by the other party upon not less than ten (10) days prior
written notice, execute, acknowledge and deliver to the other party, a statement
in writing certifying that this Sublease is unmodified and in full force and
effect (or if there have been modifications that the same is in full force and
effect as modified and stating the modifications, if any) certifying the dates
to which rent and any other charges have been paid and stating whether or not,
to the knowledge of the person signing the certificate, that the other party is
not in default beyond any applicable grace period provided herein in performance
of any of its obligations under this Sublease, and if so, specifying each such
default of which the signer may have knowledge, it being intended that any such
statement delivered pursuant hereto may be relied upon by others with whom the
party requesting such certificate may be dealing.

         12. ASSIGNMENT OR SUBLETTING. Subject further to all of the rights of
the Landlord under the Master Lease and the restrictions contained in the Master
Lease, Subtenant shall not be entitled to assign this Sublease or to sublet all
or any portion of the Subleased Premises without the prior written consent of
Sublandlord, which will not be unreasonably withheld.

                                      -5-
<PAGE>

         13. SEVERABILITY. If any term or provision of this Sublease or the
application thereof to any person or circumstances shall, to any extent, be
invalid and unenforceable, the remainder of this Sublease or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term
or provision of this Sublease shall be valid and be enforced to the fullest
extent permitted by law.

         14. ENTIRE AGREEMENT; WAIVER. This Sublease contains the entire
agreement between the parties hereto and shall be binding upon and inure to the
benefit of their respective heirs, representatives, successors and permitted
assigns. Any agreement hereinafter made shall be ineffective to change, modify,
waive, release, discharge, terminate or effect an abandonment hereof, in whole
or in part, unless such agreement is in writing and signed by the parties
hereto.

         15. CAPTIONS. Captions to the Sections in this Sublease are included
for convenience only and are not intended and shall not be deemed to modify or
explain any of the terms of this Sublease.

         16. FURTHER ASSURANCES. The parties hereto agree that each of them,
upon the request of the other party, shall execute and deliver, in recordable
form if necessary, such further documents, instruments or agreements and shall
take such further action that may be necessary or appropriate to effectuate the
purposes of this Sublease.

         17. GOVERNING LAW. This Sublease shall be governed by and in all
respects construed in accordance with the internal laws of the State of
California.

         18. CONSENT OF LANDLORD. The validity of this Sublease shall be subject
to the Landlord's prior written consent hereto, and if Landlord's consent shall
not be obtained either on Landlord's form therefor or on the form attached
hereto as Exhibit B and a copy thereof delivered to Subtenant within thirty (30)
days of the date hereof, then this Sublease shall be void and of no force or
effect, and the Security Deposit and prepaid base rent paid by Subtenant to
Sublandlord shall be immediately refunded to Subtenant. Subtenant acknowledges
that the form of consent to be used by Landlord in the event Landlord is willing
to consent to this Sublease shall be determined by Landlord in Landlord's sole
discretion.

                                      -6-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed as of the day and year first above written.

                                        "Sublandlord":

                                        ACACIA RESEARCH CORPORATION,
                                        a California corporation

                                        By: /s/ Robert L. Harris, II
                                            ------------------------------------

                                            Its: President
                                                 -------------------------------

                                        By:
                                            ------------------------------------

                                            Its:
                                                 -------------------------------

                                        "Subtenant":

                                        JENKENS & GILCHRIST,
                                        a Texas Professional Corporation

                                        By: /s/ signature
                                            ------------------------------------

                                            Its: President
                                                 -------------------------------

                                        By:
                                            ------------------------------------

                                            Its:
                                                 -------------------------------

                                      -7-
<PAGE>

                                   EXHIBIT A

                               PASADENA TOWERS
                                   TOWER II
                             Pasadena, California

                          STANDARD FORM OFFICE LEASE

                                   BETWEEN

   EOP-PASADENA TOWERS, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY DOING
  BUSINESS AS EOP-PASADENA TOWERS, LLC, a Delaware limited liability company
                                ("LANDLORD"),

                                      AND

       ACACIA RESEARCH CORPORATION, a California corporation ("TENANT")

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>      <C>                                                                <C>
I.       BASIC LEASE INFORMATION; DEFINITIONS. . . . . . . . . . . . . . .   1

II.      LEASE GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

III.     ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION. . . . . . . . . . . .   5

IV.      RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7

V.       USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

VI.      SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . .  15

VII.     SERVICES TO BE FURNISHED BY LANDLORD. . . . . . . . . . . . . . .  15

VIII.    LEASEHOLD IMPROVEMENTS. . . . . . . . . . . . . . . . . . . . . .  17

IX.      GRAPHICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

X.       REPAIRS AND ALTERATIONS . . . . . . . . . . . . . . . . . . . . .  17

XI.      USE OF ELECTRICAL SERVICES BY TENANT. . . . . . . . . . . . . . .  19

XII.     ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . .  19

XIII.    ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . .  20

XIV.     LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23

XV.      INDEMNITY AND WAIVER OF CLAIMS. . . . . . . . . . . . . . . . . .  23

XVI.     TENANT'S INSURANCE. . . . . . . . . . . . . . . . . . . . . . . .  24

XVII.    SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

XVIII.   LANDLORD'S INSURANCE. . . . . . . . . . . . . . . . . . . . . . .  26

XIX.     CASUALTY DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . .  26

XX.      DEMOLITION. . . . . . . . . . . . . . . . . . . . . . . . . . . .  28

XXI.     CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . .  28

XXII.    EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . .  28

XXIII.   REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29

XXIV.    LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . .  30

XXV.     NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31

XXVI.    EVENT OF BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . .  31

XXVII.   WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . .  32

XXVIII.  RELOCATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

XXIX.    HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . .  33

XXX.     SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE. . . . . . . . .  33

XXXI.    ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . . . .  34

XXXII.   NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

XXXIII.  LANDLORD'S LIEN . . . . . . . . . . . . . . . . . . . . . . . . .  34

XXXIV.   EXCEPTED RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . .  34

XXXV.    SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . .  35

XXXVI.   MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .  35

XXXVII.  ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . .  37
</TABLE>

<PAGE>

                            OFFICE LEASE AGREEMENT

This Office Lease Agreement (the "Lease") is made and entered into as of the
______ day of April, 1998, by and between EOP-PASADENA TOWERS, L.L.C., a
Delaware limited liability company doing business as EOP-PASADENA TOWERS,
LLC, a Delaware limited liability company ("Landlord") and ACACIA RESEARCH
CORPORATION, a California corporation ("Tenant").

I.        BASIC LEASE INFORMATION; DEFINITIONS.

          A.   The following are some of the basic lease information and defined
               terms used in this Lease.

               1.   "Additional Base Rental" shall mean Tenant's Pro Rata Share
                    of Basic Costs and any other sums (exclusive of Base Rental)
                    that are required to be paid by Tenant to Landlord
                    hereunder, which sums are deemed to be additional rent under
                    this Lease. Additional Base Rental and Base Rental are
                    sometimes collectively referred to herein as "Rent."

               2.   "Base Rental" shall mean the sum of Seven Hundred Nineteen
                    Thousand Two Hundred Sixty-Eight and NO/100 Dollars
                    ($719,268.00), payable by Tenant to Landlord in sixty (60)
                    monthly installments as follows:

                    1)   Sixty (60) equal installments of Eleven Thousand Nine
                         Hundred Eighty-Seven and 80/100 Dollars ($11,987.80)
                         each payable on or before the first day of each month
                         during the period beginning May 1, 1998, and ending
                         April 30, 2003, provided that the installment of Base
                         Rental for the first full calendar month of the Lease
                         Term shall be payable upon the execution of this Lease
                         by Tenant.

          Notwithstanding anything contained herein to the contrary, as long as
          Tenant is not in default (after notice and the expiration of any
          applicable cure period under this Lease), Tenant shall be entitled to
          an abatement of Base Rental in the amount of Eleven Thousand Nine
          Hundred Eighty-Seven and 80/100 Dollars ($11,987.80) per month for one
          (1) full calendar month of the Lease Term, beginning with the first
          (1st) full calendar month (the "Base Rental Abatement Period").  The
          total amount of Base Rental abated during the Base Rental Abatement
          Period shall equal Eleven Thousand Nine Hundred Eighty-Seven and
          80/100 Dollars ($11,987.80) (the "Abated Base Rental").  In the event
          Tenant defaults at any time during the Lease Term, and fails to cure
          such default within the applicable grace periods provided in the
          Lease, all Abated Base Rental shall immediately become due and
          payable.  The payment by Tenant of the Abated Base Rental in the event
          of a default shall not limit or effect any of Landlord's other rights,
          pursuant to this Lease or at law or in equity, provided that the
          foregoing shall not entitle Landlord to receive a double recovery of
          its costs, expenses or damages in any action against Tenant for a
          default under this Lease.  During the Base Rental Abatement Period,
          only Base Rental shall be abated, and all Additional Base Rental and
          other costs and charges specified in this Lease shall remain as due
          and payable pursuant to the provisions of this Lease.

               3.   "Building" shall mean the nine (9) story office tower
                    commonly described as Tower II, consisting of approximately
                    208,244 rentable square feet located at 55 South Lake
                    Avenue, Pasadena, Los Angeles County, State of California,
                    as outlined on Exhibit A-2 attached hereto and incorporated
                    herein.

               4.   The "Commencement Date," "Lease Term" and "Termination Date"
                    shall have the meanings set forth in subsection I.A.4.b.
                    below:

                    1)   INTENTIONALLY OMITTED.

                                       1
<PAGE>

                    2)   The "Lease Term" shall mean a period of sixty (60)
                         months commencing on the later to occur of (1) May 1,
                         1998, (the "Target Commencement Date"); and (2) the
                         first (1st) Monday following the date Tenant receives
                         written notice that all Landlord Work in the Premises
                         has been substantially completed, as such date is
                         determined pursuant to Section III.A. hereof (the later
                         to occur of such dates being defined as the
                         "Commencement Date"). The "Termination Date" shall,
                         unless sooner terminated as provided herein, mean the
                         last day of the Lease Term. Notwithstanding the
                         foregoing, if the Termination Date, as determined
                         herein, does not occur on the last day of a calendar
                         month, Landlord, at its option, may extend the Lease
                         Term by the number of days necessary to cause the
                         Termination Date to occur on the last day of the last
                         calendar month of the Lease Term. Tenant shall pay Base
                         Rental and Additional Base Rental for such additional
                         days at the same rate payable for the portion of the
                         last calendar month immediately preceding such
                         extension.

                    Further, Landlord and Tenant acknowledge that the schedule
                    of Base Rental described in Section I.A.2. above is based on
                    the assumption that the Lease Term will commence on the
                    Target Commencement Date.  If the Lease Term does not
                    commence on the Target Commencement Date, the beginning date
                    set forth in the above schedule with respect to the payment
                    of any installment(s) of Base Rental shall be appropriately
                    adjusted on a per diem basis and set forth in the
                    Commencement Letter to be prepared by Landlord.

               5.   "Premises" shall mean the area located on the sixth (6th)
                    floor of the Building, as outlined on Exhibit A attached
                    hereto and incorporated herein and known as Suite #650.
                    Landlord and Tenant hereby stipulate and agree that the
                    "Rentable Area of the Premises" shall mean 5,449 square feet
                    and the "Rentable Area of the Building" shall mean 208,244
                    square feet.  Notwithstanding the foregoing, unless
                    specifically provided herein to the contrary, the Premises
                    shall not include any telephone closets, electrical closets,
                    janitorial closets, equipment rooms or similar areas on any
                    full or partial floor that are used by Landlord for the
                    operation of the Building.

               6.   "Permitted Use" shall mean general office use, provided
                    however, no space in the parking structure, nor any ground
                    floor space in Tower I or Tower II shall be used as or
                    occupied by a retail bank, savings bank, savings and loan,
                    thrift bank, credit union or other retail banking business
                    (collectively, a "Retail Banking Business") or any use or
                    occupancy which is in competition with a Retail Banking
                    Business.

               7.   "Security Deposit" shall mean the sum of Thirteen Thousand
                    One Hundred Eighty-Six and 58/100 Dollars ($13,186.58).

               8.   "Tenant's Pro Rata Share" shall mean two and six thousand
                    one hundred sixty-six ten-thousandths percent (2.6166%),
                    which is the quotient (expressed as a percentage), derived
                    by dividing the Rentable Area of the Premises by the
                    Rentable Area of the Building.

               9.   "Guarantor(s)" shall mean any party that agrees in writing
                    to guarantee this Lease.

               10.  "Notice Addresses" shall mean the following addresses for
                    Tenant and Landlord, respectively:

                                       2
<PAGE>

                    Tenant:

                    On and after the Commencement Date, notices shall be sent
                    to Tenant at the Premises.

                    Prior to the Commencement Date, notices shall be sent to
                    Tenant at the following address:

                    Acacia Research Corporation
                    12 South Raymond Avenue
                    Pasadena, California  91105
                    Attention:  Paul Ryan

                    Landlord:

                    EOP-Pasadena Towers L.L.C., a
                    Delaware limited liability company
                    doing business as EOP-Pasadena
                    Towers, LLC, a Delaware limited
                    liability company
                    c/o Equity Office Properties Trust
                    Office of the Building
                    Pasadena Towers
                    800 East Colorado Boulevard
                    Suite 100
                    Pasadena, California  91101
                    Attention: Building Manager

                    With a copy to:

                    EOP-Pasadena Towers L.L.C., a
                    Delaware limited liability company
                    doing business as EOP-Pasadena
                    Towers, LLC, a Delaware limited
                    liability company
                    c/o Equity Office Properties Trust
                    Two North Riverside Plaza
                    Chicago, Illinois  60606
                    Attention: General Counsel for Property Operations

                    Payments of Rent only shall be made payable to the order of:

                    EQUITY OFFICE PROPERTIES

                    at the following address:

                    EOP-Pasadena Towers L.L.C., a
                    Delaware limited liability company
                    doing business as EOP-Pasadena
                    Towers, LLC, a Delaware limited
                    liability company
                    c/o Equity Office Properties Trust
                    Office of the Building
                    Pasadena Towers
                    800 East Colorado Boulevard
                    Suite 100
                    Pasadena, California   91101
                    Attention: Building Manager

          B.   The following are additional definitions of some of the defined
               terms used in the Lease.

                                       3
<PAGE>

               1.   "Base Year" shall mean 1998.

               2.   "Basic Costs" shall mean all costs and expenses paid or
                    incurred in connection with operating, maintaining,
                    repairing, managing and owning the Building and the
                    Property, as further described in Article IV hereof and
                    subject to the limitations set forth therein.

               3.   "Broker" means Cushman & Wakefield of California, Inc. and
                    Sauve Riegel, Inc.

               4.   "Building Standard" shall mean the type, grade, brand,
                    quality and/or quantity of materials Landlord designates
                    from time to time to be the minimum quality and/or quantity
                    to be used in the Building.

               5.   "Business Day(s)" shall mean Mondays through Fridays
                    exclusive of the normal business holidays ("Holidays") of
                    New Year's Day, Martin Luther King Day, Presidents' Day,
                    Memorial Day, Independence Day, Labor Day, Thanksgiving Day
                    and Christmas Day. Landlord, from time to time during the
                    Lease Term, shall have the right to designate additional
                    Holidays, provided that such additional Holidays are
                    commonly recognized by other office buildings in the area
                    where the Building is located.

               6.   "Common Areas" shall mean those areas provided for the
                    common use or benefit of all tenants generally and/or the
                    public, such as corridors, elevator foyers, common mail
                    rooms, restrooms, vending areas, lobby areas (whether at
                    ground level or otherwise) and other similar facilities.

               7.   "Exterior Common Areas" shall mean those areas of the
                    Project and/or the Property which are not located within the
                    Building and which are provided and maintained for the use
                    and benefit of Landlord and tenants of the Building and/or
                    the Project generally and the employees, invitees and
                    licensees of Landlord and such tenants, including, without
                    limitation, fountains, walkways, escalators, elevators,
                    stairways, plaza, roads, driveways, sidewalks, and
                    landscapes.

               8.   "Landlord Work" shall mean the work, if any, that Landlord
                    is obligated to perform in the Premises pursuant to the Work
                    Letter agreement, if any, attached hereto as Exhibit D.

               9.   "Maximum Rate" shall mean the greatest per annum rate of
                    interest permitted from time to time under applicable law.

               10.  "Normal Business Hours" for the Building shall mean 8:00
                    A.M. to 6:00 P.M. Mondays through Fridays, and 9:00 A.M. to
                    1:00 P.M. on Saturdays, exclusive of Holidays.

               11.  "Prime Rate" shall mean the per annum interest rate publicly
                    announced by The First National Bank of Chicago or any
                    successor thereof from time to time (whether or not charged
                    in each instance) as its prime or base rate in Chicago,
                    Illinois.

               12.  "Property" shall mean the nine (9) story office tower, the
                    address of which is 800 East Colorado Boulevard ("Tower I"),
                    the nine (9) story office tower, the address of which is 55
                    South Lake Avenue ("Tower II"), the parking structure and
                    ancillary commercial space, and the parcel(s) of land on
                    which it is located and, at Landlord's discretion, and all
                    other improvements owned by Landlord and serving the
                    Building and the tenants thereof, the parcel(s) of land on
                    which they are located, and some portions of the Exterior
                    Common Areas.

                                       4
<PAGE>

               13.  "Project" shall mean the nine (9) story office tower, the
                    address of which is 800 East Colorado Boulevard ("Tower I"),
                    the nine (9) story office tower, the address of which is 55
                    South Lake Avenue ("Tower II"), the parking structure and
                    ancillary commercial space, the Exterior Common Areas, and
                    the two (2) story office building commonly known as the Home
                    Savings of America Building.  Landlord does not own the Home
                    Savings of America Building.

II.       LEASE GRANT.

          Subject to and upon the terms herein set forth, Landlord leases to
Tenant and Tenant leases from Landlord the Premises, together with the right,
in common with others, to use the Common Areas, exterior Common Areas and
parking.

III.      ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION.

          A.   The Lease Term shall not commence until the later to occur of the
               Target Commencement Date and the date that Landlord has
               substantially completed the Landlord Work; provided, however,
               that if Landlord shall be delayed in substantially completing the
               Landlord Work as a result of the occurrence of any of the
               following (a "Delay"):

               1.   Tenant's failure to furnish information in accordance with
                    the Work Letter agreement or to respond to any request by
                    Landlord for any approval or information within any time
                    period prescribed, or if no time period is prescribed, then
                    within two (2) Business Days of a written request; or

               2.   Tenant's insistence on materials, finishes or installations
                    that have long lead times after having first been informed
                    by Landlord that such materials, finishes or installations
                    will cause a Delay; or

               3.   Changes in any plans and specifications requested by Tenant;
                    or

               4.   The performance or nonperformance by a person or entity
                    employed by Tenant in the completion of any work in the
                    Premises (all such work and such persons or entities being
                    subject to the prior approval of Landlord); or

               5.   Any request by Tenant that Landlord delay the completion of
                    any of the Landlord Work; or

               6.   Any breach or default by Tenant in the performance of
                    Tenant's obligations under this Lease (after notice and the
                    expiration of any applicable cure period under this Lease);
                    or

               7.   Any delay resulting from Tenant's having taken possession of
                    the Premises for any reason prior to substantial completion
                    of the Landlord Work; or

               8.   Any other delay actually chargeable to Tenant, its agents,
                    employees or independent contractors;

          then, for purposes of determining the Commencement Date, the date of
          substantial completion shall be deemed to be the day that said
          Landlord Work would have been substantially completed absent any such
          Delay(s). Landlord shall use reasonable efforts to notify Tenant of
          any circumstances of which Landlord is aware that have caused or may
          cause a Delay, so that Tenant may take whatever action is appropriate
          to minimize or prevent such Delay.  Notwithstanding the foregoing,
          Tenant shall only be responsible for Delays to the extent that they
          actually prevent Landlord from substantially completing the Landlord
          Work by the Target Commencement Date.  Accordingly, the number of

                                       5
<PAGE>
          days of Delay shall in no event exceed the actual number of days
          between the Target Commencement Date and the date of substantial
          completion of Landlord Work.  The Landlord Work shall be deemed to
          be substantially completed on the date that Landlord's architect
          reasonably determines that all Landlord's Work has been performed
          (or would have been performed absent any Delays), other than any
          details of construction, mechanical adjustment or any other
          matter, the noncompletion of which does not materially interfere
          with Tenant's use of the Premises. The adjustment of the
          Commencement Date and, accordingly, the postponement of Tenant's
          obligation to pay Rent shall be Tenant's sole remedy and shall
          constitute full settlement of all claims that Tenant might
          otherwise have against Landlord by reason of the Premises not
          being ready for occupancy by Tenant on the Target Commencement
          Date. Promptly after the determination of the Commencement Date,
          Landlord and Tenant shall enter into a letter agreement (the
          "Commencement Letter") on the form attached hereto as Exhibit C
          setting forth the Commencement Date, the Termination Date and any
          other dates that are affected by the adjustment of the
          Commencement Date. Tenant, within five (5) days after receipt
          thereof from Landlord, shall execute the Commencement Letter and
          return the same to Landlord. Notwithstandingthe foregoing, if
          there have been no Delays and the Commencement Date does not occur
          within six (6) months of the projected substantial completion of
          Landlord Work (the "Outside Completion Date"), Tenant, as its sole
          remedy, may terminate this Lease by giving Landlord written notice
          of termination on or before the earlier to occur of: (i) five (5)
          Business Days after the Outside Completion Date; and (ii) the
          Commencement Date.  In such event, this Lease shall be deemed null
          and void and of no further force and effect and Landlord shall
          promptly refund any Prepaid Rental and Security Deposit previously
          advanced by Tenant under this Lease and, so long as Tenant has not
          previously defaulted under any of its obligations under the Work
          Letter, the parties hereto shall have no further responsibilities
          or obligations to each other with respect to this Lease.  Landlord
          and Tenant acknowledge and agree that: (i) the determination of
          the Commencement Date shall take into consideration the affect of
          any Delays by Tenant; and (ii) the Outside Completion Date shall
          be postponed by the number of days the Commencement Date is
          delayed due to events of Force Majeure. Notwithstanding anything
          herein to the contrary, if Landlord determines that it will be
          unable to cause the Commencement Date to occur by the Outside
          Completion Date, Landlord shall have the right to immediately
          cease its performance of the Landlord Work and provide Tenant with
          written notice (the "Outside Extension Notice") of such inability,
          which Outside Extension Notice shall set forth the date on which
          Landlord reasonably believes that the Commencement Date will
          occur.  Upon receipt of the Outside Extension Notice, Tenant shall
          have the right to terminate this Lease by providing written notice
          of termination to Landlord within five (5) Business Days after the
          date of the Outside Extension Notice.  In the event that Tenant
          does not terminate this Lease within such five (5) Business Day
          period, the Outside Completion Date shall automatically be amended
          to be the dte set forth in Landlord's Outside Extension Notice.

          B.   By taking possession of the Premises, Tenant is deemed to have
               accepted the Premises and agreed that the Premises is in good
               order and satisfactory condition, with no representation or
               warranty by Landlord as to the condition of the Premises or the
               Building or suitability thereof for Tenant's use. Tenant's
               acceptance of the Premises shall be subject to Landlord's
               obligation to correct portions of the Landlord Work as set forth
               on a construction punch list prepared by Landlord and Tenant in
               accordance with the terms hereof.  Within fifteen (15) days after
               the substantial completion of the Landlord Work, Landlord and
               Tenant shall together conduct an inspection of the Premises and
               prepare a "punch list" setting forth any portions of the Landlord
               Work that are not in conformity with the Landlord Work as
               required by the terms of this Lease.  Notwithstanding the
               foregoing, at the request of Landlord, such construction punch
               list shall be mutually prepared by Landlord and Tenant prior to
               the date on which Tenant first begins to move its furniture,
               equipment or other personal property into the Premises.
               Landlord, as part of the Landlord Work, shall use good faith
               efforts to correct all such items within a reasonable time
               following the completion of the punch list.
                                       6
<PAGE>

          C.   [INTENTIONALLY OMITTED]

          D.   If Tenant takes possession of the Premises prior to the
               Commencement Date for the conduct of business in the normal
               course, such possession shall be subject to all the terms and
               conditions of the Lease and Tenant shall pay Base Rental and
               Additional Base Rental to Landlord for each day of occupancy
               prior to the Commencement Date. Notwithstanding the foregoing,
               Tenant may, so long as Tenant notifies the appropriate Building
               personnel, take possession of the Premises on the weekend
               (Saturday and Sunday) prior to the Commencement Date for the sole
               purpose of installing furniture, equipment or other personal
               property of Tenant.  Such possession shall be subject to all of
               the terms and conditions of the Lease, except that Tenant shall
               not be required to pay Base Rental or Additional Base Rental with
               respect to the aforesaid weekend during which Tenant performs
               such move-in. Tenant shall, however, be liable for the cost of
               any services (e.g. electricity, HVAC, freight elevators) that are
               provided to Tenant or the Premises during the period of Tenant's
               possession prior to the Commencement Date. Nothing herein shall
               be construed as granting Tenant the right to take possession of
               the Premises prior to the Commencement Date, whether for
               construction, fixturing or any other purpose, without the prior
               consent of Landlord.

          E.   Notwithstanding the foregoing, if there have been no Delays and
               the Commencement Date does not occur by the date that is nine (9)
               months following the completion of the Plans (defined in the Work
               Letter) and the procurement of all permits necessary for the
               commencement of Landlord's Work (the "Outside Completion Date"),
               Tenant, as its sole remedy, may terminate this Lease by giving
               Landlord written notice of termination on or before the earlier
               to occur of: (i) five (5) Business Days after the Outside
               Completion Date and (ii) the "Commencement Date".  In such event,
               this Lease shall be deemed null and void and of no further force
               and effect and Landlord shall promptly refund any Prepaid Rental
               and Security Deposit previously advanced by Tenant under this
               Lease and, so long as Tenant has not previously defaulted under
               any of its obligations under the Work Letter, the parties hereto
               shall have no further responsibilities or obligations to each
               other with respect to this Lease.  Landlord and Tenant
               acknowledge and agree that (i) the determination of the
               Commencement Date shall take into consideration the effect of any
               Delays by Tenant; and (ii) the Outside Completion Date shall be
               postponed by the number of days the Commencement Date is delayed
               due to events of Force Majeure.  Notwithstanding anything herein
               to the contrary, if Landlord determines that it will be unable to
               cause the Commencement Date to occur by the Outside Completion
               Date, the Landlord shall have the right to immediately cease its
               performance of the Landlord Work and provide Tenant with written
               notice (the "Outside Extension Notice") of such inability, which
               Outside Extension Notice shall set forth the date on which
               Landlord reasonably believes that the Commencement Date will
               occur.  Upon receipt of the Outside Extension Notice, Tenant
               shall have the right to terminate this Lease by providing written
               notice of termination to Landlord within five (5) Business Days
               after the date of the Outside Extension Notice.  In the event
               that Tenant does not terinate this Lease within such five (5)
               Business Day period, the Outside Completion Date shall
               automatically be amended to be the date set forth in Landlord's
               Outside Extension Notice.

IV.            RENT.

          A.   During each calendar year, or portion thereof, falling within the
               Lease Term, Tenant shall pay to Landlord as Additional Base
               Rental hereunder the sum of (1) Tenant's Pro Rata Share of the
               amount, if any, by which Taxes (hereinafter defined) for the
               applicable calendar year exceed Taxes for the Base Year plus (2)
               Tenant's Pro Rata Share of the amount, if any, by which Expenses
               (hereinafter defined) for the applicable calendar year exceed
               Expenses for the Base Year. For purposes hereof, "Expenses" shall
               mean all Basic Costs with the

                                       7
<PAGE>
               exception of Taxes. Tenant's Pro Rata Share of increases in
               Taxes and Tenant's Pro Rata Share of increases in Expenses
               shall be computed separate and independent of each other
               prior to being added together to determine the "Excess." In
               the event that Taxes and/or Expenses, as the case may be, in
               any calendar year decrease below the amount of Taxes or
               Expenses for the Base Year, Tenant's Pro Rata Share of Taxes
               and/or Expenses, as the case may be, for such calendar year
               shall be deemed to be $0, it being understood that Tenant
               shall not be entitled to any credit or offset if Taxes and/or
               Expenses decrease below the corresponding amount for the Base
               Year. Prior to the Commencement Date and prior to January 1
               of each calendar year during the Lease Term, or as soon
               thereafter as practical, Landlord shall make a good faith
               estimate of  the Excess for the applicable calendar year and
               Tenant's Pro Rata Share thereof. On or before the first day
               of each month during such calendar year, Tenant shall pay to
               Landlord, as Additional Base Rental, a monthly installment
               equal to one-twelfth of Tenant's Pro Rata Share of Landlord's
               estimate of the Excess. Landlord shall have the right from
               time to time during any such calendar year to revise the
               estimate of Basic Costs and the Excess for such year and
               provide Tenant with a revised statement therefor, and
               thereafter the amount Tenant shall pay each month shall be
               based upon such revised estimate. If Landlord does not
               provide Tenant with an estimate of the Basic Costs and the
               Excess by January 1 of any calendar year, Tenant shall
               continue to pay a monthly installment based on the previous
               year's estimate until such time as Landlord provides Tenant
               with an estimate of Basic Costs and the Excess for the
               current year. Upon receipt of such current year's estimate,
               an adjustment shall be made for any month during the current
               year with respect to which Tenant paid monthly installments
               of Additional Base Rental based on the previous year's
               estimate. Tenant shall pay Landlord for any underpayment
               within ten (10) days after demand. Any overpayment equal to
               or less than one (1) month's installment of Base Rental plus
               Additional Base Rental shall, at Landlord's option, be
               refunded to Tenant or credited against the installments of
               Base Rental and Additional Base Rental due for the month(s)
               immediately following the furnishing of such estimate.  In
               the event of any overpayment in excess of the equivalent of
               one (1) month's installment of Base Rental plus Additional
               Base Rental, the excess shall, at Tenant's option, be
               refunded to Tenant or credited against the installment(s) of
               Base Rental and Additional Base Rental due for the months
               immediately following the furnishing of such estimate. Any
               amounts paid by Tenant based on any estimate shall be subject
               to adjustment pursuant to the immediately following paragraph
               when actual Basic Costs are determined for such calendar year.

          As soon as is practical following the end of each calendar year during
          the Lease Term, Landlord shall furnish to Tenant a statement of
          Landlord's actual Basic Costs and the actual Excess for the previous
          calendar year. Landlord shall use reasonable efforts to furnish the
          statement of actual Basic Costs on or before June 1 of the calendar
          year immediately following the calendar year to which the statement
          applies. If the estimated Excess actually paid by Tenant for the prior
          year is in excess of Tenant's actual Pro Rata Share of the Excess for
          such prior year, then Landlord shall refund to Tenant any overpayment
          in excess of the equivalent of one (1) month's installment of Base
          Rental plus Additional Base Rental and apply the one (1) month's
          equivalent against Base Rental and Additional Base Rental due or to
          become due hereunder (or, at Tenant's option, Landlord shall apply the
          entirety of such overpayment against Base Rental and Additional Base
          Rental due or to become due hereunder); provided if the Lease Term
          expires prior to the determination of such overpayment, Landlord shall
          refund such overpayment to Tenant after first deducting the amount of
          any Rent due hereunder. Likewise, Tenant shall pay to Landlord, within
          ten (10) days after demand, any underpayment with respect to the prior
          year, whether or not the Lease has terminated prior to receipt by
          Tenant of a statement for such underpayment, it being understood that
          this clause shall survive the expiration of the Lease.

          B.   Basic Costs shall mean the sum of (y) all direct and indirect
               costs and expenses paid or incurred in each calendar year in
               connection with operating, maintaining, repairing, managing and
               owning the Premises, the  Building and the Property,

                                       8
<PAGE>

               inclusive of the Building Common Areas, and  (z) the Building's
               allocable share of direct and indirect costs of operating and
               maintaining the Exterior Common Areas of the Project, and all
               costs, fees or other amounts payable by Landlord which are the
               responsibility of Landlord and other owners of the Project
               pursuant to the Declaration of Operating and Reciprocal Easement
               Agreement, including, but not limited to, the following:

               1.   All labor costs for all persons performing services required
                    or utilized in connection with the operation, repair,
                    replacement and maintenance of and control of access to the
                    Building, the Property and the Project, including but not
                    limited to amounts incurred for wages, salaries and other
                    compensation for services, payroll, social security,
                    unemployment and other similar taxes, workers' compensation
                    insurance, uniforms, training, disability benefits,
                    pensions, hospitalization, retirement plans, group insurance
                    or any other similar or like expenses or benefits.

               2.   All management fees, the cost of equipping and maintaining a
                    management office at the Property, accounting services,
                    legal fees not attributable to leasing and collection
                    activity, and all other administrative costs relating to the
                    Building, the Property and the Project. If management
                    services are not provided by a third party, Landlord shall
                    be entitled to a management fee comparable to that due and
                    payable to third parties provided Landlord or management
                    companies owned by, or management divisions of, Landlord
                    perform actual management services of a comparable nature
                    and type as normally would be performed by third parties.

               3.   All rental and/or purchase costs of materials, supplies,
                    tools and equipment used in the operation, repair,
                    replacement and maintenance and the control of access to the
                    Building, the Property and the Project.

               4.   All amounts charged to Landlord by contractors and/or
                    suppliers for services, replacement parts, components,
                    materials, equipment and supplies furnished in connection
                    with the operation, repair, maintenance, replacement of and
                    control of access to any part of the Building, the Property,
                    or the Project  generally, including the heating, air
                    conditioning, ventilating, plumbing, electrical, elevator
                    and other systems and equipment.  At Landlord's option,
                    major repair items may be amortized over a period of up to
                    five (5) years. Notwithstanding the foregoing, except to the
                    extent set forth in Subsection IV.B.11. below, it is hereby
                    agreed that any costs in connection with replacements that
                    would properly be considered to be capital improvements
                    under generally accepted accounting principles shall be
                    excluded from Basic Costs.

               5.   All premiums and deductibles paid by Landlord for fire and
                    extended coverage insurance, earthquake and extended
                    coverage insurance, liability and extended coverage
                    insurance, rental loss insurance, elevator insurance, boiler
                    insurance and other insurance customarily carried from time
                    to time by landlords of comparable office buildings or
                    required to be carried by Landlord's Mortgagee.

               6.   Charges for water, gas, steam and sewer, but excluding those
                    charges for which Landlord is otherwise reimbursed by
                    tenants, and charges for Electrical Costs. For purposes
                    hereof, the term "Electrical Costs" shall mean: (i) all
                    charges paid by Landlord for electricity supplied to the
                    Building, Property and Premises, regardless of whether such
                    charges are characterized as distribution charges,
                    transmission charges, generation charges, public good
                    charges, disconnection charges, competitive transaction
                    charges, stranded cost recoveries or otherwise; (ii) except
                    to the extent otherwise included in Basic Costs, any costs
                    incurred in connection with the energy management program
                    for the Building, Property and Premises, including any costs
                    incurred for the replacement

                                       9
<PAGE>
                    of lights and ballasts and the purchase and installation
                    of sensors and other energy saving equipment amortized
                    over a reasonably estimated payback period; and (iii) if
                    and to the extent permitted by law, a reasonable fee for
                    the services provided by Landlord in connection with the
                    selection of utility companies and the negotiation and
                    administration of contracts for the generation of
                    electricity. Notwithstanding the foregoing, Electrical
                    Costs shall be adjusted as follows: (a) any amounts
                    received by Landlord as reimbursement for above standard
                    electrical consumption shall be deducted from Electrical
                    Costs, (b) the cost of electricity incurred in providing
                    overtime HVAC to specific tenants shall be deducted from
                    Electrical Costs, it being agreed that the electrical
                    component of overtime HVAC costs shall be calculated as
                    a reasonable percentage of the total HVAC costs charged
                    to such tenants, and (c) if Tenant is billed directly
                    for the cost of electricity to the Premises as a
                    separate charge in addition to Base Rental and Basic
                    Costs, the cost of electricity to individual tenant
                    spaces in the Building shall be deducted from Electrical
                    Costs and the electricity component of Tenant's Basic
                    Costs shall not be subject to gross-up provisions (if
                    any) stated elsewhere in this Lease.

               7.   "Taxes," which for purposes hereof, shall mean: (a) all real
                    estate taxes and assessments on the Property, the Building
                    or the Premises, and taxes and assessments levied in
                    substitution or supplementation in whole or in part of such
                    taxes, (b) all personal property taxes for the Building's
                    personal property, including license expenses, (c) all taxes
                    imposed on services of Landlord's agents and employees, (d)
                    all other taxes, fees or assessments now or hereafter levied
                    by any governmental authority on the Project, the Property,
                    the Building or its contents or on the operation and use
                    thereof (except as they relate to specific tenants), and (e)
                    all costs and fees incurred in connection with seeking
                    reductions in or refunds in Taxes including, without
                    limitation, any costs incurred by Landlord to challenge the
                    tax valuation of the Building, the Property, or the Project,
                    but excluding income taxes. For the purpose of determining
                    real estate taxes and assessments for any given calendar
                    year, the amount to be included in Taxes for such year shall
                    be as follows: (1) with respect to any special assessment
                    that is payable in installments, Taxes for such year shall
                    include the amount of the installment (and any interest) due
                    and payable during such year in the greatest number of
                    installments available for such special assessment; and (2)
                    with respect to all other real estate taxes, Taxes for such
                    year shall, at Landlord's election, include either the
                    amount accrued, assessed or otherwise imposed for such year
                    or the amount due and payable for such year, provided that
                    Landlord's election shall be applied consistently throughout
                    the Lease Term. If a reduction in Taxes is obtained for any
                    year of the Lease Term during which Tenant paid its Pro Rata
                    Share of Basic Costs, then Basic Costs for such year will be
                    retroactively adjusted and Landlord shall provide Tenant
                    with a credit, if any, based on such adjustment. Likewise,
                    if a reduction is subsequently obtained for Taxes for the
                    Base Year (if Tenant's Pro Rata Share is based upon
                    increases in Basic Costs over a Base Year), Basic Costs for
                    the Base Year shall be restated and the Excess for all
                    subsequent years recomputed. Tenant shall pay to Landlord
                    Tenant's Pro Rata Share of any such increase in the Excess
                    within thirty (30) days after Tenant's receipt of a
                    statement therefor from Landlord.

               8.   All landscape expenses of the Property and/or the Project,
                    if any.

               9.   Cost of all maintenance service agreements, including those
                    for equipment, alarm service, window cleaning, drapery or
                    venetian blind cleaning, janitorial services, pest control,
                    uniform supply, plant maintenance and  landscaping.

               10.  Cost of all other repairs, replacements and general
                    maintenance of the Project, the Property and the Building
                    neither specified above nor directly billed to tenants.
                                      10
<PAGE>

               11.  The amortized cost of capital improvements made to the
                    Project, the Building or the Property which are: (a)
                    primarily for the purpose of reducing operating expense
                    costs or otherwise improving the operating efficiency of the
                    Project, the Property or the Building; or (b) required to
                    comply with any newly enacted laws, rules or regulations of
                    any governmental authority or any changes in the existing
                    laws, rules or regulations of any governmental authority or
                    a requirement of Landlord's insurance carrier. The cost of
                    such capital improvements shall be amortized over a period
                    of five (5) years and shall, at Landlord's option, include
                    interest at a rate that is reasonably equivalent to the
                    interest rate that Landlord would be required to pay to
                    finance the cost of the capital improvement in question as
                    of the date such capital improvement is performed, provided
                    if the payback period for any capital improvement is less
                    than five (5) years, Landlord may amortize the cost of such
                    capital improvement over the payback period. Notwithstanding
                    the foregoing, Basic Costs shall not include the cost of any
                    capital improvements that are required to correct work that,
                    when initially performed by Landlord, was performed in
                    violation of the then existing laws, rules or regulations
                    governing the performance of such work.

               12.  Any other expense or charge of any nature whatsoever which,
                    in accordance with general industry practice with respect to
                    the operation of a first-class office building, would be
                    construed as an operating expense.

               Basic Costs shall not include the cost of capital improvements
               (except as set forth above and as distinguished from replacement
               parts or components purchased and installed in the ordinary
               course), depreciation, interest (except as provided above with
               respect to the amortization of capital improvements), lease
               commissions, and principal payments on mortgage and other
               non-operating debts of Landlord.  Basic Costs shall also exclude:

                    1)   Repairs or other work occasioned by: (i) fire,
                         windstorm, or other casualty of the type which Landlord
                         has insured (to the extent that Landlord has received
                         insurance proceeds and provided that the amount of any
                         deductible paid by Landlord shall be included in Basic
                         Costs); or (ii) the exercise of the right of eminent
                         domain (to the extent that such repairs or other work
                         are covered by the proceeds of the award, if any,
                         received by Landlord);

                    2)   Leasing commissions, brochures, marketing supplies,
                         attorney's fees, costs, and disbursements and other
                         expenses incurred in connection with negotiation of
                         leases with prospective tenants;

                    3)   Rental concessions granted to specific tenants and
                         expenses incurred in renovating or otherwise improving
                         or decorating, painting, or redecorating space for
                         specific tenants, other than ordinary repairs and
                         maintenance provided or available to tenants in
                         general;

                    4)   Landlord's costs of electricity and other services sold
                         or provided to tenants in the Building and for which
                         Landlord is entitled to be reimbursed by such tenants
                         as a separate additional charge or rental over and
                         above the base rental or additional base rental payable
                         under the lease with such tenant;

                    5)   Overhead and profit increment paid to subsidiaries or
                         other affiliates of Landlord for services on or to the
                         Property, Building and/or Premises to the extent only
                         that the costs of such services exceed the competitive
                         cost for such services rendered by persons or entities
                         of similar skill, competence and experience.

                                      11
<PAGE>

                    6)   The cost of services that are not available to Tenant
                         under this Lease or for which Tenant reimburses
                         Landlord as a separate charge (other than through Basic
                         Costs);

                    7)   Advertising and promotional expenditures;

                    8)   Costs incurred in connection with the sale, financing,
                         refinancing, mortgaging or sale of the Building or
                         Property, including brokerage commissions, attorneys'
                         and accountants' fees, closing costs, title insurance
                         premiums, transfer taxes and interest charges;

                    9)   Costs, fines, interest, penalties, legal fees or costs
                         of litigation incurred due to the late payments of
                         taxes, utility bills and other costs incurred by
                         Landlord's failure to make such payments when due
                         unless such failure is due to Landlord's good faith and
                         reasonable efforts in contesting the amount of such
                         payments;

                    10)  Costs incurred by Landlord for trustee's fees,
                         partnership organizational expenses and accounting fees
                         to the extent relating to Landlord's general corporate
                         overhead and general administrative expenses;

                    11)  Any penalties or liquidated damages that Landlord pays
                         to Tenant under this Lease or to any other tenants in
                         the Building under their respective leases;

                    12)  Attorney's fees, costs and disbursements and other
                         expenses incurred in connection with negotiations or
                         disputes with tenants or other occupants of the
                         Building or with prospective tenants (other than
                         attorney's fees, costs and disbursements and other
                         expenses incurred by Landlord in seeking to enforce
                         Building rules and regulations).

          If the Building is not at least ninety-five percent (95%) occupied
          during any calendar year of the Lease Term or if Landlord is not
          supplying services to at least ninety-five percent (95%) of the
          total Rentable Area of the Building at any time during any
          calendar year of the Lease Term, actual Basic Costs for purposes
          hereof shall, at Landlord's option, be determined as if the
          Building had been ninety-five percent (95%) occupied and Landlord
          had been supplying services to ninety-five percent (95%) of the
          Rentable Area of the Building during such year. If Tenant pays for
          its Pro Rata Share of Basic Costs based on increases over a "Base
          Year" and Basic Costs for any calendar year during the Lease Term
          are determined as provided in the foregoing sentence, Basic Costs
          for such Base Year shall also be determined as if the Building had
          been ninety-five percent (95%) occupied and Landlord had been
          supplying services to ninety-five percent (95%) of the Rentable
          Area of the Building. Any necessary extrapolation of Basic Costs
          under this Article shall be performed by adjusting the cost of
          those components of Basic Costs that are impacted by changes in
          the occupancy of the Building (including, at Landlord's option,
          Taxes) to the cost that would have been incurred if the Building
          had been ninety-five percent (95%) occupied and Landlord had been
          supplying services to ninety-five percent (95%) of the Rentable
          Area of the Building.  In addition, if Tenant's Pro Rata Share of
          Basic Costs is determined based upon increases over a Base Year
          and Basic Costs for the Base Year include exit and disconnection
          fees, stranded cost charges and/or competitive transaction
          charges, such fees and charges may, at Landlord's option, be
          imputed as a Basic Cost for subsequent years in which such fees
          and charges are not incurred.  In no event, however, shall the
          amount of such imputed fees and charges exceed the actual amount
          of exit and disconnection fees, stranded cost charges and/or
          competitive transaction charges that were actually included in
          Basic Costs for the Base Year.

                                      12
<PAGE>
          C.   If Basic Costs for any calendar year increase by more than five
               percent (5%) over Basic Costs for the immediately preceding
               calendar year, Tenant, within one hundred twenty (120) days after
               receiving Landlord's statement of actual Basic Costs for a
               particular calendar year, shall have the right to provide
               Landlord with written notice (the "Review Notice") of its intent
               to review Landlord's books and records relating to the Basic
               Costs for such calendar year. Within a reasonable time after
               receipt of a timely Review Notice, Landlord shall make such books
               and records available to Tenant or Tenant's agent for its review
               at either Landlord's home office or at the office of the
               Building, provided that if Tenant retains an agent to review
               Landlord's books and records for any calendar year, such agent
               must be a CPA firm licensed to do business in the state in which
               the Building is located. Tenant shall be solely responsible for
               any and all costs, expenses and fees incurred by Tenant or
               Tenant's agent in connection with such review. If Tenant elects
               to review Landlord's books and records, within sixty (60) days
               after such books and records are made available to Tenant, Tenant
               shall have the right to give Landlord written notice stating in
               reasonable detail any objection to Landlord's statement of actual
               Basic Costs for such calendar year. If Tenant fails to give
               Landlord written notice of objection within such sixty (60) day
               period or fails to provide Landlord with a Review Notice within
               the one hundred twenty (120) day period provided above, Tenant
               shall be deemed to have approved Landlord's statement of Basic
               Costs in all respects and shall thereafter be barred from raising
               any claims with respect thereto. Upon Landlord's receipt of a
               timely objection notice from Tenant, Landlord and Tenant shall
               work together in good faith to resolve the discrepancy between
               Landlord's statement and Tenant's review. If Landlord and Tenant
               determine that Basic Costs for the calendar year in question are
               less than reported, Landlord shal provide Tenant with a credit
               against future Additional Base Rental in the amount of any
               overpayment by Tenant. In addition, if Landlord and Tenant
               determine that Basic Costs for the Building were less than stated
               by more than five percent (5%), Landlord, within thirty (30) days
               after its receipt of paid invoices therefor from Tenant,  shall
               reimburse Tenant for any reasonable amounts paid by Tenant to
               third parties in connection with such review by Tenant. Likewise,
               if Landlord and Tenant determine that Basic Costs for the
               calendar year in question are greater than reported, Tenant shall
               forthwith pay to Landlord the amount of  underpayment by Tenant.
               Any information obtained by Tenant pursuant to the provisions of
               this Section shall be treated as confidential. Notwithstanding
               anything herein to the contrary, Tenant shall not be permitted to
               examine Landlord's books and records or to dispute any statement
               of Basic Costs unless Tenant has paid to Landlord the amount due
               as shown on Landlord's statement of actual Basic Costs, said
               payment being a condition precedent to Tenant's right to examine
               Landlord's books and records; provided, however, that such
               payment may be deemed to be a "payment under protest."

          D.   Tenant covenants and agrees to pay to Landlord during the Lease
               Term, without any setoff or deduction whatsoever, the full amount
               of all Base Rental and Additional Base Rental due hereunder. In
               addition, Tenant shall pay and be liable for, as additional rent,
               all rental, sales and use taxes or other similar taxes, if any,
               levied or imposed by any city, state, county or other
               governmental body having authority, such payments to be in
               addition to all other payments required to be paid to Landlord by
               Tenant under the terms and conditions of this Lease. Any such
               payments shall be paid concurrently with the payments of the Rent
               on which the tax is based. The Base Rental, Tenant's Pro Rata
               Share of Basic Costs and any recurring monthly charges due
               hereunder shall be due and payable in advance on the first day of
               each calendar month during the Lease Term without demand,
               provided that the installment of Base Rental for the first full
               calendar month of the Lease Term shall be payable upon the
               execution of this Lease by Tenant. All other items of Rent shall
               be due and payable by Tenant on or before ten (10) days after
               billing by Landlord. If the Lease Term commences on a day other
               than the first day of a calendar month or terminates on a day
               other than the last day of a calendar month, then the monthly
               Base Rental and Tenant's Pro Rata Share of Basic Costs for such
               month shall be
                                      13
<PAGE>

               prorated for the number of days in such month
               occurring within the Lease Term based on a fraction, the
               numerator of which is the number of days of the Lease Term that
               fell within such calendar month and the denominator of which is
               thirty (30). All such payments shall be by a good and sufficient
               check. No payment by Tenant or receipt or acceptance by Landlord
               of a lesser amount than the correct amount of Rent due under this
               Lease shall be deemed to be other than a payment on account of
               the earliest Rent due hereunder, nor shall any endorsement or
               statement on any check or any letter accompanying any check or
               payment be deemed an accord and satisfacion, and Landlord may
               accept such check or payment without prejudice to Landlord's
               right to recover the balance or pursue any other available
               remedy. The acceptance by Landlord of any Rent on a date after
               the due date of such payment shall not be construed to be a
               waiver of Landlord's right to declare a default for any other
               late payment. Tenant's covenant to pay Rent shall be independent
               of every other covenant set forth in this Lease.

          E.   All Rent not paid within three (3) days after when due and
               payable shall bear interest from the date due until paid at the
               lesser of: (1) eighteen percent (18%) per annum; or (2) the
               Maximum Rate. In addition, if Tenant fails to pay any installment
               of Rent when due and payable hereunder more than two (2) times in
               any twelve (12) month period during the Lease Term, a service fee
               equal to five percent (5%) of such unpaid amount will be due and
               payable immediately by Tenant to Landlord.

          F.   In lieu of requiring Tenant to pay Rent by good and sufficient
               check in the manner described in Section IV.D. above, Landlord
               shall have the right to require Tenant to pay Rent by means of an
               automated debit system (the "Automatic Debit System") whereby any
               or all payments of Rent shall be debited from Tenant's account in
               a bank or financial institution designated by Tenant and credited
               to Landlord's account in a bank or financial institution
               designated by Landlord. In the event Landlord elects to have
               Tenant pay all or any portion of Rent by means of the Automatic
               Debit System, Tenant, within thirty (30) days after written
               request by Landlord, shall execute and deliver to Landlord any
               authorizations, certificates or other documentation as may be
               required to establish and give effect to the Automatic Debit
               System.  If Landlord elects to have less than all items of Rent
               paid by the Automatic Debit System, Landlord shall advise Tenant
               in writing as to those items of Rent that will be paid by the
               Automatic Debit System (e.g. Base Rental only or Base Rental and
               Tenant's Pro Rata Share of Basic Costs only).  Either party shall
               have the right to change its bank or financial institution from
               time to time, provided that Tenant, no less than thirty (30) days
               prior to the effective date of any such change, shall provide
               Landlord with written notice of such change and any and all
               authorizations, certificates or other documentation as may be
               required to establish and give effect to the Automatic Debit
               System at Tenant's new bank or financial institution.  Tenant
               shall promptly pay all service fees and other charges imposed
               upon Landlord or Tenant in connection with the Automatic Debit
               System, including, without limitation, any charges resulting from
               insufficient funds in Tenant's bank account.  In the event that
               any Rent is not paid on time as a result of insufficient funds in
               Tenant's account, Tenant shall be liable for any interest and/or
               service fee in accordance with Section IV.E. above.   Tenant
               shall remain liable to Lndlord for all payments of Rent due
               hereunder regardless of whether Tenant's account is incorrectly
               debited in any given month, it being agreed that a debit of less
               than the full amount of Rent due shall not be construed as a
               waiver by Landlord of its right to receive any unpaid balance of
               Rent. Notwithstanding the foregoing, Landlord shall not be
               entitled to require Tenant to pay Rent through the Automatic
               Debit System unless Tenant, on more than two (2) occasions during
               the Lease Term, has failed to pay any installment of Rent on or
               before the date required herein.

                                      14
<PAGE>

V.        USE.

          The Premises shall be used for the Permitted Use and for no other
purpose.  Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal, dangerous to life, limb or property or which, in
Landlord's reasonable opinion, creates a nuisance or which would increase the
cost of insurance coverage with respect to the Building. Tenant shall conduct
its business and control its agents, servants, contractors, employees,
customers, licensees, and invitees in such a manner as not to interfere with,
annoy or disturb other tenants, or in any way interfere with Landlord in the
management and operation of the Building. Tenant will maintain the Premises
in a clean and healthful condition, and comply with all laws, ordinances,
orders, rules and regulations of any governmental entity with reference to
the operation of Tenant's business and to the use, condition, configuration
or occupancy of the Premises, including without limitation, the Americans
with Disabilities Act (collectively referred to as "Laws"). Tenant, within
ten (10) days after receipt thereof, shall provide Landlord with copies of
any notices it receives with respect to a violation or alleged violation of
any Laws. Tenant will comply with the rules and regulations of the Building
attached hereto as Exhibit B and such other rules and regulations adopted and
altered by Landlord from time to time and will cause all of its agents,
servants, contractors, employees, customers, licensees and invitees to do so.
All changes to such rules and regulations will be reasonable and shall be
sent by Landlord to Tenant in writing.

VI.       SECURITY DEPOSIT.

          The Security Deposit shall be delivered to Landlord upon the
execution of this Lease by Tenant and shall be held by Landlord without
liability for interest (except as required by law) and as security for the
performance of Tenant's obligations under this Lease. The Security Deposit
shall not be considered an advance payment of Rent or a measure of Tenant's
liability for damages. Landlord may, from time to time, without prejudice to
any other remedy, use all or a portion of the Security Deposit to make good
any arrearage of Rent, to repair damages to the Premises, to clean the
Premises upon termination of this Lease or otherwise to satisfy any other
covenant or obligation of Tenant hereunder. Following any such application of
the Security Deposit, Tenant shall pay to Landlord on demand the amount so
applied in order to restore the Security Deposit to its original amount. If
Tenant is not in default at the termination of this Lease, after Tenant
surrenders the Premises to Landlord in accordance with this Lease and all
amounts due Landlord from Tenant are finally determined and paid by Tenant or
through application of the Security Deposit, the balance of the Security
Deposit remaining after any such application shall be returned to Tenant. If
Landlord transfers its interest in the Premises during the Lease Term,
Landlord may assign the Security Deposit to the transferee and thereafter
shall have no further liability for the return of such Security Deposit.
Tenant agrees to look solely to such transferee or assignee for the return of
the Security Deposit. Landlord and its successors and assigns shall not be
bound by any actual or attempted assignment or encumbrance of the Security
Deposit by Tenant, provided, however, if Tenant's interest in this Lease has
been assigned, Landlord shall, provided that Landlord has been furnished with
a fully executed copy of the agreement assigning such Security Deposit,
return the Security Deposit to such assignee in accordance with the terms and
conditions hereof. If Landlord return the Security Deposit to Tenant's
assignee as aforesaid, Landlord will have no further obligation to any party
with respect thereto. Landlord shall not be required to keep the Security
Deposit separate from its other accounts.

VII.      SERVICES TO BE FURNISHED BY LANDLORD.

          A.   Landlord, as part of Basic Costs (except as otherwise provided),
               agrees to furnish Tenant the following services:

               1.   Water for use in the lavatories on the floor(s) on which the
                    Premises is located. If Tenant desires water in the Premises
                    for any approved reason, including a private lavatory or
                    kitchen, cold water shall be supplied, at Tenant's sole cost
                    and expense, from the Building water main through a line and
                    fixtures installed at Tenant's sole cost and expense with
                    the prior reasonable consent of Landlord. If Tenant desires
                    hot water in the

                                      15
<PAGE>

                    Premises, Tenant, at its sole cost and expense and subject
                    to the prior reasonable consent of Landlord, may install a
                    hot water heater in the Premises. Tenant shall be solely
                    responsible for maintenance and repair of any such hot water
                    heater.

               2.   Central heat and air conditioning in season during Normal
                    Business Hours, at such temperatures and in such amounts as
                    are considered by Landlord, in its reasonable judgment, to
                    be standard for buildings of similar class, size, age and
                    location, or as required by governmental authority. In the
                    event that Tenant requires central heat, ventilation or air
                    conditioning at hours other than Normal Business Hours, such
                    central heat, ventilation or  air conditioning may be
                    provided by telephonic activation of the Building's HVAC
                    system and/or shall be furnished upon the written request of
                    Tenant delivered to Landlord at the office of the Building
                    prior to 3:00 P.M. at least one Business Day in advance of
                    the date for which such usage is requested. Tenant shall pay
                    Landlord, as Additional Base Rental, the entire cost of
                    additional service as such costs are determined by Landlord
                    from time to time (as of the date of this Lease, Landlord's
                    cost for such service is $60.00 per hour (or fractional
                    hour), which charge may be subject to change from time to
                    time to reflect changes in Landlord's direct or indirect
                    costs of providing such service).

               3.   Maintenance and repair of all Common Areas in the manner and
                    to the extent reasonably deemed by Landlord to be standard
                    for buildings of similar class, size, age and location.

               4.   Janitor service on Business Days in accordance with the
                    cleaning specifications attached hereto as Exhibit G, or
                    such other reasonably comparable specifications designated,
                    from time to time, by Landlord; provided, however, if
                    Tenant's use, floor covering or other improvements require
                    special services, Tenant shall pay the additional cost
                    reasonably attributable thereto as Additional Base Rental.

               5.   Passenger elevator service in common with other tenants of
                    the Building.

               6.   Electricity to the Premises for general office use, in
                    accordance with and subject to the terms and conditions set
                    forth in Article XI of this Lease.

               7.   The failure by Landlord to any extent to furnish, or the
                    interruption or termination of, any services in whole or in
                    part, resulting from adherence to laws, regulations and
                    administrative orders, wear, use, repairs, improvements,
                    alterations or any causes beyond the reasonable control of
                    Landlord shall not render Landlord liable in any respect nor
                    be construed as a constructive eviction of Tenant, nor give
                    rise to an abatement of Rent, nor relieve Tenant from the
                    obligation to fulfill any covenant or agreement hereof.
                    Should any of the equipment or machinery used in the
                    provision of such services for any cause cease to function
                    properly, Landlord shall use reasonable diligence to repair
                    such equipment or machinery.

          B.   Tenant expressly acknowledges that if Landlord, from time to
               time, elects to provide security services, Landlord shall not be
               deemed to have warranted the efficiency of any security
               personnel, service, procedures or equipment and Landlord shall
               not be liable in any manner for the failure of any such security
               personnel, services, procedures or equipment to prevent or
               control, or apprehend anyone suspected of personal injury,
               property damage or any criminal conduct in, on or around the
               Property.

                                      16
<PAGE>

VIII.     LEASEHOLD IMPROVEMENTS.

          Any trade fixtures, unattached and movable equipment or furniture,
or other personalty brought into the Premises by Tenant ("Tenant's Property")
shall be owned and insured by Tenant. Tenant shall remove all such Tenant's
Property from the Premises in accordance with the terms of Article XXXV
hereof. Any and all alterations, additions and improvements to the Premises,
including any built-in furniture (collectively, "Leasehold Improvements")
shall be owned and insured by Landlord and shall remain upon the Premises,
all without compensation, allowance or credit to Tenant. Landlord may,
nonetheless, at any time prior to, or within six (6) months after, the
expiration or earlier termination of this Lease or Tenant's right to
possession, require Tenant to remove any Leasehold Improvements performed by
or for the benefit of Tenant and all electronic, phone and data cabling as
are designated by Landlord (the "Required Removables") at Tenant's sole cost.
In the event that Landlord so elects, Tenant shall remove such Required
Removables within ten (10) days after written notice from Landlord, provided
that in no event shall Tenant be required to remove such Required Removables
prior to the expiration or earlier termination of this Lease or Tenant's
right to possession. In addition to Tenant's obligation to remove the
Required Removables, Tenant shall repair any damage caused by such removal
and perform such other work as is reasonably necessary to restore the
Premises to a "move in" condition, ordinary wear, tear and casualty excepted.
If Tenant fails to remove any specified Required Removables or to perform any
required repairs and restoration within the time period specified above,
Landlord, at Tenant's sole cost and expense, may remove, store, sell and/or
dispose of the Required Removables and perform such required repairs and
restoration work. Tenant, within five (5) days after demand from Landlord,
shall reimburse Landlord for any and all reasonable costs incurred by
Landlord in connection with the Required Removables. Notwithstanding the
foregoing, Tenant may request in writing at the time it submits its plans and
specifications for an alteration, addition or improvement, that Landlord
advise Tenant whether Landlord will require Tenant to remove, at the
termination of this Lease or Tenant's right to possession hereunder, such
alteration, addition or improvement, or any particular portion thereof
andLandlord shall advise Tenant within twenty (20) days after receipt of
Tenant's request as to whether Landlord will require removal; provided,
however, Landlord shall have the right to require Tenant to remove any vault,
stairway, raised floor or structural alterations installed in the Premises,
regardless of whether Landlord timely notified Tenant that it would require
such removal.

IX.       GRAPHICS.

          Landlord shall provide and install, at Tenant's cost, any suite
numbers and Tenant identification on the exterior of the Premises using the
standard graphics for the Building. Tenant shall not be permitted to install
any signs or other identification without Landlord's prior written consent.
Landlord shall not permit signage identifying any Retail Banking Business or
competitor of a Retail Banking Business to be located above the ground floor
level of the improvements on or about, or visible from, the exterior of the
Building, the Property or the Project.

X.        REPAIRS AND ALTERATIONS.

          A.   Except to the extent such obligations are imposed upon Landlord
               hereunder, Tenant, at its sole cost and expense, shall perform
               all maintenance and repairs to the Premises as are necessary to
               keep the same in good condition and repair throughout the entire
               Lease Term, reasonable wear and tear excepted. Tenant's repair
               and maintenance obligations with respect to the Premises shall
               include, without limitation, any necessary repairs with respect
               to: (1) any carpet or other floor covering, (2) any interior
               partitions, (3) any doors, (4) the interior side of any demising
               walls, (5) any telephone and computer cabling that serves
               Tenant's equipment exclusively,  (6) any supplemental air
               conditioning units, private showers and kitchens, including any
               plumbing in connection therewith, and similar facilities serving
               Tenant exclusively, and (7) any alterations, additions or
               improvements performed by contractors retained by Tenant. All
               such work shall be performed in accordance with Section X.B.
               below and the rules, policies and procedures reasonably enacted
               by Landlord from time to time for the performance of work in the
               Building. If Tenant fails to make any necessary

                                      17
<PAGE>

               repairs to the Premises within ten (10) days after notice
               from Landlord (provided that no prior notice shall be
               required in the event of an emergency), Landlord may, at its
               option, make such repairs, and Tenant shall pay the cost
               thereof to the Landlord on demand as Additional Base Rental,
               together with an administrative charge in an amount equal to
               ten percent (10%) of the cost of such repairs. Landlord
               shall, at its expense (except as included in Basic Costs),
               keep and maintain in good repair and working order and make
               all repairs to and perform necessary maintenance upon: (a)
               all structural elements of the Building; and  (b) all
               mechanical, electrical and plumbing systems that serve the
               Building in general; and (c) the Building facilities common
               to all tenants including, but not limited to, the ceilings,
               walls and floors in the Common Areas.

          B.   Tenant shall not make or allow to be made any alterations,
               additions or improvements to the Premises without first obtaining
               the written consent of Landlord in each such instance.
               Notwithstanding the foregoing, Landlord's consent shall not be
               required for any alteration, addition or improvement that
               satisfies all of the following criteria:  1) costs less than Ten
               Thousand and No/100 Dollars ($10,000.00); 2) is of a cosmetic
               nature such as painting, wallpapering, hanging pictures and
               installing carpeting; 3) is not visible from the exterior of the
               Premises or Building; and 4) will not affect the systems or
               structure of the Building and does not require work to be
               performed inside the walls or above the ceiling of the Premises;
               provided that even if consent is not required, Tenant shall still
               comply with all the other provisions of this Section X.B. Prior
               to commencing any such work and as a condition to obtaining
               Landlord's consent, Tenant must furnish Landlord with plans and
               specifications reasonably acceptable to Landlord; names and
               addresses of contractors reasonably acceptable to Landlord;
               copies of contracts; necessary permits and approvals; evidence of
               contractor's and subcontractor's insurance in accordance with
               Article XVI Section B. hereof; and payment bond or other
               security, all in form and amount satisfactory to Landlord. All
               such improvements, alterations or additions shall be constructed
               in a good and workmanlike manner using Building Standard
               materials or other new materials of equal or greater quality.
               Landlord, to the extent reasonably necessary to avoid any
               disruption to the tenants and occupants of the Building, shall
               have the right to designate the time when any such alterations,
               additions and improvements may be performed and to otherwise
               designate reasonable rules, regulations and procedures for the
               performance of work in the Building. Upon completion, Tenant
               shall furnish "as-built" plans, contractor's affidavits and
               partial, or full and final waivers of lien, as applicable, in
               recordable form, and receipted bills covering all labor and
               materials. All improvements, alterations and additions shall
               comply with all insurance requirements, codes, ordinances, laws
               and regulations, including without limitation, the Americans with
               Disabilities Act. Tenant shall reimburse Landlord upon demand as
               Additional Base Rental for all sums, if any, expended by Landlord
               for third party examination of the architectural, mechanical,
               electric and plumbing plans for any alterations, additions or
               improvements. In addition, if Landlord so requests, Landlord
               shall be entitled to oversee the construction of any alterations,
               additions or improvements that may affect the structure of the
               Building or any of the mechanical, electrical, plumbing or life
               safety systems of the Building. In the event Landlord elects to
               oversee such work, Landlord shall be entitled to receive a fee
               for such oversight in an amount equal to ten percent (10%) of the
               cost of such alterations, additions or improvements. Landlord's
               approval of Tenant's plans and specifications for any work
               performed for or on behalf of Tenant shall not be deemed to be a
               representation by Landlord that such plans and specifications
               comply with applicable insurance requirements, building codes,
               ordinances, laws or regulations or that the alterations,
               additions and improvements constructed in accordance with such
               plans and specifications will be adequate for Tenant's use.

                                      18
<PAGE>

XI.       USE OF ELECTRICAL SERVICES BY TENANT.

          A.   All electricity used by Tenant in the Premises shall be paid for
               by Tenant through inclusion in Basic Costs (except as provided in
               Section XI.B. below with respect to excess usage).  It is
               understood that electrical service to the Premises may be
               furnished by one or more companies providing electrical
               generation, transmission and/or distribution services and that
               the cost of electricity may be billed as a single charge or
               divided into and billed in a variety of categories such as
               distribution charges, transmission charges, generation charges,
               public good charges or other similar categories.  Landlord shall
               have the exclusive right to select the company(ies) providing
               electrical service to the Building, Premises and Property, to
               aggregate the electrical service for the Building, Premises and
               Property with other buildings, to purchase electricity for the
               Building, Premises and Property through a broker and/or buyers
               group and to change the providers and/or manner of purchasing
               electricity from time to time. Landlord shall be entitled to
               receive a reasonable fee (if permitted by law) for the services
               provided by Landlord in connection with the selection of utility
               companies and the negotiation and administration of contracts for
               the generation of electricity. In addition, if Landlord bills
               Tenant directly for the cost of electricity as Additional Base
               Rental, the cost of electricity may include (if permitted by law)
               an administrative fee to reimburse Landlord for the cost of
               reading meters, preparing invoices and related costs.

          B.   Tenant's use of electrical service in the Premises shall not
               exceed, either in voltage, rated capacity, use beyond Normal
               Business Hours or overall load, that which Landlord deems to be
               standard for the Building. In the event Tenant shall consume (or
               request that it be allowed to consume) electrical service in
               excess of that deemed by Landlord to be standard for the
               Building, Landlord may refuse to consent to such excess usage or
               may condition its consent to such excess usage upon such
               conditions as Landlord reasonably elects (including the
               installation of utility service upgrades, submeters, air handlers
               or cooling units), and all such additional usage (to the extent
               permitted by law), installation and maintenance thereof shall be
               paid for by Tenant as Additional Base Rental.  Use of electricity
               after Normal Business Hours is charged to Tenant, as of the date
               of this Lease, at $10.00 per hour (or fractional hour) of use;
               such charge is subject to change from time to time to reflect
               changes in Landlord's direct or indirect costs of providing such
               service.  Landlord, at any time during the Lease Term, shall have
               the right to separately meter electrical usage for the Premises
               or to measure electrical usage by survey or any other method that
               Landlord, in its reasonable judgment, deems to be appropriate.

          C.   Notwithstanding Section A. above to the contrary, if Landlord
               permits Tenant to purchase electrical power for the Premises from
               a provider other than Landlord's designated company(ies), such
               provider shall be considered to be a contractor of Tenant and
               Tenant shall indemnify and hold Landlord harmless from such
               provider's acts and omissions while in, or in connection with
               their services to, the Building or Premises in accordance with
               the terms and conditions of Article XV. In addition, at the
               request of Landlord, Tenant shall allow Landlord to purchase
               electricity from Tenant's provider at Tenant's rate or at such
               lower rate as can be negotiated by the aggregation of Landlord's
               and Tenant's requirements for electricity power.

XII.      ENTRY BY LANDLORD.

          Landlord and its agents or representatives shall have the right to
enter the Premises to inspect the same, or to show the Premises to
prospective purchasers, mortgagees, tenants (during the last twelve months of
the Lease Term or earlier in connection with a potential relocation) or
insurers, or to clean or make repairs, alterations or additions thereto,
including any work that Landlord deems necessary for the safety, protection
or preservation of the Building or any occupants thereof, or to facilitate
repairs, alterations or additions to the Building or any other tenants'
premises. Except for any entry by Landlord in an emergency situation or to

                                      19
<PAGE>

provide normal cleaning and janitorial service, Landlord shall provide Tenant
with reasonable prior notice of any entry into the Premises, which notice may
be given verbally. If reasonably necessary for the protection and safety of
Tenant and its employees, Landlord shall have the right to temporarily close
the Premises to perform repairs, alterations or additions in the Premises,
provided that Landlord shall use reasonable efforts to perform all such work
on weekends and after Normal Business Hours. Entry by Landlord hereunder
shall not constitute a constructive eviction or entitle Tenant to any
abatement or reduction of Rent by reason thereof. Notwithstanding the
foregoing, except in emergency situations as determined by Landlord, Landlord
shall exercise reasonable efforts: (1) not to unreasonably interfere with the
conduct of the business of Tenant on the Premises; and (2) if entry during
Normal Business Hours would unreasonably interfere with Tenant's business, to
affect such entry during hours other than Normal Business Hours.  Landlord,
however, shall not be required to perform such entry after Normal Business
Hours if Landlord's entry is necessitated by the acts or omissions of Tenant
or the performance of Landlord's obligations hereunder and, by performing
work during non-business hours, Landlord would be required to have building
personnel remain in the Building after normal working hours or to pay its
contractors overtime.

XIII.     ASSIGNMENT AND SUBLETTING.

          A.   Tenant shall not assign, sublease, transfer or encumber this
               Lease or any interest therein or grant any license, concession or
               other right of occupancy of the Premises or any portion thereof
               or otherwise permit the use of the Premises or any portion
               thereof by any party other than Tenant (any of which events is
               hereinafter called a "Transfer") without the prior written
               consent of Landlord, which consent shall not be unreasonably
               withheld with respect to any proposed assignment or subletting.
               Landlord's consent shall not be considered unreasonably withheld
               if: (1) the proposed transferee's financial responsibility does
               not meet the same criteria Landlord uses to select Building
               tenants; (2) the proposed transferee's business is not suitable
               for the Building considering the business of the other tenants
               and the Building's prestige or would result in a violation of an
               exclusive right granted to another tenant in the Building; (3)
               the proposed use is different than the Permitted Use; (4) the
               proposed transferee is a government agency or occupant of the
               Building or Property; (5) Tenant is in default (after notice and
               the expiration of any applicable cure period under this Lease);
               or (6) any portion of the Building or Premises would become
               subject to additional or different governmental laws or
               regulations as a consequence of the proposed Transfer and/or the
               proposed transferee's use and occupancy of the Premises. Tenant
               acknowledges that the foregoing is not intended to be an
               exclusive list of the reasons for which Landlord may reasonably
               withhold its consent to a proposed Transfer. Any attempted
               Transfer in violation of the terms of this Article shall, at
               Landlord's option, be void. Consent by Landlord to one or more
               Transfers shall not operate as a waiver of Landlord's rights as
               to any subsequent Transfers. In addition, Tenant shall not,
               without Landlord's consent, publicly advertise the proposed
               rental rate for any Transfer. Notwithstanding anything to the
               contrary contained herein or in Section XIII.D., Tenant mayassign
               its entire interest under this Lease or sublet the Premises to a
               wholly owned corporation, partnership or other legal entity or
               controlled subsidiary or parent of Tenant or to any successor to
               Tenant by purchase, merger, consolidation or reorganization
               (hereinafter, collectively, referred to as "Permitted Transfer")
               without the consent of Landlord, provided: (i) Tenant is not in
               default under this Lease; (ii) if such proposed transferee is a
               successor to Tenant by purchase, merger, consolidation or
               reorganization, the continuing or surviving entity shall own all
               or substantially all of the assets of Tenant and shall have a net
               worth which is at least equal to the greater of Tenant's net
               worth at the date of this Lease or Tenant's net worth at the date
               of the Transfer; (iii) such proposed transferee operates the
               business in the Premises for the Permitted Use and no other
               purpose; and (iv) in no event shall any Transfer release or
               relieve Tenant from any of its obligations under this Lease.
               Additionally, Tenant may, without the consent of Landlord and as
               a Permitted Transfer, sublet up to five (5) individual offices
               within the Premises to subtenant(s) or occupant(s) within the
               Premises in which Tenant has a substantial ownership interest
               (but not
                                      20
<PAGE>

               necessarily a controlling interest), but in no event shall
               the aggregate of area covered by such transactions exceed
               1,000 rentable square feet of the Premises, and provided only
               that (w) Tenant does not separately demise such space and the
               subtenants in each of such individual offices shall utilize,
               together with all other such subtenants, one (1) common entry
               way to the Premises (as well as possibly utilizing certain
               shared central services, such as reception, photocopying and
               the like); (x) the proposed transferee operates the business
               in the Premises for the Permitted Use, not in violation of
               any of the terms and conditions of this Lease or any of the
               Rules and Regulations of the Building, and for no other
               purpose; (y) in no event shall any such Transfer release or
               relieve Tenant from any of its obligations under this Lease;
               and (z) the proposed subtenant's business is professional and
               suitable for the Building considering the business of other
               tenants and the Building's prestige (a transaction
               contemplated by this sentence being referred to herein as a
               "Permitted Office Transfer").  A violation of any of the
               foregoing with respect to any purported Permitted Office
               Transfer to any Transfer shall be considered a default by
               Tenant hereunder.  Tenant shall give Landlord written notice
               at least thirty (30) days prior to the effective date of any
               Permitted Transfer or Permitted Office Transfer; in the case
               of any Permitted Office Transfer, such notice shall specify
               in reasonable detail the terms and conditions of such
               transfer, which may not include any consideration to Tenant
               which would be subject to the provisions of Section XIV.C
               below or a term in excess of nine (9) months.  In addition,
               Tenant hereby agrees that, to the fullest extent permissible
               under applicable law, Tenant will indemnify Landlord for the
               acts and omissions of any Permitted Office Transfer
               subtenant, its agents, employees, contractors, customers and
               invitees in accordance with the terms and conditions of
               Article XV of this Lease and to cause any insurance to the
               maintained by Tenant under this Lease to be extended to cover
               the acts and omissions of any Permitted Office Transfer
               subtenant, its agents, employees, contractors, customers and
               invitees) while in the Building.  As used herein: (a)
               "parent" shall mean a company which owns a majority of
               Tenant's voting equity; (b) "controlled" or "subsidiary"
               shall mean a entity wholly owned by Tenant or at least
               fifty-one percent (51%) of whose voting equity is owned by
               Tenant; and (c) "affiliate" shall mean an entity controlled,
               controlling or under common control with Tenant.
               Notwithstanding the foregoing, sale of the shares of equity
               of any affiliate or subsidiary to which this Lease has been
               assigned or transferred other than to another parent,
               subsidiary or affiliate of the original Tenant named
               hereunder shall be deemed to be an assignment requiring the
               consent of Landlord hereunder.  Landlord agrees, following
               Tenant's written request therefore, to provide directory
               strips identifying Permitted Office Transfer occupants in the
               Building's lobby directory; provided, however, that the
               aggregate number of directory strips identifying Tenant and
               Tenant's employees as well Tenant's Permitted Office Transfer
               occupants shall not at any time exceed the aggregate number
               of lobby directory strips allocable to Tenant and the
               Premises pursuant to the terms and provisions of this Lease
               and Landlord's then-current policies for determining such
               allocation.

          B.   If Tenant requests Landlord's consent to a Transfer, Tenant,
               together with such requests for consent, shall provide Landlord
               with the name of the proposed transferee and the nature of the
               business of the proposed transferee, the term, use, rental rate
               and all other material terms and conditions of the proposed
               Transfer, including, without limitation, a copy of the proposed
               assignment, sublease or other contractual documents and evidence
               satisfactory to Landlord that the proposed transferee is
               financially responsible. Notwithstanding Landlord's agreement to
               act reasonably under Section XIII.A. above, Landlord may, within
               thirty (30) days after its receipt of all information and
               documentation required herein, either, (1)  consent to or
               reasonably refuse to consent to such Transfer in writing; or (2)
               if the Transfer is an assignment or a sublease of all or
               substantially all the Premises for any portion of the Lease Term
               or a sublease of any portion of the Premises for all or
               substantially all of the remaining Lease Term, negotiate directly
               with the proposed transferee and in the event Landlord is able to
               reach an agreement with such proposed transferee, terminate this

                                      21
<PAGE>

               Lease (in part or in whole, as appropriate) upon thirty (30)
               days' notice; or (3) if the Transfer is an assignment or a
               sublease of all or substantially all the Premises for any portion
               of the Lease Term or a sublease of any portion of the Premises
               for all or substantially all of the remaining Lease Term, cancel
               and terminate this Lease, in whole or in part as appropriate,
               upon thirty (30) days' notice. Notwithstanding the foregoing,
               Landlord shall not have the right to terminate pursuant to 2 or 3
               above if the proposed transferee is a wholly owned corporation or
               controlled subsidiary or affiliate of Tenant or a successor to
               Tenant by purchase, merger, consolidation or reorganization. In
               the event Landlord consents to any such Transfer, the Transfer
               and consent thereto shall be in a form approved by Landlord, and
               Tenant shall bear all costs and expenses incurred by Landlord in
               connection with the review and approval of such documentation,
               which costs and expenses shall be deemed to be at least Seven
               Hundred Fifty Dollars ($750.00). Notwithstanding the foregoing,
               provided that Tenant does not request any changes to this Lease
               or Landlord's standard form of consent in connection with the
               proposed transfer, such costs and expenses shall not exceed Seven
               Hundred Fifty Dollars ($750.00).

          C.   Fifty percent (50%) of all cash or other proceeds (the "Transfer
               Consideration") of any Transfer of Tenant's interest in this
               Lease and/or the Premises, whether consented to by Landlord or
               not, shall be paid to Landlord and Tenant hereby assigns all
               rights it might have or ever acquire in fifty percent (50%) of
               any such proceeds to Landlord. In addition to the Rent hereunder,
               Tenant hereby covenants and agrees to pay to Landlord fifty
               percent (50%) of all rent and other consideration which it
               receives which is in excess of the Rent payable hereunder within
               ten (10) days following receipt thereof by Tenant.  In
               determining excess rent in connection with a Transfer, Tenant may
               (on an amortized basis, as described below), deduct the following
               expenditures resulting from such a Transfer: (i) reasonable
               brokerage fees, (ii) reasonable attorneys' fees, and (iii)
               construction costs incurred in improving the space that is the
               subject of the Transfer (as opposed to any upgrades or
               improvements to remainder areas of the Premises in which Tenant
               will retain occupancy); such costs shall be amortized on a
               straight-line basis over the remainder of the Lease Term (or,
               with respect to a sublease for less than the remainder of the
               Lease Term, the remainder of the term of the Sublease), and
               Tenant shall be entitled to offset against Tenant's monthly
               payment of Transfer Consideration to Landlord payable hereunder
               an amount equal to the monthly amortization of such costs.  In
               addition to any other rights Landlord may have, Landlord shall
               have the right to contact any transferee and require that all
               payments made pursuant to the Transfer shall be made directly to
               Landlord.

          D.   If Tenant is a corporation, limited liability company or similar
               entity, and if at any time during the Lease Term the entity or
               entities who own the voting shares at the time of the execution
               of this Lease cease for any reason (including but not limited to
               merger, consolidation or other reorganization involving another
               corporation) to own a majority of such shares, or if Tenant is a
               partnership and if at any time during the Lease Term the general
               partner or partners who own the general partnership interests in
               the partnership at the time of the execution of this Lease, cease
               for any reason to own a majority of such interests (except as the
               result of transfers by gift, bequest or inheritance to or for the
               benefit of members of the immediate family of such original
               shareholder[s] or partner[s]), such an event shall be deemed to
               be a Transfer. The preceding sentence shall not apply whenever
               Tenant is a corporation, the outstanding stock of which is listed
               on a recognized security exchange, or if at least eighty percent
               (80%) of its voting stock is owned by another corporation, the
               voting stock of which is so listed.

          E.   Any Transfer consented to by Landlord in accordance with this
               Article XIII shall be only for the Permitted Use and for no other
               purpose. In no event shall any Transfer release or relieve Tenant
               or any Guarantors from any obligations under this Lease.

                                      22
<PAGE>

XIV.      LIENS.

          Tenant will not permit any mechanic's liens or other liens to be
placed upon the Premises or Tenant's leasehold interest therein, the
Building, or the Property. Landlord's title to the Building and Property is
and always shall be paramount to the interest of Tenant, and nothing herein
contained shall empower Tenant to do any act that can, shall or may encumber
Landlord's title. In the event any such lien does attach, Tenant shall,
within ten (10) days of notice of the filing of said lien, either discharge
or bond over such lien to the satisfaction of Landlord and Landlord's
Mortgagee (as hereinafter defined), and in such a manner as to remove the
lien as an encumbrance against the Building and Property. If Tenant shall
fail to so discharge or bond over such lien, then, in addition to any other
right or remedy of Landlord, Landlord may, but shall not be obligated to bond
over or discharge the same. Any amount paid by Landlord for any of the
aforesaid purposes, including reasonable attorneys' fees (if and to the
extent permitted by law) shall be paid by Tenant to Landlord on demand as
Additional Base Rental. Landlord shall have the right to post and keep posted
on the Premises any notices that may be provided by law or which Landlord may
deem to be proper for the protection of Landlord, the Premises and the
Building from such liens.

XV.       INDEMNITY AND WAIVER OF CLAIMS.

          A.   Except to the extent such losses, liabilities, obligations,
               damages, penalties, claims, costs, charges, and expenses result
               from the negligence of Landlord and/or its agents, employees or
               contractors, Tenant shall indemnify, defend and hold Landlord,
               its members, principals, beneficiaries, partners, officers,
               directors, employees, Mortgagee(s) and agents, and the respective
               principals and members of any such agents (collectively the
               "Landlord Related Parties") harmless against and from all
               liabilities, obligations, damages, penalties, claims, costs,
               charges and expenses, including, without limitation, reasonable
               attorneys' fees and other professional fees (if and to the extent
               permitted by law), which may be imposed upon, incurred by, or
               asserted against Landlord or any of the Landlord Related Parties
               and arising, directly or indirectly, out of or in connection with
               the use, occupancy or maintenance of the Premises by, through or
               under Tenant including, without limitation, any of the following:
               (1) any work or thing done in, on or about the Premises or any
               part thereof by Tenant or any of its transferees, agents,
               servants, contractors, employees, customers, licensees or
               invitees; (2) any use, non-use, possession, occupation,
               condition, operation or maintenance of the Premises or any part
               thereof; (3) any act or omission of Tenant or any of its
               transferees, agents, servants, contractors, employees, customers,
               licensees or invitees, regardless of whether such act or omission
               occurred within the Premises; (4) any injury or damage to any
               person or property occurring in, on or about the Premises or any
               part thereof; or (5) any failure on the part of Tenant to perform
               or comply with any of the covenants, agreements, terms or
               conditions contained in this Lease with which Tenant must comply
               or perform. In case any action or proceeding is brought against
               Landlord or any of the Landlord Related Parties by reason of any
               of the foregoing, Tenant shall, at Tenant's sole cost and
               expense, resist and defend such action or proceeding with counsel
               approved by Landlord or, at Landlord's option, reimburse Landlord
               for the cost of any counsel retained directly by Landlord to
               defend and resist such action or proceeding.

          B.   Landlord and the Landlord Related Parties shall not be liable
               for, and Tenant hereby waives, all claims for loss or damage to
               Tenant's business or damage to person or property sustained by
               Tenant or any person claiming by, through or under Tenant
               [including Tenant's principals, agents and employees
               (collectively, the "Tenant Related Parties")] resulting from any
               accident or occurrence in, on or about the Premises, the
               Building, the Property or the Project,  including, without
               limitation, claims for loss, theft or damage resulting from: (1)
               the Premises, Building, Property or Project, or any equipment or
               appurtenances becoming out of repair; (2) wind or weather; (3)
               any defect in or failure to operate, for whatever reason, any
               sprinkler, heating or air-conditioning equipment, electric
               wiring, gas,

                                      23
<PAGE>

               water or steam pipes; (4) broken glass; (5) the backing up of
               any sewer pipe or downspout; (6) the bursting, leaking or
               running of any tank, water closet, drain or other pipe; (7)
               the escape of steam or water; (8) water, snow or ice being
               upon or coming through the roof, skylight, stairs, doorways,
               windows, walks or any other place upon or near the Building;
               (9) the falling of any fixture, plaster, tile or other
               material; (10) any act, omission or negligence of other
               tenants, licensees or any other persons or occupants of the
               Building or of adjoining or contiguous buildings, or owners
               of adjacent or contiguous property or the public, or by
               construction of any private, public or quasi-public work; or
               (11) any other cause of any nature except, as to items 1-9,
               where such loss or damage is due to Landlord's willful
               failure to make repairs required to be made pursuant to other
               provisions of this Lease, after the expiration of a
               reasonable time after written notice to Landlord of the need
               for such repairs. To the maximum extent permitted by law,
               Tenant agrees to use and occupy the Premises, and to use such
               other portions of the Building as Tenant is herein given the
               right to use, at Tenant's own risk.

          C.   Except to the extent such losses, liabilities, obligations,
               damages, penalties, claims, costs, charges and expenses result
               from the negligence of Tenant or any Tenant Related Parties,
               Landlord shall indemnify and hold Tenant harmless from and
               against all liabilities, obligations, damages (other than
               consequential damages), penalties, claims, costs, charges and
               expenses, including, without limitation, reasonable attorneys'
               fees, which may be imposed upon, incurred by, or asserted against
               Tenant by any third parties and arising, directly or indirectly,
               out of or in connection with any of the following: (i) any work
               or thing done in, on or about the Common Areas or any part
               thereof by Landlord or any of its agents, contractors or
               employees; (ii) any use, non-use, possession, occupation,
               condition, operation, maintenance or management of the Common
               Areas or any part thereof by Landlord or any of its agents,
               contractors or employees; (iii) any act or omission of Landlord
               or any of its agents, contractors or employees; and (iv) any
               injury or damage to any person or property occurring in, on or
               about the Common Areas or any part thereof; provided, however,
               that in each case such liability, obligation, damage, penalty,
               claim, cost, charge or expense results from the negligence of
               Landlord and/or its agents, employees or contractors. In case any
               action or proceeding is brought against Tenant or any of the
               Tenant Related Parties by a third party by reason of any of the
               foregoing, Landlord shall, at Landlord's sole cost and expense,
               resist and defend such action or proceeding with counsel
               reasonably approved by Tenant.

XVI.      TENANT'S INSURANCE.

          A.   At all times commencing on and after the earlier of the
               Commencement Date and the date Tenant or its agents, employees or
               contractors enters the Premises for any purpose, Tenant shall
               carry and maintain, at its sole cost and expense:

               1.   Commercial General Liability Insurance applicable to the
                    Premises and its appurtenances providing, on an occurrence
                    basis, a minimum combined single limit of Two Million
                    Dollars ($2,000,000.00), with a contractual liability
                    endorsement covering Tenant's indemnity obligations under
                    this Lease.

               2.   All Risks of Physical Loss Insurance written at replacement
                    cost value and with a replacement cost endorsement covering
                    all of Tenant's Property in the Premises.

               3.   Workers' Compensation Insurance as required by the state in
                    which the Premises is located and in amounts as may be
                    required by applicable statute, and Employers' Liability
                    Coverage of One Million Dollars ($1,000,000.00) per
                    occurrence.

                                      24
<PAGE>

               4.   If and to the extent commonly required by other landlords of
                    first class office buildings in the Los Angeles, California
                    area, Landlord, in the exercise of prudent business
                    judgment, shall have the right to require Tenant to obtain
                    additional insurance coverage or different types of
                    insurance.

          B.   Except for items for which Landlord is responsible under the Work
               Letter agreement, before any repairs, alterations, additions,
               improvements, or construction are undertaken by or on behalf of
               Tenant, Tenant shall carry and maintain, at its expense, or
               Tenant shall require any contractor performing work on the
               Premises to carry and maintain, at no expense to Landlord, in
               addition to Workers' Compensation Insurance as required by the
               jurisdiction in which the Building is located, All Risk Builder's
               Risk Insurance in the amount of the replacement cost of any
               alterations, additions or improvements (or such other amount
               reasonably required by Landlord) and Commercial General Liability
               Insurance (including, without limitation, Contractor's Liability
               coverage, Contractual Liability coverage and Completed Operations
               coverage,) written on an occurrence basis with a minimum combined
               single limit of Two Million Dollars ($2,000,000.00) and adding
               "the named Landlord hereunder (or any successor thereto), Equity
               Office Properties Trust, a Maryland real estate investment trust,
               EOP Operating Limited Partnership, a Delaware limited
               partnership, and their respective members, principals,
               beneficiaries, partners, officers, directors, employees, agents
               and any Mortgagee(s)", and other designees of Landlord as the
               interest of such designees shall appear, as additional insureds
               (collectively referred to as the "Additional Insureds").

          C.   Any company writing any insurance which Tenant is required to
               maintain or cause to be maintained pursuant to the terms of this
               Lease (all such insurance as well as any other insurance
               pertaining to the Premises or the operation of Tenant's business
               therein being referred to as "Tenant's Insurance"), as well as
               the form of such insurance, shall at all times be subject to
               Landlord's reasonable approval, and each such insurance company
               shall have an A.M. Best rating of "A-" or better and shall be
               licensed and qualified to do business in the state in which the
               Premises is located.  All policies evidencing Tenant's Insurance
               (except for Workers' Compensation Insurance) shall specify Tenant
               as named insured and the Additional Insureds as additional
               insureds.  Provided that the coverage afforded Landlord and any
               designees of Landlord shall not be reduced or otherwise adversely
               affected, all of Tenant's Insurance may be carried under a
               blanket policy covering the Premises and any other of Tenant's
               locations.  All policies of Tenant's Insurance shall contain
               endorsements that the insurer(s) will give to Landlord and its
               designees at least thirty (30) days' advance written notice of
               any change, cancellation, termination or lapse of said Tenant's
               Insurance.  Tenant shall be solely responsible for payment of
               premiums for all of Tenant's Insurance.  Tenant shall deliver to
               Landlord at least fifteen (15) days prior to the time Tenant's
               Insurance is first required to be carried by Tenant, and upon
               renewals at least fifteen (15) days prior to the expiration of
               any such Tenant's Insurance coverage, a certificate of insurance
               of all policies procured by Tenant in compliance with its
               obligations under this Lease.  The limits of Tenant's Insurance
               shall in no event limit Tenant's liability under this Lease.

          D.   Tenant shall not do or fail to do anything in, upon or about the
               Premises which will: (1) violate the terms of any of Landlord's
               insurance policies; (2)  prevent Landlord from obtaining policies
               of insurance acceptable to Landlord or any Mortgagees; or (3)
               result in an increase in the rate of any insurance on the
               Premises, the Building, any other property of Landlord or of
               others within the Building. In the event of the occurrence of any
               of the events set forth in this Section, Tenant shall pay
               Landlord upon demand, as Additional Base Rental, the cost of the
               amount of any increase in any such insurance premium, provided
               that the acceptance by Landlord of such payment shall not be
               construed to be a waiver of any rights by Landlord in connection
               with a default by Tenant under the Lease. If Tenant fails to
               obtain the insurance coverage required by this Lease,

                                      25
<PAGE>

               Landlord may, at its option, obtain such insurance for
               Tenant, and Tenant shall pay, as Additional Base Rental, the
               cost of all premiums thereon and all of Landlord's costs
               associated therewith.

XVII.     SUBROGATION.

          Notwithstanding anything set forth in this Lease to the contrary,
Landlord and Tenant do hereby waive any and all right of recovery, claim,
action or cause of action against the other, the other owners of the Project,
 their respective principals, beneficiaries, partners, officers, directors,
agents, and employees, and, with respect to Landlord, its Mortgagee(s), for
any loss or damage that may occur to Landlord or Tenant or any party claiming
by, through or under Landlord or Tenant, as the case may be, with respect to
their respective property, the Building, the Property, the Project, or the
Premises or any addition or improvements thereto, or any contents therein, by
reason of fire, the elements or any other cause, regardless of cause or
origin, including the negligence of Landlord or Tenant, or their respective
principals, beneficiaries, partners, officers, directors, agents and
employees and, with respect to Landlord, its Mortgagee(s), which loss or
damage is (or would have been, had the insurance required by this Lease been
carried) covered by insurance. Since this mutual waiver will preclude the
assignment of any such claim by subrogation (or otherwise) to an insurance
company (or any other person), Landlord and Tenant each agree to give each
insurance company which has issued, or in the future may issue, policies of
insurance, with respect to the items covered by this waiver, written notice
of the terms of this mutual waiver, and to have such insurance policies
properly endorsed, if necessary, to prevent the invalidation of any of the
coverage provided by such insurance policies by reason of such mutual waiver.
For the purpose of the foregoing waiver, the amount of any deductible
applicable to any loss or damage shall be deemed covered by, and recoverable
by the insured under the insurance policy to which such deductible relates.
In the event that Tenant is permitted to and self-insures any risk which
would have been covered by the insurance required to be carried by Tenant
pursuant to Article XVI of the Lease, or if Tenant fails to carry any
insurance required to be carried by Tenant pursuant to Article XVI of this
Lease, then all loss or damage to Tenant, its leasehold interest, its
business, its property, the Premises or any additions or improvements thereto
or contents thereof shall be deemed covered by and recoverable by Tenant
under valid and collectible policies of insurance.

XVIII.    LANDLORD'S INSURANCE.

          Landlord shall maintain property insurance on the Building in such
amounts as Landlord reasonably elects, provided that during the Lease Term
Landlord shall maintain standard so-called "all risk" property insurance
covering the Building in an amount equal to ninety percent (90%) of the
replacement cost thereof (including Leasehold Improvements approved by
Landlord) at the time in question. The cost of such insurance shall be
included as a part of the Basic Costs, and payments for losses and recoveries
thereunder shall be made solely to Landlord or the Mortgagees of Landlord as
their interests shall appear.

XIX.      CASUALTY DAMAGE.

          A.   If the Premises or any part thereof shall be damaged by fire or
               other casualty, Tenant shall give prompt written notice thereof
               to Landlord. In case the Building shall be so damaged that in
               Landlord's reasonable judgment, substantial alteration or
               reconstruction of the Building shall be required (whether or not
               the Premises has been damaged by such casualty) or in the event
               Landlord will not be permitted by applicable law to rebuild the
               Building in substantially the same form as existed prior to the
               fire or casualty or in the event the Premises has been materially
               damaged and there is less than one (1) year of the Lease Term
               remaining on the date of such casualty or in the event any
               Mortgagee should require that the insurance proceeds payable as a
               result of a casualty be applied to the payment of the mortgage
               debt or in the event of any material uninsured loss to the
               Building, Landlord may, at its option, terminate this Lease by
               notifying Tenant in writing of such termination within ninety
               (90) days after the date of such casualty. Such termination shall
               be effective as of the date of fire or casualty, with respect to
               any portion of the Premises that was rendered untenantable, and
               the effective date of termination specified in Landlord's notice,

                                      26
<PAGE>
               with respect to any portion of the Premises that remained
               tenantable. In addition to Landlord's rights to terminate as
               provided herein, Tenant shall have the right to terminate this
               Lease if: (1) a substantial portion of the Premises has been
               damaged by fire or other casualty and such damage cannot
               reasonably be repaired within sixty (60) days after the date of
               such fire or other casualty; (2) there is less than one (1) year
               of the Lease Term remaining on the date of such casualty; (3) the
               casualty was not caused by the negligence or willful misconduct
               of Tenant or its agents, employees or contractors; and (4) Tenant
               provides Landlord with written notice of its intent to terminate
               within thirty (30) days after the date of the fire or other
               casualty.  If neither Landlord nr Tenant elect to terminate this
               Lease, Landlord shall commence and proceed with reasonable
               diligence to restore the Building (provided that Landlord shall
               not be required to restore any unleased premises in the Building)
               and the Leasehold Improvements (but excluding any improvements,
               alterations or additions made by Tenant in violation of this
               Lease) located within the Premises, if any, which Landlord has
               insured to substantially the same condition they were in
               immediately prior to the happening of the casualty.
               Notwithstanding the foregoing, Landlord's obligation to restore
               the Building, and the Leasehold Improvements, if any, shall not
               require Landlord to expend for such repair and restoration work
               more than the insurance proceeds actually received by the
               Landlord as a result of the casualty. When repairs to the
               Premises have been completed by Landlord, Tenant shall complete
               the restoration or replacement of all Tenant's Property necessary
               to permit Tenant's reoccupancy of the Premises, and Tenant shall
               present Landlord with evidence satisfactory to Landlord of
               Tenant's ability to pay such costs prior to Landlord's
               commencement of repair and restoration of the Premises. Landlord
               shall not be liable for any inconvenience or annoyance to Tenant
               or injury to the business of Tenant resulting in any way from
               such damage or the repair thereof, except that, subject to the
               provisions of the next sentence, Landlord shall allow Tenant a
               fair diminution of Rent on a per diem basis during the time and
               to the extent any damage to the Premises causes the Premises to
               be rendered untenantable and not used by Tenant. If the Premises
               or any other portion of the Building is damaged by fire or other
               casualty resulting from the negligence of Tenant or any Tenant
               Related Parties, the Rent hereunder shall not be diminished
               during any period during which the Premises, or any portion
               thereof, is untenantable (except to the extent Landlord is
               entitled to be reimbursed by the proceeds of any rental
               interruption insurance), and Tenant shll be liable to Landlord
               for the cost of the repair and restoration of the Building caused
               thereby to the extent such cost and expense is not covered by
               insurance proceeds. Landlord and Tenant hereby waive the
               provisions of any law from time to time in effect during the
               Lease Term relating to the effect upon leases of partial or total
               destruction of leased property. Landlord and Tenant agree that
               their respective rights in the event of any damage to or
               destruction of the Premises shall be those specifically set forth
               herein.

          B.   Notwithstanding anything in this Article XIX to the contrary, if
               all or any portion of the Premises shall be made untenantable by
               a fire or other casualty, Landlord shall with reasonable
               promptness, cause an architect or general contractor selected by
               Landlord to estimate the amount of time required to substantially
               complete repair and restoration of the Premises and make the
               Premises tenantable again, using standard working methods (the
               "Completion Estimate").  If the Completion Estimate indicates
               that the Premises cannot be made tenantable within nine (9)
               months from the date the repair and restoration is started,
               either party shall have the right to terminate this Lease by
               giving written notice to the other of such election within ten
               (10) days after its receipt of the Completion Estimate.  Tenant,
               however, shall not have the right to terminate this Lease in the
               event that the fire or casualty in question was caused by the
               negligence or intentional misconduct of Tenant or any Tenant
               Related Parties. If the Completion Estimate indicates that the
               Premises can be made tenantable within nine (9) months from the
               date the repair and restoration is started and Landlord has not
               otherwise exercised its right to terminate the Lease pursuant to
               the terms hereof, or if the Completion Estimate indicates that
               the Premises
                                      27
<PAGE>

               cannot be made tenantable within nine (9) months but neither
               party terminates this Lease pursuant to this Article XIX,
               Landlord shall proceed with reasonable promptness to repair and
               restore the Premises.

XX.       DEMOLITION.

          Intentionally Omitted.

XXI.      CONDEMNATION.

          If (a) the whole or any substantial part of the Premises or (b) any
portion of the Building, the Property or the Project which would leave the
remainder of the Building unsuitable for use as an office building comparable
to its use on the Commencement Date, shall be taken or condemned for any
public or quasi-public use under governmental law, ordinance or regulation,
or by right of eminent domain, or by private purchase in lieu thereof, then
Landlord may, at its option, terminate this Lease effective as of the date
the physical taking of said Premises or said portion of the Building,
Property or Project shall occur. In the event this Lease is not terminated,
the Rentable Area of the Building, the Rentable Area of the Premises, the
Building's allocable share, and Tenant's Pro Rata Share shall be
appropriately adjusted.  In addition, Rent for any portion of the Premises so
taken or condemned shall be abated during the unexpired term of this Lease
effective when the physical taking of said portion of the Premises shall
occur.  All compensation awarded for any such taking or condemnation, or sale
proceeds in lieu thereof, shall be the property of Landlord, and Tenant shall
have no claim thereto, the same being hereby expressly waived by Tenant,
except for any portions of such award or proceeds which are specifically
allocated by the condemning or purchasing party for the taking of or damage
to trade fixtures of Tenant, which Tenant specifically reserves to itself.
In addition, Tenant may file a claim at its sole cost and expense and receive
an award for the Tenant's Property and Tenant's reasonable relocation
expenses, provided the filing of any claim for relocation expenses does not
adversely affect or diminish the award which would otherwise have been
received by Landlord had Tenant not filed such a claim and received such
award.

XXII.     EVENTS OF DEFAULT.

          The following events shall be deemed to be events of default under
this Lease:

          A.   Tenant shall fail to pay when due any Base Rental, Additional
               Base Rental or other Rent under this Lease and such failure shall
               continue for three (3) days after written notice from Landlord
               (hereinafter sometimes referred to as a "Monetary Default").

          B.   Any failure by Tenant (other than a Monetary Default) to comply
               with any term, provision or covenant of this Lease, including,
               without limitation, the rules and regulations, which failure is
               not cured within twenty (20) days after delivery to Tenant of
               notice of the occurrence of such failure, provided that if any
               such failure creates a hazardous condition, such failure must be
               cured immediately.

          C.   Tenant or any Guarantor shall become insolvent, or shall make a
               transfer in fraud of creditors, or shall commit an act of
               bankruptcy or shall make an assignment for the benefit of
               creditors, or Tenant or any Guarantor shall admit in writing its
               inability to pay its debts as they become due.

          D.   Tenant or any Guarantor shall file a petition under any section
               or chapter of the United States Bankruptcy Code, as amended,
               pertaining to bankruptcy, or under any similar law or statute of
               the United States or any State thereof, or Tenant or any
               Guarantor shall be adjudged bankrupt or insolvent in proceedings
               filed against Tenant or any Guarantor thereunder; or a petition
               or answer proposing the adjudication of Tenant or any Guarantor
               as a debtor or its reorganization under any present or future
               federal or state bankruptcy or similar law shall be filed in any
               court and such petition or answer shall not be discharged or
               denied within sixty (60) days after the filing thereof.

                                      28
<PAGE>

          E.   A receiver or trustee shall be appointed for all or substantially
               all of the assets of Tenant or any Guarantor or of the Premises
               or of any of Tenant's Property located thereon in any proceeding
               brought by Tenant or any Guarantor, or any such receiver or
               trustee shall be appointed in any proceeding brought against
               Tenant or any Guarantor and shall not be discharged within sixty
               (60) days after such appointment or Tenant or such Guarantor
               shall consent to or acquiesce in such appointment.

          F.   The leasehold estate hereunder shall be taken on execution or
               other process of law or equity in any action against Tenant.

          G.   Intentionally Omitted.

          H.   Intentionally Omitted.

          I.   The liquidation, termination, dissolution, forfeiture of right to
               do business, or death of Tenant.

          J.   Intentionally Omitted.

XXIII.    REMEDIES.

          A.   Upon the occurrence of any event or events of default under this
               Lease, whether enumerated in Article XXII or not, Landlord shall
               have the option to pursue any one or more of the following
               remedies without any notice (except as expressly prescribed
               herein) or demand whatsoever (and without limiting the generality
               of the foregoing, Tenant hereby specifically waives notice and
               demand for payment of Rent or other obligations and waives any
               and all other notices or demand requirements imposed by
               applicable law):

               1.   Terminate this Lease and Tenant's right to possession of the
                    Premises and recover from Tenant an award of damages equal
                    to the sum of the following:

                    (a)  The Worth at the Time of Award of the unpaid Rent which
                         had been earned at the time of termination;

                    (b)  The Worth at the Time of Award of the amount by which
                         the unpaid Rent which would have been earned after
                         termination until the time of award exceeds the amount
                         of such Rent loss that Tenant affirmatively proves
                         could have been reasonably avoided;

                    (c)  The Worth at the Time of Award of the amount by which
                         the unpaid Rent for the balance of the Lease Term after
                         the time of award exceeds the amount of such Rent loss
                         that Tenant affirmatively proves could be reasonably
                         avoided;

                    (d)  Any other amount necessary to compensate Landlord for
                         all the detriment either proximately caused by Tenant's
                         failure to perform Tenant's obligations under this
                         Lease or which in the ordinary course of things would
                         be likely to result therefrom; and

                    (e)  All such other amounts in addition to or in lieu of the
                         foregoing as may be permitted from time to time under
                         applicable law.

                         The "Worth at the Time of Award" of the amounts
                         referred to in parts (a) and (b) above, shall be
                         computed by allowing interest at the rate specified in
                         Article IV.E., and the "Worth at the Time of Award" of
                         the amount referred to in part (c), above, shall be
                         computed by discounting such amount at the discount
                         rate of the Federal Reserve Bank of San Francisco at
                         the time of award plus one percent (1%);

                                      29
<PAGE>

               2.   Employ the remedy described in California Civil Code Section
                    1951.4 (Landlord may continue this Lease in effect after
                    Tenant's breach and abandonment and recover Rent as it
                    becomes due, if Tenant has the right to sublet or assign,
                    subject only to reasonable limitations); or

               3.   Notwithstanding Landlord's exercise of the remedy described
                    in California Civil Code Section 1951.4 in respect of an
                    event or events of default, at such time thereafter as
                    Landlord may elect in writing, to terminate this Lease and
                    Tenant's right to possession of the Premises and recover an
                    award of damages as provided above in Paragraph XXIII.A.1.

          B.   The subsequent acceptance of Rent hereunder by Landlord shall not
               be deemed to be a waiver of any preceding breach by Tenant of any
               term, covenant or condition of this Lease, other than the failure
               of Tenant to pay the particular Rent so accepted, regardless of
               Landlord's knowledge of such preceding breach at the time of
               acceptance of such Rent.  No waiver by Landlord of any breach
               hereof shall be effective unless such waiver is in writing and
               signed by Landlord.

          C.   TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275
               OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (C) AND 1179
               OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL
               OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING
               THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO
               REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION
               BY REASON OF TENANT'S BREACH.  TENANT ALSO HEREBY WAIVES, TO THE
               FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN
               ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

          D.   No right or remedy herein conferred upon or reserved to Landlord
               is intended to be exclusive of any other right or remedy, and
               each and every right and remedy shall be cumulative and in
               addition to any other right or remedy given hereunder or now or
               hereafter existing by agreement, applicable law or in equity.  In
               addition to other remedies provided in this Lease, Landlord shall
               be entitled, to the extent permitted by applicable law, to
               injunctive relief, or to a decree compelling performance of any
               of the covenants, agreements, conditions or provisions of this
               Lease, or to any other remedy allowed to Landlord at law or in
               equity.  Forbearance by Landlord to enforce one or more of the
               remedies herein provided upon an event of default shall not be
               deemed or construed to constitute a waiver of such default.

          E.   This Article XXIII shall be enforceable to the maximum extent
               such enforcement is not prohibited by applicable law, and the
               unenforceability of any portion thereof shall not thereby render
               unenforceable any other portion.

XXIV.     LIMITATION OF LIABILITY.

          NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE,
THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD HEREUNDER) TO TENANT
SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE BUILDING, AND TENANT
AGREES TO LOOK SOLELY TO LANDLORD'S INTEREST IN THE BUILDING FOR THE RECOVERY
OF ANY JUDGMENT OR AWARD AGAINST THE LANDLORD, IT BEING INTENDED THAT NEITHER
LANDLORD NOR ANY MEMBER, PRINCIPAL, PARTNER, SHAREHOLDER, OFFICER, DIRECTOR
OR BENEFICIARY OF LANDLORD SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR
AN ALLEGED DEFAULT BY LANDLORD HEREUNDER, IT SHALL GIVE LANDLORD AND ALL
MORTGAGEES WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES OR DEED OF TRUST
LIENS ON THE PROPERTY, BUILDING OR PREMISES NOTICE AND REASONABLE TIME TO
CURE SUCH ALLEGED DEFAULT BY LANDLORD.  "INTEREST OF LANDLORD IN THE
BUILDING"

                                      30
<PAGE>

SHALL INCLUDE ANY ASSETS OF LANDLORD IN THE OPERATION OF THE BUILDING (PRIOR
TO THE DISTRIBUTION OF THE SAME TO ANY PARTNER OR SHAREHOLDER OF LANDLORD OR
ANY OTHER THIRD PARTY) SUCH AS ACCOUNTS RECEIVABLE, RENTS DUE FROM TENANTS,
INSURANCE PROCEEDS, FIXTURES, EQUIPMENT, SUPPLIES, CLAIMS OF ANY NATURE, SORT
OR DESCRIPTION AND ANY OTHER ITEMS DEEMED TO BE ASSETS IN CONNECTION WITH THE
OWNERSHIP, MAINTENANCE AND OPERATION OF THE BUILDING.

XXV.      NO WAIVER.

          Failure of either party to declare any default immediately upon its
occurrence, or delay in taking any action in connection with an event of
default shall not constitute a waiver of such default, nor shall it
constitute an estoppel against the non-defaulting party, but such
non-defaulting party shall have the right to declare the default at any time
during the continuance of the same and take such action as is lawful or
authorized under this Lease.  Failure by Landlord or Tenant to enforce its
rights with respect to any one default shall not constitute a waiver of its
rights with respect to any subsequent default.  Receipt by Landlord of
Tenant's keys to the Premises shall not constitute an acceptance or surrender
of the Premises.

XXVI.     EVENT OF BANKRUPTCY.

          In addition to, and in no way limiting the other remedies set forth
herein, Landlord and Tenant agree that if Tenant ever becomes the subject of
a voluntary or involuntary bankruptcy, reorganization, composition, or other
similar type proceeding under the federal bankruptcy laws, as now enacted or
hereinafter amended, then:

          A.   "Adequate protection" of Landlord's interest in the Premises
               pursuant to the provisions of Section 361 and 363 (or their
               successor sections) of the Bankruptcy Code, 11 U.S.C. Section 101
               et seq., (such Bankruptcy Code as amended from time to time being
               herein referred to as the "Bankruptcy Code"), prior to assumption
               and/or assignment of the Lease by Tenant shall include, but not
               be limited to all (or any part) of the following:

               1.   the continued payment by Tenant of the Base Rental and all
                    other Rent due and owing hereunder and the performance of
                    all other covenants and obligations hereunder by Tenant;

               2.   the furnishing of an additional/new security deposit by
                    Tenant in the amount of three (3) times the then current
                    monthly Base Rental.

          B.   "Adequate assurance of future performance" by Tenant and/or any
               assignee of Tenant pursuant to Bankruptcy Code Section 365 will
               include (but not be limited to) payment of an additional/new
               Security Deposit in the amount of three (3) times the then
               current monthly Base Rental payable hereunder.

          C.   Any person or entity to which this Lease is assigned pursuant to
               the provisions of the Bankruptcy Code, shall be deemed without
               further act or deed to have assumed all of the obligations of
               Tenant arising under this Lease on and after the effective date
               of such assignment. Any such assignee shall, upon demand by
               Landlord, execute and deliver to Landlord an instrument
               confirming such assumption of liability.

          D.   Notwithstanding anything in this Lease to the contrary, all
               amounts payable by Tenant to or on behalf of the Landlord under
               this Lease, whether or not expressly denominated as "Rent," shall
               constitute "rent" for the purposes of Section 502(b) (6) of the
               Bankruptcy Code.

          E.   If this Lease is assigned to any person or entity pursuant to the
               provisions of the Bankruptcy Code, any and all monies or other
               considerations payable or otherwise to be delivered to Landlord
               (including Base Rental and other Rent hereunder), shall be and
               remain the exclusive property of Landlord and shall not

                                      31
<PAGE>

               constitute property of Tenant or of the bankruptcy estate of
               Tenant. Any and all monies or other considerations constituting
               Landlord's property under the preceding sentence not paid or
               delivered to Landlord shall be held in trust by Tenant or
               Tenant's bankruptcy estate for the benefit of Landlord and shall
               be promptly paid to or turned over to Landlord.

          F.   If Tenant assumes this Lease and proposes to assign the same
               pursuant to the provisions of the Bankruptcy Code to any person
               or entity who shall have made a bona fide offer to accept an
               assignment of this Lease on terms acceptable to the Tenant, then
               notice of such proposed offer/assignment, setting forth:  (1) the
               name and address of such person or entity, (2) all of the terms
               and conditions of such offer, and (3) the adequate assurance to
               be provided Landlord to assure such person's or entity's future
               performance under the Lease, shall be given to Landlord by Tenant
               no later than twenty (20) days after receipt by Tenant, but in
               any event no later than ten (10) days prior to the date that
               Tenant shall make application to a court of competent
               jurisdiction for authority and approval to enter into such
               assumption and assignment, and Landlord shall thereupon have the
               prior right and option, to be exercised by notice to Tenant given
               at any time prior to the effective date of such proposed
               assignment, to accept an assignment of this Lease upon the same
               terms and conditions and for the same consideration, if any, as
               the bona fide offer made by such persons or entity, less any
               brokerage commission which may be payable out of the
               consideration to be paid by such person for the assignment of
               this Lease.

          G.   To the extent permitted by law, Landlord and Tenant agree that
               this Lease is a contract under which applicable law excuses
               Landlord from accepting performance from (or rendering
               performance to) any person or entity other than Tenant within the
               meaning of Sections 365(c) and 365(e) (2) of the Bankruptcy Code.
               Notwithstanding anything herein to the contrary, to the extent
               that the United States Bankruptcy Code supersedes any of the
               provisions of Article XXII, or stays the enforcement of any of
               Landlord's remedies under Article XXIII, the United States
               Bankruptcy Code shall control.

XXVII.    WAIVER OF JURY TRIAL.

          Landlord and Tenant hereby waive any right to a trial by jury in
any action or proceeding based upon, or related to, the subject matter of
this Lease. This waiver is knowingly, intentionally, and voluntarily made by
Tenant, and Tenant acknowledges that neither Landlord nor any person acting
on behalf of Landlord has made any representations of fact to induce this
waiver of trial by jury or in any way to modify or nullify its effect. Tenant
further acknowledges that it has been represented (or has had the opportunity
to be represented) in the signing of this Lease and in the making of this
waiver by independent legal counsel, selected of its own free will, and that
it has had the opportunity to discuss this waiver with counsel.

XXVIII.   RELOCATION.

          Landlord, at its expense at any time before or during the Lease
Term, shall be entitled to cause Tenant to relocate from the Premises to
space containing approximately the same Rentable Area as the Premises (the
"Relocation Space") within the Building or adjacent buildings within the same
Project at any time upon sixty (60) days' prior written notice to Tenant.
Landlord agrees to reimburse Tenant for all reasonable out-of-pocket costs
incurred by Tenant in connection with the relocation and not paid directly by
Landlord, including the cost of reprinting existing stationery and business
cards and similar items of expense.  Such a relocation shall not affect this
Lease except that from and after the date of such relocation, "Premises"
shall refer to the Relocation Space into which Tenant has been moved, rather
than the original Premises as herein defined, and the Base Rental shall be
adjusted so that immediately following such relocation the Base Rental for
the Relocation Space per annum on a per square foot of Rentable Area basis
shall be the same as the Base Rental per annum immediately prior to such
relocation for the original Premises on a per square foot of Rentable Area
basis. Tenant's Pro Rata Share shall also be adjusted in accordance with the
formula set forth in this Lease.

                                      32
<PAGE>

XXIX.     HOLDING OVER.

          In the event of holding over by Tenant after expiration or other
termination of this Lease or in the event Tenant continues to occupy the
Premises after the termination of Tenant's right of possession pursuant to
Articles XXII and XXIII hereof, occupancy of the Premises subsequent to such
termination or expiration shall be that of a tenancy at sufferance and in no
event for month-to-month or year-to-year.  Tenant shall, throughout the
entire holdover period, be subject to all the terms and provisions of this
Lease and shall pay for its use and occupancy an amount (on a per month basis
without reduction for any partial months during any such holdover) equal to
150% of the sum of the Base Rental and Additional Base Rental due for the
period immediately preceding such holding over, provided that in no event
shall Base Rental and Additional Base Rental during the holdover period be
less than the fair market rental for the Premises.  Notwithstanding the
foregoing, if such holding over continues for more than fifteen (15) days,
effective as of the sixteenth (16th) day, holdover rent shall increase to
200% of the sum of the Base Rental and Additional Base Rental due for the
period immediately preceding such holding over.  No holding over by Tenant or
payments of money by Tenant to Landlord after the expiration of the Lease
Term shall be construed to extend the Lease Term or prevent Landlord from
recovery of immediate possession of the Premises by summary proceedings or
otherwise. In addition to the obligation to pay the amounts set forth above
during any such holdover period, Tenant also shall be liable to Landlord for
all damage, including any consequential damage, which Landlord may suffer by
reason of any holding over by Tenant, and Tenant shall indemnify Landlord
against any and all claims made by any other tenant or prospective tenant
against Landlord for delay by Landlord in delivering possession of the
Premises to such other tenant or prospective tenant. Notwithstanding the
foregoing, Tenant shall not be liable for consequential damages unless the
holdover continues for thirty (30) or more days after the termination of this
Lease or Tenant's right to possession.

XXX.      SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.

          Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust, ground lease or other lien presently existing or hereafter
arising upon the Premises, or upon the Building and/or the Property and to
any renewals, modifications, refinancings and extensions thereof (any such
mortgage, deed of trust, lease or other lien being hereinafter referred to as
a "Mortgage", and the person or entity having the benefit of same being
referred to hereinafter as a "Mortgagee"), but Tenant agrees that any such
Mortgagee shall have the right at any time to subordinate such Mortgage to
this Lease on such terms and subject to such conditions as such Mortgagee may
deem appropriate in its discretion. This clause shall be self-operative and
no further instrument of subordination shall be required. However, Landlord
is hereby irrevocably vested with full power and authority to subordinate
this Lease to any Mortgage, and Tenant agrees upon demand to execute such
further instruments subordinating this Lease, acknowledging the subordination
of this Lease or attorning to the holder of any such Mortgage as Landlord may
request. The terms of this Lease are subject to approval by the Landlord's
existing lender(s) and any lender(s) who, at the time of the execution of
this Lease, have committed or are considering committing to Landlord to make
a loan secured by all or any portion of the Property, and such approval is a
condition precedent to Landlord's obligations hereunder.  In the event that
Tenant shall fail to execute any subordination or other agreement required by
this Article within ten (10) days after request by Landlord, such failure
shall be considered to be an event of default by Tenant entitling Landlord to
exercise its rights and remedies under Article XXIII of this Lease.  If any
person shall succeed to all or part of Landlord's interests in the Premises
whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale,
termination of lease or otherwise, and if and as so requested or required by
such sucessor-in-interest, Tenant shall, without charge, attorn to such
successor-in-interest. Tenant agrees that it will from time to time upon
request by Landlord and, within fifteen (15) days of the date of such
request, execute and deliver to such persons as Landlord shall request an
estoppel certificate or other similar statement in recordable form certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as so
modified), stating the dates to which Rent and other charges payable under
this Lease have been paid, stating that Landlord is not in default hereunder
(or if Tenant alleges a default stating the nature of such alleged default)
and further stating such other matters as Landlord shall reasonably require.
Landlord, in connection with

                                      33
<PAGE>

any previously approved Transfer by Tenant, agrees that it will from time to
time, upon request by Tenant, execute and deliver to Tenant, or to any other
person designated by Tenant, a statement certifying: (i) that this Lease is
unmodified and in full force and effect (or if there has been a modification,
that the same is in full force and effect as modified, and stating the
modification); (ii) the dates, if any, to which the Rent and other sums and
payments due under this Lease have been paid; and (iii) whether Tenant has
breached the performance of any covenants, terms, and conditions on Tenant's
part to be performed under this Lease, and the nature of Tenant's breach, if
any.

XXXI.     ATTORNEYS' FEES.

          In the event that Landlord should retain counsel and/or institute
any suit against Tenant for violation of or to enforce any of the covenants
or conditions of this Lease, or should Tenant institute any suit against
Landlord for violation of any of the covenants or conditions of this Lease,
or should either party intervene in any suit in which the other is a party to
enforce or protect its interest or rights hereunder, the prevailing party in
any such suit shall be entitled to all of its costs, expenses and reasonable
fees of its attorney(s) (if and to the extent permitted by law) in connection
therewith.

XXXII.    NOTICE.

          Whenever any demand, request, approval, consent or notice
("Notice") shall or may be given to either of the parties by the other, each
such Notice shall be in writing and shall be sent by registered or certified
mail with return receipt requested, or sent by overnight courier service
(such as Federal Express) at the respective addresses of the parties for
notices as set forth in Section I.A.10. of this Lease, provided that if
Tenant has vacated the Premises or is in default of this Lease Landlord may
serve Notice by any manner permitted by law. Any Notice under this Lease
delivered by registered or certified mail shall be deemed to have been given,
delivered, received and effective on the earlier of (A) the third day
following the day on which the same shall have been mailed with sufficient
postage prepaid or (B) the delivery date indicated on the return receipt.
Notice sent by overnight courier service shall be deemed given, delivered,
received and effective upon the day after such Notice is delivered to or
picked up by the overnight courier service. Either party may, at any time,
change its Notice Address by giving the other party Notice stating the change
and setting forth the new Notice Address.

XXXIII.   LANDLORD'S LIEN.

          Intentionally Omitted, provided that the deletion of this Article
shall not be construed to be a waiver of Landlord's lien rights as provided
by law.

XXXIV.    EXCEPTED RIGHTS.

          This Lease does not grant any rights to light or air over or about
the Building. Landlord specifically excepts and reserves to itself the use of
any roofs, the exterior portions of the Premises, all rights to the land and
improvements below the improved floor level of the Premises, the improvements
and air rights above the Premises and the improvements and air rights located
outside the demising walls of the Premises, and such areas within the
Premises as are required for installation of utility lines and other
installations required to serve any occupants of the Building and the right
to maintain and repair the same, and no rights with respect thereto are
conferred upon Tenant unless otherwise specifically provided herein. Landlord
further reserves to itself the right from time to time: (A) to change the
Building's name or street address, provided that Landlord shall use
reasonable efforts to provide Tenant with at least thirty (30) days prior
notice with respect to a change in the Building's street address that will
prohibit Tenant from receiving mail at the current address.  In the event
Landlord fails to provide Tenant with at least thirty (30) days prior notice,
Landlord shall reimburse Tenant for the cost of replacing all business
stationery on hand (not to exceed a two month's supply) at the effective date
of such change; (B) to install, fix and maintain signs on the exterior and
interior of the Building; (C) to designate and approve window coverings; (D)
to make any decorations, alterations, additions, improvements to the
Building, or any part thereof (including the Premises) which Landlord shall
desire, or deem necessary for the safety, protection, preservation or
improvement of the Building, or as Landlord may be required to do by law; (e)
subject to the
                                      34
<PAGE>

terms of Article XII hereof, to have access to the Premises to perform its
duties and obligations and to exercise its rights under this Lease; (f) to
retain at all times and to use pass-keys to all locks within and into the
Premises; (G) to approve the weight, size, or location of heavy equipment, or
articles in and about the Premises; (H) to close or restrict access to the
Building at all times other than Normal Business Hours subject to Tenant's
right to admittance at all times under such regulations as Landlord may
prescribe from time to time, or to close (temporarily or permanently) any of
the entrances to the Building; (I) to change the arrangement and/or location
of entrances of passageways, doors and doorways, corridors, elevators,
stairs, toilets and public parts of the Building, provided that Landlord,
subject to a temporary closure pursuant to Article XIX hereof, shall always
provide Tenant with suitable ingress and egress to and from the Premises; (J)
if Tenant has vacated the Premises during the last six (6) months of the
Lease Term, to perform additions, alterations and improvements to the
Premises in connection with a reletting or anticipated reletting thereof
without being responsible or liable for the value or preservation of any then
existing improvements to the Premises; and (K) to grant to anyone the
exclusive right to conduct any business or undertaking in the Building,
provided that the granting of such exclusive rights shall not: (1) restrict
or interfere with Tenant's ability to conduct its business in the Premises;
or (2) require Tenant to do business with any other Building tenant.
Landlord, in accordance with Article XII hereof, shall have the right to
enter the Premises in connection with the exercise of any of the rights set
forth herein and such entry into the Premises and the performance of any work
therein shall not constitute a constructive eviction or entitle Tenant to any
abatement or reduction of Rent by reason thereof.

XXXV.     SURRENDER OF PREMISES.

          At the expiration or earlier termination of this Lease or Tenant's
right of possession hereunder, Tenant shall remove all Tenant's Property from
the Premises, remove all Required Removables designated by Landlord and quit
and surrender the Premises to Landlord, broom clean, and in good order,
condition and repair, ordinary wear and tear excepted. If Tenant fails to
remove any of Tenant's Property within five (5) days after the termination of
this Lease or Tenant's right to possession hereunder, Landlord, at Tenant's
sole cost and expense, shall be entitled to remove and/or store such Tenant's
Property and Landlord shall in no event be responsible for the value,
preservation or safekeeping thereof. Tenant shall pay Landlord, upon demand,
any and all expenses caused by such removal and all storage charges against
such property so long as the same shall be in the possession of Landlord or
under the control of Landlord. In addition, if Tenant fails to remove any
Tenant's Property from the Premises or storage, as the case may be, within
ten (10) days after written notice from Landlord, Landlord, at its option,
may deem all or any part of such Tenant's Property to have been abandoned by
Tenant and title thereof shall immediately pass to Landlord.

XXXVI.    MISCELLANEOUS.

          A.   If any term or provision of this Lease, or the application
               thereof to any person or circumstance shall, to any extent, be
               invalid or unenforceable, the remainder of this Lease, or the
               application of such term or provision to persons or circumstances
               other than those as to which it is held invalid or unenforceable,
               shall not be affected thereby, and each term and provision of
               this Lease shall be valid and enforced to the fullest extent
               permitted by law. This Lease represents the result of
               negotiations between Landlord and Tenant, each of which has been
               (or has had opportunity to be) represented by counsel of its own
               selection, and neither of which has acted under duress or
               compulsion, whether legal, economic or otherwise. Consequently,
               Landlord and Tenant agree that the language in all parts of the
               Lease shall in all cases be construed as a whole according to its
               fair meaning and neither strictly for nor against Landlord or
               Tenant.

          B.   Tenant agrees not to record this Lease or any memorandum hereof
               without Landlord's prior written consent.

          C.   This Lease and the rights and obligations of the parties hereto
               shall be interpreted, construed, and enforced in accordance with
               the laws of the State of California.

                                      35
<PAGE>

          D.   Events of "Force Majeure" shall include strikes, riots, acts of
               God, shortages of labor or materials and war.  Whenever a period
               of time is herein prescribed for the taking of any action by
               Landlord or Tenant, as the case may be, other than the payment of
               Rent or any other sums due hereunder, such party shall not be
               liable or responsible for, and there shall be excluded from the
               computation of such period of time, any delays due to events of
               Force Majeure.

          E.   Landlord shall have the right to transfer and assign, in whole or
               in part, all of its rights and obligations hereunder and in the
               Building, Property and Project referred to herein, and in such
               event and upon such transfer Landlord shall be released from any
               further obligations hereunder, and Tenant agrees to look solely
               to such successor in interest of Landlord for the performance of
               such obligations, provided that, any successor pursuant to a
               voluntary, third-party transfer (but not as part of an
               involuntary transfer resulting from a foreclosure or deed in lieu
               thereof) shall have assumed Landlord's obligations under this
               Lease either by contractual obligation, assumption agreement or
               by operation of law.

          F.   Tenant hereby represents to Landlord that it has dealt directly
               with and only with the Broker as a broker in connection with this
               Lease. Tenant agrees to indemnify and hold Landlord and the
               Landlord Related Parties harmless from all claims of any brokers
               claiming to have represented Tenant in connection with this
               Lease. Landlord agrees to indemnify and hold Tenant and the
               Tenant Related Parties harmless from all claims of any brokers
               claiming to have represented Landlord in connection with this
               Lease.

          G.   If there is more than one Tenant, or if the Tenant is comprised
               of more than one person or entity, the obligations hereunder
               imposed upon Tenant shall be joint and several obligations of all
               such parties. All notices, payments, and agreements given or made
               by, with or to any one of such persons or entities shall be
               deemed to have been given or made by, with or to all of them.

          H.   In the event Tenant is a corporation (including any form of
               professional association), partnership (general or limited), or
               other form of organization other than an individual (each such
               entity is individually referred to herein as an "Organizational
               Entity"), then Tenant hereby covenants, warrants and represents:
               (1) that such individual is duly authorized to execute or attest
               and deliver this Lease on behalf of Tenant in accordance with the
               organizational documents of Tenant; (2) that this Lease is
               binding upon Tenant; (3) that Tenant is duly organized and
               legally existing in the state of its organization, and is
               qualified to do business in the State of California; and (4) that
               the execution and delivery of this Lease by Tenant will not
               result in any breach of, or constitute a default under any
               mortgage, deed of trust, lease, loan, credit agreement,
               partnership agreement or other contract or instrument to which
               Tenant is a party or by which Tenant may be bound. If Tenant is
               an Organizational Entity, upon request, Tenant will, prior to the
               Commencement Date, deliver to Landlord true and correct copies of
               all organizational documents of Tenant, including, without
               limitation, copies of an appropriate resolution or consent of
               Tenant's board of directors or other appropriate governing body
               of Tenant authorizing or ratifying the execution and delivery of
               this Lease, which resolution or consent will be duly certified to
               Landlord's satisfaction by an appropriate individual with
               authority to certify such documents, such as the secretary or
               assistant secretary or the managing general partner of Tenant.

          I.   Tenant acknowledges that the financial capability of Tenant to
               perform its obligations hereunder is material to Landlord and
               that Landlord would not enter into this Lease but for its belief,
               based on its review of Tenant's financial statements, that Tenant
               is capable of performing such financial obligations. Tenant
               hereby represents, warrants and certifies to Landlord that its
               financial statements previously furnished to Landlord were at the
               time given true and correct in all material respects and that
               there have been no material subsequent changes thereto as of the
               date of this Lease. At any time during the Lease Term,

                                      36
<PAGE>

               Tenant shall provide Landlord, upon ten (10) days' prior
               written notice from Landlord, with a current financial
               statement and financial statements of the two (2) years prior
               to the current financial statement year and such other
               information as Landlord or its Mortgagee may request in order
               to create a "business profile" of Tenant and determine
               Tenant's ability to fulfill its obligations under this Lease.
               Such statement shall be prepared in accordance with generally
               accepted accounting principles and, if such is the normal
               practice of Tenant, shall be audited by an independent
               certified public accountant.

          J.   Except as expressly otherwise herein provided, with respect to
               all required acts of Tenant, time is of the essence of this
               Lease. This Lease shall create the relationship of Landlord and
               Tenant between the parties hereto.

          K.   This Lease and the covenants and conditions herein contained
               shall inure to the benefit of and be binding upon Landlord and
               Tenant and their respective permitted successors and assigns.

          L.   Notwithstanding anything to the contrary contained in this Lease,
               the expiration of the Lease Term, whether by lapse of time or
               otherwise, shall not relieve Tenant from Tenant's obligations
               accruing prior to the expiration of the Lease Term, and such
               obligations shall survive any such expiration or other
               termination of the Lease Term.

          M.   The headings and titles to the paragraphs of this Lease are for
               convenience only and shall have no effect upon the construction
               or interpretation of any part hereof.

          N.   LANDLORD HAS DELIVERED A COPY OF THIS LEASE TO TENANT FOR
               TENANT'S REVIEW ONLY, AND THE DELIVERY HEREOF DOES NOT CONSTITUTE
               AN OFFER TO TENANT OR OPTION. THIS LEASE SHALL NOT BE EFFECTIVE
               UNTIL AN ORIGINAL OF THIS LEASE EXECUTED BY BOTH LANDLORD AND
               TENANT AND AN ORIGINAL GUARANTY, IF ANY, EXECUTED BY EACH
               GUARANTOR IS DELIVERED TO AND ACCEPTED BY LANDLORD.

          O.   QUIET ENJOYMENT.  Tenant shall, and may peacefully have, hold,
               and enjoy the Premises, subject to the other terms of this Lease
               (including, without limitation, Article XXX hereof), provided
               that Tenant pays the Rent herein recited to be paid by Tenant and
               performs all of Tenant's covenants and agreements herein
               contained.  This covenant and any and all other covenants of
               Landlord shall be binding upon Landlord and its successors only
               during its or their respective periods of ownership of the
               Landlord's interest hereunder.

XXXVII.        ENTIRE AGREEMENT.

               This Lease agreement, including the following Exhibits:

<TABLE>
          <S>                 <C>
          EXHIBIT A           Outline and Location of Premises
          EXHIBIT A-2         Outline and Location of Project
          EXHIBIT B           Rules and Regulations
          EXHIBIT C           Commencement Letter
          EXHIBIT D           Work Letter Agreement
          EXHIBIT E           Additional Terms
          EXHIBIT F           Parking Agreement
          EXHIBIT G           Janitorial Specifications
</TABLE>

constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease and supersedes all prior agreements and
understandings between the parties related to the Premises, including all lease
proposals, letters of intent and similar documents. TENANT EXPRESSLY
ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT MADE AND IS NOT MAKING, AND
TENANT, IN EXECUTING AND DELIVERING THIS LEASE, IS NOT RELYING UPON, ANY
WARRANTIES, REPRESENTATIONS, PROMISES OR STATEMENTS, EXCEPT TO THE EXTENT THAT
THE SAME ARE EXPRESSLY SET FORTH

                                      37
<PAGE>

IN THIS LEASE. ALL UNDERSTANDINGS AND AGREEMENTS HERETOFORE MADE BETWEEN THE
PARTIES ARE MERGED IN THIS LEASE WHICH ALONE FULLY AND COMPLETELY EXPRESSES
THE AGREEMENT OF THE PARTIES, NEITHER PARTY RELYING UPON ANY STATEMENT OR
REPRESENTATION NOT EMBODIED IN THIS LEASE. THIS LEASE MAY BE MODIFIED ONLY BY
A WRITTEN AGREEMENT SIGNED BY LANDLORD AND TENANT. LANDLORD AND TENANT
EXPRESSLY AGREE THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF
MERCHANTABILITY, HABITABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE
OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, ALL OF WHICH ARE HEREBY
WAIVED BY TENANT, AND THAT THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE
EXPRESSLY SET FORTH IN THIS LEASE.

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

                                       LANDLORD: EOP-PASADENA TOWERS, L.L.C.,
                                       A DELAWARE LIMITED LIABILITY COMPANY
                                       DOING BUSINESS AS EOP-PASADENA TOWERS,
                                       LLC, A DELAWARE LIMITED LIABILITY
                                       COMPANY

                                       BY:  EOP Operating Limited
                                            Partnership, a Delaware
                                            limited partnership, its
                                            managing member

                                            BY:  Equity Office
                                                 Properties Trust, a
                                                 Maryland real estate
                                                 investment trust, its
                                                 managing general
                                                 partner

                                        /s/ PETER H. ADAMS
                                       ----------------------------------------
                                       Name: Peter H. Adams
                                            -----------------------------------
                                       Title: Sr. Vice President
                                             ----------------------------------

                                       TENANT:  ACACIA RESEARCH CORPORATION,
                                       A CALIFORNIA CORPORATION

                                       /s/ KATHRYN KING-VAN WIE
                                       ----------------------------------------
                                       Name: Kathryn King-Van Wie
                                            -----------------------------------
                                       Title: Chief Operating Officer
                                             ----------------------------------

                                       By: /s/ R. BRUCE STEWART
                                          -------------------------------------
                                       Name: R. Bruce Stewart
                                            -----------------------------------
                                       Title: Chief Financial Officer
                                             ----------------------------------

                                      38
<PAGE>

                                  EXHIBIT A

                       OUTLINE AND LOCATION OF PREMISES

          This Exhibit is attached to and made a part of the Lease dated the
day of  ____________________, 1998, by and between EOP-PASADENA TOWERS,
L.L.C., A DELAWARE LIMITED LIABILITY COMPANY DOING BUSINESS AS EOP-PASADENA
TOWERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Landlord"), and ACACIA
RESEARCH CORPORATION, A CALIFORNIA CORPORATION ("Tenant") for space in the
Building located at 55 South Lake Avenue, Pasadena, California.

                        Building:  Pasadena Towers II
                                Suite No.: 650
                Rentable Area of the Premises:  5,449 sq. ft.
                    Target Commencement Date:  May 1, 1998
                            Lease Term:  60 months

                                      A-1
<PAGE>

                                  EXHIBIT A-2

                                    PROJECT

                                     A-2-1
<PAGE>

                                   EXHIBIT B
                         BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage associated therewith (if any), the
Property and the appurtenances thereto:

     1.   Sidewalks, doorways, vestibules, halls, stairways and other similar
          areas shall not be obstructed by Tenant or used by Tenant for any
          purpose other than ingress and egress to and from the Premises. No
          rubbish, litter, trash, or material of any nature shall be placed,
          emptied, or thrown in those areas. At no time shall Tenant permit
          Tenant's employees to loiter in common areas or elsewhere in or about
          the Building or Property.

     2.   Plumbing fixtures and appliances shall be used only for the purposes
          for which designed, and no sweepings, rubbish, rags or other
          unsuitable material shall be thrown or placed therein. Damage
          resulting to any such fixtures or appliances from misuse by Tenant or
          its agents, employees or invitees, shall be paid for by Tenant, and
          Landlord shall not in any case be responsible therefor.

     3.   No signs, advertisements or notices shall be painted or affixed on or
          to any windows, doors or other parts of the Building, except those of
          such color, size, style and in such places as shall be first approved
          in writing by Landlord. No nails, hooks or screws shall be driven or
          inserted into any part of the Premises or Building except by the
          Building maintenance personnel, nor shall any part of the Building be
          defaced by Tenant.

     4.   Landlord may provide and maintain in the first floor (main lobby) of
          the Building an alphabetical directory board listing all tenants, and
          no other directory shall be permitted unless previously consented to
          by Landlord in writing.

     5.   Tenant shall not place any additional lock or locks on any door in the
          Premises or Building without Landlord's prior written consent. A
          reasonable number of keys to the locks on the doors in the Premises
          shall be furnished by Landlord to Tenant at the cost of Tenant, and
          Tenant shall not have any duplicate keys made. All keys shall be
          returned to Landlord at the expiration or earlier termination of this
          Lease.

     6.   All contractors, contractor's representatives, and installation
          technicians performing work in the Building shall be subject to
          Landlord's prior approval and shall be required to comply with
          Landlord's standard rules, regulations, policies and procedures, as
          the same may be revised from time to time.  Tenant shall be solely
          responsible for complying with all applicable laws, codes and
          ordinances pursuant to which said work shall be performed.

     7.   Movement in or out of the Building of furniture or office equipment,
          or dispatch or receipt by Tenant of any merchandise or materials
          which require the use of elevators, stairways, lobby areas, or
          loading dock areas, shall be restricted to hours designated by
          Landlord. Tenant must seek Landlord's prior approval by providing
          in writing a detailed listing of any such activity. If approved by
          Landlord, such activity shall be under the supervision of Landlord
          and performed in the manner stated by Landlord. Landlord may
          prohibit any article, equipment or any other item from being
          brought into the Building. Tenant is to assume all risk for damage
          to articles moved and injury to any persons resulting from such
          activity. If any equipment, property, and/or personnel of Landlord
          or of any other tenant is damaged or injured as a result of or in
          connection with such activity, Tenant shall be solely liable for
          any and all damage or loss resulting therefrom.

     8.   Landlord shall have the power to prescribe the weight and position of
          safes and other heavy equipment or items, which in all cases shall not
          in the opinion of Landlord exceed acceptable floor loading and weight
          distribution requirements.

                                      B-1
<PAGE>

          All damage done to the Building by the installation, maintenance,
          operation, existence or removal of any property of Tenant shall be
          repaired at the expense of Tenant.

     9.   Corridor doors, when not in use, shall be kept closed.

     10.  Tenant shall not: (1) make or permit any improper, objectionable or
          unpleasant noises or odors in the Building, or otherwise interfere in
          any way with other tenants or persons having business with them; (2)
          solicit business or distribute, or cause to be distributed, in any
          portion of the Building any handbills, promotional materials or other
          advertising; or (3) conduct or permit any other activities in the
          Building that might constitute a nuisance.

     11.  No animals, except seeing eye dogs, shall be brought into or kept in,
          on or about the Premises.

     12.  No inflammable, explosive or dangerous fluid or substance shall be
          used or kept by Tenant in the Premises or Building. Tenant shall not,
          without Landlord's prior written consent, use, store, install, spill,
          remove, release or dispose of within or about the Premises or any
          other portion of the Property, any asbestos-containing materials or
          any solid, liquid or gaseous material now or hereafter considered
          toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et
          seq. or any other applicable environmental law which may now or
          hereafter be in effect. If Landlord does give written consent to
          Tenant pursuant to the foregoing sentence, Tenant shall comply with
          all applicable laws, rules and regulations pertaining to and governing
          such use by Tenant, and shall remain liable for all costs of cleanup
          or removal in connection therewith.

     13.  Tenant shall not use or occupy the Premises in any manner or for any
          purpose which would injure the reputation or impair the present or
          future value of the Premises or the Building; without limiting the
          foregoing, Tenant shall not use or permit the Premises or any portion
          thereof to be used for lodging, sleeping or for any illegal purpose.

     14.  Tenant shall not take any action which would violate Landlord's labor
          contracts affecting the Building or which would cause any work
          stoppage, picketing, labor disruption or dispute, or any interference
          with the business of Landlord or any other tenant or occupant of the
          Building or with the rights and privileges of any person lawfully in
          the Building. Tenant shall take any actions necessary to resolve any
          such work stoppage, picketing, labor disruption, dispute or
          interference and shall have pickets removed and, at the request of
          Landlord, immediately terminate at any time any construction work
          being performed in the Premises giving rise to such labor problems,
          until such time as Landlord shall have given its written consent for
          such work to resume.   Tenant shall have no claim for damages of any
          nature against Landlord or any of the Landlord Related Parties in
          connection therewith, nor shall the Commencement Date of the Lease
          Term be extended as a result thereof.

     15.  Tenant shall utilize the termite and pest extermination service
          designated by Landlord to control termites and pests in the Premises.
          Except as included in Basic Costs, Tenant shall bear the cost and
          expense of such extermination services.

     16.  Tenant shall not install, operate or maintain in the Premises or in
          any other area of the Building, any electrical equipment which does
          not bear the U/L (Underwriters Laboratories) seal of approval, or
          which would overload the electrical system or any part thereof beyond
          its capacity for proper, efficient and safe operation as determined by
          Landlord, taking into consideration the overall electrical system and
          the present and future requirements therefor in the Building. Tenant
          shall not furnish any cooling or heating to the Premises, including,
          without limitation, the use of any electronic or gas heating devices,
          without Landlord's prior written consent. Tenant shall not use more
          than its proportionate share of telephone lines available to service
          the Building.

                                      B-2
<PAGE>

     17.  Tenant shall not operate or permit to be operated on the Premises any
          coin or token operated vending machine or similar device (including,
          without limitation, telephones, lockers, toilets, scales, amusement
          devices and machines for sale of beverages, foods, candy, cigarettes
          or other goods), except for those vending machines or similar devices
          which are for the sole and exclusive use of Tenant's employees, and
          then only if such operation does not violate the lease of any other
          tenant of the Building.

     18.  Bicycles and other vehicles are not permitted inside or on the
          walkways outside the Building, except in those areas specifically
          designated by Landlord for such purposes.

     19.  Landlord may from time to time adopt appropriate systems and
          procedures for the security or safety of the Building, its occupants,
          entry and use, or its contents. Tenant, Tenant's agents, employees,
          contractors, guests and invitees shall comply with Landlord's
          reasonable requirements relative thereto.

     20.  Landlord shall have the right to prohibit the use of the name of the
          Building or any other publicity by Tenant that in Landlord's opinion
          may tend to impair the reputation of the Building or its desirability
          for Landlord or other tenants. Upon written notice from Landlord,
          Tenant will refrain from and/or discontinue such publicity
          immediately.

     21.  Tenant shall carry out Tenant's permitted repair, maintenance,
          alterations, and improvements in the Premises only during times agreed
          to in advance by Landlord and in a manner which will not unreasonably
          interfere with the rights of other tenants in the Building.

     22.  Canvassing, soliciting, and peddling in or about the Building is
          prohibited. Tenant shall cooperate and use its best efforts to prevent
          the same.

     23.  At no time shall Tenant permit or shall Tenant's agents, employees,
          contractors, guests, or invitees smoke in any common area of the
          Building, unless such common area has been declared a designated
          smoking area by Landlord, or to allow any smoke from the Premises to
          emanate into the common areas or any other tenant's premises.
          Landlord shall have the right at any time to designate the Building as
          a non-smoking building.

     24.  Tenant shall observe Landlord's rules with respect to maintaining
          standard window coverings at all windows in the Premises so that the
          Building presents a uniform exterior appearance. Tenant shall ensure
          that to the extent reasonably practicable, window coverings are closed
          on all windows in the Premises while they are exposed to the direct
          rays of the sun.

     25.  All deliveries to or from the Premises shall be made only at such
          times, in the areas and through the entrances and exits designated for
          such purposes by Landlord. Tenant shall not permit the process of
          receiving deliveries to or from the Premises outside of said areas or
          in a manner which may interfere with the use by any other tenant of
          its premises or of any common areas, any pedestrian use of such area,
          or any use which is inconsistent with good business practice.

     26.  The work of cleaning personnel shall not be hindered by Tenant after
          5:30 P.M., and such cleaning work may be done at any time when the
          offices are vacant. Windows, doors and fixtures may be cleaned at any
          time. Tenant shall provide adequate waste and rubbish receptacles
          necessary to prevent unreasonable hardship to Landlord regarding
          cleaning service.

                                      B-3
<PAGE>

                                  EXHIBIT C
                             COMMENCEMENT LETTER

Date
     ----------------------

Acacia Research Corporation
55 South Lake
Suite 650
Pasadena, California  91101

Re:  Commencement Letter with respect to that certain Lease dated _____________,
     1998 by and between EOP-PASADENA TOWERS, L.L.C., A DELAWARE LIMITED
     LIABILITY COMPANY DOING BUSINESS AS EOP-PASADENA TOWERS, LLC, A DELAWARE
     LIMITED LIABILITY COMPANY, as Landlord, and ACACIA RESEARCH CORPORATION,
     A CALIFORNIA CORPORATION as Tenant, for 5,449 square feet of Rentable Area
     on the sixth (6th) floor of the Building located at 55 South Lake Avenue,
     Pasadena, California.

Dear                :
     ---------------

In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:

     1.  The Commencement Date of the Lease is:
                                                ---------------------------
     2.  The Termination Date of the Lease is:
                                               ----------------------------

Please acknowledge your acceptance of possession and agreement to the terms
set forth above by signing all three (3) copies of this Commencement Letter
in the space provided and returning two (2) fully executed copies of the same
to my attention.

Sincerely,

- --------------------------------
Property Manager

Agreed and Accepted:

Tenant:  ACACIA RESEARCH CORPORATION, A CALIFORNIA CORPORATION

By:
    ------------------------------------
Name:
      ----------------------------------
Title:
      ----------------------------------
Date:
      ----------------------------------

By:
    ------------------------------------
Name:
      ----------------------------------
Title:
      ----------------------------------
Date:
      ----------------------------------

                                      C-1
<PAGE>

                                  EXHIBIT D

                                 WORK LETTER

This Exhibit is attached to and made a part of the Lease dated
____________________, 1998, by and between EOP-PASADENA TOWERS, L.L.C., A
DELAWARE LIMITED LIABILITY COMPANY DOING BUSINESS AS EOP-PASADENA TOWERS,
LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Landlord"), and ACACIA RESEARCH
CORPORATION, A CALIFORNIA CORPORATION ("Tenant") for space in the Building
located at 55 South Lake Avenue, Pasadena, California.

1.   This Work Letter shall set forth the obligations of Landlord and Tenant
     with respect to the preparation of the Premises for Tenant's occupancy.
     All improvements described in this Work Letter to be constructed in and
     upon the Premises by Landlord are hereinafter referred to as the "Landlord
     Work." It is agreed that construction of the Landlord Work will be
     completed at Tenant's sole cost and expense, subject to the Allowance (as
     defined below).  Landlord shall bid the Landlord Work to the following
     three (3) general contractors on Landlord's approved list of contractors:
     Howard Building, Stanhope, and Corporate Contractors, and Landlord shall
     allow Tenant to review the bids received.  Tenant shall have the right to
     select the lowest bid which Landlord deems to be qualified, and Landlord
     shall enter into a direct contract for the Landlord Work with the general
     contractor so selected by Tenant.  In addition, Landlord shall have the
     right to select and/or approve of any subcontractors used in connection
     with the Landlord Work.

2.   Space planning, architectural and engineering (mechanical, electrical and
     plumbing) drawings for the Landlord Work shall be prepared by Landlord's
     architect at Tenant's sole cost and expense, subject to the Allowance.  The
     space planning, architectural and mechanical drawings are collectively
     referred to herein as the "Plans".

3.   Tenant shall furnish any requested information and approve or disapprove
     any preliminary or final layout, drawings, or plans within two (2) Business
     Days after written request (the "Approval Period").  Any disapproval shall
     be in writing and shall specifically set forth the reasons for such
     disapproval.  Landlord's approval of the Plans and any revisions thereto or
     Landlord's supervision or performance of any work for or on behalf of the
     Tenant shall not be deemed to be a representation by Landlord that such
     Plans or the revisions thereto comply with applicable insurance
     requirements, building codes, ordinances, laws or regulations or that the
     improvements constructed in accordance with the Plans and any revisions
     thereto will be adequate for Tenant's use.  Tenant and Tenant's architect,
     if any, shall devote such time in consultation with Landlord and Landlord's
     architect and/or engineer as may be required to provide all information
     Landlord deems necessary in order to enable Landlord's architect and
     engineer to complete plans for Tenant's written approval as soon as
     reasonably possible.  In the event that Tenant fails to approve or
     disapprove the Plans within the Approval Period, Tenant shall be
     responsible for one (1) day of Delay (as defined in the Lease) for each day
     of delay in response beyond the Approval Period.

4.   In the event Landlord's estimate and/or the actual cost of construction
     shall exceed the Allowance, Landlord, prior to commencing any construction
     of Landlord Work, shall submit to Tenant a written estimate setting forth
     the anticipated cost of the Landlord Work, including but not limited to
     labor and materials, contractor's fees and permit fees.  Within three (3)
     Business Days thereafter, Tenant shall either notify Landlord in writing of
     its approval of the cost estimate, or specify its objections thereto and
     any desired changes to the proposed Landlord Work.  In the event Tenant
     notifies Landlord of such objections and desired changes, Tenant shall work
     with Landlord to reach a mutually acceptable alternative cost estimate.

                                      D-1
<PAGE>

5.   In the event Landlord's estimate and/or the actual cost of construction
     shall exceed the Allowance, if any (such amounts exceeding the Allowance
     being herein referred to as the "Excess Costs"), Tenant shall pay to
     Landlord such Excess Costs upon demand.  The statements of costs submitted
     to Landlord by Landlord's contractors shall be conclusive for purposes of
     determining the actual cost of the items described therein.  The amounts
     payable hereunder constitute Rent payable pursuant to the Lease, and the
     failure to timely pay same constitutes an event of default under the Lease.

6.   If Tenant shall request any change, addition or alteration in any of the
     Plans after approval by Landlord, Landlord shall have such revisions to the
     drawings prepared, and Tenant shall reimburse Landlord for the cost thereof
     upon demand.  Promptly upon completion of the revisions, Landlord shall
     notify Tenant in writing of the increased cost which will be chargeable to
     Tenant by reason of such change, addition or deletion.  Tenant, within one
     (1) Business Day, shall notify Landlord in writing whether it desires to
     proceed with such change, addition or deletion.  In the absence of such
     written authorization, Landlord shall have the option to continue work on
     the Premises disregarding the requested change, addition or alteration, or
     Landlord may elect to discontinue work on the Premises until it receives
     notice of Tenant's decision, in which event Tenant shall be responsible for
     any Delay in completion of the Premises resulting therefrom.  In the event
     such revisions result in a higher estimate of the cost of construction
     and/or higher actual construction costs which exceed the Allowance, such
     increased estimate or costs shall be deemed Excess Costs pursuant to
     Paragraph 5 hereof and Tenant shall pay such Excess Costs upon demand.

7.   Following approval of the Plans and the payment by Tenant of the required
     portion of the Excess Costs, if any, Landlord shall cause the Landlord Work
     to be constructed substantially in accordance with the approved Plans.
     Landlord shall notify Tenant of substantial completion of the Landlord
     Work.

8.   Landlord, provided Tenant is not in default, agrees to provide Tenant with
     an allowance (the "Allowance") in an amount not to exceed Eighty-One
     Thousand Seven Hundred Thirty-Five and NO/100 Dollars ($81,735.00) (i.e.,
     $15.00 per rentable square foot of the Premises) to be applied toward the
     cost of the Landlord Work in the Premises.  Provided Tenant is not in
     default, Landlord further agrees to contribute the sum of Six Hundred Fifty
     Three and 88/100 Dollars ($653.88) (i.e., 12 cents per square foot of
     Rentable Area of the Premises) ("Space Plan Allowance") toward the cost of
     preparation by Klawitter & Associates of preliminary space plans and other
     preliminary consulting costs related to Tenant's potential tenancy in the
     Building.  The Space Plan Allowance shall be disbursed by Landlord in
     accordance with the same procedures set forth in Exhibit D for the
     Allowance.  In the event the Allowance shall not be sufficient to complete
     the Landlord Work which shall include construction of improvements,
     including walls, cabinets, shelving and the like and carpet, paint and
     other finish work to prepare the Premises for Tenant's occupancy, Tenant
     shall pay the Excess Costs as prescribed in Paragraph 5 above.  In the
     event the Allowance exceeds the cost of Landlord Work, Tenant may apply up
     to ten percent (10%) of the remaining Allowance toward moving costs or the
     costs of furniture or equipment.  Any remaining Allowance (after Tenant's
     allowed ten percent [10%]) shall accrue to the sole benefit of Landlord, it
     being agreed that Tenant shall not be entitled to any credit, offset,
     abatement or payment with respect thereto. Landlord shall be entitled to
     deduct from the Allowance a construction management fee for Landlord's
     oversight of the Landlord Work in an amount equal to four percent (4%) of
     the total cost of the Landlord Work.

9.   Items of work not shown in the Plans including, for example, the
     installation of telephone service, equipment or furniture (including wiring
     and cabling connections or installations) for which Tenant contracts
     separately, and at Tenant's sole cost and expense (hereinafter "Tenant's
     Work"), shall be subject to Landlord's policies and schedules and shall be
     conducted in such a way as not to hinder, cause any disharmony with or
     delay the Landlord Work or any work of improvement in the Building.
     Tenant's suppliers, contractors, workmen and mechanics shall be subject to
     approval by Landlord prior to the commencement of their work and shall be
     subject to Landlord's administrative control while performing their work.
     Tenant shall cause its suppliers and contractors to engage only labor that
     is harmonious and compatible with other labor working in the Building.  In
     the event of any labor disturbance caused by persons employed by Tenant or
     Tenant's contractor, Tenant shall immediately, and at Tenant's sole cost
     and expense, take all actions necessary to eliminate such disturbance.  If
     at any time any supplier, contractor, workman or mechanic performing
     Tenant's Work hinders or delays the Landlord Work or any other work of
     improvement in the Building or performs any work which may or does impair
     the quality, integrity or performance of any portion of the Building,
     Tenant shall, at Tenant's sole cost and

                                      D-2
<PAGE>

     expense, cause such supplier, contractor, workman or mechanic to leave
     the Building and remove all his tools, equipment and materials
     immediately upon written notice delivered to Tenant and Tenant shall
     reimburse Landlord for any repairs or corrections of the Tenant
     Improvements or Tenant's Work or of any portion of the Building caused
     by or resulting from the work of any supplier, contractor, workman or
     mechanic with whom Tenant contracts.  Landlord shall give access to
     Tenant's suppliers, contractors, workmen and mechanics so as to achieve
     timely completion and occupancy of the Premises.

10.  This Exhibit D shall not be deemed applicable to any additional space added
     to the original Premises at any time or from time to time, whether by any
     options under the Lease or otherwise, or to any portion of the original
     Premises or any additions to the Premises in the event of a renewal or
     extension of the original Lease Term whether by any options under the Lease
     or otherwise, unless expressly so provided in the Lease or any amendment or
     supplement to the Lease.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Exhibit in
multiple original counterparts as of the day and year first above written.

                                       LANDLORD: EOP-PASADENA TOWERS,
                                       L.L.C., A DELAWARE LIMITED
                                       LIABILITY COMPANY DOING BUSINESS AS
                                       EOP-PASADENA TOWERS, LLC, A
                                       DELAWARE LIMITED LIABILITY COMPANY

                                       BY:  EOP Operating Limited
                                            Partnership, a Delaware
                                            limited partnership, its
                                            managing member

                                            BY:  Equity Office Properties
                                                 Trust, a Maryland real
                                                 estate investment trust,
                                                 its managing general
                                                 partner

                                        /s/ PETER H. ADAMS
                                       ----------------------------------------
                                       Name: Peter H. Adams
                                            -----------------------------------
                                       Title: Sr. Vice President
                                             ----------------------------------

                                       TENANT:  ACACIA RESEARCH
                                       CORPORATION, a California
                                       corporation

                                       /s/ KATHRYN KING-VAN WIE
                                       ----------------------------------------
                                       Name: Kathryn King-Van Wie
                                            -----------------------------------
                                       Title: Chief Operating Officer
                                             ----------------------------------

                                       By: /s/ R. BRUCE STEWART
                                          -------------------------------------
                                       Name: R. Bruce Stewart
                                            -----------------------------------
                                       Title: Chief Financial Officer
                                             ----------------------------------

                                      D-3
<PAGE>
                                  EXHIBIT E

                               ADDITIONAL TERMS

     This Exhibit is attached to and made a part of the Lease dated
____________________, 1998, by and between EOP-PASADENA TOWERS, L.L.C., A
DELAWARE LIMITED LIABILITY COMPANY DOING BUSINESS AS EOP-PASADENA TOWERS,
LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Landlord"), and ACACIA RESEARCH
CORPORATION, A CALIFORNIA CORPORATION ("Tenant") for space in the Building
located at 55 South Lake Avenue, Pasadena, California.

I.   RENEWAL OPTION.

     A.   Tenant shall have the right to extend the Lease Term (the "Renewal
          Option") for one additional period of five (5) years commencing on the
          day following the Termination Date of the initial Lease Term and
          ending on the fifth (5th) anniversary of the Termination Date (the
          "Renewal Term"), if:

          1.   Landlord receives notice of exercise of the Renewal Option
               ("Initial Renewal Notice") not less than twelve (12) full
               calendar months prior to the expiration of the initial Lease Term
               and not more than fifteen (15) full calendar months prior to the
               expiration of the initial Lease Term; and

          2.   Tenant is not in default under the Lease beyond any applicable
               cure periods at the time that Tenant delivers its Initial Renewal
               Notice or at the time Tenant delivers its Binding Notice (as
               hereinafter defined); and

          3.   No part of the Premises is sublet at the time that Tenant
               delivers its Initial Renewal Notice or at the time Tenant
               delivers its Binding Notice other than in connection with a
               Permitted Transfer; and

          4.   The Lease has not been assigned prior to the date that Tenant
               delivers its Initial Renewal Notice or prior to the date Tenant
               delivers its Binding Notice other than in connection with a
               Permitted Transfer; and

          5.   Tenant executes and returns the Renewal Amendment (hereinafter
               defined) within fifteen (15) days after its submission to Tenant.

     B.   The initial Base Rental rate per rentable square foot for the Premises
          during the Renewal Term shall equal the Prevailing Market (hereinafter
          defined) rate per rentable square foot for the Premises.

     C.   Tenant shall pay Additional Base Rental (i.e. Basic Costs) for the
          Premises during the Renewal Term in accordance with Article IV of the
          Lease.

     D.   Within thirty (30) days after receipt of Tenant's Initial Renewal
          Notice, Landlord shall advise Tenant of the applicable Base Rental
          rate for the Premises for the Renewal Term.  Tenant, within fifteen
          (15) days after the date on which Landlord advises Tenant of the
          applicable Base Rental rate for the Renewal Term, shall either (i)
          give Landlord final binding written notice ("Binding Notice") of
          Tenant's exercise of its option, or (ii) if Tenant disagrees with
          Landlord's determination, provide Landlord with written notice of
          rejection (the "Rejection Notice").  If Tenant fails to provide
          Landlord with either a Binding Notice or Rejection Notice within such
          fifteen (15) day period, Tenant's Renewal Option shall be null and
          void and of no further force and effect.  If Tenant provides Landlord
          with a Binding Notice, Landlord and Tenant shall enter into the
          Renewal Amendment

                                      E-1
<PAGE>

          upon the terms and conditions set forth herein.  If Tenant
          provides Landlord with a Rejection Notice, Landlord and
          Tenant shall work together in good faith to agree upon the
          Prevailing Market Base Rental rate for the Premises during
          the Renewal Term.  Upon agreement Tenant shall provide
          Landlord with Binding Notice and Landlord and Tenant shall
          enter into the Renewal Amendment in accordance with the terms
          and conditions hereof.  Notwithstanding the foregoing, if
          Landlord and Tenant are unable to agree upon the Prevailing
          Market Base Rental rate for the Premises within thirty (30)
          days after the date on which Tenant provides Landlord with a
          Rejection Notice, Tenant may elect to either rescind its
          intention to renew, or subject the process to binding
          arbitration.  Tenant's election to cause the disagreement to
          be resolved by arbitration shall be deemed to be its Binding
          Notice.  If Tenant fails to require arbitration by notice
          (the "Arbitration Notice") within three (3) days of the
          expiration of the thirty (30) day period set forth above,
          Tenant's right to extend the Lease shall be null and void and
          of no further force and effect.  If Tenant provide Landlord
          with an Arbitration Notice as set forth above, Landlord and
          Tenant, within ten (10) days after the date of the
          Arbitration Notice, shall each simultaneously submit to the
          other, in a sealed envelope, its good faith estimate of the
          Prevailing Market Base Rental rate (collectively referred to
          as the "Estimates").  If the higher of such Estimates is not
          more than one hundred five percent (105%) of the lower of
          such Estimates, then Prevailing Market Base Rental rate shall
          be the average of the two (2) Estimates.  If the Prevailing
          Market Base Rental rate is not resolved by the exchange of
          Estimates, Landlord and Tenant, within seven (7) days of the
          exchange of Estimates, shall select as an arbitrator a
          mutually acceptable licensed real estate broker with
          experience in commercial activities, including at least ten
          (10) years experience in leasing high-rise office space in
          the Pasadena, California area.  If the parties cannot agree
          on an arbitrator, then within a second period of seven (7)
          days, each shall select an independent licensed real estate
          broker meeting the aforementioned criteria and within a third
          period of seven (7) days, the two appointed licensed real
          estate brokers shall select a third licensed real estate
          broker meeting the aforementioned criteria, and the third
          licensed real estate broker shall determine the Prevailing
          Market Base Rental rate.  If one party shall fail to make
          such an appointment within said second seven (7) day period,
          then the licensed real estate broker chosen by the other
          party shall be the sole arbitrator.  Once the arbitrator has
          been selected as provided for above, then, as soon thereafter
          as practicable but in any case within fourteen (14) days, the
          arbitrator shall select one of the two (2) Estimates of the
          Prevailing Market Base Rental rate submitted by the Landlord
          and Tenant, which must be the one that is closer to the
          Prevailing Market Base Rental rate as determined by the
          arbitrator.  The selection of the arbitrator shall be
          rendered in writing to both Landlord and Tenant and shall be
          final and binding upon them.  If the arbitrator believes that
          expert advice would materially assist him, he may retain one
          or more qualified persons to provide such expert advice.
          Landlord and Tenant shall each pay one half (1/2) of the
          costs of the arbitrator and of any experts retained by the
          arbitrator.  Any fees of any counsel or experts engaged
          directly by Landlord or Tenant, however, shall be borne by
          the party retaining such counsel or expert.

     E.   If Tenant is entitled to and properly exercises its Renewal Option,
          Landlord shall prepare an amendment (the "Renewal Amendment") to
          reflect changes in the Base Rental, Lease Term, Termination Date and
          other appropriate terms.  The Renewal Amendment shall be:

          1.   sent to Tenant within a reasonable time after receipt of the
               Binding Notice; and

          2.   executed by Tenant and returned to Landlord in accordance with
               paragraph A.5. above.

An otherwise valid exercise of the Renewal Option shall, at Landlord's option,
be fully effective whether or not the Renewal Amendment is executed.

     F.   For purpose hereof, "Prevailing Market" shall mean the arms length
          fair market annual rental rate per rentable square foot under renewal
          leases and amendments entered into on or about the date on which the
          Prevailing Market is

                                      E-2
<PAGE>

          being determined hereunder for space comparable to the
          Premises in the Building.  The determination of Prevailing
          Market shall take into account any material economic
          differences between the terms of this Lease and any
          comparison lease, such as rent abatements, construction costs
          and other concessions and the manner, if any, in which the
          Landlord under any such lease is reimbursed for operating
          expenses and taxes.  The determination of Prevailing Market
          shall also take into consideration any reasonably anticipated
          changes in the Prevailing Market rate from the time such
          Prevailing Market rate is being determined and the time such
          Prevailing Market rate will become effective under this Lease.

II.  VIDEO PHONE.

     Landlord hereby quitclaims, transfers, and assigns to Tenant any and all
     interest Landlord has in the videophone systems in the Premises, which
     transfer and quitclaim is made by Landlord in the "as-is" condition and
     location of said system on the date of this Lease and without any express
     or implied warranties of merchantability, suitability, or fitness for a
     particular purpose or any other kind with regard to said videophone system.

     IN WITNESS WHEREOF, Landlord and Tenant have entered into this Exhibit
as of the date first written above.

                                       LANDLORD: EOP-PASADENA TOWERS,
                                       L.L.C., A DELAWARE LIMITED LIABILITY
                                       COMPANY DOING BUSINESS AS EOP-
                                       PASADENA TOWERS, LLC, A DELAWARE
                                       LIMITED LIABILITY COMPANY

                                       BY:  EOP Operating Limited
                                            Partnership, a Delaware limited
                                            partnership, its managing member

                                            BY:  Equity Office Properties
                                                 Trust, a Maryland real
                                                 estate investment trust,
                                                 its managing general
                                                 partner

                                        /s/ PETER H. ADAMS
                                       ----------------------------------------
                                       Name: Peter H. Adams
                                            -----------------------------------
                                       Title: Sr. Vice President
                                             ----------------------------------

                                       TENANT:  ACACIA RESEARCH CORPORATION,
                                       a California corporation

                                       /s/ KATHRYN KING-VAN WIE
                                       ----------------------------------------
                                       Name: Kathryn King-Van Wie
                                            -----------------------------------
                                       Title: Chief Operating Officer
                                             ----------------------------------

                                       By: /s/ R. BRUCE STEWART
                                          -------------------------------------
                                       Name: R. Bruce Stewart
                                            -----------------------------------
                                       Title: Chief Financial Officer
                                             ----------------------------------

                                      E-3
<PAGE>

                                   EXHIBIT F

                               PARKING AGREEMENT

     This Exhibit is attached to and made a part of the Lease dated
____________________, 1998, by and between EOP-PASADENA TOWERS, L.L.C., A
DELAWARE LIMITED LIABILITY COMPANY DOING BUSINESS AS EOP-PASADENA TOWERS,
LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Landlord"), and ACACIA RESEARCH
CORPORATION, A CALIFORNIA CORPORATION ("Tenant") for space in the Building
located at 55 South Lake Avenue, Pasadena, California.

     1.   The parties acknowledge that they are contemporaneously herewith
entering into a certain lease (the "Lease") for the Premises known as Suite
No. 650 located in the Building located at 55 South Lake Avenue, Pasadena,
California.  In the event of any conflict between the Lease and this Parking
Agreement, the latter shall control.

     2.   Landlord hereby grants to Tenant and persons designated by Tenant a
license to use one (1) reserved parking spaces, and fifteen (15)
non-reserved, random parking spaces in the Building parking structure.  The
term of such license shall commence on the Commencement Date under the Lease
and shall continue until the earlier to occur of the Termination Date under
the Lease, or termination of the Lease or Tenant's abandonment of the
Premises thereunder. During the term of this license, Tenant shall pay
Landlord the monthly charges established from time to time by Landlord for
parking in the Building parking structure, payable in advance, with Tenant's
payment of monthly Base Rental. The initial charge for such parking space(s)
is $110.00 per reserved parking space, per month, and $65.00 per
non-reserved, random parking space, per month, for all such parking spaces.
No deductions from the monthly charge shall be made for days on which the
Building parking structure is not used by Tenant. However, Tenant may reduce
the number of parking spaces hereunder, at any time, providing at least
thirty (30) days advance written notice to Landlord, accompanied by a
key-card, sticker, or other identification or entrance system provided by
Landlord or its parking contractor. Tenant may, from time to time request
additional parking spaces, and if Landlord shall provide the same, such
parking spaces shall be provided and used on a month-to-month basis, and
otherwise on the foregoing terms and provisions, and at such monthly parking
charges as Landlord shall establish from time to time.

     3.   Tenant shall at all times comply with all applicable ordinances,
rules, regulations, codes, laws, statutes and requirements of all federal,
state, county and municipal governmental bodies or their subdivisions
respecting the use of the Building parking structure.  Landlord reserves the
right to adopt, modify and enforce reasonable rules ("Rules") governing the
use of the Building parking structure from time to time including any
key-card, sticker or other identification or entrance system and hours of
operation.  The Rules set forth herein are currently in effect.  Landlord may
refuse to permit any person who violates such Rules to park in the Building
parking structure, and any violation of the Rules shall subject the car to
removal from the Building parking structure.

     4.   Tenant may validate visitor parking by such method or methods as
Landlord may approve, at the validation rate from time to time generally
applicable to visitor parking. Unless specified to the contrary above, the
parking spaces hereunder shall be provided on an unreserved "first-come,
first-served" basis. Tenant acknowledges that Landlord has or may arrange for
the Building parking structure to be operated by an independent contractor,
not affiliated with Landlord.  In such event, Tenant acknowledges that
Landlord shall have no liability for claims arising through acts or omissions
of such independent contractor, if such contractor is reputable.  Landlord
shall have no liability whatsoever for any damage to building or any other
items located in the Building parking structure, nor for any personal
injuries or death arising out of any matter relating to the Building parking
structure, and in all events, Tenant agrees to look first to its insurance
carrier and to require that Tenant's employees look first to their respective
insurance carriers for payment of any losses sustained in connection

                                      F-1
<PAGE>

with any use of the Building parking structure.  Tenant hereby waives on
behalf of its insurance carriers all rights of subrogation against Landlord
or Landlord's agents.  Landlord reserves the right to assign specific parking
spaces, and to reserve parking spaces for visitors, small cars, handicapped
persons and for other tenants, guests of tenants or other parties, which
assigned and/or reserved spaces may be relocated by Landlord from time to
time, and Tenant and persons designated by Tenant hereunder shall not park in
any such assigned or reserved parking spaces. Landlord also reserves the
right to close all or any portion of the Building parking structure in order
to make repairs or perform maintenance services, or to alter, modify,
re-stripe or renovate the Building parking structure, or if required by
casualty, strike, condemnation, act of God, governmental law or requirement
or other reason beyond Landlord's reasonable control.  In such event,
Landlord shall refund any prepaid parking rent hereunder, prorated on a per
diem basis.  If, for any other reason, Tenant or persons properly designated
by Tenant, shall be denied access to the Building parking structure, and
Tenant or such persons shall have complied with this Parking Agreement and
this Parking Agreement shall be in effect, Landlord's liability shall be
limited to such parking charges (excluding tickets for parking violations)
incurred by Tenant or such persons in utilizing alternative parking, which
amount Landlord shall pay upon presentation or documentation supporting
Tenant's claims in connection therewith.

     5.   If Tenant shall default under this Parking Agreement, Landlord
shall have the right to remove from the Building parking structure any
vehicles hereunder which shall have been involved or shall have been owned or
driven by parties involved in causing such default, without liability
therefore whatsoever.  In addition, if Tenant shall default under this
Parking Agreement, Landlord shall have the right to cancel this Parking
Agreement on ten (10) days' written notice, unless within such ten (10) day
period, Tenant cures such default.  If Tenant defaults with respect to the
same term or condition under this Parking Agreement more than three (3) times
during any twelve (12) month period, and Landlord notifies Tenant thereof
promptly after each such default, the next default of such term or condition
during the succeeding twelve (12) month period, shall, at Landlord's
election, constitute an incurable default. Such cancellation right shall be
cumulative and in addition to any other rights or remedies available to
Landlord at law or equity, or provided under the Lease (all of which rights
and remedies under the Lease are hereby incorporated herein, as though fully
set forth).  Any default by Tenant under the Lease shall be a default under
this Parking Agreement, and any default under this Parking Agreement shall be
a default under the Lease.

                                     RULES

            (i)  Building parking structure hours shall be 6:00 a.m. to 8:00
                 p.m., however, Tenant shall have access to the garage or
                 parking lot on a 24 hour basis, 7 days a week.  Tenant shall
                 not store or permit its employees to store any automobiles in
                 the garage or on the surface parking areas without the prior
                 written consent of Landlord.  Except for emergency repairs,
                 Tenant and its employees shall not perform any work on any
                 automobiles while located in the garage or on the Property.
                 If it is necessary for Tenant or its employees to leave an
                 automobile in the garage or on the surface parking areas
                 overnight, Tenant shall provide Landlord with prior notice
                 thereof designating the license plate number and model of such
                 automobile.

           (ii)  Cars must be parked entirely within the stall lines painted on
                 the floor, and only small cars may be parked in areas reserved
                 for small cars.

          (iii)  All directional signs and arrows must be observed.

           (iv)  The speed limit shall be 5 miles per hour.

            (v)  Parking spaces reserved for handicapped parking must be used
                 only by vehicles properly designated.

                                      F-2
<PAGE>

           (vi)  Parking is prohibited in all areas not expressly designated
                 for parking, including without limitation:

                 (a)     Areas not striped for parking
                 (b)     aisles
                 (c)     where "no parking" signs are posted
                 (d)     ramps
                 (e)     loading zones

          (vii)  Parking stickers, key cards or any other devices or forms of
                 identification or entry supplied by Landlord shall remain the
                 property of Landlord.  Such devised must be displayed as
                 requested and may not be mutilated in any manner.  The serial
                 number of the parking identification device may not be
                 obliterated.  Devises are not transferable and an device in
                 the possession of an unauthorized holder will be void.

         (viii)  Monthly fees shall be payable in advance prior to the first
                 day of each month.  Failure to do so will automatically cancel
                 parking privileges and a charge at the prevailing daily
                 parking rate will be due.  No deductions or allowances from
                 the monthly rate will be made for days on which the Building
                 parking structure is not used by Tenant or its designees.

           (ix)  Building parking structure managers or attendants are not
                 authorized to make or allow any exceptions to these Rules.

            (x)  Every parker is required to park and lock his/her own car.

           (xi)  Loss or theft of parking identification, key cards or other
                 such devices must be reported to Landlord to any garage
                 manager immediately.  Any parking devices reported lost or
                 stolen found on any authorized car will be confiscated and the
                 illegal holder will be subject to prosecution.  Lost or stolen
                 devices found by Tenant or its employees must be reported to
                 the office of the garage immediately.

          (xii)  Washing, waxing, cleaning or servicing of any vehicle by the
                 customer and/or his agents is prohibited.  Parking spaces may
                 be used only for parking automobiles.

         (xiii)  By signing this Parking Agreement, Tenant agrees to acquaint
                 all persons to whom Tenant assigns parking spaces with these
                 Rules.

          6.     NO LIABILITY.  TENANT ACKNOWLEDGES AND AGREES THAT, TO THE
     FULLEST EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY
     LOSS OR DAMAGE TO TENANT OR TENANT'S PROPERTY (INCLUDING, WITHOUT
     LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT'S AUTOMOBILE OR THE CONTENTS
     THEREOF DUE TO THEFT, VANDALISM OR ACCIDENT) ARISING FROM OR RELATED TO
     TENANT'S USE OF THE BUILDING PARKING STRUCTURE OR EXERCISE OF ANY RIGHTS
     UNDER THIS PARKING AGREEMENT, UNLESS SUCH LOSS OR DAMAGE RESULTS FROM
     LANDLORD'S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION.  THE LIMITATION ON
     LANDLORD'S LIABILITY UNDER THE PRECEDING SENTENCE SHALL NOT APPLY HOWEVER
     TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD'S WILLFUL MISCONDUCT.

          7.     Release of Liability.  Without limiting the provisions of
     Paragraph 6 above, Tenant hereby voluntarily releases, discharges, waives
     and relinquishes any and all actions or causes of action for personal
     injury or property damage occurring to

                                      F-3
<PAGE>

     Tenant arising as a result of parking in the Building parking
     structure, or any activities incidental thereto, wherever or however
     the same may occur, and further agrees that Tenant will not prosecute
     any claim for personal injury or property damage against Landlord or
     any of its officers, agents, servants or employees for any said causes
     of action.  It is not the intention of Tenant by this instrument, to
     exempt and relieve Landlord from liability for personal injury or
     property damage caused by negligence.

          8.     The provisions of Article XXIV of the Lease are hereby
     incorporated by reference as if fully recited.

          Tenant acknowledges that Tenant has read the provisions of this
     Parking Agreement, has been fully and completely advised of the potential
     dangers incidental to parking in the Building parking structure and is
     fully aware of the legal consequences of signing this instrument.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Exhibit in
multiple original counterparts as of the day and year first above written.

                                       LANDLORD: EOP-PASADENA TOWERS,
                                       L.L.C., A DELAWARE LIMITED
                                       LIABILITY COMPANY DOING BUSINESS AS
                                       EOP-PASADENA TOWERS, LLC, A
                                       DELAWARE LIMITED LIABILITY COMPANY

                                       BY:  EOP Operating Limited
                                            Partnership, a Delaware
                                            limited partnership, its
                                            managing member

                                            BY:  Equity Office Properties
                                                 Trust, a Maryland real
                                                 estate investment trust,
                                                 its managing general
                                                 partner

                                       By: /s/ PETER H. ADAMS
                                       ----------------------------------------
                                       Name: Peter H. Adams
                                            -----------------------------------
                                       Title: Sr. Vice President
                                             ----------------------------------

                                       TENANT:  ACACIA RESEARCH
                                       CORPORATION, a California
                                       corporation

                                       /s/ KATHRYN KING-VAN WIE
                                       ----------------------------------------
                                       Name: Kathryn King-Van Wie
                                            -----------------------------------
                                       Title: Chief Operating Officer
                                             ----------------------------------

                                       By: /s/ R. BRUCE STEWART
                                          -------------------------------------
                                       Name: R. Bruce Stewart
                                            -----------------------------------
                                       Title: Chief Financial Officer
                                             ----------------------------------

                                      F-4
<PAGE>

                                  EXHIBIT G

                          JANITORIAL SPECIFICATIONS

MONDAY - FRIDAY

1.   Sweep, dry-mop or vacuum all floors (stairwells and landings included).

2.   Clean cigarette urns or cigarette disposal units.

3.   Empty and wipe all ashtrays.

4.   Dust and wipe clean with a treated cloth, base-boards, window sills, desk
     tops, telephones and all horizontal surfaces that can be reached without a
     ladder.

5.   Clean, polish and sanitize all drinking fountains.

6.   Sweep all steps, sidewalks and plazas.

7.   Clean elevator cabs and landing doors, including floors.

8.   Empty all waste containers.

9.   Clean all public restrooms.

     a.   All cleaning performed with disinfectant-strength germicidal
          detergents.

     b.   Surfaces of toilets and urinals will be cleaned; interiors will be
          cleaned with acid bowl cleaner.

     c.   Wash basins, shelves, dispensers and all other washroom fixtures will
          be cleaned.

     d.   Mirrors will be cleaned and polished.

     e.   Chrome and other bright work, including exposed plumbing, toilet seat
          hinges, etc., will be cleaned and polished.

     f.   Waste receptacles are to be emptied and cleaned.

     g.   Lavatory floors will be swept and mopped.

     h.   Washroom supplies will be replenished.

10.  All normal rubbish and office waste paper shall be removed from tenant
     floors and carried to a designated location.

11.  Sweep clean loading dock areas.

12.  In building lobby, dust and wipe clean metal door knobs, kick plates,
     directional signs and door saddles.

13.  Dust and sanitize all telephones.

14.  Low dust moldings, picture frames and convectors.

15.  Clean the upper side of all glass furniture tops.

16.  Spot clean interior glass in partitions and doors and both sides of
     exterior entrance door glass.

                                      G-1
<PAGE>

WEEKLY

1.   Spot clean all carpeting, doors, switch plates, wall and glass areas
     adjacent to doors.

2.   Dust and wipe tops of all counters and file cabinets.

3.   Wipe clean interior building metals.

4.   Damp mop floors and/or spray buff for heavy scuffs if necessary.

5.   Clean building directory glass.

6.   Wipe all waste containers.

7.   Wash all glass entrance doors and side panels inside and out.

8.   Clean all loading dock areas.

MONTHLY

1.   Dust electric fixtures and other fittings in public corridors.  Replace
     building standard fluorescent bulbs when necessary.

2.   Shampoo common area and elevator carpeting.

3.   Damp-mop building stairwells.

4.   Dust corridor and lobby walls.

5.   Dust all high areas not reached in nightly cleaning, including pictures
     frames, charts, graphs, wall hangings, walls, partitioning, light
     fixtures, window frames and overhead pipes and sprinklers.

6.   When possible, sweep and hose down outside terrace space, exterior walks,
     trucking areas and shipping platforms.

7.   Scrub Loading dock areas.

8.   Remove hard water deposits from toilet fixtures by using bowl cleaner
     after normal cleaning.

9.   Wash washroom partitions, tile walls, and enamel surfaces with germicidal
     detergent.

EVERY THREE MONTHS

1.   Dust vertical surfaces of all furnitures.

2.   Scrub all resilient floor areas to maintain a highly polished surface.

3.   Spot clean Tenant carpeting as required.

4.   Clean all light fixtures.

5.   Clean Venetian blinds.

6.   Lavatory floors will be machine-scrubbed.

                                      G-2
<PAGE>

MISCELLANEOUS

1.   Wash Tenant lobby windows once a month; wash exterior windows twice a
     year; and wash interior windows once a year.

2.   Sidewalks, entrances (including dock) and grounds to be kept clean of
     paper, leaves and debris.

3.   Put out in lobby entrances floor mats during inclement weather.  Clean
     floor mats as necessary.

4.   Keep walls and ceilings clean.

5.   As needed, but not less than weekly, remove fingerprints from doors,
     frames, handles, railings, light switches and push plates.

                                      G-3

<PAGE>

                                    EXHIBIT B
                                    ---------

                      ALTERNATE FORM FOR LANDLORD'S CONSENT
                      -------------------------------------

                               Consent of Landlord

         The undersigned, being the landlord ("Landlord") under that certain
lease dated April 30, 1998, as amended by a First Amendment dated June 26, 2000
and a Parking Agreement dated April 30, 1998 (collectively, the "Master Lease")
between Landlord and Acacia Research Corporation ("Tenant"), hereby agrees as
follows:

         1. Landlord consents to the subletting of the Premises by Tenant to
Jenkens & Gilchrist, a Texas Professional Corporation ("Subtenant") pursuant to
that certain Sublease, a copy of which is attached hereto as Exhibit "A",
subject to the terms and conditions set forth herein.

         2. Landlord acknowledges that pursuant to the Sublease, Tenant's
Security Deposit (as described in the Master Lease) has been assigned to
Subtenant and that upon expiration or termination of the Master Lease, to the
extent that Tenant is entitled to a return of all or any portion thereof, it
shall be returned directly to Subtenant at the address set forth herein.
Landlord confirms that the amount of such Security Deposit is $16,876.08, and
that no part thereof has been applied by Landlord towards rent or as a result of
any default of Tenant under the Master Lease.

         3. Notwithstanding the fact that no direct contractual relationship
exists between Landlord and Subtenant (except for the agreements set forth in
this Consent of Landlord) Subtenant shall have the right to exercise the
Tenant's right to extend the Term of the Master Lease (as set forth in Exhibit
"E" to the Master Lease), subject to the terms and conditions set forth therein.
If Subtenant timely exercises such right, Landlord and Tenant shall execute a
new lease on substantially the same terms and conditions as the Master Lease,
but with the term and rent as described in the said Exhibit "E". Under no
circumstances will Tenant be obligated to Landlord in any way under said new
lease, nor will Tenant be in any way liable to Landlord for any rent or other
sums resulting from the exercise of the extension option by Subtenant.

         4. This Consent does not release Sublandlord of its obligations or
alter the primary liability of Sublandlord to pay the rent and perform and
comply with all of the obligations of Sublandlord to be performed (as Tenant)
under the Master Lease during the original Term of the Master Lease.

         5. This Consent shall not constitute a consent to any subsequent
subletting of the Premises.

         6. In the event of any default of Sublandlord (as Tenant) under the
Master Lease, Landlord may proceed directly against Sublandlord, or any one else
liable under the Master Lease, without first exhausting Landlord's remedies
against any other person or entity liable thereon to Landlord.

                                      -1-
<PAGE>

         7. Landlord will not amend or modify the Master Lease in any respect
which adversely affects the rights of Subtenant under the Sublease, nor will
Landlord terminate the Master Lease (except as a result of a default by
Sublandlord thereunder).

         8. In the event that Sublandlord shall default in its obligations under
the Master Lease, then Landlord may, at its option and without being obligated
to do so, require Subtenant to attorn to Landlord, in which event Landlord shall
undertake the obligations of Sublandlord under the Sublease from the time of the
exercise of said option to terminate the Sublease, but Landlord shall not be
liable for any prepaid rent paid by Subtenant nor shall Landlord be liable for
any defaults of the Sublandlord under the Sublease. Whether or not Landlord
requires Subtenant to so attorn, as long as Subtenant is not in default under
the Sublease, Landlord will not disturb the quite enjoyment, use or occupancy of
the Premises by Subtenant pursuant to the terms of the Sublease.

         9. Landlord acknowledges that, to the best of its knowledge, no default
presently exists under the Master Lease of obligations to be performed by
Sublandlord or by Landlord, and that the Master Lease is in full force and
effect, and that a full, true and correct copy of the Master Lease is attached
to the Sublease, and that the Master Lease has not been amended or modified
except as set forth therein.

         10. In the event that Sublandlord defaults under its obligations to be
performed under the Master Lease, Landlord agrees to deliver to Subtenant a copy
of any such notice of default concurrently with the delivery of any notice of
default to Sublandlord. Subtenant shall have the right to cure any default of
Sublandlord described in any such notice of default within the later of the time
to cure set forth in the Master Lease, or 30 days (10 days for a monetary
default) after service of such notice of default on Subtenant. If such default
is cured by Subtenant, then Subtenant shall have the right of reimbursement
against Sublandlord. Any notices to Subtenant shall be sent to Jenkens &
Gilchrist, 1445 Ross Avenue, Suite 3200, Dallas, Texas 75202-2799, Attn: Roger
L. Hayse.

         Landlord acknowledges that Subtenant is relying on the provisions of
this Consent of Landlord in entering into the Sublease and that without such
consent, Subtenant would not enter into the Sublease.

         Dated:  November ___, 2001

                                            EOP - Pasadena Towers, L.L.C.,
                                            a Delaware limited liability company

                                            By:
                                                --------------------------------

                                                Its:
                                                     ---------------------------

                                      -2-<PAGE>
EXHIBIT 10.12
OFFICE SPACE LEASE

                               OFFICE SPACE LEASE

                                     BETWEEN

                               THE IRVINE COMPANY

                                       AND

                           ACACIA RESEARCH CORPORATION

<PAGE>

                               OFFICE SPACE LEASE

      THIS LEASE is made as of the 28th day of January, 2002, by and between THE
IRVINE COMPANY, hereafter called "Landlord," and ACACIA RESEARCH CORPORATION, a
Delaware corporation, hereafter called "Tenant."

                        ARTICLE I. BASIC LEASE PROVISIONS

      Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.    TENANT'S TRADE NAME:  N/A

2.    PREMISES: Suite No. 700 (the Premises are more particularly described in
      Section 2.1).

      ADDRESS OF BUILDING:  500 Newport Center Drive, Newport Beach, CA  92660

      PROJECT DESCRIPTION Newport Center Block 500 (consisting of the Building
      and the adjacent building at 550 Newport Center Drive, together with all
      attendant parking and other Common Areas).

3.    USE OF PREMISES: General Office and for no other use.

4.    COMMENCEMENT DATE: February 15, 2002

5.    LEASE TERM: The Term of this Lease shall expire on the date immediately
      preceding the fifth anniversary of the Commencement Date.

6.    BASIC RENT: Twenty-Three Thousand Two Hundred Fifteen Dollars ($23,215.00)
      per month.

      RENTAL ADJUSTMENTS:

      Commencing February 1, 2003, the Basic Rent shall be Twenty-Three Thousand
      Nine Hundred Twenty-Nine Dollars ($23,929.00) per month.

      Commencing February 1, 2004, the Basic Rent shall be Twenty-Four Thousand
      Six Hundred Forty-Three Dollars ($24,643.00) per month.

      Commencing February 1, 2005, the Basic Rent shall be Twenty-Five Thousand
      Three Hundred Fifty-Eight Dollars ($25,358.00) per month.

      Commencing February 1, 2006, the Basic Rent shall be Twenty-Six Thousand
      Seventy-Two Dollars ($26,072.00) per month.

7.    PROPERTY TAX BASE: The Property Taxes per rentable square foot incurred by
      Landlord and attributable to the twelve month period ending June 30, 2002
      (the "Base Year").

      BUILDING COST BASE: The Building Costs per rentable square foot incurred
      by Landlord and attributable to the Base Year.

      EXPENSE RECOVERY PERIOD: Every twelve month period during the Term (or
      portion thereof during the first and last Lease years) ending June 30.

8.    FLOOR AREA OF PREMISES: approximately 7,143 rentable square feet and
      approximately 6,028 usable square feet

9.    SECURITY DEPOSIT:  $28,679.00

10.   BROKER(S):  The Staubach Company

11.   PLAN APPROVAL DATE:  N/A

12.   PARKING: Twenty-Four (24) unreserved vehicle parking spaces (see Exhibit
      C).

<PAGE>
<TABLE>
<CAPTION>
<S>                                                   <C>
13.   ADDRESS FOR PAYMENTS AND NOTICES:

      LANDLORD                                        TENANT

      The Irvine Company                              Acacia Research Corporation
      c/o Insignia/ESG, Inc.                          500 Newport Center Drive
      630 Newport Center Drive, Suite 100             Suite 700
      Newport Beach, CA  92660                        Newport Beach, CA  92660
      Attn:  Property Manager                         Attn:  Robert Berman, Esq.

      with a copy of notices to:                      with a copy of default notices to:

      THE IRVINE COMPANY                              Allen Matkins Leck Gamble
      P.O. Box 6370                                   & Mallory LLP
      Newport Beach, CA 92658-6370                    1901 Avenue of the Stars
      Attn:  Vice President,                          Suite 1800
            Operations - Office Properties            Los Angeles, CA  90067
                                                      Attn:  Mark Kelson, Esq.

</TABLE>

<PAGE>

                              ARTICLE II. PREMISES

      SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant rents
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 2 of the Basic Lease
Provisions. The Premises are located in the building identified in Item 2 of the
Basic Lease Provisions (the "Building"), which is a portion of the project
described in Item 2 (the "Project").

      SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, except as set forth in this Lease. Nothing
contained in this Section shall affect the commencement of the Term or the
obligation of Tenant to pay rent. Landlord shall diligently complete all punch
list items of which it is notified as provided above.

      SECTION 2.3. BUILDING NAME, ADDRESS AND DEPICTION. Tenant shall not
utilize any name selected by Landlord from time to time for the Building and/or
the Project as any part of Tenant's corporate or trade name. Landlord shall have
the right to change the name, number or designation of the Building or Project
without liability to Tenant upon reasonable prior notice to Tenant. Tenant shall
not use any picture of the Building in its advertising, stationery or in any
other manner.

      SECTION 2.4. RIGHT OF FIRST OFFER. Provided Tenant is not then in default
beyond any applicable cure period hereunder, Landlord hereby grants Tenant the
continuing right ("First Right") to lease, during the initial sixty (60) month
Term of this Lease, any space which is contiguous to the Premises that may
become available for lease on the seventh (7th) floor of the Building ("First
Right Space") in accordance with and subject to the provisions of this Section
2.4. At any time after the date of this Lease, but prior to leasing the First
Right Space, or any portion thereof, to any other party, Landlord shall give
Tenant written notice of the basic economic terms including but not limited to
the Basic Rent, term, operating expense base, rent abatement, security deposit,
and tenant improvement allowance (collectively, the "Economic Terms"), upon
which Landlord is willing to lease such particular First Right Space to Tenant
or to a third party; provided that the Economic Terms shall exclude brokerage
commissions and other Landlord payments that do not directly inure to the
tenant's benefit. It is understood that should Landlord intend to lease other
space in addition to the First Right Space as part of a single transaction, then
Landlord's notice shall so provide and all such space shall collectively be
subject to the following provisions. Within five (5) business days after receipt
of Landlord's notice, Tenant shall give Landlord written notice pursuant to
which Tenant shall elect to (i) lease all, but not less than all, of the space
specified in Landlord's notice (the "Designated Space") upon such Economic Terms
and the same non-Economic Terms as set forth in this Lease; (ii) refuse to lease
the Designated Space, specifying that such refusal is not based upon the
Economic Terms, but upon Tenant's lack of need for the Designated Space, in
which event Landlord may lease the Designated Space upon any terms it deems
appropriate; or (iii) refuse to lease the Designated Space, specifying that such
refusal is based upon said Economic Terms, in which event Tenant shall also
specify revised Economic Terms upon which Tenant shall be willing to lease the
Designated Space. In the event that Tenant does not so respond in writing to
Landlord's notice within said period, Tenant shall be deemed to have elected
clause (ii) above. In the event Tenant gives Landlord notice pursuant to clause
(iii) above, Landlord may elect to either (x) lease the Designated Space to
Tenant upon such revised Economic Terms and the same other non-Economic Terms as
set forth in this Lease, or (y) lease the Designated Space to any third party
upon Economic Terms which are not more favorable to such party than those
Economic Terms proposed by Tenant. Should Landlord so elect to lease the
Designated Space to Tenant, then Landlord shall promptly prepare and deliver to
Tenant an amendment to this Lease consistent with the foregoing, and Tenant
shall execute and return same to Landlord within ten (10) business days. In the
event that Landlord shall not enter into a lease for the Designated Space with a
third party within one hundred eighty (180) days following Landlord's notice

<PAGE>

described above, then prior to leasing the First Right Space to any third party,
Landlord shall repeat the procedures set forth in this Section 2.4. In the event
that Landlord leases the Designated Space to a third party in accordance with
the provisions of this Section 2.4, and during the initial sixty (60) month term
of this Lease the First Right Space, or any portion thereof, shall again become
available for releasing, then prior to Landlord entering into any such new lease
with a third party for the First Right Space, Landlord shall repeat the
procedures specified above in this Section 2.4. Notwithstanding the foregoing,
it is understood that Tenant's First Right shall be subject to any extension or
expansion rights previously granted by Landlord to any existing third party
tenant in the Building, and to any extension rights which may hereafter be
granted by Landlord to any third party tenant now or hereafter occupying the
First Right Space or any portion thereof, and in no event shall any such First
Right Space be deemed available for leasing unless the then-existing tenant
thereof shall vacate that First Right Space. In addition, Landlord may from time
to time utilize segments of the First Right Space for temporary office or
storage purposes, and such temporary use shall not trigger the First Right
granted herein. Tenant's rights under this Section 2.4 shall belong solely to
Acacia Research Corporation and any Tenant Affiliate (as defined in Section
9.1(f) below) to which this Lease may be assigned, and may not otherwise be
assigned or transferred by it.

                                ARTICLE III. TERM

      SECTION 3.1. GENERAL. The Term shall be for the period shown in Item 5 of
the Basic Lease Provisions. The Term shall commence ("Commencement Date") on the
Commencement Date as set forth in Item 4 of the Basic Lease Provisions and shall
expire on the date set forth in Item 5 of the Basic Lease Provisions
("Expiration Date"). Landlord shall complete the recarpet and painting of the
Premises in accordance with the provisions of the Work Letter attached as
Exhibit X hereto.

      SECTION 3.2. RIGHT TO EXTEND THIS LEASE. Provided that Tenant is not then
in default under any provision of this Lease after the expiration of any
applicable notice and cure period, Tenant may extend the Term of this Lease for
one (1) period of sixty (60) months. Tenant shall exercise its right to extend
the Term by and only by delivering to Landlord, not less than ten (10) months
prior to the expiration date of the Term, Tenant's written notice of its
election to extend (the "Exercise Notice"). The Basic Rent payable under the
Lease during the extension of the Term shall be at the prevailing rental rate
and other economic terms for office space being leased by Landlord in the
Building and in the other high-rise buildings in Block 600 of Newport Center
with a term commencing at or about the commencement of the extension period (the
"Prevailing Rate").

In determining the Prevailing Rate, recent new and renewal leases with
non-equity tenants shall be considered. The Prevailing Rate shall reflect the
rental rate and terms payable in those third party transactions, taking into
account pertinent economic concessions then generally being granted by Landlord
such as "free rent," Operating Expense base years, parking charge limitations,
tenant improvement allowances and the like. It is understood, however, that no
consideration shall be given to brokerage commissions, lease "takeover"
payments, or moving allowances. The rental rates payable in any third party
transactions executed more than nine (9) months prior to the commencement of the
extension period shall be reasonably extrapolated, if applicable, to reflect
anticipated changes in the Prevailing Rate based on current rental trends.

Following Tenant's delivery of the Exercise Notice, but not later than nine (9)
months prior to the expiration date of the Term, Landlord shall notify Tenant in
writing ("Landlord's Notice") of Landlord's calculation of the Prevailing Rate
for the extension period based on the foregoing criteria. Not later than fifteen
(15) days following delivery of the Landlord's Notice, Tenant may elect to
rescind the Exercise Notice by delivery of written notice to Landlord
("Rescission Notice"), in which event this extension right shall lapse and cease
to be of any force or effect; provided that should Tenant fail timely to deliver
the Rescission Notice, Tenant's election to extend this Lease shall be
irrevocable.
<PAGE>

Provided that Tenant does not elect to rescind as provided above, the parties
shall diligently and in good faith attempt to agree in writing on the Prevailing
Rate. In the event the parties are unable to so agree on the Prevailing Rate by
the date that is six (6) months prior to the commencement of the extension
period, then either party may cause the Prevailing Rate to be determined by
arbitration in accordance with Section 14.7(b). The arbitrator shall determine
the Prevailing Rate based on the criteria set forth above, and neither party
shall be bound in the arbitration by any earlier calculation by such party of
the Prevailing Rate.

Within twenty (20) days after the determination of the Prevailing Rate, Landlord
shall prepare a reasonably appropriate amendment to this Lease for the extension
period and Tenant shall execute and return same to Landlord within ten (10)
business days. Should the Prevailing Rate not be established by the commencement
of the extension period, then Tenant shall continue paying rent at the rate in
effect during the last month of the initial Term, and a lump sum adjustment
shall be made within thirty (30) days following the determination of such new
rental.

If Tenant does not deliver the Exercise Notice by the date set forth above, or
otherwise fails to comply with any of the other provisions of this paragraph,
then Tenant's right to extend the Term shall be extinguished and the Lease shall
automatically terminate as of the expiration date of the Term, without any
extension and without any liability to Landlord. Any attempt by the original
Tenant herein to assign or transfer any right or interest created by this
paragraph, except in connection with an assignment of this Lease to a Tenant
Affiliate, shall be void from its inception. Time is specifically made of the
essence of this Section.

                     ARTICLE IV. RENT AND OPERATING EXPENSES

      SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset (except as otherwise provided
in this Lease) a Basic Rent for the Premises in the total amount shown
(including subsequent adjustments, if any) in Item 6 of the Basic Lease
Provisions. Any rental adjustment shown in Item 6 shall be deemed to occur on
the specified monthly anniversary of the Commencement Date, whether or not that
date occurs at the end of a calendar month. The rent shall be due and payable in
advance commencing on the Commencement Date and continuing thereafter on the
first day of each successive calendar month of the Term, as prorated for any
partial month. No demand, notice or invoice shall be required. An installment of
rent in the amount of one (1) full month's Basic Rent at the initial rate
specified in Item 6 of the Basic Lease Provisions shall be delivered to Landlord
concurrently with Tenant's execution of this Lease and shall be applied against
the Basic Rent first due hereunder; the next installment of Basic Rent shall be
due on the first day of the second calendar month of the Term, which installment
shall, if applicable, be appropriately prorated to reflect the amount prepaid
for that calendar month.

      SECTION 4.2.   OPERATING EXPENSE INCREASE.

           (a) Commencing twelve (12) months following the Commencement Date,
Tenant shall compensate Landlord, as additional rent, for Tenant's proportionate
shares of "Building Costs" and "Property Taxes," as those terms are defined
below, incurred by Landlord in the operation of the Building, inclusive of the
Building's proportionate share of expenses attributable to the Common Areas of
the Project as reasonably determined by Landlord. Property Taxes and Building
Costs are mutually exclusive and may be billed separately or in combination as
determined by Landlord, provided Tenant is treated in a nondiscriminatory manner
with respect to other tenants of the Building. Tenant's proportionate share of
Property Taxes shall equal the product of the rentable floor area of the
Premises, as set forth in Item 8 of the Basic Lease Provisions, multiplied by
the difference of (i) Property Taxes per rentable square foot less (ii) the
Property Tax Base set forth in Item 7 of the Basic Lease Provisions. Tenant's
proportionate share of Building Costs shall equal the product of the rentable
floor area of the Premises multiplied by the difference of (i) Building Costs
per rentable square foot less (ii) the Building Cost Base set forth in Item 7 of
the Basic Lease Provisions. For convenience of reference, Property Taxes and
Building Costs may sometimes be collectively referred to as "Operating
Expenses."
<PAGE>

           (b) Commencing prior to the start of the first full "Expense Recovery
Period" of the Lease (as defined in Item 7 of the Basic Lease Provisions), and
prior to the start of each full or partial Expense Recovery Period thereafter,
Landlord shall give Tenant a written estimate of the amount of Tenant's
proportionate shares of Building Costs and Property Taxes for the Expense
Recovery Period or portion thereof. Commencing twelve (12) months following the
Commencement Date, Tenant shall pay the estimated amounts to Landlord in equal
monthly installments, in advance, with Basic Rent. If Landlord has not furnished
its written estimate for any Expense Recovery Period by the time set forth
above, Tenant shall continue to pay cost reimbursements at the rates established
for the prior Expense Recovery Period, if any; provided that when the new
estimate is delivered to Tenant, Tenant shall, within thirty (30) days following
Tenant's receipt of the new statement, pay any accrued cost reimbursements based
upon the new estimate. Landlord may from time to time change the Expense
Recovery Period to reflect a calendar year or a new fiscal year of Landlord, as
applicable, in which event Tenant's share of Operating Expenses shall be
equitably prorated for any partial year.

           (c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a reasonably detailed
statement setting forth the actual or prorated Property Taxes and Building Costs
attributable to that period, and the parties shall within thirty (30) days
thereafter make any payment or allowance necessary to adjust Tenant's estimated
payments, if any, to Tenant's actual proportionate shares as shown by the annual
statement. If Tenant has not made estimated payments during the Expense Recovery
Period, any amount owing by Tenant pursuant to subsection (a) above shall be
paid to Landlord in accordance with Article XVI. If actual Property Taxes or
Building Costs allocable to Tenant during any Expense Recovery Period are less
than the Property Tax Base or the Building Cost Base, respectively, Landlord
shall not be required to pay that differential to Tenant, although Landlord
shall refund any applicable estimated payments collected from Tenant. Should
Tenant fail to object in writing to Landlord's determination of actual Operating
Expenses within six (6) months following delivery of Landlord's expense
statement, Landlord's determination of actual Operating Expenses for the
applicable Expense Recovery Period shall be conclusive and binding on Tenant.

           (d) Tenant shall not be responsible for Tenant's proportionate share
of any Operating Expenses attributable to any Expense Recovery Period which are
first billed to Tenant more than two (2) calendar years after the end of the
applicable Expense Recovery Period. Landlord shall have the right to recalculate
Operating Expenses and to deliver to Tenant revisions of previously delivered
statements setting forth such recalculation, whereupon any increase in the
amount payable by Tenant shall be paid by Tenant within thirty (30) days after
receipt of any such revised statement or any decrease in the amount payable by
Tenant shall be refunded to Tenant concurrently with Landlord's delivery of such
revised statement to Tenant; provided, however, Landlord shall have no right to
recalculate Operating Expenses more than two (2) years following the expiration
of the applicable Expense Recovery Period. Even though the Lease has terminated
and the Tenant has vacated the Premises, when the final determination is made of
Tenant's share of Property Taxes and Building Costs for the Expense Recovery
Period in which the Lease terminates, Tenant shall upon notice pay the entire
increase due over the estimated expenses paid; conversely, any overpayment made
in the event expenses decrease shall be rebated by Landlord to Tenant.

           (e) If, at any time during any Expense Recovery Period but after the
first twelve (12) months of the Lease Term, any one or more of the Operating
Expenses are increased to a rate(s) or amount(s) in excess of the rate(s) or
amount(s) used in calculating the estimated expenses for the year, and provided
such increase(s) are in excess of the costs and expenses incurred during the
Base Year, then Tenant's estimated share of Property Taxes or Building Costs, as
applicable, shall be increased for the month in which the increase becomes
effective and for all succeeding months by an amount equal to Tenant's
proportionate share of the increase. Landlord shall give Tenant written notice
of the amount or estimated amount of the increase, the month in which the
increase will become effective, Tenant's monthly share thereof and the months
for which the payments are due. Tenant shall pay the increase to Landlord as a
part of Tenant's monthly payments of estimated expenses as provided in paragraph
(b) above, commencing with the month in which effective. Landlord shall not
exercise its rights under this subsection (e) more than once during any Expense
Recovery Period.
<PAGE>

           (f) The term "Building Costs" shall include all expenses of operation
and maintenance of the Building, together with the Building's proportionate
allotment of the expenses attributable to all appurtenant Common Areas (as
defined in Section 6.2), and shall include the following charges by way of
illustration but not limitation: water and sewer charges; insurance premiums or
reasonable premium equivalents should Landlord elect to self-insure any risk or
deductible that Landlord is authorized to insure hereunder; license, permit, and
inspection fees; heat; light; power; janitorial services; repairs; air
conditioning; supplies; materials; tools; programs instituted to comply with
mandatory transportation management requirements; amortization of capital
investments reasonably intended to produce a reduction in operating charges or
energy conservation; amortization of capital investments necessary to bring the
Building into compliance with applicable laws and building codes enacted
subsequent to the date of this Lease; labor; reasonably allocated wages and
salaries, fringe benefits, and payroll taxes for administrative and other
personnel directly applicable to the Building and/or Project, including both
Landlord's personnel and outside personnel; any expense incurred pursuant to
Sections 6.1, 6.2, 6.4, 7.2, and 10.2 and Exhibits B and C below; and a
reasonable management fee. It is understood that Building Costs shall include
competitive charges for direct services provided by any subsidiary or division
of Landlord. The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes (which personal
property taxes are imposed upon the fixtures, machinery, equipment, apparatus,
systems and equipment, appurtenances, furniture and other personal property used
in connection with the Building), as such property taxes may be reassessed from
time to time, which real property and personal property taxes were paid in
connection with the ownership, leasing and operation of the Building or
Landlord's interest therein during any Expense Recovery Period; and (ii) other
taxes, documentary transfer fees, charges and assessments which are levied with
respect to this Lease or to the Building and/or the Project, and any
improvements, fixtures and equipment and other property of Landlord located in
the Building and/or the Project, except that all excess profits taxes, franchise
taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate
taxes, federal and state income taxes, and other taxes to the extent applicable
to Landlord's general or net income (as opposed to rents or income attributable
to operations at the Building), and any items included as Building Costs shall
be excluded; and (iii) any tax, surcharge or assessment which shall be levied in
addition to or in lieu of real estate or personal property taxes, other than
taxes covered by Article VIII; and (iv) costs and expenses incurred in
contesting the amount or validity of any Property Tax by appropriate
proceedings. A copy of Landlord's unaudited statement of expenses shall be made
available to Tenant upon request. The Building Costs may be extrapolated by
Landlord to reflect at least ninety-five percent (95%) occupancy of the rentable
area of the Building.

           (g) Notwithstanding any contrary provision set forth above, Operating
Expenses for purposes of this Lease shall not include:

                (1) costs, including marketing costs, legal fees, space
planners' fees, advertising and promotional expenses, and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license
and inspection costs, incurred with respect to the installation of tenant
improvements made for new tenants initially occupying space in the Project after
the Lease Commencement Date or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Project (excluding, however, such costs relating to any common areas of
the Project or parking facilities);

                (2) depreciation, interest and principal payments on mortgages
and other debt costs, if any, or any penalties thereon;

                (3) costs for which the Landlord is reimbursed by any tenant or
occupant of the Project or by insurance by its carrier or any tenant's carrier
or by anyone else, and electric power costs for which any tenant directly
contracts with the local public service company;

                (4) any bad debt loss, rent loss, or reserves for bad debts or
rent loss;
<PAGE>

                (5) costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord, as the same are
distinguished from the costs of operation of the Project (which shall
specifically include, but not be limited to, accounting costs associated with
the operation of the Project). Costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord include
costs of partnership accounting and legal matters, costs of defending any
lawsuits with any mortgagee (except as the actions of the Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of the Landlord's interest in the Project, and costs incurred in connection
with any disputes between Landlord and its employees, between Landlord and
Project management, or between Landlord and other tenants or occupants, and
Landlord's general corporate overhead and general and administrative expenses;

                (6) the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-a-vis time spent on matters unrelated to operating and managing the
Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of Project manager;

                (7) except for a Project management fee to the extent allowed
pursuant to item (l), below, overhead and profit increment paid to the Landlord
or to subsidiaries or affiliates of the Landlord for services in the Project to
the extent the same exceeds the costs of such services rendered by qualified,
first-class unaffiliated third parties on a competitive basis;

                (8) any compensation paid to clerks, attendants or other persons
in commercial concessions (other than parking) operated by the Landlord;

                (9) rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment which if purchased the cost
of which would be excluded from Operating Expenses as a capital cost, except
equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project;

                (10) all items and services for which Tenant or any other tenant
in the Project reimburses Landlord or which Landlord provides selectively to one
or more tenants (other than Tenant) without reimbursement;

                (11) costs, other than those incurred in ordinary maintenance
and repair, for sculpture, paintings or other objects of art;

                (12) fees and reimbursements payable to Landlord (including its
affiliates) for management of the Project which would ordinarily be included in
a management fee to the extent in excess of the fee comparably paid by other
landlords of high-rise office projects in Orange County;

                (13) costs incurred to comply with laws relating to the removal
of a hazardous material (as defined under applicable law) which was in existence
in the Building or on the Project prior to the Lease Commencement Date, and was
of such a nature that a federal, State or municipal governmental authority, if
it had then had knowledge of the presence of such hazardous material, in the
state, and under the conditions that it then existed in the Building or on the
Project, would have then required the removal of such hazardous material or
other remedial or containment action with respect thereto; and costs incurred to
remove, remedy, contain, or treat hazardous material, which hazardous material
is brought into the Building or onto the Project after the date hereof by
Landlord or any other tenant of the Project and is of such a nature, at that
time, that a federal, State or municipal governmental authority, if it had then
had knowledge of the presence of such hazardous material, in the state, and
under the conditions, that it then exists in the Building or on the Project,
would have then required the removal of such hazardous material or other
remedial or containment action with respect thereto;

                (14) costs arising from Landlord's charitable or political
contributions;
<PAGE>

                (15) advertising and promotional expenditures by Landlord;

                (16) costs, fines and penalties incurred due to the violation by
Landlord of any governmental rule or regulation, or due to the negligence or
wilful misconduct of Landlord or its agents, employees, vendors, contractors, or
providers of materials or services;

                (17) any reserves retained by Landlord;

                (18) costs incurred by Landlord for expenditures which are
considered capital improvements and replacements under generally accepted
accounting principles, consistently applied, except for those expenditures
incurred to comply with new laws and/or to reduce other Building Costs as
authorized under subsection (f) above;

                (19) costs incurred due to the violation by Landlord or any
other tenant of the terms and conditions of any lease of space in the Building;

                (20) costs of general overhead and general administrative
expenses;

                (21) amounts paid as ground rental for the Project by the
Landlord;

                (22) any costs expressly excluded from Operating Expenses
elsewhere in this Lease;

                (23) the cost of any magazine, newspaper, trade or other
subscriptions;

                (24) any costs covered by any warranty, rebate, guarantee or
service contract which are actually collected by Landlord (which shall not
prohibit Landlord from passing through the costs of any such service contract if
otherwise includable in Operating Expenses);

                (25) tax penalties incurred as a result of Landlord's
negligence, inability or unwillingness to make payments or file returns when
due;

                (26) rent for any office space occupied by Project or Building
management personnel to the extent the size or rental rate of such office space
exceeds the size or fair market rental value of office space occupied by
management personnel of comparable buildings in the vicinity of the Project,
with adjustment for size where appropriate for the size of the applicable
project (it being understood that the current office size as of the date hereof
is approved); and

                (27) costs arising from the negligence or willful misconduct of
Landlord, its partners and their respective officers, agents, servants,
employees and independent contractors.

      Landlord shall not (i) make a profit by charging items to Operating
Expenses that are otherwise also charged separately to others and (ii) collect
Operating Expenses from Tenant and all other tenants in the Building in an
amount in excess of what Landlord incurs for the items included in Operating
Expenses. In the event Landlord incurs costs during any calendar year after the
Base Year relating to insurance premiums from earthquake insurance which were
not part of Operating Expenses during the Base Year, Operating Expenses for the
Base Year shall be deemed increased by the amounts Landlord would have incurred
during the Base Year with respect to such insurance premiums had such earthquake
insurance been carried by Landlord during the Base Year.

           (h) Provided Tenant is not then in default hereunder, Tenant shall
have the right to cause a certified public accountant, engaged on a
non-contingency fee basis, to audit Operating Expenses by inspecting Landlord's
general ledger of expenses not more than once during any Expense Recovery
Period. However, to the extent that insurance premiums or any other component of
Operating Expenses is determined by Landlord on the basis of an internal
allocation of costs utilizing information Landlord in good faith deems
proprietary, such expense component shall not be subject to audit so long as it
does not exceed the amount per square foot typically imposed by landlords of
other first class office projects in Orange County, California. Tenant shall

<PAGE>

give notice to Landlord of Tenant's intent to audit within six (6) months after
Tenant's receipt of Landlord's expense statement which sets forth Landlord's
actual Operating Expenses. Such audit shall be conducted at a mutually agreeable
time during normal business hours at the office of Landlord or its management
agent where such accounts are maintained. If Tenant's audit determines that
actual Operating Expenses have been overstated by more than five percent (5%),
then subject to Landlord's right to review and/or contest the audit results,
Landlord shall reimburse Tenant for the reasonable out-of-pocket costs of such
audit. Tenant's rent shall be appropriately adjusted to reflect any
overstatement in Operating Expenses (or, if the determination is made after the
end of the Lease Term, any sums owing to Tenant shall be paid within thirty (30)
days). In addition, if any component of Operating Expenses is determined to be
either inappropriate or excessive during an Expense Recovery Period, and if the
Building Cost Base or Property Tax Base also included such component, then the
appropriate Base shall concurrently be adjusted if and to the extent reasonably
appropriate, subject to Tenant's right to review the Base Year expenses for that
component. In the event of a dispute between Landlord and Tenant regarding such
audit, either party may elect to submit the matter for binding arbitration
pursuant to Section 14.7(b) below. All of the information obtained by Tenant
and/or its auditor in connection with such audit, as well as any compromise,
settlement, or adjustment reached between Landlord and Tenant as a result
thereof, shall be held in strict confidence and, except as may be required
pursuant to litigation, shall not be disclosed to any third party, directly or
indirectly, by Tenant or its auditor or any of their officers, agents or
employees. Landlord may require Tenant's auditor to execute a separate
confidentiality agreement affirming the foregoing as a condition precedent to
any audit. Notwithstanding the foregoing, Tenant shall have no right of audit
with respect to any Expense Recovery Period unless the total Operating Expenses
per square foot for such Expense Recovery Period, as set forth in Landlord's
annual expense reconciliation, exceed the total Operating Expenses per square
foot during the Base Year, as increased by the percentage change in the United
States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for
all Urban Consumers, Los Angeles - Riverside - Orange County Area Average, all
items (1982-84 = 100) (the "Index"), which change in the Index shall be measured
by comparing the Index published for January of the Base Year with the Index
published for January of the applicable Expense Recovery Period.

      SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of
the Basic Lease Provisions (the "Security Deposit"), to be held by Landlord as
security for the full and faithful performance of Tenant's obligations under
this Lease to pay any rent as and when due, including without limitation such
additional rent as may be owing under any provision hereof, and to maintain the
Premises as required by Sections 7.1 and 15.3 or any other provision of this
Lease. Upon any breach of those obligations by Tenant following the expiration
of any applicable notice and cure period, Landlord may apply all or part of the
Security Deposit as full or partial compensation. If any portion of the Security
Deposit is so applied, Tenant shall within ten (10) business days after written
demand by Landlord deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount. Landlord shall not be required to
keep this Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on the Security Deposit. In no event may Tenant utilize
all or any portion of the Security Deposit as a payment toward any rental sum
due under this Lease. If Tenant fully performs its obligations under this Lease,
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 in this Lease
within thirty (30) days following the expiration or earlier termination of this
Lease and Tenant's vacation of the Premises.

<PAGE>

                                 ARTICLE V. USES

      SECTION 5.1. USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way unreasonably
interfere with the rights or quiet enjoyment of other occupants of the Building
or the Project, or use or allow the Premises to be used for any unlawful
purpose, nor shall Tenant permit any nuisance or commit any waste in the
Premises or the Project. Tenant shall not do or permit to be done anything which
will invalidate or increase the cost of any insurance policy(ies) covering the
Building, the Project and/or their contents, and shall comply with all
applicable reasonable insurance underwriters rules of which Tenant has received
written notice. Tenant shall comply at its expense with all present and future
laws, ordinances and requirements of all governmental authorities that pertain
to Tenant or its use of the Premises for non-general office use, including
without limitation all federal and state occupational health and safety and
handicap access requirements, whether or not Tenant's compliance will
necessitate expenditures or interfere with its use and enjoyment of the
Premises. Tenant shall not generate, handle, store or dispose of hazardous or
toxic materials (as such materials may be identified in any federal, state or
local law or regulation) in the Premises or Project without the prior written
consent of Landlord; provided that the foregoing shall not be deemed to
proscribe the use by Tenant of customary office supplies in normal quantities so
long as such use comports with all applicable laws. Tenant agrees that it shall
promptly complete and deliver to Landlord any disclosure form regarding
hazardous or toxic materials that may be required by any governmental agency.
Tenant shall also, from time to time upon request by Landlord, execute such
commercially reasonable affidavits concerning Tenant's best knowledge and belief
regarding the presence of hazardous or toxic materials in the Premises.
Notwithstanding anything to the contrary set forth in this Lease, Tenant shall
have no obligation to clean up, remediate, monitor, or abate, or to reimburse,
release, indemnify or defend Landlord with respect to, any hazardous materials
which Tenant did not cause to be introduced onto the Premises or any other
portion of the Building. Landlord shall have the right at any time to perform an
assessment of the environmental condition of the Premises and of Tenant's
compliance with this Section. As part of any such assessment, Landlord shall
have the right, upon reasonable prior notice to Tenant, to enter and inspect the
Premises and to perform tests, provided those tests are performed in a manner
that minimizes disruption to Tenant. Tenant will cooperate with Landlord in
connection with any assessment by, among other things, promptly responding to
inquiries and providing relevant documentation and records. The reasonable cost
of the assessment/testing shall be reimbursed by Tenant to Landlord if such
assessment/testing determines that Tenant failed in a material way to comply
with the requirements of this Section. In all events Tenant shall indemnify
Landlord in the manner elsewhere provided in this Lease from any release of
hazardous or toxic materials caused by Tenant, its agents, employees,
contractors, subtenants or licensees. The foregoing covenants shall survive the
expiration or earlier termination of this Lease.

      SECTION 5.2. SIGNS. Landlord shall, upon request by Tenant and at Tenant's
expense, affix and maintain a sign (restricted solely to Tenant's name as set
forth herein or such other name as Landlord may consent to in writing) adjacent
to the entry door of the Premises, together with a proportional allotment of
directory strips in the lobby directory of the Building; provided that the cost
of such initial signage and directory strips shall be borne by Landlord. The
signage shall conform to the criteria for signs established by Landlord and
shall be ordered through Landlord. Tenant shall not place or allow to be placed
any other sign, decoration or advertising matter of any kind that is visible
from the exterior of the Premises. Any violating sign or decoration may, if not
removed by Tenant within twenty-four hours after written or oral notice from
Landlord, be removed by Landlord at Tenant's expense without the removal
constituting a breach of this Lease or entitling Tenant to claim damages.

      SECTION 5.3. TENANT'S SECURITY SYSTEM. Tenant may, at its own expense,
subject to Landlord's prior written consent, which consent shall not be
unreasonably conditioned, withheld or delayed, install its own security system
("Tenant's Security System") in the Premises, provided that Tenant shall
coordinate the installation and operation of Tenant's Security System with
Landlord to assure that Tenant's Security System is compatible with any security
system of Landlord and the systems and equipment of the Building. Tenant shall
be solely responsible, at Tenant's sole cost and expense, for the monitoring,
operation and removal of Tenant's Security System.
<PAGE>

                          ARTICLE VI. LANDLORD SERVICES

      SECTION 6.1. UTILITIES AND SERVICES. Landlord shall furnish to the
Premises the utilities and services described in Exhibit B. Except as set forth
in Section 6.6 below, Landlord shall not be liable for any failure to furnish
any services or utilities when the failure is the result of any accident or
other cause beyond Landlord's reasonable control, nor shall Landlord be liable
for damages resulting from power surges or any breakdown in telecommunications
facilities or services except to the extent arising from Landlord's negligence
or willful misconduct and not covered by Tenant's insurance. Except as set forth
in Section 6.6 below, Landlord's temporary inability to furnish any services or
utilities shall not entitle Tenant to any damages, relieve Tenant of the
obligation to pay rent or constitute a constructive or other eviction of Tenant,
except that Landlord shall diligently attempt to restore the service or utility
promptly. Tenant shall comply with all nondiscriminatory rules and regulations
which Landlord may reasonably establish for the provision of services and
utilities, and shall cooperate with all reasonable conservation practices
established by Landlord. Upon reasonable prior written or oral notice, Landlord
shall at all reasonable times have free access to all electrical and mechanical
installations of Landlord.

      SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building and the Project. The
term "Common Areas" shall mean all areas within the Building and other buildings
in the Project which are not held for exclusive use by persons entitled to
occupy space, and all other appurtenant areas and improvements provided by
Landlord for the common use of Landlord and tenants and their respective
employees and invitees, including without limitation parking areas and
structures, driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant, common
entrances and lobbies, elevators, and restrooms not located within the premises
of any tenant.

      SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all reasonable nondiscriminatory
rules and regulations as are prescribed from time to time by Landlord. Landlord
shall at all times during the Term have exclusive control of the Common Areas,
and may reasonably restrain or permit any use or occupancy, except as otherwise
provided in this Lease or in Landlord's rules and regulations. Tenant shall keep
the Common Areas clear of any obstruction or unauthorized use related to
Tenant's operations. Landlord may temporarily close any portion of the Common
Areas for repairs, remodeling and/or alterations, to prevent a public dedication
or the accrual of prescriptive rights, or for any other reasonable purpose, but
Landlord shall not thereby interfere with Tenant's use of or access to the
Premises.

      SECTION 6.4. PARKING. Parking shall be provided in accordance with the
provisions set forth in Exhibit C to this Lease.

      SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. No change shall entitle Tenant
to any abatement of rent or other claim against Landlord, provided that the
change does not materially adversely affect Tenant's access to or use of the
Premises.

      SECTION 6.6. ABATEMENT. If Tenant is prevented from using, and does not
use, the Premises, or any portion thereof, for five (5) consecutive business
days (the "Eligibility Period") as a result of any failure of Landlord to
provide services, utilities, or access to the Premises, or due to the presence
of hazardous materials not introduced by Tenant, its agents or contractors, then
rent payable by Tenant shall be abated or reduced, as the case may be, after
expiration of the Eligibility Period for such time that Tenant continues to be
so prevented from using, and does not use, the Premises or a portion thereof, in
the proportion that the rentable area of the portion of the Premises that Tenant
is prevented from using, and does not use, bears to the total rentable area of
the Premises. However, if Tenant is prevented from conducting, and does not

<PAGE>

conduct, its business in a portion of the Premises for a period of time in
excess of the Eligibility Period, and the remaining portion of the Premises is
not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion, then for
such time after expiration of the Eligibility Period during which Tenant is so
prevented from effectively conducting its business therein, the rent payable by
Tenant for the entire Premises shall be abated. If Tenant thereafter reoccupies
and conducts its business from any portion of the Premises during such period,
then the Rent allocable to such reoccupied portion, based on the proportion that
the rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date such
business operations commence.

                      ARTICLE VII. MAINTAINING THE PREMISES

      SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Subject to Article XI,
Tenant at its sole expense shall make all repairs reasonably necessary to keep
the Premises and all improvements and fixtures therein in the condition as
existed on the Commencement Date (or on any later date that the applicable
improvements may have been installed), excepting ordinary wear and tear.
Notwithstanding Section 7.2 below, Tenant's maintenance obligation shall include
without limitation all appliances, non-building standard lighting/electrical
systems, and plumbing fixtures and installations located within or servicing
only the Premises. All repairs shall be at least equal in quality to the
original work, shall be made only by a licensed, bonded contractor reasonably
approved in writing in advance by Landlord and shall be made only at the time or
times reasonably approved by Landlord. Any contractor utilized by Tenant shall
be subject to Landlord's reasonable standard requirements for contractors, as
modified from time to time. Landlord may impose reasonable restrictions and
requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs. Alternatively, should
Landlord or its management agent agree to make a repair on behalf of Tenant and
at Tenant's request, Tenant shall promptly reimburse Landlord as additional rent
for all costs incurred within thirty (30) days following delivery of an invoice.

      SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Article XI,
Landlord shall provide service, maintenance and repair with respect to the
heating, ventilating and air conditioning ("HVAC") equipment of the Building
(exclusive of any supplemental HVAC equipment servicing only the Premises) and
shall maintain in good repair the Common Areas, roof, foundations, footings, the
exterior surfaces of the exterior walls of the Building, and the structural,
electrical, mechanical and plumbing systems of the Building except as provided
in Section 7.1 above. Landlord shall have the right to employ or designate any
reputable person or firm, including any employee or agent of Landlord or any of
Landlord's affiliates or divisions, to perform any service, repair or
maintenance function provided such agents and/or affiliates perform first class
work at prices which are competitive with other first class contractors
performing similar work. Landlord need not make any other improvements or
repairs except as specifically required under this Lease, and nothing contained
in this Section shall limit Landlord's right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided elsewhere in this
Lease. Tenant understands that it shall not make repairs at Landlord's expense
or by rental offset. Except as provided in Sections 6.6, 11.1 and 12.1 below,
there shall be no abatement of rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
any repairs, alterations or improvements to any portion of the Building,
including repairs to the Premises, nor shall any related activity by Landlord
constitute an actual or constructive eviction; provided, however, that in making
repairs, alterations or improvements, Landlord shall use commercially reasonable
efforts to avoid or minimize any interference with Tenant's access to the
Premises or parking areas and with the conduct of Tenant's business in the
Premises. In no event shall Landlord change the nature of the Building to
something other than a first class office building project. Landlord shall
comply with all laws, statutes, ordinances or other governmental rules,
regulations or requirements now in force or which may hereafter be enacted
relating to the base Building and the Common Areas within the Project, provided
that compliance is not the responsibility of Tenant.
<PAGE>

      SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
which consent shall be given or refused within ten (10) business days.
Landlord's consent shall not be unreasonably withheld as long as the proposed
changes do not affect the structural, electrical or mechanical components or
systems of the Building, are not visible from the exterior of the Premises, and
utilize only building standard materials. Moreover, as long as the foregoing
criteria are satisfied, Landlord's consent shall not be required (but prior
written notice to Landlord must be given) for cosmetic alternations costing in
the aggregate not more than Forty Thousand Dollars ($40,000.00). Landlord may
impose, as a condition to its consent, any requirements that Landlord in its
discretion may deem reasonable, including but not limited to requirements as to
the manner and time for performance of the work. Without limiting the generality
of the foregoing, Tenant shall use Landlord's designated mechanical and
electrical contractors for all work affecting the mechanical or electrical
systems of the Building. Should Tenant perform any work that would necessitate
any ancillary Building modification or other expenditure by Landlord, then
Tenant shall promptly fund the reasonable cost thereof to Landlord. Tenant shall
obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances, and Landlord
shall be entitled to a supervision fee in the amount uniformly established by
Landlord for the Building, but not in excess of five percent (5%) of the cost of
the work. Under no circumstances shall Tenant make any improvement which
incorporates asbestos-containing construction materials into the Premises. Any
request for Landlord's consent shall be made in writing and, if applicable,
shall contain architectural plans describing the work in detail reasonably
satisfactory to Landlord. Landlord may elect to cause its architect to review
Tenant's architectural plans, and the reasonable cost of that review shall be
reimbursed by Tenant. Should the work proposed by Tenant modify the internal
configuration of the Premises, then Tenant shall, at its expense, furnish
Landlord with as-built drawings and CAD disks compatible with Landlord's
systems. Unless Landlord otherwise agrees in writing, all alterations, additions
or improvements affixed to the Premises (excluding moveable trade fixtures and
furniture) shall become the property of Landlord and shall be surrendered with
the Premises at the end of the Term, except that Landlord may, by notice to
Tenant given at the time of Landlord's consent to the alteration or improvement,
require Tenant to remove by the Expiration Date, or sooner termination date of
this Lease, all or any alterations, decorations, fixtures, additions,
improvements and the like installed either by Tenant or by Landlord at Tenant's
request and to repair any damage to the Premises arising from that removal.
Landlord may require Tenant to remove an improvement provided as part of the
initial build-out pursuant to Exhibit X, if any, if and only if the improvement
is a non-building standard item and Tenant is notified of the requirement in
writing prior to the build-out. Except as otherwise provided in this Lease or in
any Exhibit to this Lease, should Landlord make any alteration or improvement to
the Premises at the request of Tenant, Landlord shall be entitled to prompt
payment from Tenant of the reasonable cost thereof, inclusive of the standard
coordination fee of Landlord's management agent uniformly established for the
Project.

      SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All reasonable expenses so
incurred by Landlord, including Landlord's reasonable attorneys' fees, shall be
reimbursed by Tenant promptly following Landlord's demand, together with
interest from the date of payment by Landlord at the rate of ten percent (10%)
per annum until paid. Tenant shall give Landlord no less than fifteen (15) days'
prior notice in writing before commencing construction of any kind on the
Premises so that Landlord may post and maintain notices of nonresponsibility on
the Premises.
<PAGE>

      SECTION 7.5. ENTRY AND INSPECTION. Landlord shall upon reasonable prior
written or oral notice and at all reasonable times have the right to enter the
Premises to inspect them, to supply services in accordance with this Lease, to
protect the interests of Landlord in the Premises, to make repairs and
renovations as reasonably deemed necessary by Landlord, and to submit the
Premises to prospective or actual purchasers or encumbrance holders (or, during
the final nine months of the Term or when an uncured monetary or other material
Tenant default exists, to prospective tenants), all without being deemed to have
caused an eviction of Tenant and without abatement of rent except as provided
elsewhere in this Lease. Landlord shall at all times have and retain a key which
unlocks all of the doors in the Premises, excluding Tenant's vaults and safes,
and Landlord shall have the right to use any and all means which Landlord may
reasonably deem proper to open the doors in an emergency in order to obtain
entry to the Premises, and any entry to the Premises obtained by Landlord shall
not under any circumstances be deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or any eviction of Tenant from the Premises. In
exercising Landlord's rights under this Section 7.5, Landlord shall use
commercially reasonably efforts to not interfere with Tenant's use of, or access
to, the Premises.

      SECTION 7.6. SPACE PLANNING AND SUBSTITUTION. Landlord shall have the
one-time right, upon providing not less than forty-five (45) days written
notice, to move Tenant to other space of comparable size and on the same floor
or above in the Building or in one of the buildings located at 610, 620 or 660
Newport Center Drive. The new space shall be provided with improvements of
comparable quality to those within the Premises and shall have a comparable
interior configuration. Landlord shall pay the reasonable out-of-pocket costs to
relocate and reconnect Tenant's personal property and equipment within the new
space; provided that Landlord may elect to cause such work to be done by its
contractors. Landlord shall also reimburse Tenant for such other reasonable
out-of-pocket costs that Tenant may incur in connection with the relocation,
including without limitation necessary stationery revisions, provided that a
reasonable estimate thereof is given to Landlord within twenty (20) days
following Landlord's notice. In no event, however, shall Landlord be obligated
to incur or fund total relocation costs, exclusive of tenant improvement
expenditures, in an amount in excess of three (3) months of Basic Rent at the
rate then payable hereunder. Should Tenant be relocated by Landlord pursuant to
this Section, Tenant shall also be afforded an abatement of the first full month
of Basic Rent for the new space. Within ten (10) business days following request
by Landlord, Tenant shall execute an amendment to this Lease prepared by
Landlord to memorialize the relocation. Notwithstanding the foregoing, in the
event the new space designated by Landlord not be acceptable to Tenant for any
reason, then Tenant may, by written notice to Landlord within ten (10) business
days following Landlord's relocation notice, elect to terminate this Lease
without penalty, which termination shall be effective sixty (60) days following
delivery of Landlord's relocation notice unless otherwise agreed in writing by
the parties.

            ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

      Tenant shall be liable for and shall pay before delinquency, all taxes and
assessments levied against all personal property of Tenant located in the
Premises. When possible Tenant shall cause its personal property to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property are levied against Landlord or
Landlord's property and if Landlord pays the same, or if the assessed value of
Landlord's property is increased by the inclusion of a value placed upon the
personal property of Tenant and if Landlord pays the taxes based upon the
increased assessment, Tenant shall pay to Landlord the taxes so levied against
Landlord or the proportion of the taxes resulting from the increase in the
assessment.
<PAGE>

                      ARTICLE IX. ASSIGNMENT AND SUBLETTING

      SECTION 9.1.   RIGHTS OF PARTIES.

         (a) Tenant may not, either voluntarily or by operation of law, assign,
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in
this Lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1.(c). For purposes
of this Lease, references to any subletting, sublease or variation thereof shall
be deemed to apply not only to a sublease effected directly by Tenant, but also
to a sub-subletting or an assignment of subtenancy by a subtenant at any level.
No assignment (whether voluntary, involuntary or by operation of law) and no
subletting shall be valid or effective without Landlord's prior written consent.
Landlord shall not be deemed to have given its consent to any assignment or
subletting by any other course of action, including its acceptance of any name
for listing in the Building directory. To the extent not prohibited by
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section 9.1(c) of this Lease. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.

         (b)    [Intentionally omitted]

         (c) If Tenant or any subtenant hereunder desires to transfer an
interest in this Lease, Tenant shall first notify Landlord and request in
writing Landlord's consent to the transfer. Tenant shall also submit in writing
to Landlord: (i) the name and address of the proposed transferee; (ii) the
nature of any proposed subtenant's or assignee's business to be carried on in
the Premises; (iii) the terms and provisions of any proposed sublease or
assignment (including without limitation the rent and other economic provisions,
term, improvement obligations and commencement date); (iv) any other information
reasonably requested by Landlord and reasonably related to the transfer. Except
as provided in Subsection (d) of this Section, Landlord shall not unreasonably
withhold its consent, provided: (1) the use of the Premises will be consistent
with the provisions of this Lease and with Landlord's commitment to other
tenants of the Building and Project; (2) any proposed assignee demonstrates that
it is financially responsible by submission to Landlord of all reasonable
information as Landlord may request concerning the proposed assignee, including,
but not limited to, a balance sheet of the proposed assignee as of a date within
ninety (90) days of the request for Landlord's consent and statements of income
or profit and loss of the proposed assignee for the two-year period preceding
the request for Landlord's consent; (3) the proposed assignee or subtenant is
neither an existing tenant or occupant of the Building or Project nor a
prospective tenant with whom Landlord is then actively negotiating unless
Landlord does not have sufficient available space in the Building to offer for
lease; and (4) the proposed transfer will not impose additional burdens or
adverse tax effects on Landlord. If Landlord consents to the proposed transfer,
then the transfer may be effected within one hundred eighty (180) days after the
date of the consent upon the terms described in the information furnished to
Landlord; provided that any material change in the terms shall be subject to
Landlord's consent as set forth in this Section. Landlord shall approve or
disapprove any requested transfer within fifteen (15) days following receipt of
Tenant's written notice and the information set forth above. Tenant shall pay to
Landlord a transfer fee of Five Hundred Dollars ($500.00) if and when any
transfer request submitted by Tenant is approved.
<PAGE>

         (d) Notwithstanding the provisions of Subsection (c) above, in lieu of
consenting to a proposed assignment or subletting of the entire Premises,
Landlord may elect to terminate this Lease, effective on the date that the
proposed sublease or assignment would have commenced. Landlord may thereafter,
at its option, assign or re-let any space so recaptured to any third party,
including without limitation the proposed transferee identified by Tenant.
Notwithstanding the foregoing, however, should Landlord exercise its right of
recapture pursuant to this subsection, Tenant may, within five (5) business days
following delivery of Landlord's recapture notice, elect by written notice to
rescind Tenant's request to sublease or assign this Lease, in which event
Landlord's recapture election shall be null and void.

         (e) Should any assignment or subletting occur, Tenant shall promptly
pay or cause to be paid to Landlord, as additional rent, fifty percent (50%) of
any amounts paid by the assignee or subtenant, after all rental abatements and
however described and whether funded during or after the Lease Term (but
exclusive of sums attributable to the sale of Tenant's business, if applicable),
to the extent such amounts are in excess of the sum of (i) the scheduled rental
sums payable by Tenant hereunder (or, in the event of a subletting of only a
portion of the Premises, the rent allocable to such portion as reasonably
determined by Landlord) and (ii) the direct out-of-pocket costs, as evidenced by
third party invoices provided to Landlord, incurred by Tenant to effect the
transfer. Upon request by Landlord, Tenant and all other parties to the transfer
shall memorialize in writing the amounts to be paid pursuant to this paragraph.

           (f) Notwithstanding the foregoing, provided Tenant is not then in
default hereunder, Tenant may, without Landlord's prior consent but with written
notice to Landlord and subject to the provisions of Section 9.2, assign or
transfer its right, title and interest in this Lease or sublease the Premises to
any of the following: (i) any entity resulting from a merger or consolidation
with Tenant; (ii) any entity succeeding to the business and assets of Tenant; or
(iii) any entity controlling, controlled by, or under common control with,
Tenant (collectively, "Tenant Affiliate"). For purposes of the foregoing,
"control" shall mean the ownership, directly or indirectly, of at least fifty
percent (50%) of the voting securities of, or possession of the right to vote,
in the ordinary direction of its affairs, of at least fifty percent (50%) of the
voting interest in the entity.

      SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant, or any successor-in-interest to
Tenant hereunder, of its obligation to pay rent and to perform all its other
obligations under this Lease. Moreover, Tenant shall indemnify and hold Landlord
harmless, as provided in Section 10.3, for any act or omission by an assignee or
subtenant. Each assignee, other than Landlord, shall be deemed to assume all
obligations of Tenant under this Lease and shall be liable jointly and severally
with Tenant for the payment of all rent, and for the due performance of all of
Tenant's obligations, under this Lease. Such joint and several liability shall
not be discharged or impaired by any subsequent modification or extension of
this Lease. No transfer to other than a Tenant Affiliate shall be binding on
Landlord unless any document memorializing the transfer is delivered to Landlord
and both the assignee/subtenant and Tenant deliver to Landlord an executed and
commercially reasonable consent to transfer instrument prepared by Landlord and
consistent with the requirements of this Article. The acceptance by Landlord of
any payment due under this Lease from any other person shall not be deemed to be
a waiver by Landlord of any provision of this Lease or to be a consent to any
transfer. Consent by Landlord to one or more transfers shall not operate as a
waiver or estoppel to the future enforcement by Landlord of its rights under
this Lease. In addition to the foregoing, no change in the status of Tenant or
any party jointly and severally liable with Tenant as aforesaid (e.g., by
conversion to a limited liability company or partnership) shall serve to
abrogate the liability of any person or entity for the obligations of Tenant,
including any obligations that may be incurred by Tenant after the status change
by exercise of a pre-existing right in this Lease.

      SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be included in each sublease:
<PAGE>

         (a) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs in
the performance of Tenant's obligations under this Lease and is not timely cured
by Tenant as required herein, Tenant shall have the right to receive and collect
the sublease rentals. Landlord shall not, by reason of this assignment or the
collection of sublease rentals, be deemed liable to the subtenant for the
performance of any of Tenant's obligations under the sublease. Tenant hereby
irrevocably authorizes and directs any subtenant, upon receipt of a written
notice from Landlord stating that an uncured default exists in the performance
of Tenant's obligations under this Lease, to pay to Landlord all sums then and
thereafter due under the sublease. Tenant agrees that the subtenant may rely on
that notice without any duty of further inquiry and notwithstanding any notice
or claim by Tenant to the contrary. Tenant shall have no right or claim against
the subtenant or Landlord for any rentals so paid to Landlord. In the event
Landlord collects amounts from subtenants that exceed the total amount then due
from Tenant hereunder, Landlord shall promptly remit the excess to Tenant.

         (b) In the event of the termination of this Lease, Landlord may, at its
sole option, take over Tenant's entire interest in any sublease and, upon notice
from Landlord, the subtenant shall attorn to Landlord. In no event, however,
shall Landlord be liable for any previous act or omission by Tenant under the
sublease or for the return of any advance rental payments or deposits under the
sublease that have not been actually delivered to Landlord, nor shall Landlord
be bound by any sublease modification executed without Landlord's consent or for
any advance rental payment by the subtenant in excess of one month's rent. The
general provisions of this Lease, including without limitation those pertaining
to insurance and indemnification, shall be deemed incorporated by reference into
the sublease despite the termination of this Lease.

                       ARTICLE X. INSURANCE AND INDEMNITY

      SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.

      SECTION 10.2. LANDLORD'S INSURANCE. Landlord may, at its election, provide
any or all of the following types of insurance, with or without deductible and
in amounts and coverages as may be determined by Landlord in its reasonable
discretion: "all risk" property insurance, subject to standard exclusions,
covering the Building or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, and commercial general
liability coverage. Notwithstanding the foregoing, Landlord shall at a minimum
carry insurance with coverages and amounts comparable to that carried by
landlords of comparable first class office projects in the Newport Beach area
(except that Landlord may self-insure a portion of such risks), together with
workers' compensation and employer liability coverage as required by applicable
law. Landlord shall not be required to carry insurance of any kind on
improvements, trade fixtures, furnishings, equipment, interior plate glass,
signs and all items of personal property in the Premises, and shall not be
obligated to repair or replace that property should damage occur. All proceeds
of insurance maintained by Landlord upon the Building and Project shall be the
property of Landlord, whether or not Landlord is obligated to or elects to make
any repairs.

      SECTION 10.3. INDEMNITY.

           (a) To the fullest extent permitted by law, Tenant shall defend,
indemnify and hold harmless Landlord, its agents, lenders, and any and all
affiliates of Landlord, from and against any and all claims, liabilities, costs
or expenses arising either before or after the Commencement Date from Tenant's
use or occupancy of the Premises, the Building or the Common Areas, or from the
conduct of its business, or from any activity, work, or thing done, permitted or
suffered by Tenant or its agents, employees, subtenants, vendors, contractors or
licensees in or about the Premises, the Building or the Common Areas, or from
any default in the performance of any obligation on Tenant's part to be
performed under this Lease, or from any willful misconduct or negligence of
Tenant or its agents, employees, subtenants, vendors, contractors or licensees.
Landlord may, at its option, require Tenant to assume Landlord's defense in any
action covered by this Section through counsel reasonably satisfactory to
Landlord.
<PAGE>

           (b) Landlord shall indemnify and hold harmless Tenant from and
against any liability to third parties, together with any attorneys fees, costs
and expenses reasonably incurred in connection with such third party claims, to
the extent arising out of the negligence or willful misconduct of Landlord or
Landlord's breach of this Lease.

      SECTION 10.4. LANDLORD'S NONLIABILITY. Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord, its employees and agents for loss of or damage to any
property, or any injury to any person, or loss or interruption of business or
income, resulting from any condition including, but not limited to, fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak or flow from or into any part of the Premises or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building. It is understood that any
such condition may require the temporary evacuation or closure of all or a
portion of the Building. Should Tenant elect to receive any service from a
concessionaire, licensee or third party tenant of Landlord, Tenant shall not
seek recourse against Landlord for any breach or liability of that service
provider. Neither Landlord nor its agents shall be liable for interference with
light or other similar intangible interests. Tenant shall immediately notify
Landlord in case of fire or accident in the Premises, the Building or the
Project and of defects in any improvements or equipment unless Landlord already
has knowledge thereof.

      SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other on account of loss and damage
occasioned to the property of such waiving party to the extent that the waiving
party is entitled to proceeds for such loss and damage under any "all risk"
property insurance policies carried or otherwise required to be carried by this
Lease. By this waiver it is the intent of the parties that neither Landlord nor
Tenant shall be liable to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage insured against under
any "all risk" property insurance policies, even though such loss or damage
might be occasioned by the negligence of such party, its agents, employees, or
contractors. The foregoing waiver by Tenant shall also inure to the benefit of
Landlord's management agent for the Building.

                        ARTICLE XI. DAMAGE OR DESTRUCTION

      SECTION 11.1. RESTORATION.

         (a) If the Building of which the Premises are a part is damaged as the
result of an event of casualty, then subject to the provisions below, Landlord
shall repair that damage as soon as reasonably possible unless: (i) Landlord
reasonably determines that the cost of repair would exceed ten percent (10%) of
the full replacement cost of the Building ("Replacement Cost") and the damage is
not covered by Landlord's fire and extended coverage insurance; or (ii) Landlord
reasonably determines that the cost of repair would exceed twenty-five percent
(25%) of the Replacement Cost; or (iii) Landlord reasonably determines that the
cost of repair would exceed ten percent (10%) of the Replacement Cost and the
damage occurs during the final twelve (12) months of the Term, as the Term may
have been extended pursuant to Section 3.2. Should Landlord elect not to repair
the damage for one of the preceding reasons, Landlord shall so notify Tenant in
the "Casualty Notice" (as defined below), and this Lease shall terminate as of
the date of delivery of that notice. Landlord agrees that it shall not exercise
its right to terminate this Lease in a manner that unreasonably discriminates
against Tenant.

         (b) As soon as reasonably practicable following the casualty event but
not later than sixty (60) days thereafter, Landlord shall notify Tenant in
writing ("Casualty Notice") of Landlord's election, if applicable, to terminate
this Lease. If this Lease is not so terminated, the Casualty Notice shall set
forth the anticipated period for repairing the casualty damage. If the
anticipated repair period exceeds the period (the "Maximum Period") of one

<PAGE>

hundred eighty (180) days (or sixty (60)) days if the casualty occurs during the
final year of the Term, as the Term may have been extended), and if the damage
is so extensive as to reasonably prevent Tenant's substantial use and enjoyment
of the Premises, then Tenant may elect to terminate this Lease by written notice
to Landlord within fifteen (15) days following delivery of the Casualty Notice.
If the anticipated repair period as set forth in the Casualty Notice was less
than the Maximum Period but Landlord determines subsequently that the actual
repair period will exceed the Maximum Period, then Landlord shall so notify
Tenant and Tenant may, within five (5) business days thereafter, elect to
terminate this lease; otherwise, the Maximum Period shall be deemed extended as
set forth in Landlord's notice. Should Landlord fail substantially to complete
the restoration within the Maximum Period (as the same may be extended as
aforesaid), then Tenant may terminate this Lease by notice to Landlord.

         (c) From and after the sixth business day following the casualty event,
the rental to be paid under this Lease shall be abated in the same proportion
that the floor area of the Premises that is rendered unusable by the damage from
time to time bears to the total floor area of the Premises.

         (d) Notwithstanding the provisions of subsections (a), (b) and (c) of
this Section, Tenant shall not be entitled to rental abatement or termination
rights if the damage is due to the willful misconduct of Tenant or its
employees, subtenants, contractors, or representatives. In addition, the
provisions of this Section shall not be deemed to require Landlord to repair any
improvements, fixtures and other items that Tenant is obligated to repair or
insure pursuant to Article VII, Exhibit D, or any other provision of this Lease;
provided, however, that if and to the extent Landlord receives insurance
proceeds from Landlord's insurance carrier for damage to interior leasehold
improvements, as reasonably determined by Landlord after first applying any
proceeds to damage in areas other than tenant suites, then Landlord shall,
subject to the rights of any mortgagee or ground lessor, make those excess
proceeds available for repair of the affected leasehold improvements.

      SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

                           ARTICLE XII. EMINENT DOMAIN

      SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of the
Premises is taken by any lawful authority by exercise of the right of eminent
domain, or sold to prevent a taking, either Tenant or Landlord may terminate
this Lease effective as of the date possession is required to be surrendered to
the authority. In the event title to a portion of the Building or Project, other
than the Premises, is taken or sold in lieu of taking, and if Landlord elects to
restore the Building in such a way as to alter the Premises materially, either
party may terminate this Lease, by written notice to the other party, effective
on the date of vesting of title. In the event neither party has elected to
terminate this Lease as provided above, then Landlord shall promptly, after
receipt of the condemnation award, proceed to restore the Premises to
substantially their condition prior to the taking, and a proportionate allowance
shall be made to Tenant for the rent corresponding to the time during which, and
to the part of the Premises of which, Tenant is deprived on account of the
taking and restoration. In the event of a taking, Landlord shall be entitled to
the entire amount of the condemnation award without deduction for any estate or
interest of Tenant; provided that nothing in this Section shall be deemed to
give Landlord any interest in, or prevent Tenant from seeking any award against
the taking authority for, the taking of personal property and fixtures belonging
to Tenant or for relocation or business interruption expenses recoverable from
the taking authority.

      SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.

<PAGE>

      SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a taking
of the parking area such that Landlord can no longer provide sufficient parking
to comply with this Lease, Landlord shall use commercially reasonable efforts to
substitute reasonably equivalent parking in a location reasonably close to the
Building; provided that if Landlord fails to make that substitution within
ninety (90) days following the taking and if the taking materially impairs
Tenant's use and enjoyment of the Premises, Tenant may, at its option, terminate
this Lease by written notice to Landlord. If this Lease is not so terminated by
Tenant, there shall be no abatement of rent (other than the parking charges) and
this Lease shall continue in effect.

                ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE

      SECTION 13.1. SUBORDINATION. At the option of Landlord or any of its
mortgagees/deed of trust beneficiaries, this Lease shall be either superior or
subordinate to all ground or underlying leases, mortgages and deeds of trust, if
any, which may hereafter affect the Building, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
that so long as Tenant is not in default under this Lease, this Lease shall not
be terminated or Tenant's quiet enjoyment of the Premises disturbed in the event
of termination of any such ground or underlying lease, or the foreclosure of any
such mortgage or deed of trust, to which this Lease has been subordinated
pursuant to this Section. In the event of a termination or foreclosure, Tenant
shall become a tenant of and attorn to the successor-in-interest to Landlord
upon the same terms and conditions as are contained in this Lease, and shall
promptly execute any commercially reasonable instrument reasonably required by
Landlord's successor for that purpose. Tenant shall also, within twenty (20)
days following written request of Landlord (or the beneficiary under any deed of
trust encumbering the Building), execute and deliver all commercially reasonable
instruments as may be required from time to time by Landlord or such beneficiary
(including without limitation any commercially reasonable subordination,
nondisturbance and attornment agreement in the form customarily required by such
beneficiary) to subordinate this Lease and the rights of Tenant under this Lease
to any ground or underlying lease or to the lien of any mortgage or deed of
trust; provided, however, that any such beneficiary may, by written notice to
Tenant given at any time, subordinate the lien of its deed of trust to this
Lease. It is understood that Tenant may condition its execution of a
subordination agreement upon receipt of a commercially reasonable nondisturbance
covenant. Tenant shall agree that any purchaser at a foreclosure sale or lender
taking title under a deed in lieu of foreclosure shall not be responsible for
any act or omission of a prior landlord, shall not be subject to any offsets or
defenses Tenant may have against a prior landlord, and shall not be liable for
the return of any security deposit not actually recovered by such purchaser or
bound by any rent paid in advance of the calendar month in which the transfer of
title occurred; provided that the foregoing shall not release the applicable
prior landlord from any liability for those obligations. Tenant acknowledges
that Landlord's mortgagees and successors-in-interest and all beneficiaries
under deeds of trust encumbering the Building are intended third party
beneficiaries of this Section.

      SECTION 13.2. ESTOPPEL CERTIFICATE. Tenant shall, within twenty (20) days
following written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any commercially reasonable form that Landlord may reasonably
require, a statement in writing in favor of Landlord and/or any prospective
purchaser or encumbrancer of the Building (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
the modification and certifying that this Lease, as modified, is in full force
and effect) and the dates to which the rental, additional rent and other charges
have been paid in advance, if any, and (ii) acknowledging that, to Tenant's
actual knowledge, there are no uncured defaults on the part of Landlord, or
specifying each default if any are claimed, and (iii) setting forth all further
information that Landlord may reasonably require. Tenant's statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the Building or Project. In addition to Landlord's other rights and remedies,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not more than one month's
rental has been paid in advance. Within twenty (20) days following request by
Tenant but not more often than once annually, Landlord shall execute and deliver
a corresponding estoppel certificate for the benefit of a purchaser or lender of
Tenant.
<PAGE>

                       ARTICLE XIV. DEFAULTS AND REMEDIES

      SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of default
set forth in this Lease, the occurrence of any one or more of the following
events shall constitute a default by Tenant:

         (a) The failure by Tenant to make any payment of rent required to be
made by Tenant, as and when due, where the failure continues for a period of
five (5) business days after written notice from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161 and
1161(a) as amended. For purposes of these default and remedies provisions, the
term "additional rent" shall be deemed to include all amounts of any type
whatsoever other than Basic Rent to be paid by Tenant pursuant to the terms of
this Lease.

         (b) The discovery by Landlord that any financial statement provided by
Tenant, or by any affiliate, successor or guarantor of Tenant, was materially
false.

         (c) The failure or inability by Tenant to observe or perform any of the
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in any other subsection of this Section, where the
failure continues for a period of thirty (30) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 and 1161(a) as amended. However, if the nature of the
failure is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant commences the
cure within thirty (30) days, and thereafter diligently pursues the cure to
completion.

         (d) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.

      SECTION 14.2. LANDLORD'S REMEDIES.

         (a) In the event of any default by Tenant, then in addition to any
other remedies available to Landlord, Landlord may exercise the following
remedies:

                (i) Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:

                      (1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;

                      (2) The worth at the time of award of the amount by which
the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that Tenant
proves could have been reasonably avoided;

<PAGE>

                      (3) The worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;

                      (4) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's default, including, but not limited to, the cost
of recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, reasonable attorneys' fees, and any other
reasonable costs; and

                      (5) At Landlord's election, all other amounts in addition
to or in lieu of the foregoing as may be permitted by law. The term "rent" as
used in this Lease shall be deemed to mean the Basic Rent and all other sums
required to be paid by Tenant to Landlord pursuant to the terms of this Lease.
Any sum, other than Basic Rent, shall be computed on the basis of the average
monthly amount accruing during the twenty-four (24) month period immediately
prior to default, except that if it becomes necessary to compute such rental
before the twenty-four (24) month period has occurred, then the computation
shall be on the basis of the average monthly amount during the shorter period.
As used in subparagraphs (1) and (2) above, the "worth at the time of award"
shall be computed by allowing interest at the rate of ten percent (10%) per
annum. As used in subparagraph (3) above, the "worth at the time of award" shall
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).

                (ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.

         (b) The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.
No delay or omission of either party to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any default by the other
party. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. Tenant hereby waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Section 1174 or 1179, or
under any other present or future law, in the event this Lease is terminated by
reason of any default by Tenant. No act or thing done by Landlord or Landlord's
agents during the Term shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender shall be valid unless in
writing and signed by Landlord. No employee of Landlord or of Landlord's agents
shall have any power to accept the keys to the Premises prior to the termination
of this Lease, and the delivery of the keys to any employee shall not operate as
a termination of the Lease or a surrender of the Premises.

<PAGE>

      SECTION 14.3. LATE PAYMENTS. Any rent due under this Lease that is not
paid to Landlord within five (5) business days after written notice that the
same was not paid when due shall bear interest at the rate of ten percent (10%)
per annum from the date due until fully paid. The payment of interest shall not
cure any default by Tenant under this Lease. In addition, Tenant acknowledges
that the late payment by Tenant to Landlord of rent will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Those costs may include, but
are not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any rent due from
Tenant shall not be received by Landlord or Landlord's designee within five (5)
business days after written notice of nonpayment, then Tenant shall pay to
Landlord, in addition to the interest provided above, a late charge for each
delinquent payment equal to two hundred and fifty dollars ($250.00). Acceptance
of a late charge by Landlord shall not constitute a waiver of Tenant's default
with respect to the overdue amount, nor shall it prevent Landlord from
exercising any of its other rights and remedies.

      SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off except as
otherwise set forth in this Lease. If Tenant fails to pay any sum of money, or
fails to perform any other act on its part to be performed under this Lease, and
the failure continues beyond any applicable grace period set forth in Section
14.1, then in addition to any other available remedies, Landlord may, at its
election, make the payment or perform the other act on Tenant's part. Landlord's
election to make the payment or perform the act on Tenant's part shall not give
rise to any responsibility of Landlord to continue making the same or similar
payments or performing the same or similar acts. Tenant shall, promptly upon
demand by Landlord, reimburse Landlord for all reasonable sums paid by Landlord
and all necessary incidental costs, together with interest at the rate of ten
percent (10%) per annum from the date of the payment by Landlord.

      SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.

      SECTION 14.6. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant
bring any action in connection with this Lease, the prevailing party shall be
entitled to recover as a part of the action its reasonable attorneys' fees, and
all other costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.

      SECTION 14.7. WAIVER OF JURY TRIAL/RIGHT TO ARBITRATE.

         (a) LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS
HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY
JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL
SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.

         (b) SHOULD A DISPUTE ARISE BETWEEN THE PARTIES REGARDING ANY MATTER
DESCRIBED ABOVE, THEN EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR FORCIBLE
DETAINER EITHER PARTY MAY CAUSE THE DISPUTE TO BE SUBMITTED TO JAMS/ENDISPUTE
("JAMS") OR ITS SUCCESSOR, IN THE COUNTY IN WHICH THE BUILDING IS SITUATED FOR
BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR. HOWEVER, EACH PARTY RESERVES THE
RIGHT TO SEEK A PROVISIONAL REMEDY BY JUDICIAL ACTION. NO ARBITRATION ELECTION
BY EITHER PARTY PURSUANT TO THIS SUBSECTION SHALL BE EFFECTIVE IF MADE LATER
THAN THIRTY (30) DAYS FOLLOWING SERVICE OF A JUDICIAL SUMMONS AND COMPLAINT BY
OR UPON SUCH PARTY CONCERNING THE DISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE RULES OF PRACTICE AND PROCEDURE OF JAMS AND OTHERWISE

<PAGE>

PURSUANT TO THE CALIFORNIA ARBITRATION ACT (CODE OF CIVIL PROCEDURE SECTIONS
1280 ET SEQ.). NOTWITHSTANDING THE FOREGOING, THE ARBITRATOR IS SPECIFICALLY
DIRECTED TO LIMIT DISCOVERY TO THAT WHICH IS ESSENTIAL TO THE EFFECTIVE
PROSECUTION OR DEFENSE OF THE ACTION, AND IN NO EVENT SHALL SUCH DISCOVERY BY
EITHER PARTY INCLUDE MORE THAN ONE NON-EXPERT WITNESS DEPOSITION UNLESS BOTH
PARTIES OTHERWISE AGREE. THE ARBITRATOR SHALL, TO THE EXTENT APPLICABLE, FOLLOW
THE SUBSTANTIVE LAW OF CALIFORNIA AND SHALL RENDER A REASONED WRITTEN DECISION
WITHIN TWENTY DAYS FOLLOWING THE HEARING. THE ARBITRATOR SHALL APPORTION THE
COSTS OF THE ARBITRATION, TOGETHER WITH THE ATTORNEYS' FEES OF THE PARTIES, IN
THE MANNER DEEMED EQUITABLE BY THE ARBITRATOR, IT BEING THE INTENTION OF THE
PARTIES THAT THE PREVAILING PARTY ORDINARILY BE ENTITLED TO RECOVER ITS
REASONABLE COSTS AND FEES. JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR
MAY BE ENTERED BY ANY COURT HAVING JURISDICTION; PROVIDED THAT SUCH AWARD SHALL
BE VACATED IN ACCORDANCE WITH THE CALIFORNIA ARBITRATION ACT SHOULD THE COURT
DETERMINE, UPON TIMELY PETITION, THAT THE ARBITRATOR EXCEEDED HIS/HER POWERS BY
RENDERING A DECISION INCONSISTENT WITH CALIFORNIA LAW OR THAT OTHER GOOD AND
SUFFICIENT CAUSE FOR VACATION EXISTS.

                             ARTICLE XV. END OF TERM

      SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, commencing on the first (1st) day following the termination
of this Lease. However, should Landlord accept the payment of monthly hold-over
rent by Tenant, then a month-to-month tenancy shall be deemed effected and
neither party shall terminate this Lease without thirty (30) days prior written
notice to the other party. Any hold-over by Tenant shall be subject to all of
the terms of this Lease, except that the monthly rental shall be one hundred
fifty percent (150%) of the total monthly rental for the month immediately
preceding the date of termination, subject to Landlord's right to modify same
upon thirty (30) days notice to Tenant. If Tenant fails to surrender the
Premises upon the expiration of this Lease despite demand to do so by Landlord,
Tenant shall indemnify and hold Landlord harmless from all loss or liability,
including without limitation, any claims made by any succeeding tenant relating
to such failure to surrender, provided that Tenant was notified of the existence
of such succeeding tenant. Acceptance by Landlord of rent after the termination
shall not constitute a consent to a holdover or result in a renewal of this
Lease. The foregoing provisions of this Section are in addition to and do not
affect Landlord's right of re-entry or any other rights of Landlord under this
Lease or at law.

      SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.

      SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear, casualty damage and repairs which are
Landlord's obligation excepted, and shall remove or fund to Landlord the cost of
removing all wallpapering and voice and/or data transmission cabling installed
by or for Tenant, together with all personal property and debris, except for any
items that Landlord may by written authorization allow to remain. Tenant shall
repair all damage to the Premises resulting from the removal, which repair shall
include the patching and filling of holes. If Tenant shall fail to comply with
the provisions of this Section, Landlord may, after five (5) business days
notice to Tenant (if Landlord has been given Tenant's new address), effect the
removal and/or make any repairs, and the reasonable cost to Landlord shall be
additional rent payable by Tenant upon demand. If requested by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord a commercially reasonable
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.

<PAGE>

                        ARTICLE XVI. PAYMENTS AND NOTICES

      All sums payable by Tenant to Landlord shall be paid, without deduction or
offset (except as otherwise set forth in this Lease), in lawful money of the
United States to Landlord at its address set forth in Item 13 of the Basic Lease
Provisions, or at any other place as Landlord may designate in writing. Unless
this Lease expressly provides otherwise, as for example in the payment of rent
pursuant to Section 4.1, all payments shall be due and payable within five (5)
business days after written demand. All payments requiring proration shall be
prorated on the basis of the number of days in the pertinent calendar month or
year, as applicable. Any notice, election, demand, consent, approval or other
communication to be given or other document to be delivered by either party to
the other may be delivered to the other party, at the address set forth in Item
13 of the Basic Lease Provisions, by personal service, or by any courier or
"overnight" express mailing service, or may be deposited in the United States
mail, postage prepaid, certified mail, return receipt requested. Either party
may, by written notice to the other, served in the manner provided in this
Article, designate a different address. If any notice or other document is sent
by mail, it shall be deemed served or delivered upon the date personal delivery
is made, or one (1) business day after deposit with a nationally recognized
courier service or three (3) business days after mailing or, if sooner, upon
actual receipt. The refusal to accept delivery of a notice, or the inability to
deliver the notice (whether due to a change of address for which notice was not
duly given or other good reason), shall be deemed delivery and receipt of the
notice as of the date of attempted delivery. If more than one person or entity
is named as Tenant under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them.

                       ARTICLE XVII. RULES AND REGULATIONS

      Tenant agrees to comply with the Rules and Regulations attached as Exhibit
E, and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted and published by written notice to tenants
(including Tenant) by Landlord for the safety, care, security, good order, or
cleanliness of the Premises, Building, Project and/or Common Areas. Landlord
shall not be liable to Tenant for any violation of the Rules and Regulations or
the breach of any covenant or condition in any lease or any other act or conduct
by any other tenant, and the same shall not constitute a constructive eviction
hereunder. One or more waivers by Landlord of any breach of the Rules and
Regulations by Tenant or by any other tenant(s) shall not be a waiver of any
subsequent breach of that rule or any other. Landlord shall not enforce, change
or modify the Rules and Regulations in a manner discriminatory to Tenant.
Tenant's failure to keep and observe the Rules and Regulations after notice and
a reasonable cure period under the circumstances shall constitute a default
under this Lease. In the case of any conflict between the Rules and Regulations
and this Lease, this Lease shall be controlling.

                       ARTICLE XVIII. BROKER'S COMMISSION

      The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Each party warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
agrees to indemnify and hold the other party harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by the indemnifying party in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease.

                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST

      In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that Tenant is duly notified of the transfer, the transferor turns over
or credits any prepaid rent or Security Deposit to the transferee, and the
transferee assumes in writing the obligations of Landlord accruing from and
after the date of the transfer. Any funds held by the transferor in which Tenant
has an interest shall be turned over, subject to that interest, to the
transferee. No holder of a mortgage and/or deed of trust to which this Lease is
or may be subordinate shall be responsible in connection with the Security
Deposit unless the mortgagee or holder of the deed of trust actually receives
the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.
<PAGE>

                           ARTICLE XX. INTERPRETATION

      SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.

      SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.

      SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease. This Section is not intended to apply
to the joint and several obligations imposed by an assignment of the Lease.

      SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.

      SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.

      SECTION 20.6. CONTROLLING LAW/VENUE. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California. Should any
litigation be commenced between the parties in connection with this Lease, such
action shall be prosecuted in the applicable State Court of California in the
county in which the Building is located.

      SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

      SECTION 20.8. WAIVER. One or more waivers by Landlord or Tenant of any
breach of any term, covenant or condition contained in this Lease shall not be a
waiver of any subsequent breach of the same or any other term, covenant or
condition. Consent to any act by one of the parties shall not be deemed to
render unnecessary the obtaining of that party's consent to any subsequent act.
No breach of this Lease shall be deemed to have been waived unless the waiver is
in a writing signed by the waiving party.

      SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay; provided that the foregoing shall not be deemed to extend the time
periods set forth in Article XI of this Lease. The provisions of this Section
shall not operate to excuse Tenant from the prompt payment of rent.

      SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
<PAGE>

      SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, Tenant shall have the right of quiet enjoyment and use of the
Premises for the Term without hindrance or interruption by Landlord or any other
person claiming by or through Landlord.

      SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

                      ARTICLE XXI. EXECUTION AND RECORDING

      SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.

      SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation, limited liability company or partnership, each individual executing
this Lease on behalf of the entity represents and warrants that he is duly
authorized to execute and deliver this Lease and that this Lease is binding upon
the corporation, limited liability company or partnership in accordance with its
terms. Tenant shall, at Landlord's request, deliver a certified copy of its
organizational documents or an appropriate certificate authorizing or evidencing
the execution of this Lease.

      SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.

      SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.

      SECTION 21.5. AMENDMENTS. No amendment or mutual termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.

                           ARTICLE XXII. MISCELLANEOUS

      SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease, to Tenant's agents, or as required by applicable law.

      SECTION 22.2. REPRESENTATIONS BY TENANT. The application, financial
statements and tax returns, if any, submitted and certified to by Tenant as an
accurate representation of its financial condition have been prepared, certified
and submitted to Landlord as an inducement and consideration to Landlord to
enter into this Lease. The application and statements are represented and
warranted by Tenant to be correct in all material respects and to accurately and
fully reflect in all material respects Tenant's true financial condition as of
the date of execution of this Lease by Tenant. Tenant shall during the Term
promptly furnish Landlord with current annual financial statements accurately
reflecting Tenant's financial condition upon written request from Landlord but
not more than one (1) time in any calendar year.
<PAGE>

      SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not increase the obligations of Tenant or adversely affect the leasehold
interest created by this Lease or Tenant's rights hereunder.

      SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
the same period following notice that Landlord is granted herein to cure the
default.

      SECTION 22.5. WAIVER OF CONSEQUENTIAL DAMAGES. Notwithstanding anything to
the contrary contained in this Lease, nothing in this Lease shall impose any
obligation on either party ("Releasee") to be responsible or liable for, and the
other party ("Releasor") hereby releases the Releasee from all liability for,
consequential damages incurred by the Releasor; provided that the foregoing
shall not apply to those consequential damage incurred by Landlord in connection
with a holdover of the Premises by Tenant after the expiration or earlier
termination of this Lease, subject to the terms of Section 15.1, above.

LANDLORD:                                     TENANT:

THE IRVINE COMPANY                            ACACIA RESEARCH CORPORATION

By /s/ Donald S. McNutt                       By /s/ Robert L. Harris II
   -----------------------------------           --------------------------
     Donald S. McNutt
     Senior Vice President, Leasing,          Printed Name Robert L. Harris II
     Office Properties
                                              Title President

By /s/ Lydia Kennedy                          By /s/ Robert A. Berman
   -----------------------------------           -------------------------------
     Lydia Kennedy
     Vice President, Asset Management,        Printed Name Robert A. Berman
     Office Properties
                                              Title Sr. VP & Secretary
<PAGE>
                                   EXHIBIT A

                           [floor plan diagram here]

<PAGE>

                                    EXHIBIT B

                             UTILITIES AND SERVICES

      The following standards for utilities and services shall be in effect at
the Building. In the case of any conflict between these standards and the Lease,
the Lease shall be controlling. Subject to all of the provisions of the Lease,
including but not limited to the restrictions contained in Section 6.1, the
following shall apply:

      1. Landlord shall make available to the Premises during the hours of 8:00
a.m. to 6:00 p.m., Monday through Friday ("Building Hours"), generally
recognized national holidays excepted, HVAC services for normal comfort for
normal office use in the Premises. Subject to the provisions set forth below,
Landlord shall also furnish the Building with elevator service, reasonable
amounts of electric current consistent with that utilized for normal office
purposes by other tenants of the Building, and water for lavatory purposes.
Tenant will not, without the prior written consent of Landlord, increase the
amount of electricity, gas or water usually furnished or supplied for use of the
Premises as general office space; nor shall Tenant connect any apparatus,
machine or device with water pipes or electric current (except through existing
electrical outlets in the Premises) for the purpose of using electric current or
water. This paragraph shall at all times be subject to applicable governmental
regulations.

      2. Upon written request from Tenant delivered to Landlord at least 24
hours prior to the period for which service is requested, but during normal
business hours, Landlord will provide HVAC services to Tenant at such times when
such services are not otherwise available. Tenant agrees to pay Landlord for
those after-hour services at rates that Landlord may establish from time to
time, provided such rates are generally consistent with those imposed by
landlords of comparable high-rise office projects in the Newport Beach area. If
Tenant requires electric current in excess of that which Landlord is obligated
to furnish under this Exhibit B, Tenant shall first obtain the consent of
Landlord, which consent shall not be unreasonably withheld, and Landlord may
cause an electric current meter to be installed in the Premises to measure the
amount of electric current consumed. The cost of installation, maintenance and
repair of the meter shall be paid for by Tenant, and Tenant shall reimburse
Landlord promptly upon demand for all electric current consumed for any special
power use as shown by the meter. The reimbursement shall be at the rates charged
for electrical power by the local public utility furnishing the current.

      3. If any lights, machines or equipment (including without limitation
electronic data processing machines) are used by Tenant in the Premises which
materially affect the temperature otherwise maintained by the air conditioning
system, or generate substantially more heat in the Premises than would be
generated by the building standard lights and usual fractional horsepower office
equipment, Landlord shall have the right at its reasonable election (but upon
prior written notice to Tenant) to install or modify any machinery and equipment
to the extent Landlord reasonably deems necessary to restore temperature
balance. The reasonable cost of installation, and any reasonable additional cost
of operation and maintenance, shall be paid by Tenant to Landlord promptly upon
demand.

      4. Landlord shall furnish water for drinking, personal hygiene and
lavatory purposes only. If Tenant requires or uses water for any purposes in
addition to ordinary drinking, cleaning and lavatory purposes, Landlord may, in
its discretion but upon prior written notice to Tenant, install a water meter to
measure Tenant's water consumption. Tenant shall pay Landlord for the reasonable
cost of the meter and the cost of its installation, and for consumption
throughout the duration of Tenant's occupancy. Tenant shall keep the meter and
installed equipment in good working order and repair at Tenant's own cost and
expense, in default of which Landlord may cause the meter to be replaced or
repaired at Tenant's expense. Tenant agrees to pay for water consumed, as shown
on the meter and when bills are rendered, and on Tenant's default in making that
payment Landlord may pay the charges on behalf of Tenant. Any costs or expenses
or payments made by Landlord for any of the reasons or purposes stated above
shall be deemed to be additional rent payable by Tenant to Landlord upon demand.

      5. In the event that any utility service to the Premises is separately
metered or billed to Tenant, Tenant shall pay all charges for that utility
service to the Premises and the cost of furnishing the utility to tenant suites
shall be excluded from the Operating Expenses as to which reimbursement from
Tenant is required in the Lease. If any utility charges are not paid when due
Landlord may pay them, and any amounts paid by Landlord shall immediately become
due to Landlord from Tenant as additional rent. If Landlord elects to furnish
any utility service to the Premises, Tenant shall purchase its requirements of
that utility from Landlord as long as the rates charged by Landlord do not
exceed those which Tenant would be required to pay if the utility service were
furnished it directly by a public utility.

      6. Landlord shall provide janitorial services five days per week,
equivalent to that furnished in comparable first class high-rise office
buildings in the Newport Beach area, and window washing as reasonably required
but in any event at least twice per year; provided, however, that Tenant shall
pay for any additional or unusual janitorial services required by reason of any
nonstandard improvements in the Premises, including without limitation wall
coverings and floor coverings installed by or for Tenant, or by reason of any
use of Premises other than exclusively as offices. The cleaning services
provided by Landlord shall also exclude refrigerators, eating utensils (plates,
drinking containers and silverware), and interior glass partitions.

      7. Tenant shall have access to the Building and parking 24 hours per day,
7 days per week, 52 weeks per year; provided that Landlord may install access
control systems as it deems advisable for the Building. Such systems may, but
need not, include full or part-time lobby supervision, the use of a sign-in
sign-out log, a card identification access system, building parking and access
pass system, closing hours procedures, access control stations, fire stairwell
exit door alarm system, electronic guard system, mobile paging system, elevator
control system or any other access controls. In the event that Landlord elects
to provide any or all of those services, Landlord may discontinue providing them
at any time with or without notice; provided that Landlord shall continue to
utilize a reasonable access control system for the Building. Landlord may impose
a reasonable charge that is uniform for the Building for access control cards
and/or keys issued to Tenant. Landlord shall have no liability to Tenant for the
provision by Landlord of improper access control services, for any breakdown in
service, or for the failure by Landlord to provide access control services.
Tenant further acknowledges that Landlord's access systems may be temporarily
inoperative during building emergency and system repair periods.

<PAGE>

                                    EXHIBIT C

                                     PARKING

      The following parking regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable, nondiscriminatory modifications
and additions to the regulations by written notice to Tenant. In the case of any
conflict between these regulations and the Lease, the Lease shall be
controlling.

      1. Landlord agrees to maintain, or cause to be maintained, an automobile
parking area ("Parking Area") in reasonable proximity to the Building for the
benefit and use of the visitors and patrons and, except as otherwise provided,
employees of Tenant, and other tenants and occupants of the Building. The
Parking Area shall include, whether in a surface parking area or a parking
structure, the automobile parking stalls, driveways, entrances, exits, sidewalks
and attendant pedestrian passageways and other areas designated for parking.
Landlord shall have the right and privilege of determining the nature and extent
of the automobile Parking Area, whether it shall be surface, underground or
other structure, and of making such changes to the Parking Area from time to
time which in its opinion are desirable and for the best interests of all
persons using the Parking Area, provided that Landlord does not thereby
materially adversely affect Tenant's parking rights hereunder. Landlord shall
keep the Parking Area in a neat, clean and orderly condition, and shall repair
any damage to its facilities. Landlord shall not be liable for any damage to
motor vehicles of visitors or employees, for any loss of property from within
those motor vehicles, or for any injury to Tenant, its visitors or employees,
unless ultimately determined to be caused by the negligence or willful
misconduct of Landlord. Unless otherwise instructed by Landlord, every parker
shall park and lock his or her own motor vehicle. Landlord shall also have the
right to establish, and from time to time amend, and to enforce against all
users of the Parking Area all reasonable nondiscriminatory rules and regulations
(including the designation of areas for employee parking) as Landlord may deem
necessary and advisable for the proper and efficient operation and maintenance
of the Parking Area. Garage managers or attendants are not authorized to make or
allow any exceptions to these regulations.

      2. Landlord may, if it deems advisable in its sole discretion, charge for
parking and may establish for the Parking Area a system or systems of permit
parking for Tenant, its employees and its visitors, which may include, but not
be limited to, a system of charges against nonvalidated parking, verification of
users, a set of regulations governing different parking locations, and an
allotment of reserved or nonreserved parking spaces based upon the charges paid
and the identity of users. In no event shall Tenant or its employees park in
reserved stalls leased to other tenants or in stalls within designated visitor
parking zones, nor shall Tenant or its employees utilize more than the number of
parking stalls allotted in this Lease to Tenant. It is understood that Landlord
shall not have any obligation to cite improperly parked vehicles or otherwise
attempt to enforce reserved parking rules during hours when parking attendants
are not present at the Parking Area. Tenant shall comply with such system in its
use of the Parking Area (and shall endeavor to cause its visitors to comply),
provided, however, that the system and rules and regulations shall apply to all
persons entitled to the use of the Parking Area, and all charges to Tenant for
use of the Parking Area shall be no greater than Landlord's then current
scheduled charge for parking.

      3. Tenant shall, upon request of Landlord from time to time, furnish
Landlord with a list of its employees' names and of Tenant's and its employees'
vehicle license numbers. Tenant agrees to acquaint its employees with these
regulations, and shall be liable to Landlord for all unpaid parking charges
incurred by its employees. Any amount due from Tenant shall be deemed additional
rent. Tenant authorizes Landlord to tow away from the Building any vehicle
belonging to Tenant or Tenant's employees parked in violation of these
provisions, and/or to attach violation stickers or notices to those vehicles. In
the event Landlord elects or is required to limit or control parking by tenants,
employees, visitors or invitees of the Building, whether by validation of
parking tickets, parking meters or any other method of assessment, Tenant agrees
to participate in the validation or assessment program under reasonable
nondiscriminatory rules and regulations as are established by Landlord and/or
any applicable governmental agency.
<PAGE>

      4. Landlord may establish an identification system for vehicles of Tenant
and its employees which may consist of stickers, magnetic parking cards or other
identification devices supplied by Landlord. All identification devices shall
remain the property of Landlord, shall be displayed as required by Landlord or
upon request and may not be mutilated or obliterated in any manner. Those
devices shall not be transferable and any such device in the possession of an
unauthorized holder shall be void and may be confiscated. Landlord may impose a
reasonable and uniform fee for identification devices and a reasonable and
uniform replacement charge for devices which are lost or stolen. Each
identification device shall be returned to Landlord promptly following the
Expiration Date or sooner termination of this Lease. Loss or theft of parking
identification devices shall be reported to Landlord or its Parking Area
operator immediately and a written report of the loss filed if requested by
Landlord or its Parking Area operator.

      5. Persons using the Parking Area shall observe all directional signs and
arrows and any posted speed limits. Unless otherwise posted, in no event shall
the speed limit of 5 miles per hour be exceeded. All vehicles shall be parked
entirely within painted stalls, and no vehicles shall be parked in areas which
are posted or marked as "no parking" or on or in ramps, driveways and aisles.
Only one vehicle may be parked in a parking space. In no event shall Tenant
interfere with the use and enjoyment of the Parking Area by other tenants of the
Building or their employees or invitees.

      6. Parking Areas shall be used only for parking vehicles. Washing, waxing,
cleaning or servicing of vehicles, or the parking of any vehicle on an overnight
basis, in the Parking Area (other than emergency services) by any parker or his
or her agents or employees is prohibited unless otherwise authorized by
Landlord. Tenant shall have no right to install any fixtures, equipment or
personal property (other than vehicles) in the Parking Area, nor shall Tenant
make any alteration to the Parking Area.

      7. It is understood that the employees of Tenant and the other tenants of
Landlord within the Building and Project shall not be permitted to park their
automobiles in the portions of the Parking Area which may from time to time be
designated for patrons of the Building and/or Project and that Landlord shall at
all times have the right to establish reasonable and nondiscriminatory rules and
regulations for employee parking. Landlord shall make available for lease by
Tenant the number of vehicle parking spaces set forth in Item 12 of the Basic
Lease Provisions, and Tenant shall at all times lease not fewer than six (6) of
those allotted stalls. During the initial sixty (60) month Lease Term, the
monthly rate for each of the allotted unreserved stalls leased by Tenant shall
be Fifty-Five Dollars ($55.00). In addition, Tenant may, by notice to Landlord
given not later than two (2) months after the Commencement Date, convert up to
six (6) of the allotted unreserved stalls to reserved spaces (the "Converted
Stalls"). During the initial sixty (60) month Term, the monthly rate for each
Converted Stall leased continuously by Tenant shall be Ninety-Eight Dollars
($98.00). Should Tenant fail timely to lease the full allotment of six (6)
Converted Stalls, or should Tenant thereafter relinquish its leasing of any of
those reserved stalls, then Tenant may thereafter lease additional reserved
stalls (up to the aggregate total of six) subject to their then-current
availability and at Landlord's scheduled rate from time to time. Following the
initial sixty (60) month Term, all parking shall be at Landlord's scheduled
rates from time to time, as shall any parking that may be leased by Tenant in
addition to the foregoing. Should any monthly parking charge installment not be
paid within five (5) business days following the date due, then a late charge
shall be payable by Tenant equal to fifty dollars ($50.00), which late charge
shall be separate and in addition to any late charge that may be assessed
pursuant to Section 14.3 of the Lease for other than delinquent monthly parking
charges. Landlord may authorize persons other than those described above,
including occupants of other buildings, to utilize the Parking Area. In the
event of the use of the Parking Area by other persons, those persons shall pay
for that use in accordance with the terms established above; provided, however,
Landlord may allow those persons to use the Parking Area on weekends, holidays,
and at other non-office hours without payment.

      8. Notwithstanding the foregoing paragraphs 1 through 7, Landlord shall be
entitled to pass on to Tenant, pursuant to Article IV of this Lease, its
proportionate share of any charges or parking surcharge or transportation
management costs levied by any governmental agency. The foregoing parking
provisions are further subject to any mandatory governmental regulations which
limit parking or otherwise seek to encourage the use of carpools, public transit
or other alternative transportation forms or traffic reduction programs. Tenant
agrees that it will use its commercially reasonable efforts to cooperate,
including registration and attendance, in governmentally mandated programs which
may be undertaken to reduce traffic. Tenant acknowledges that as a part of those
programs, it may be required to distribute employee transportation information,
participate in employee transportation surveys, allow employees to participate
in commuter activities, designate a liaison for commuter transportation
activities, distribute commuter information to all employees, and otherwise
participate in other programs or services initiated under a transportation
management program.

      9. Should any parking spaces be allotted by Landlord to Tenant, either on
a reserved or nonreserved basis, Tenant shall not assign or sublet any of those
spaces, either voluntarily or by operation of law, without the prior written
consent of Landlord, except in connection with an authorized assignment of this
Lease or subletting of the Premises.

<PAGE>

                                    EXHIBIT D

                               TENANT'S INSURANCE

      The following standards for Tenant's insurance shall be in effect at the
Building. Tenant agrees to obtain and present evidence to Landlord that it has
fully complied with the insurance requirements.

      1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
personal injury, nonowned automobile, blanket contractual, independent
contractors, broad form property damage, fire legal liability, products
liability (if a product is sold from the Premises), liquor law liability (if
alcoholic beverages are sold, served or consumed within the Premises), and cross
liability and severability of interest clauses, which policy(ies) shall be
written on an "occurrence" basis and for not less than $2,000,000 combined
single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance coverage; (iii) with respect to improvements,
alterations, and the like required or permitted to be made by Tenant under this
Lease, builder's all-risk insurance, in amounts reasonably satisfactory to
Landlord; (iv) insurance against fire, vandalism, malicious mischief and such
other additional perils as may be included in a standard "all risk" form,
insuring the improvements, trade fixtures, furnishings, equipment and items of
personal property in the Premises, in an amount equal to not less than ninety
percent (90%) of their actual replacement cost (with replacement cost
endorsement), which policy shall also include loss of income/business
interruption/extra expense coverage in an amount not less than nine months loss
of income from Tenant's business in the Premises. Notwithstanding the foregoing,
Tenant may elect to self-insure the loss of income/business interruption/extra
expense coverage with full waiver of subrogation in favor of Landlord. In no
event shall the limits of any policy be considered as limiting the liability of
Tenant under this Lease.

      2. All policies of insurance required to be carried by Tenant pursuant to
this Exhibit shall be written by insurance companies authorized to do business
in the State of California and with a general policyholder rating of not less
than "A" and financial rating of not less than "X" in the most current Best's
Insurance Report. Any insurance required of Tenant may be furnished by Tenant
under any blanket policy carried by it or under a separate policy. A certificate
of insurance, certifying that the policy has been issued, provides the coverage
required by this Exhibit and contains the required provisions, together with
endorsements reasonably acceptable to Landlord evidencing the waiver of
subrogation and additional insured provisions required under Paragraph 3 below,
shall be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days
prior to the expiration of the coverage.

      3. Unless otherwise provided below, each policy evidencing insurance
required to be carried by Tenant pursuant to this Exhibit shall contain the
following provisions and/or clauses satisfactory to Landlord: (i) with respect
to Tenant's commercial general liability insurance, a provision that the policy
and the coverage provided shall be primary and that any coverage carried by
Landlord shall be excess and noncontributory, together with a provision
including Landlord, its management agent and lender as additional insureds; (ii)
a waiver by the insurer of any right to subrogation against Landlord, its
agents, employees, contractors and representatives which arises or might arise
by reason of any payment under the policy or by reason of any act or omission of
Landlord, its agents, employees, contractors or representatives; and (iii) a
provision that the insurer will not cancel or change the coverage provided by
the policy without first giving Landlord thirty (30) days prior written notice.

      4. In the event that Tenant fails to procure, maintain and/or pay for, at
the times and for the durations specified in this Exhibit, any insurance
required by this Exhibit, or fails to carry insurance required by any
governmental authority, Landlord may, upon ten (10) days prior written notice to
Tenant and Tenant's failure to cure, at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all reasonable sums
paid by Landlord, together with interest at ten percent (10%) per annum and any
related reasonable costs or expenses incurred by Landlord, within ten (10) days
following Landlord's written demand to Tenant.

NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST
PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD'S MANAGEMENT AGENT PRIOR
TO BEING AFFORDED ACCESS TO THE PREMISES.

<PAGE>

                                    EXHIBIT E

                              RULES AND REGULATIONS

      The following Rules and Regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time. In the case of any conflict between these regulations
and the Lease, the Lease shall be controlling.

      1. Except with the prior written consent of Landlord, or unless otherwise
specifically authorized in this Lease, Tenant shall not sell or permit the
retail sale of goods or services in or from the Premises, nor shall Tenant allow
the Premises to be utilized for any manufacturing or medical practice.

      2. The sidewalks, halls, passages, elevators, stairways, and other common
areas shall not be obstructed by Tenant or used by it for storage, for
depositing items, or for any purpose other than for ingress to and egress from
the Premises. The halls, passages, entrances, elevators, 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 to those areas of all
persons whose presence, in the judgment of Landlord, shall be prejudicial to the
safety, character, reputation and interests of the Building and its tenants.
Should Tenant have access to any balcony or patio area, Tenant shall not place
any furniture or other personal property in such area without the prior written
approval of Landlord. Nothing contained in this Lease shall be construed to
prevent access to persons with whom Tenant normally deals only for the purpose
of conducting its business on the Premises (such as clients, customers, office
suppliers and equipment vendors and the like) unless those persons are engaged
in illegal activities. Neither Tenant nor any employee or contractor of Tenant
shall go upon the roof of the Building without the prior written consent of
Landlord

      3. The sashes, sash doors, windows, glass lights, solar film and/or
screen, and any lights or skylights that reflect or admit light into the halls
or other places of the Building shall not be covered or obstructed. The toilet
rooms, water and wash closets and other water apparatus shall not be used for
any purpose other than that for which they were constructed, and no foreign
substance of any kind shall be thrown in those facilities, and the expense of
any breakage, stoppage or damage resulting from the violation of this rule by
Tenant shall be borne by Tenant.

      4. No sign, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted or affixed by Tenant on any part of the
Building or the Premises without the prior written consent of Landlord. If
Landlord shall have given its consent at any time, whether before or after the
execution of this Lease, that consent shall in no way operate as a waiver or
release of any of the provisions of this Lease, and shall be deemed to relate
only to the particular sign, advertisement or notice so consented to by Landlord
and shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Landlord with respect to any subsequent sign,
advertisement or notice. If Landlord, by a notice in writing to Tenant, shall
object to any curtain, blind, tinting, shade or screen attached to, or hung in,
or used in connection with, any window or door of the Premises, then provided
such curtain, blind, tinting, shade or screen is visible from outside the
Premises, the use of that curtain, blind, tinting, shade or screen shall be
immediately discontinued and removed by Tenant. No awnings shall be permitted on
any part of the Premises. No antenna or satellite dish shall be installed by
Tenant that is either located or visible from outside the Premises without the
prior written agreement of Landlord.

      5. Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything in the Premises, which shall in any way increase the rate
of fire insurance on the Building, or on the property kept in the Building, or
obstruct or interfere with the rights of other tenants, or in any way injure or
annoy them, or conflict with the regulations of the Fire Department or the fire
laws, or with any insurance policy upon the Building, or any portion of the
Building or its contents, or with any rules and ordinances established by the
Board of Health or other governmental authority.
<PAGE>

      6. The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, safes and electronic
data processing equipment, shall require the prior written approval of Landlord.
Landlord may restrict the weight and position of any equipment that may exceed
the weight load limits for the structure of the Building, and may further
require, at Tenant's expense, the reinforcement of any flooring on which such
equipment may be placed and/or an engineering study to be performed to determine
whether the equipment may safely be installed in the Building and the necessity
of any reinforcement. The moving of large or heavy objects shall occur only
between those reasonable hours as may be designated by, and only upon previous
written notice to, Landlord, and the persons employed to move those objects in
or out of the Building must be reasonably acceptable to Landlord. Without
limiting the generality of the foregoing, no freight, furniture or bulky matter
of any description shall be received into or moved out of the lobby of the
Building or carried in any elevator other than the freight elevator designated
by Landlord unless approved in writing by Landlord.

      7. Landlord shall clean the Premises as provided in the Lease, and except
with the written consent of Landlord, no person or persons other than those
reasonably approved by Landlord will be permitted to enter the Building for that
purpose. Tenant shall not cause unnecessary labor by reason of Tenant's
carelessness and indifference in the preservation of good order and cleanliness.
Landlord shall not be responsible to Tenant or its employees for loss or damage
to property in connection with the provision of janitorial services by third
party contractors, except to the extent due to Landlord's direct negligence or
willful misconduct.

      8. Tenant shall not sweep or throw, or permit to be swept or thrown, from
the Premises any dirt or other substance into any of the corridors or halls or
elevators, or out of the doors or windows or stairways of the Building, and
Tenant shall not use, keep or permit to be used or kept any foul or noxious gas
or substance in the Premises, or interfere in any material way with other
tenants or those having business with other tenants, nor shall any animals or
birds be kept by Tenant in or about the Building. Smoking or carrying of lighted
cigars, cigarettes, pipes or similar products anywhere within the Premises or
Building is strictly prohibited, and Landlord may enforce such prohibition
pursuant to Landlord's leasehold remedies. Smoking is permitted outside the
Building and within the project only in areas designated by Landlord.

      9. No cooking shall be done or permitted by Tenant on the Premises, except
pursuant to the normal use of a U.L. approved microwave oven and coffee maker
for the benefit of Tenant's employees and invitees, nor shall the Premises be
used for the storage of merchandise or for lodging.

      10. Tenant shall not use or keep in the Building any kerosene, gasoline,
or inflammable fluid or any other illuminating material, exclusive of normal
office supplies, or use any method of heating other than that supplied by
Landlord.

      11. If Tenant desires telephone, telegraph, burglar alarm or similar
connections, Landlord will direct electricians as to where and how the wires are
to be introduced. No boring or cutting for wires or otherwise shall be made
without directions from Landlord.

      12. Upon the termination of its tenancy, Tenant shall deliver to Landlord
all the keys to offices, rooms and toilet rooms and all access cards which shall
have been furnished to Tenant or which Tenant shall have had made.

      13. Tenant shall not mark, drive nails, screw or drill into the
partitions, woodwork or plaster or in any way deface the Premises, except to
install normal wall hangings. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except by a paste, or other material which
may easily be removed with water, the use of cement or other similar adhesive
materials being expressly prohibited. The method of affixing any floor covering
shall be subject to reasonable approval by Landlord. The expense of repairing
any damage resulting from a violation of this rule shall be borne by Tenant.
<PAGE>

      14. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 8:00 a.m., access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises, may be
refused unless the person seeking access complies with any reasonable and
nondiscriminatory access control system that Landlord may establish. Landlord
shall in no case be liable for damages for the admission to or exclusion from
the Building of any person whom Landlord has the right to exclude under Rules 2
or 18 of this Exhibit. In case of invasion, mob, riot, public excitement, or
other commotion, or in the event of any other situation reasonably requiring the
evacuation of the Building, Landlord reserves the right at its election and
without liability to Tenant to prevent access to the Building by closing the
doors or otherwise, for the safety of the tenants and protection of property in
the Building.

      15. Tenant shall be responsible for protecting the Premises from theft,
which includes keeping doors and other means of entry closed and securely
locked. Tenant shall use commercially reasonable efforts to cause all water
faucets or water apparatus to be shut off before Tenant or Tenant's employees
leave the Building so as to prevent waste or damage.

      16. Tenant shall not alter any lock or install a new or additional lock or
any bolt on any door of the Premises without the prior written consent of
Landlord. If Landlord gives its consent, Tenant shall in each case promptly
furnish Landlord with a key for any new or altered lock.

      17. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease except in accordance with Exhibit B.

      18. Landlord shall have full and absolute authority to regulate or
prohibit the entrance to the Premises of any vendor, supplier, purveyor,
petitioner, proselytizer or other similar person. In the event any such person
is a guest or invitee of Tenant, Tenant shall notify Landlord in advance of each
desired entry, and Landlord shall authorize the person so designated to enter
the Premises, provided that in the reasonable judgment of Landlord, such person
will not be involved in general solicitation activities, or the proselytizing,
petitioning, or disturbance of other tenants or their customers or invitees.
Notwithstanding the foregoing, Landlord may condition such access by a food or
beverage vendor upon the vendor's execution of an entry permit agreement which
may contain provisions for insurance coverage.

      19. Tenant shall, at its expense, be required to utilize the third party
contractor designated by Landlord for the Building to provide any telephone
wiring services from the minimum point of entry of the telephone cable in the
Building to the Premises, provided that such contractor's charges shall be
generally competitive with those of other contractors performing like services
in other high-rise office projects in the area.

      20. Tenant shall, upon request by Landlord, supply Landlord with the names
and telephone numbers of personnel designated by Tenant to be contacted on an
after-hours basis should circumstances warrant.

      21. Landlord may from time to time grant tenants individual and temporary
variances from these Rules, provided that any variance does not have a material
adverse effect on the use and enjoyment of the Premises by Tenant.

<PAGE>

                                    EXHIBIT X

                                   WORK LETTER

                                DOLLAR ALLOWANCE

                            [SECOND GENERATION SPACE]

The Tenant Improvement work (herein Tenant Improvements") shall consist of any
work required to complete the Premises pursuant to plans and specifications
approved by both Landlord and Tenant. All of the Tenant Improvement work shall
be performed by Turelk Inc. in accordance with the procedures and requirements
set forth below.

I.       ARCHITECTURAL AND CONSTRUCTION PROCEDURES

         A.       Tenant and Landlord shall approve both (i) a detailed space
                  plan for the Premises, prepared by the architect engaged by
                  Landlord for the work described herein, Gensler ("Landlord's
                  Architect"), which includes interior partitions, ceilings,
                  interior finishes, interior office doors, suite entrance,
                  floor coverings, window coverings, lighting, electrical and
                  telephone outlets, plumbing connections, heavy floor loads and
                  other special requirements ("Preliminary Plan"), and (ii) an
                  estimate, prepared by the contractor engaged by Landlord for
                  the work herein ("Landlord's Contractor"), of the cost for
                  which Landlord will complete or cause to be completed the
                  Tenant Improvements ("Preliminary Cost Estimate"). Tenant
                  shall approve or disapprove each of the Preliminary Plan and
                  the Preliminary Cost Estimate by written notice and delivering
                  same to Landlord within ten (10) business days of its receipt
                  by Tenant. If Tenant disapproves any matter, Tenant shall
                  specify in detail the reasons for disapproval and Landlord
                  shall attempt to modify the Preliminary Plan and the
                  Preliminary Cost Estimate to incorporate Tenant's suggested
                  revisions in a mutually satisfactory manner.

         B.       Before Landlord's Architect commences any work on the Working
                  Drawings and Specifications (as defined below), Tenant shall
                  provide in writing to Landlord or Landlord's Architect all
                  specifications and information reasonably requested by
                  Landlord for the preparation of final construction documents
                  and costing, including without limitation Tenant's final
                  selection of wall and floor finishes, complete specifications
                  and locations (including load and HVAC requirements) of
                  Tenant's equipment, and details of all "Non-Standard
                  Improvements" (as defined below) to be installed in the
                  Premises (collectively, "Programming Information"). Tenant
                  understands that final construction documents for the Tenant
                  Improvements shall be predicated on the Programming
                  Information, and accordingly that such information must be
                  accurate and complete.

         C.       Within ten (10) business days following Tenant's approval of
                  the Preliminary Plan and Preliminary Cost Estimate and
                  delivery of the complete Programming Information, Landlord's
                  Architect and engineers shall prepare and deliver to the
                  parties working drawings and specifications ("Working Drawings
                  and Specifications"), and Landlord's Contractor shall prepare
                  a final construction cost estimate ("Final Cost Estimate") for
                  the Tenant Improvements in conformity with the Working
                  Drawings and Specifications. Tenant shall have ten (10)
                  business days from the receipt thereof to approve or
                  disapprove the Working Drawings and Specifications and the
                  Final Cost Estimate. Should Tenant disapprove the Working
                  Drawings and Specifications or the Final Cost Estimate, such
                  disapproval shall be accompanied by a detailed list of
                  revisions. Any revision requested by Tenant and accepted by
                  Landlord shall be incorporated by Landlord's Architect into a
                  revised set of Working Drawings and Specifications and Final
                  Cost Estimate, and Tenant shall approve or disapprove same in
                  writing within five (5) business days of receipt.
<PAGE>

         D.       In the event that Tenant requests in writing a revision in the
                  approved Working Drawings and Specifications ("Change"), then
                  provided such Change is acceptable to Landlord in good faith,
                  Landlord shall advise Tenant by written change order as soon
                  as is practical of any increase in the Completion Cost such
                  Change would cause. Tenant shall approve or disapprove such
                  change order in writing within three (3) business days
                  following its receipt from Landlord. Tenant's approval of a
                  Change shall be accompanied by Tenant's payment of any
                  resulting increase in the Completion Cost provided that the
                  "Landlord's Contribution" (as defined below) has been
                  exceeded.

         E.       It is understood that the Preliminary Plan and the Working
                  Drawings and Specifications, together with any Changes
                  thereto, shall be subject to the prior good faith approval of
                  Landlord. Landlord shall identify any disapproved items within
                  three (3) business days (or two (2) business days in the case
                  of Changes) after receipt of the applicable document. In lieu
                  of disapproving an item, Landlord may approve same on the
                  condition that Tenant pay to Landlord, prior to the start of
                  construction and in addition to all sums otherwise due
                  hereunder, an amount equal to the cost, as reasonably
                  estimated by Landlord, of removing and replacing the item upon
                  the expiration or termination of the Lease. Should Landlord
                  approve work that would necessitate any ancillary Building
                  modification or other expenditure by Landlord, then Landlord
                  shall so notify Tenant at the time of Landlord's approval and
                  except to the extent of any remaining balance of the
                  "Landlord's Contribution" as described below, Tenant shall, in
                  addition to its other obligations herein, promptly fund the
                  cost thereof to Landlord.

         F.       Landlord shall permit Tenant and its agents to enter the
                  Premises up to ten (10) business days prior to the
                  Commencement Date of the Lease in order that Tenant may
                  perform any work to be performed by Tenant hereunder through
                  its own contractors, subject to Landlord's prior written
                  approval (which shall not be unreasonably withheld), and in a
                  manner and upon terms and conditions and at times satisfactory
                  to Landlord's representative. The foregoing license to enter
                  the Premises prior to the Commencement Date is, however,
                  conditioned upon Tenant's contractors and their subcontractors
                  and employees working in harmony and not interfering with the
                  work being performed by Landlord. If at any time that entry
                  shall cause disharmony or unreasonably interfere with the work
                  being performed by Landlord, this license may be withdrawn by
                  Landlord upon twenty-four (24) hours written notice to Tenant.
                  That license is further conditioned upon the compliance by
                  Tenant's contractors with all requirements reasonably imposed
                  by Landlord on third party contractors and subcontractors,
                  including without limitation the maintenance by Tenant and its
                  contractors and subcontractors of workers' compensation and
                  public liability and property damage insurance in amounts and
                  with companies and on forms reasonably satisfactory to
                  Landlord, with certificates of such insurance being furnished
                  to Landlord prior to proceeding with any such entry. The entry
                  shall be deemed to be under all of the provisions of the Lease
                  except as to the covenants to pay rent. Except to the extent
                  caused by the negligence or willful misconduct of Landlord or
                  Landlord's agents, Landlord shall not be liable in any way for
                  any injury, loss or damage which may occur to any such work
                  being performed by Tenant, the same being solely at Tenant's
                  risk. In no event shall the failure of Tenant's contractors to
                  complete any work in the Premises extend the Commencement Date
                  of this Lease.
<PAGE>

         G.       Tenant hereby designates Chip Harris, Telephone No. (626)
                  396-8300, as its representative and agent for the purpose of
                  receiving notices, approving submittals and issuing requests
                  for Changes, and Landlord shall be entitled to rely upon
                  authorizations and directives of such person(s) as if given
                  directly by Tenant. Tenant may amend the designation of its
                  construction representative(s) at any time upon delivery of
                  written notice to Landlord. Conversely, Landlord hereby
                  designates Stewart Morse of lnsignia/ESG, Telephone No. (949)
                  784-0844, as its construction representative, subject to
                  modification by written notice to Tenant.

         H.       It is understood that the Tenant Improvements shall be
                  completed during Tenant's occupancy of the Premises. However,
                  Landlord agrees that it shall use diligent efforts to recarpet
                  and paint those areas of the Premises not affected by the
                  demising walls by February 15, 2002 (which date is based on
                  the assumption that Tenant shall execute and deliver this
                  Lease to Landlord by January 22, 2002). In this regard, Tenant
                  agrees to assume any risk of injury, loss or damage which may
                  result, except for the gross negligence or willful misconduct
                  of Landlord or its contractors or agents. Tenant further
                  agrees that it shall be solely responsible for relocating its
                  office equipment and furniture in the Premises in order for
                  Landlord to complete the work in the Premises and that no
                  rental abatement shall result while the Tenant Improvements
                  are completed in the Premises.

                  Landlord agrees that it shall use diligent efforts to complete
                  the Tenant Improvements as expeditiously as is reasonably
                  possible once such work has commenced and to minimize
                  interference with Tenant's access to and use of the Premises;
                  provided that overtime charges shall be included in the
                  Completion Cost. Landlord further agrees that it shall
                  cooperate in good faith with Tenant to provide notice to
                  Tenant of the schedule of the various components of the work.

II.      COST OF TENANT IMPROVEMENTS
         ---------------------------

         A.       Landlord shall complete, or cause to be completed, the Tenant
                  Improvements, at the construction cost shown in the approved
                  Final Cost Estimate (subject to the provisions of this Work
                  Letter), in accordance with final Working Drawings and
                  Specifications approved by both Landlord and Tenant. Landlord
                  shall pay towards the final construction costs ("Completion
                  Cost") as incurred a maximum of Seventy-Eight Thousand Three
                  Hundred Sixty-Four Dollars ($78,364.00) ("Landlord's
                  Contribution"), and Tenant shall be fully responsible for the
                  remainder ("Tenant's Contribution"); provided, however, that
                  Landlord shall, in addition to the Landlord's Contribution,
                  be responsible for the cost of the following items as
                  reflected in the January 14, 2002 cost estimate (the "Landlord
                  Work"), which cost items shall not be included in the Tenant's
                  Contribution: (i) the installation and finishing of the
                  demising walls of the Premises, (ii) the life safety upgrade
                  work, and (iii) the retrofit of the existing ceilings to
                  comport with applicable codes. If the actual cost of
                  completion of the Tenant Improvements is less than the maximum
                  amount provided for the Landlord's Contribution, such savings
                  shall inure to the benefit of Landlord and Tenant shall not be
                  entitled to any credit or payment.
<PAGE>

         B.       The Completion Cost shall include all direct costs of Landlord
                  in completing the Tenant Improvements (exclusive of the cost
                  of the Landlord Work as provided above), including but not
                  limited to the following: (i) payments made to architects,
                  engineers, contractors, subcontractors and other third party
                  consultants in the performance of the work, (ii) permit fees
                  and other sums paid to governmental agencies, and (iii) costs
                  of all materials incorporated into the work or used in
                  connection with the work. The Completion Cost shall also
                  include an administrative/supervision fee to be paid to
                  Landlord in the amount of five percent (5%) of all hard
                  construction costs.

         C.       Prior to start of construction of the Tenant Improvements,
                  Tenant shall pay to Landlord the amount of the Tenant's
                  Contribution set forth in the approved Final Cost Estimate. In
                  addition, if the actual Completion Cost of the Tenant
                  Improvements is greater than the Final Cost Estimate because
                  of modifications or extras not reflected on the approved
                  Working Drawings and Specifications which are requested by
                  Tenant, and further provided that the sum of (i) the cost of
                  such modifications and extras and (ii) the Final Cost
                  Estimate, exceeds the Landlord's Contribution, then Tenant
                  shall pay to Landlord, within ten (10) days following
                  submission of an invoice therefor, all such additional costs,
                  including any additional architectural fee, so long as the
                  additional cost of any changes had been approved by Tenant. If
                  Tenant defaults in the payment of any sums due under this Work
                  Letter, Landlord shall (in addition to all other remedies)
                  have the same rights as in the case of Tenant's failure to pay
                  rent under the Lease.

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