Document:

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                                                                   EXHIBIT 10.37

                                                                  AS PROPOSED ON
                                                                JANUARY 28, 2000

                     NETWORK ACCESS SOLUTIONS CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN

     The following constitutes the provisions of the 2000 Employee Stock
Purchase Plan of Network Access Solutions Corporation.

     1.  Purpose.  The purpose of the Plan is to provide employees of the
         -------
Company and its Subsidiaries with an opportunity to purchase Common Stock of the
Company through payroll deductions.  It is the intention of the Company that the
Plan qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended.  The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

     2.  Definitions.
         -----------

          (a) "Board" means the Board of Directors of the Company.

          (b) "Company" means Network Access Solutions Corporation, a Delaware
corporation.

          (c) "Code" means the Internal Revenue Code of 1986, as amended.

          (d) "Common Stock" means the Common Stock, $0.001 par value, of the
Company.

          (e) "Compensation," unless otherwise determined by the Board, means
total cash compensation from employment reportable on Form W-2 including,
without limitation, regular straight-time gross earnings, overtime pay, shift
premium, incentive compensation, bonuses, commissions and automobile allowances.

          (f) "Employee" means any person, including an officer, who is
customarily employed for more than 20 hours per week and five months or more per
calendar year by the Company or its subsidiaries.  For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the person
is on military leave, sick leave or other leave of absence approved by the
Company; provided that where the period of leave exceeds 90 days and the
person's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
91st day of such leave.

          (g) "Exercise Date" means the last business day of an Offering Period
of the Plan.

          (h) "Offering Date" means the first business day of an Offering Period
of the Plan.

          (i) "Offering Period" means the period of time beginning with the
Offering Date and ending with the Exercise Date.

                                      -1-
<PAGE>

          (j) "Plan" means this Network Access Solutions Corporation 2000
Employee Stock Purchase Plan.

          (k) "Subsidiary," for purposes of this Plan, means those subsidiaries
of the Company which have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Plan (in general, a subsidiary
(as described in Section 424 of the Code) is any corporation in which the
Company owns, directly or indirectly, 50% or more of the voting shares).

     3.  Eligibility.
         -----------

          (a) General Rule.  Any person who is an Employee, as defined in
              ------------
Section 2, as of either Offering Date during a Plan year shall be eligible to
participate in the Plan (subject to the limitations imposed by Section 5 herein
and Section 423(b) of the Code).

          (b) Exceptions.  Any provisions of the Plan to the contrary
              ----------
notwithstanding, no Employee shall be granted an option under the Plan if:

                (i) immediately after the grant such Employee (or any other
person whose stock ownership would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own shares and/or hold outstanding options to
purchase shares possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of any Subsidiary; or

                (ii) such option would permit the Employee's rights to purchase
stock under all employee stock purchase plans (within the meaning of Section 423
of the Code and any successor provision) of the Company and its Subsidiaries to
accrue (i.e., become exercisable) at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.

     4.  Offerings.  The Plan shall be implemented by two offerings (each an
         ---------
Offering Period) during each calendar 12-month period during the term of the
Plan.  Each offering shall be of 12 months' duration.  Offering I shall commence
on January 1 and end on December 31 of each year of the Plan; Offering II shall
commence on July 1 and end on June 30 of the following year of the Plan.
Participation in one offering under the Plan shall neither limit nor require
participation in any other offering; provided, however, that an eligible
Employee may only participate in one Offering Period at a time.

     5.  Participation.  An eligible Employee may become a participant in an
         -------------
offering under the Plan by completing and signing a subscription agreement
authorizing payroll deductions on a form provided by the Company (the
"Subscription Agreement") and by filing it with the Company's payroll office not
less than 15 days prior to the first Offering Date with respect to which it is
to be effective, unless a later time for filing the Subscription Agreement has
been set by the Company with respect to a given offering.  An Employee's
authorization and participation in the Plan shall become effective on the first
Offering Date following the timely filing of his or her Subscription Agreement
and shall remain effective until revoked by the participant by the filing of a
Notice Of Cancellation Of Option And Withdrawal from the Plan as described in
Section 10(a) or until changed by the filing of a Payroll Deduction
Authorization Change or Withdrawal form providing for a change in the
participant's payroll deduction rate.  An Employee who becomes eligible to
participate in the Plan after the commencement of an Offering Period may not
become a participant in the Plan until the commencement of the next Offering
Period, two of which shall occur each calendar year.

                                      -2-
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     6.  Payroll Deductions.
         ------------------

          (a) At the time a participant files his or her Subscription Agreement,
he or she shall elect to have payroll deductions made on each payday (and on
each such other day upon which any form of Compensation is paid to the
participant (e.g., a separate bonus payment)) during the next Offering Period at
a percentage rate equal to a whole number and not exceeding $10,000, or such
other maximum rate as may be determined from time to time by the Board subject
to the provisions of Section 19, of the Compensation which he or she receives
during the Offering Period.

          (b) Payroll deductions for a participant shall commence on the first
payday following the date when a participant's payroll deduction authorization
becomes effective and shall automatically continue from Offering Period to
Offering Period until terminated by the participant in accordance with the terms
hereof.

          (c) All payroll deductions authorized by a participant shall be
credited to the participant's individual account under the Plan.  A participant
may not make any additional payments into such account.

          (d) A participant may terminate his or her participation in the Plan
as provided in Section 10 at any time prior to the Exercise Date, but may not
change the rate of his or her payroll deductions with respect to an Offering
Period during such Offering Period.

          (e) By enrolling in the Plan, each participant will be deemed to have
authorized the establishment of a brokerage account in his or her name at a
securities brokerage firm or other financial institution, if approved by the
Committee in its discretion.

          (f) Each participant agrees, by entering the Plan, to promptly give
the Company notice of any disposition of shares purchased under the Plan where
such disposition occurs within two years after the Exercise Date pursuant to
which such shares were purchased.

     7.  Grant of Option.
         ---------------

          (a) Subject to the limitations set forth in Sections 3(b) and 12, on
each Offering Date with respect to which a participant's payroll deduction
authorization is effective, each participant in the Plan shall automatically be
granted an option to purchase (at the option price as provided in Section 7(b))
up to the number of whole shares of the Common Stock arrived at by dividing (x)
such participant's payroll deductions accumulated prior to the Exercise Date and
retained in the participant's account as of the Exercise Date by (y) the option
price per share set forth in Section 7(b).

          (b) The option price per share of the shares to be sold during each
offering shall be the lower of:  (i) 85% of the fair market value of a share of
the Common Stock on the Offering Date; or (ii) 85% of the fair market value of a
share of the Common Stock on the Exercise Date.  The fair market value of a
share of the Common Stock shall be determined as provided in Section 7(c).

          (c) The fair market value of a share of the Common Stock shall equal
the closing price per share of the Common Stock on The Nasdaq Stock Market, as
reported in The Wall Street Journal.  In the event that there has been no
            -----------------------
trading in the Common Stock on any Offering Date or Exercise Date, then the fair

                                      -3-
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market value of a share of the Common Stock shall equal the closing price in
effect for the immediately previous day upon which the Common Stock has been
traded.

     8.  Exercise of Option.  Unless a participant cancels his or her option and
         ------------------
withdraws from the Plan as provided in Section 10, his or her option for the
purchase of shares shall be exercised automatically as of the Exercise Date of
the Offering Period, and the accumulated payroll deductions credited to a
participant's account on the Exercise Date will be applied to purchase whole
shares of the Common Stock at the applicable option price.  Any amount credited
to a participant's account and not applied to the purchase of Common Stock by
reason of the limitation on the number of shares subject to option shall be
refunded promptly to such participant after the Exercise Date, provided that any
amount remaining in a participant's account and representing a fractional share
shall be carried over and applied to the purchase of shares in the subsequent
Offering Period if the participant participates in the subsequent offering.
During his or her lifetime, a participant's option to purchase shares hereunder
is exercisable only by such participant.

     9.  Delivery.  As promptly as practicable after the end of each Offering
         --------
Period, the Company shall arrange the delivery to each participant, as
appropriate, either of a certificate or via direct deposit into a book entry
account or brokerage account representing the shares purchased upon exercise of
his or her option.

     10.  Withdrawal; Termination of Employment.
          -------------------------------------

          (a) A participant may terminate his or her participation in the Plan
and withdraw all, but not less than all, of the payroll deductions credited to
his or her account under the Plan at any time prior to an Exercise Date by
giving written notice of withdrawal to the Company on a Payroll Deduction
Authorization Change or Withdrawal form provided for such purpose.  All of the
participant's payroll deductions credited to his or her account shall be paid to
him or her promptly after receipt of his or her notice of withdrawal, and his or
her option for the current period shall be automatically cancelled, and no
further payroll deductions for the purchase of shares shall be made except
pursuant to a new Subscription Agreement filed in accordance with Section 5.

          (b) Upon termination of a participant's employment for any reason,
including retirement or death, as soon as practicable after such termination,
the payroll deductions credited to his or her account for any incomplete
Offering Period shall be returned to him or her or, in the case of his or her
death, to the person or persons entitled thereto under Section 14, and his or
her option in such incomplete Offering Period shall be automatically cancelled.

          (c) Except as otherwise provided herein, in the event an Employee
fails to remain in the continuous employ of the Company or its Subsidiaries for
more than 20 hours per week during the Offering Period in which the Employee is
a participant, he or she will be deemed to have elected to withdraw from the
Plan and the payroll deductions credited to his or her account for any
incomplete Offering Period will be returned to him or her and his or her option
in such incomplete Offering Period will be cancelled.

          (d) A participant's withdrawal from an offering shall not have any
effect upon his or her eligibility to participate in a subsequent offering or in
any similar plan which may hereafter be adopted by the Company in which such
participant otherwise qualifies for eligibility.

     11.  Interest.  No interest shall accrue for benefit of a participant on
          --------
the payroll deductions of a participant in the Plan.

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     12.  Stock.
          -----

          (a) The maximum number of shares of the Common Stock which shall be
made available for sale under the Plan shall be Five Hundred Thousand (500,000)
shares, subject to adjustment upon changes in capitalization of the Company as
provided in Section 18.  The shares to be sold to participants in the Plan will
be authorized but unissued shares, or treasury shares if available and at the
discretion of the Committee.  If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) at the Offering
Date exceeds the number of shares then available under the Plan (after deduction
of all shares for which options have been exercised or are then outstanding),
the Company shall make a pro rata allocation of the shares remaining available
for option grant in as uniform and equitable a manner as is practicable.  In
such event, the Company shall give written notice of such reduction of the
number of shares subject to the option to each participant affected thereby and
shall reduce the rate of payroll deductions, if necessary.

          (b) A participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

          (c) Shares to be delivered to a participant under the Plan shall, as
specified in the participant's Subscription Agreement, be registered in the name
of the participant, or in the name of the participant and his or her spouse, or
in the "street name" of a Company approved broker for benefit of a participant's
account.

     13.  Administration.  The Plan shall be administered by the Board or a
          --------------
committee of members of the Board appointed by the Board, as necessary to comply
with Rule 16b-3 under the Securities Exchange Act of 1934.  The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan; provided, however, that to
the extent necessary to comply with Rule 16b-3 no discretion concerning
decisions regarding the Plan shall be afforded to a person who is not a
"disinterested person" as that term is defined and interpreted under Rule 16b-3.
Every finding, decision and determination made by the Board or its committee
shall, to the full extent permitted by law, be final and binding upon all
parties.

     14.  Designation of Beneficiary.
          --------------------------

          (a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the Exercise
Date of an Offering Period but prior to delivery to him or her of such shares
and cash.  In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to the Exercise Date of an
Offering Period.

          (b) Such designation of beneficiary may be changed by the participant
at any time by written notice.  In the event of the death of a participant and
in the absence of a valid designation of a beneficiary who is living at the time
of such participant's death, the Company shall deliver such shares and/or cash
to the executor or administrator of the estate of the participant; or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant; or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

                                      -5-
<PAGE>

     15.  Transferability.  Neither payroll deductions credited to a
          ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, pursuant to a qualified domestic relations order as defined by the
Code, or as provided in Section 14) by the participant.  Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.

     16.  Use of Funds.  All payroll deductions received or held by the Company
          ------------
on behalf of a participant under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.

     17.  Reports.  Individual accounts will be maintained for each participant
          -------
in the Plan.  Individual statements of account will be given to participating
Employees as promptly as practicable following the Exercise Date of an Offering
Period, which statements shall set forth the amounts of payroll deductions, the
per share option price, the number of shares purchased and the remaining cash
balance, if any, in a participant's account.

     18.  Adjustments Upon Changes in Capitalization.
          ------------------------------------------

          (a) Subject to any required action by the stockholders of the Company,
the number of shares of Common Stock covered by each option under the Plan which
has not yet been exercised and the number of shares of Common Stock which have
been authorized for issuance under the Plan but have not yet been placed under
option or which has been returned to the Plan upon the cancellation of an
option, as well as the option price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, stock dividend, spin-off, reorganization,
recapitalization, merger, consolidation, exchange of shares or the like.  Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive.  Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to option.

          (b) In the event of the proposed dissolution or liquidation of the
Company, or in the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger or consolidation of the Company with or
into another corporation, the Board shall (i) make provision for the assumption
of all outstanding options by the successor corporation or (ii) declare that any
option shall terminate as of a date fixed by the Board which is at least 30 days
after the notice thereof and unless a participant terminates his or her
participation in the Plan prior to such date, his or her option for the purchase
of shares will be exercised automatically on such date and the accumulated
payroll deductions credited to a participant's account on such date will be
applied to purchase whole shares of the Common Stock (up to the maximum number
subject to option as determined in accordance with Section 7(a)) at the
applicable option price.

          (c) No fractional shares of Common Stock shall be issuable on account
of any adjustment described herein, and the aggregate number of shares into
which shares then covered by an option, when changed as the result of such
adjustment, shall be reduced to the largest number of whole shares resulting
from such adjustment, unless the Board, in its sole discretion, shall determine
to issue scrip certificates in respect

                                      -6-
<PAGE>

to any fractional shares, which scrip certificates, in such event, shall be in a
form and have such terms and conditions as the Board in its discretion shall
prescribe.

     19.  Amendment or Termination.  The Board may at any time terminate or
          ------------------------
amend the Plan in such respects as the Board may deem advisable. No such
termination will affect options previously granted, nor may an amendment make
any change in any option theretofore granted which adversely affects the rights
of any participant without the prior written consent of such participant, nor
may an amendment be made without prior approval of the stockholders of the
Company if such amendment would:

          (a) Increase the number of shares that may be issued under the Plan;

          (b) Materially modify the requirements as to eligibility for
participation in the Plan; or

          (c) Materially increase the benefits which accrue to participants
under the Plan.

     20.  Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board or its approval by vote of a majority of the
outstanding shares of the Company entitled to vote on the adoption of the Plan.
The Plan shall continue in effect for a term of ten years unless sooner
terminated under Sections 19 or 22.

     21.  Notices.  All notices or other communications by a participant to the
          -------
Company in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.

     22.  Stockholder Approval.  Notwithstanding anything to the contrary
          --------------------
herein, the continuance of the Plan and the effectiveness of any option granted
hereunder shall be subject to approval by the affirmative vote of the holders of
a majority of the outstanding shares of stock of the Company present or
represented and entitled to vote thereon at a meeting within 12 months before or
after the date the Plan is adopted by the Board.  No options granted before such
stockholder approval has been obtained shall be exercisable unless such
stockholder approval is obtained.  If the Plan is not approved by the
stockholders of the Company within the above-referenced 12-month period, the
Plan and any options granted thereunder shall terminate and all payroll
deductions credited to a participant's account shall be promptly returned to him
or her.

     23.  No Enlargement of Employee Rights.  The Plan is purely voluntary on
          ---------------------------------
the part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee.  Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its parent, subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time.  No
Employee shall have any right to or interest in options authorized hereunder
prior to the grant of an option to such Employee, and upon such grant he or she
shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Certificate of
Incorporation, as the same may be amended from time to time.

     24.  Information to Participants.  The Company shall make available without
          ---------------------------
charge to each participant in the Plan copies of such annual and periodic
reports as are provided by the Company to its stockholders generally.

                                      -7-
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     25.  Governing Law.  To the extent that Federal laws do not otherwise
          -------------
control, the Plan and all determinations made or actions taken pursuant hereto
shall be governed by the laws of the state of Delaware, without regard to the
conflicts of laws rules thereof, and construed accordingly.

     26.  Tax Withholding.  If, at any time, the Company or any Subsidiary is
          ---------------
required, under applicable laws and regulations, to withhold, or to make any
deduction of, any taxes or take any other action in connection with any exercise
of an option made hereunder or transfer of shares of Common Stock, the Company
or such Subsidiary shall have the right to deduct from all amounts paid in cash
any taxes required by law to be withheld therefrom, and in the case of shares of
Common Stock, the participant or his or her estate or beneficiary shall be
required to pay the Company or such Subsidiary the amount of taxes required to
be withheld, or, in lieu thereof, the Company or such Subsidiary shall have the
right to retain, or sell without notice, a sufficient number of shares of Common
Stock to cover the amount required to be withheld, or to make other arrangements
with respect to withholding as it shall deem appropriate.

     27.  Securities Law Compliance.  No shares of Common Stock may be issued
          -------------------------
upon the exercise of any option under the Plan until all requirements of
applicable Federal, state, foreign or other securities laws, with respect to the
purchase, sale and issuance of shares of Common Stock shall have been satisfied.
If any action must be taken because of such requirements, then the purchase,
sale and issuance of shares shall be postponed until such action can reasonably
be taken.  Upon demand by the Company, an Employee shall deliver to the Company
a representation in writing that the purchase of shares pursuant to the exercise
of an option hereunder is being made for investment only and not for resale or
with a view to distribution, or such other information, representations or
undertakings as the Company may reasonably require in order to comply with any
registration requirements of, or exemptions from, applicable securities laws.
The Company may require any securities so issued to bear a legend, may give its
transfer agent instructions, and may take such other steps as in its judgment
are reasonably required to prevent any such violation of applicable securities
laws.

                                      -8-<PAGE>

                                                                   EXHIBIT 10.19

                           BUILDING LEASE AGREEMENT

                                By and Between

                      FIRST STATE REALTY OF AMERICA, INC.

                                  as Landlord

                                      and

                      INTERTRUST TECHNOLOGIES CORPORATION

                                   as Tenant

                            Dated: January 24, 2000
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                              Page
<S>                                                           <C>
ARTICLE 1 PREMISES..........................................  1
     Section 1.1............................................  1
     Section 1.2............................................  1
ARTICLE 2 TERM; EXTENSIONS..................................  1
     Section 2.1............................................  1
     Section 2.2............................................  1
     Section 2.3............................................  2
     Section 2.4............................................  3
     Section 2.5............................................  3
ARTICLE 3 DEFINITIONS.......................................  4
     Section 3.1 Definitions................................  4
          Additional Rent...................................  4
          Alterations.......................................  4
          Annual Base Rent..................................  4
          Building..........................................  4
          CC&R's............................................  4
          Commencement Date.................................  4
          Effective Date....................................  4
          Environmental Requirements........................  4
          Event of Default..................................  4
          Expiration Date...................................  5
          Extension Term....................................  5
          Extension Term Commencement Date..................  5
          Hazardous Materials...............................  5
          HVAC..............................................  5
          Landlord..........................................  5
          Lease Term........................................  5
          Permitted Use.....................................  5
          Premises..........................................  5
          Real Property Taxes...............................  6
          Rent..............................................  6
          Security Deposit..................................  6
          Tenant............................................  6
          Tenant Affiliate..................................  6
          Tenant's Personal Property........................  6
ARTICLE 4 RENT..............................................  6
     Section 4.1............................................  6
     Section 4.2............................................  7
     Section 4.3............................................  7
     Section 4.4............................................  7
     Section 4.5............................................  7
     Section 4.6............................................  7
ARTICLE 5 POSSESSION, LEASEHOLD IMPROVEMENTS................  8
</TABLE>

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
<TABLE>
<CAPTION>
                                                              Page
<S>                                                           <C>
     Section 5.1............................................   8
     Section 5.2............................................   8
ARTICLE 6 USE OF PREMISES; LIMITATIONS OF USE...............   8
     Section 6.1............................................   8
     Section 6.2............................................   9
     Section 6.3............................................   9
     Section 6.4............................................   9
     Section 6.5............................................   9
ARTICLE 7 TAXES.............................................  10
     Section 7.1............................................  10
     Section 7.2............................................  10
     Section 7.3............................................  10
     Section 7.4............................................  10
ARTICLE 8 INSURANCE.........................................  11
     Section 8.1............................................  11
     Section 8.2............................................  12
     Section 8.3............................................  12
     Section 8.4............................................  12
     Section 8.5............................................  12
     Section 8.6............................................  12
     Section 8.7............................................  13
ARTICLE 9 INDEMNIFICATION...................................  13
     Section 9.1............................................  13
     Section 9.2............................................  14
ARTICLE 10 UTILITIES AND SERVICE............................  14
     Section 10.1...........................................  14
ARTICLE 11 CONSTRUCTION IMPROVEMENTS........................  14
     Section 11.1...........................................  14
     Section 11.2...........................................  15
ARTICLE 12 REPAIRS AND MAINTENANCE..........................  16
     Section 12.1...........................................  16
     Section 12.2...........................................  16
     Section 12.3...........................................  16
     Section 12.4...........................................  17
ARTICLE 13 DESTRUCTION - FIRE OR OTHER CAUSES...............  17
     Section 13.1...........................................  17
     Section 13.2...........................................  17
     Section 13.3...........................................  18
ARTICLE 14 CONDEMNATION.....................................  18
     Section 14.1...........................................  18
     Section 14.2...........................................  18
     Section 14.3...........................................  18
     Section 14.4...........................................  18
</TABLE>

                                      -ii-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
<TABLE>
<CAPTION>
                                                              Page
<S>                                                           <C>
     Section 14.5...........................................  18
     Section 14.6...........................................  19
     Section 14.7...........................................  19
     Section 14.8...........................................  19
ARTICLE 15 SIGNS AND ADVERTISING............................  19
ARTICLE 16 ENTRY BY LANDLORD................................  20
     Section 16.1...........................................  20
     Section 16.2...........................................  20
     Section 16.3...........................................  20
ARTICLE 17 ASSIGNMENT AND SUBLETTING........................  21
     Section 17.1...........................................  21
     Section 17.2...........................................  21
     Section 17.3...........................................  22
     Section 17.4...........................................  22
     Section 17.5...........................................  22
     Section 17.6...........................................  22
     Section 17.7...........................................  23
     Section 17.8...........................................  23
ARTICLE 18 SUBORDINATION....................................  24
     Section 18.1...........................................  24
     Section 18.2...........................................  24
ARTICLE 19 DEFAULT..........................................  24
     Section 19.1...........................................  24
     Section 19.2...........................................  25
     Section 19.3...........................................  26
     Section 19.4...........................................  26
     Section 19.5...........................................  27
     Section 19.6...........................................  28
     Section 19.7...........................................  28
     Section 19.8...........................................  28
ARTICLE 20 NOTICES..........................................  29
ARTICLE 21 BROKER'S COMMISSIONS.............................  30
ARTICLE 22 MECHANIC'S AND OTHER LIENS.......................  30
     Section 22.1...........................................  30
     Section 22.2...........................................  30
ARTICLE 23 NO RENT ABATEMENT AND QUIET ENJOYMENT............  31
     Section 23.1...........................................  31
     Section 23.2...........................................  31
ARTICLE 24 END OF TERM......................................  31
     Section 24.1...........................................  31
     Section 24.2...........................................  31
     Section 24.3...........................................  32
     Section 24.4...........................................  32
</TABLE>

                                     -iii-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
<TABLE>
<CAPTION>
                                                              Page
<S>                                                           <C>

ARTICLE 25 ESTOPPEL CERTIFICATE.............................  32
     Section 25.1...........................................  32
ARTICLE 26 HAZARDOUS SUBSTANCES.............................  32
     Section 26.1...........................................  32
     Section 26.2...........................................  32
     Section 26.3...........................................  33
     Section 26.4...........................................  33
     Section 26.5...........................................  33
ARTICLE 27 PARKING ENTITLEMENTS.............................  33
     Section 27.1...........................................  33
ARTICLE 28 MISCELLANEOUS....................................  34
     Section 28.1...........................................  34
     Section 28.2...........................................  34
     Section 28.3...........................................  34
     Section 28.4...........................................  34
     Section 28.5...........................................  34
     Section 28.6...........................................  34
     Section 28.7...........................................  34
     Section 28.8...........................................  34
     Section 28.9...........................................  34
     Section 28.10..........................................  34
     Section 28.11..........................................  35
     Section 28.12..........................................  35
</TABLE>

                                      -iv-
<PAGE>

     This BUILDING LEASE AGREEMENT (hereinafter the "Lease") dated for reference
purposes as of the 24th day of January, 2000 ("Effective Date"), is made by and
between FIRST STATE REALTY OF AMERICA, INC., a Delaware corporation, and
INTERTRUST TECHNOLOGIES CORPORATION, a Delaware corporation.

                                   ARTICLE 1

                                    PREMISES

     Section 1.1  Landlord hereby leases to Tenant and Tenant hereby leases from
     -----------
Landlord, for the term and subject to the covenants, agreements and conditions
hereinafter set forth, those certain premises located at 4800 Patrick Henry
Drive, Santa Clara, California (the "Premises") as more particularly described
on EXHIBIT A attached hereto and by this reference incorporated herein, and the
improvements thereon (the "Building") including the exclusive right to use all
parking on the Premises, as such parking may be reconfigured by Tenant from time
to time in accordance with all applicable laws and prior written approval by
Landlord, subject to the estates, interests, liens, charges, encumbrances and
matters set forth in EXHIBIT B annexed hereto and made a part hereof.

     Section 1.2  The "Rentable Area" of the Building is agreed to be fifty-
     -----------
eight thousand three hundred twenty (58,320) square feet. The area of the
Premises leased to Tenant hereunder is agreed to be fifty-eight thousand three
hundred twenty (58,320) square feet.

                                   ARTICLE 2
                                TERM; EXTENSIONS

     Section 2.1  The term of this Lease (the "Lease Term") shall commence on
     -----------
March 9, 2000 (the "Commencement Date") and terminate on August 31, 2004 (the
"Expiration Date"), subject to earlier termination or Tenant's right to extend
the Lease Term under the terms of this Lease. Landlord shall tender possession
of the Premises to Tenant on or before the Commencement Date, provided that the
Commencement Date shall be extended for no more than 60 days for any and all
delays resulting from causes beyond the reasonable control of Landlord. If
Landlord fails to deliver possession by such date other than due to delays
beyond the reasonable control of Landlord, Tenant, as its sole remedy and in
lieu of all other remedies provided herein or by law, may, at its election,
terminate this Lease by serving on Landlord at any time after the Commencement
Date a written Notice of Termination.

     Section 2.2  Landlord hereby grants to Tenant the option to extend the
     -----------
Lease Term for a term of five (5) years at fair market net rent, determined in
accordance with Section 2.3 below (the "Extension Term"), upon and subject to
the following terms and conditions:

          (a) The Extension Term shall commence on the day next succeeding the
Expiration Date of the initial Lease Term.

          (b) Tenant shall exercise such option as to the Extension Term by
giving written notice of exercise of the option (the "Option Notice") to
Landlord at least one hundred eighty (180) days but no more than two hundred
seventy (270) days before the first day of such
<PAGE>

Extension Term, time being of the essence. Landlord and Tenant shall have a 30
day period after Landlord receives the Option Notice in which to agree on Annual
Base Rent during the Extension Term, which shall include, without limitation, a
rent escalation for each year of the Extension Term if market lease rates at
that time assume annual rent escalations. If the parties are unable to agree on
the Annual Base Rent for the Extension Term within such 30-day period, the
Annual Base Rent for the Extension Term shall be the fair market net rent (as
defined in Section 2.3 below) for the Premises, which shall be conclusively
determined in the manner set forth in Section 2.3 below.

          (c) When exercising such right and on the Expiration Date of the
initial Lease Term, Tenant shall not be in default, beyond any applicable grace
period, in the performance of any of its obligations under this Lease, or
Tenant's exercise of its option shall be deemed ineffective, and this Lease
shall terminate on the Expiration Date without notice.

          (d) If Tenant elects to exercise its option to extend the Lease Term,
all the provisions of this Lease shall be applicable during each Extension Term
except that:

              (i)  Tenant shall have no further right to extend this Lease
beyond the Extension Term;

              (ii) Effective as of the commencement of the Extension Term
("Extension Term Commencement Date"), the Annual Base Rent in effect shall be
increased as set forth in this Section 2.2 and Section 2.3 below.

     As used hereinafter, the term "Lease Term" shall mean the initial Lease
Term, plus the Extension Term as to which Tenant gives a timely Option Notice
and all references to the Expiration Date shall mean the final day of the Lease
Term as so extended.

     Section 2.3
     -----------

          (a) For purposes of this Lease, "fair market net rent" shall be deemed
to mean the base amount of rental which would typically be paid by a tenant
under a net lease (exclusive of all other sums payable by the tenant under a net
lease such as taxes, insurance premiums, common area maintenance charges, repair
and restoration costs, and similar charges) for premises of a similar type,
design and quality in the same or similar quality geographic area in which the
Premises are situated trader market leasing conditions existing at that time and
including, without limitation, a rent escalation for each year of the Extension
Term if market lease rates at that time assume annual rent escalations.

          (b) Within 10 days after the expiration of the 30-day period described
in Section 2.2 above, each party at its cost and by giving notice to the other
party, shall appoint a real estate appraiser with at least five years full-time
commercial appraisal experience in the geographical area in which the Premises
are located, to appraise and set the then fair market net rent for the Extension
Term. If a party does not appoint an appraiser within 10 days after the other
party has given notice of the name of its appraiser, the single appraiser
appointed shall be the sole appraiser and shall set the fair market net rent for
the Extension Term.

                                      -2-
<PAGE>

          (c) If the two appraisers are appointed by the parties as stated in
this Section 2.3, they shall meet promptly and attempt to appraise and set the
then fair market net rent for the Extension Term. If they are unable to agree
within 30 days after the second appraiser has been appointed, they shall attempt
to select a third appraiser, meeting the qualifications stated in this Section
2.3, within 10 days after the last day the two appraisers are given to set the
Annual Base Rent. If they are unable to agree on a third appraiser, either of
the parties to this Lease, by giving 10 days written notice to the other party,
may apply to the presiding judge of the Superior Court for Santa Clara County
for the selection of a third appraiser who meets the qualifications stated in
this Section 2.3. Each of the parties shall bear one-half of the cost of
appointing the third appraiser, and of paying the third appraiser's fees. The
third appraiser, however selected, shall be a person who has not previously
acted in any capacity for either party.

          (d) Within 30 days after the selection of the third appraiser, a
majority of the appraisers shall appraise and set the fair market net rent for
the Extension Term. If a majority of the appraisers are unable to so set the
fair market net rent within the stipulated period of time, the three appraisals
of same shall be added together and their total divided by three. The resulting
quotient shall be the fair market net rent for the Extension Term.

          (e) If, however, the low appraisal and/or the high appraisal are more
than 10% lower or higher than the middle appraisal, the low appraisal and/or the
high appraisal shall he disregarded. If only one appraisal is disregarded, the
remaining two appraisals shall be added together and their total divided by two.
The resulting quotient shall be the fair market net rent for the Premises during
the Extension Terns.

          (f) If the foregoing appraisal process continues through the Extension
Term Commencement Date, Tenant shall continue to pay Annual Base Rent at the
rate payable for the last year of the initial term of this Lease. Within 10 days
after completion of the appraisal process, Tenant shall pay to Landlord the
difference between the adjusted Annual Base Rent and the Annual Base Rent
previously paid by Tenant (pursuant to the previous sentence) after the
Extension Term Commencement Date.

     Section 2.4  Any holding over by Tenant of all or any part of the Premises
     -----------
after the expiration of the Lease Term shall be construed as a tenancy From
month-to-month, upon all of the other terms and conditions as set forth in this
Lease, except that Tenant shall pay as Annual Base Rent for the holdover period
an amount equal to one hundred fifty percent (150%) of the last Annual Base Rent
payable hereunder on a per diem basis plus all Additional Rent payable
hereunder. Landlord may terminate such month-to-month tenancy upon 30 days
written notice to the Tenant.

     Section 2.5  Upon written notice from Tenant of its need for early
     -----------
possession, Landlord will use reasonable efforts, at no cost or expense to
Landlord, to negotiate and execute a written early lease termination agreement
between Landlord and the current tenant so that Landlord will be able to deliver
possession of the Premises to Tenant prior to the Commencement Date, subject to
all of the terms and conditions of this Lease other than the obligation to pay
Rent, which obligation shall not commence until March 23, 2000.

                                      -3-
<PAGE>

                                   ARTICLE 3

                                  DEFINITIONS

     Section 3.1  Definitions.  The following terms shall have the following
     ------------------------
meanings in this Lease:

          "Additional Rent" shall mean all payments other than Annual Base Rent
required to be made by Tenant pursuant to this Lease, including without
limitation real estate taxes and insurance, as more particularly describe in
Section 4.5 below.

          "Alterations" shall mean any alterations, additions, replacements,
rebuilding, changes or improvements made in, on or about the Building or the
Premises alter the Commencement Date or earlier occupancy pursuant to Section
2.5, including, but not limited to, lighting, HVAC, electrical, partitioning,
fixtures, drapery and carpentry installations.

          "Annual Base Rent" shall have the meaning ascribed to such term in
Section 4.1 hereof.

          "Building" shall have the meaning ascribed to such term in Section 1.1
hereof.

          "CC&R's" shall mean those certain covenants, conditions and
restrictions applicable to the Premises included in EXHIBIT B.

          "Commencement Date" shall have the meaning ascribed to such term in
Section 2.1 hereof.

          "Effective Date" shall have the meaning ascribed to such term in the
first paragraph on page one.

          "Environmental Requirements" shall mean all present and future laws,
statutes, ordinances, rules, regulations, orders, codes, licenses, permits,
decrees, judgments, directives or the equivalent of or by the federal government
or any state or other political subdivision thereof having jurisdiction over the
Premises, or any agency, court, or body of the Federal Government, any State or
other political subdivision thereof having jurisdiction over the Premises,
exercising executive, legislative, judicial, regulatory or administrative
functions and relating to or addressing the protection of the environment or
human health, including, without limitation, the U.S. Environmental Protection
Agency, the Consumer Product Safety Commission, the Food and Drug
Administration, the California Water Resources Control Board, the Regional Water
Quality Control Board, San Francisco Bay Region, the California Air Resources
Board, CAL/OSHA Standards Board, Division of Occupational Safety and Health, the
California Department of Food and Agriculture, the California Department of
Health Services, and any federal agencies that have overlapping jurisdiction
with such California agencies.

          "Event of Default" shall have the meaning ascribed to such term in
Section 19.1 hereof.

                                      -4-
<PAGE>

          "Expiration Date" shall have the meaning ascribed to such term in
Section 2.1 hereof.

          "Extension Term" shall have the meaning ascribed to such term in
Section 2.2 hereof.

          "Extension Term Commencement Date" shall have the meaning ascribed to
such term in Section 2.2(d) hereof.

          "Hazardous Materials" shall mean any material substance that, whether
by its nature or use, is now or hereafter defined as a hazardous waste,
hazardous substance, pollutant or contaminant under any Environmental
Requirement, or which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous or which is now or
hereafter regulated under any Environmental Requirement, including without
limitation under any of the Environmental Protection Agency's lists of hazardous
wastes or which are identified in Sections 66680 through 66685 of Title 22 of
the California Code of Regulations, as the same may be amended from time to time
or which is or contains petroleum, gasoline, diesel fuel or any other petroleum
hydrocarbon product.

          "HVAC" shall mean heating, ventilating and air conditioning.

          "Landlord" as used herein shall mean only the owner for the time being
in fee of the Premises, or the owner of the leasehold estate created by an
underlying lease, or the mortgagee or the beneficiary under a deed of trust of
the fee or of such underlying lease, in possession for the time being of the
Premises, so that in the event of any sale or transfer of the Premises, or of
the making of any such underlying lease, or of any transfer or assignment or
other conveyance of such underlying lease and the leasehold estate thereby
created, the seller, lessor, transferor or assignor shall be and hereby is
entirely freed and relieved of all agreements, covenants and obligations of
Landlord herein and it shall be deemed and construed without further agreement
between the parties or their successors in interest or between the parties and
the purchase, lessee, transferee or assignee on any such sale, leasing, transfer
or assignment that such purchaser, lessee, transferee or assignee has assumed
and agreed to carry out may and all agreements, covenants and obligations of
Landlord hereunder and that such purchaser, lessee, transferee or assignee has
agreed to recognize Tenant's leasehold interest in the Premises; and provided,
however, that notwithstanding any such sale, leasing, transfer or assignment,
Landlord shall not be released from any liability or obligation to Tenant
accruing prior to the date of such sale, leasing, transfer or assignment, nor
shall the transferring Landlord be released from its obligation relating to the
return of the Security Deposit pursuant to Section 4.6 below, unless said
Security Deposit is transferred by Landlord to such purchaser, lessee,
transferee, or assignee.

          "Lease Term" shall have the meaning ascribed to such term in Section
2.1 hereof.

          "Permitted Use" shall have the meaning ascribed to such term in
Section 6.1 hereof.

          "Premises" shall have the meaning ascribed to such term in Section
1.1.

                                      -5-
<PAGE>

          "Real Property Taxes" shall have the meaning ascribed to such term in
Section 7.2.

          "Rent" shall mean Annual Base Rent, as defined in Section 4.1, and
Additional Rent, as defined in Section 3.1.

          "Security Deposit" shall mean the Security Deposit, as defined in
Section 4.6.

          "Tenant" shall mean InterTrust Technologies Corporation, a Delaware
corporation, and from and after any valid assignment, with the prior written
consent of Landlord (if required under this Lease), of the whole of Tenant's
interest in this Lease pursuant to the provisions hereof, shall also mean the
assignee thereof, subject, however, to the provisions of Section 17.3 herein.

          "Tenant Affiliate" shall have the meaning ascribed to such term in
Section 17.1 hereof.

          "Tenant's Personal Property" shall mean Tenant's trade fixtures,
furniture, equipment and other personal property installed or located in the
Premises at any time and from time to time.

                                   ARTICLE 4

                                      RENT

     Section 4.1  Tenant agrees to pay to Landlord as annual rent for the use of
     -----------
the Premises (herein referred to as "Annual Base Rent"), in lawful money of the
United States, the following SUMS:

Year                           Annual Base Rent         Monthly Installment
----                           ----------------         -------------------
March 23, 2000, through          $1,329,696.00              $110,808.00
March 22, 2001
March 23, 2001, through          $1,378,684.80              $114,890.40
March 22, 2002
March 23, 2002, through          $1,434,672.00              $119,556.00
March 22, 2003
March 23, 2003, through          $1,490,659.20              $124,221.60
March 22, 2004
March 23, 2004, through          $  683,102.16              $128,887.20
August 31, 2004                  (Partial Year)

     Commencing on March 23, 2000, monthly installments of Annual Base Rent
shall be due and payable in advance, on the first day of each calendar month
during the Lease Term. Monthly installments of Annual Base Rent for any partial
calendar months during the Lease Term shall be proportionately reduced. The rent
payable from March 23, 2000, through April

                                      -6-
<PAGE>

30, 2000, shall be due and payable upon execution of this Lease, in the amount
of $143,595.00, which shall be made together with an advance payment of
$24,960.78 (for a total payment of $168,555.78), representing Real Property
Taxes (as defined in Article 7 below) for the remainder of the 1999-2000 tax
year. With regard to the adjustment of Annual Base Rent for the period from
March 23 through March 31 of each year commencing 2001, an adjustment payment
("March Adjustment") shall be made together with the monthly payment of Annual
Base Rent for the month of April immediately following. The 2001 March
Adjustment, due and payable April 1, 2001, shall be in fine amount of $1,207.98;
the 2002, 2003, and 2004 March Adjustments, due and payable April 1 of each
respective year, shall be in the amount of $1,380.51 each.

     Section 4.2   All payments of Rent and other charges which are required to
     -----------
be made by Tenant to Landlord hereunder shall be made payable to and sent to
First State Realty of America, Inc. at the address set forth in Article 20
below.

     Section 4.3   It is the purpose and intent of Landlord and Tenant that
     -----------
Annual Base Rent shall be net to Landlord, so that this Lease shall yield, net
to Landlord, the Annual Base Rent specified in Section 4.1 hereof in each year
during the initial Lease Term of this Lease and the Annual Base Rent specified
in Section 2.2 and 2.3 hereof in each year during the Extension Term hereof if
extended and that (except for Landlord's maintenance and repair responsibilities
under Article 12 hereof) all costs, expenses and charges directly relating to
the Premises which may arise or become due during the Lease Term shall be paid
by Tenant, and that Landlord shall be indemnified and saved harmless by Tenant
from and against the same.

     Section 4.4   The Annual Base Rent shall be paid to Landlord without notice
     -----------
or demand and without abatement, deduction or set-off.

     Section 4.5   All taxes, charges, costs and expenses which Tenant assumes
     -----------
or agrees to pay under any provisions of this Lease together with all interest
and penalties that may accrue thereon in the event of Tenant's failure to pay
the same as herein provided, all other damages, costs and expenses which
Landlord may suffer or incur, and any and all other sums which may become due,
by reason of any default of Tenant or failure on Tenant's part to comply with
the agreements, terms, covenants and conditions of this Lease on Tenant's part
to be performed, and each or any of them, shall be deemed to be Additional Rent
and, in the event of non-payment, Landlord shall have all the rights and
remedies herein provided in the case of non-payment, of Annual Base Rent.

     Section 4.6   Upon the execution of this Lease by Tenant, Tenant shall
     -----------
deposit with Landlord, in cash, the sum of One Hundred Twenty-Five Thousand
Dollars ($125,000) as and for a Security Deposit to secure the faithful
performance by Tenant of each term, covenant and condition to be performed or
observed by Tenant under this Lease. If Tenant shall at any time fail to timely
make any payment due or fail to timely perform or observe any term, covenant and
condition on its part to be performed or observed under this Lease, Landlord
may, without waiving or releasing Tenant from any obligation under this Lease,
and without waiving its right to treat such failure as a default hereof, use,
apply, or retain the whole or any part of the Security

                                      -7-
<PAGE>

Deposit reasonably necessary to remedy such failure of Tenant and to compensate
Landlord for damage it suffers thereby. If Landlord uses, applies, or retains
all or any portion of the Security Deposit, Tenant shall, within five (5)
business days of written demand by Landlord, remit to Landlord sufficient funds
to restore said Security Deposit to its original sum. Tenant's failure to do so
shall be a material breach of this Lease. Landlord shall not be a trustee of the
Security Deposit, and may commingle it, use it in ordinary business, transfer or
assign it, or use it in any combination of those ways. Tenant shall not be
entitled to any interest on the Security Deposit. Said Security Deposit shall be
returned to Tenant within 30 days following the expiration or sooner termination
of this Lease and surrender of the Premises by Tenant, to the extent not already
applied by Landlord in the manner described above.

                                   ARTICLE 5

                       POSSESSION, LEASEHOLD IMPROVEMENTS

     Section 5.1   Landlord shall, on or before the Commencement Date, deliver
     -----------
actual possession of the Premises to Tenant with the roof, HVAC system,
electrical system, plumbing, and lighting in good working condition. Landlord
shall keep the roof, HVAC system, electrical system, plumbing and lighting in
good working condition for up to ninety (90) days after the Commencement Date,
except that Tenant shall repair, at its sole cost, any system failure caused by
Tenant's or Tenant's agents', employees' or contractors' negligence, willful
misconduct, or abuse. Landlord shall, no later than five (5) days before the
Commencement Date, have the Premises, including the interior and exterior
windows, professionally cleaned. In addition, Landlord shall use reasonable
efforts to resurface and re-stripe the asphalt portions of the parking areas
located on the Premises no later than thirty (30) days after the Commencement
Date. Except as expressly set forth in this Section 5.1, Tenant accepts the
Premises in their "as is" condition. Tenant acknowledges that it has made full
and complete investigations and inspections of the Premises, and Tenant accepts
the Premises and acknowledges that the Premises are in good order, condition,
and repair.

     Section 5.2   Landlord hereby represents to Tenant that, to the best of
     -----------
Landlord's actual knowledge, Landlord has not received notice of any building
code or governmental agency violation. Except for such representation, Tenant
covenants that no representations, statements or warranties, express or implied,
have been made by or on behalf of Landlord in respect of the condition of the
Premises, or the use or occupation that may be made thereof, and that Landlord
shall in no event whatsoever be liable for, and Tenant waives any claims it may
have against Landlord for, any defects therein. Landlord agrees that Tenant
shall not be liable for any latent defects in the Building foundation, exterior
walls and roof except that Tenant shall be responsible for any and all defects,
latent or patent, in the Building foundation, exterior walls and roof caused by
its contractors in connection with completing any tenant improvements.

                                   ARTICLE 6

                      USE OF PREMISES; LIMITATIONS OF USE

     Section 6.1 Permitted Use.  Tenant shall be permitted to use the Premises
     -------------------------
for software development, storage and distribution, offices, marketing and any
other lawful uses incidental to

                                      -8-
<PAGE>

the foregoing (in each case, a "Permitted Use"), in full compliance with all
applicable laws, ordinances, statutes, rules, and regulations, the certificate
of occupancy for the Premises, and the matters set forth in EXHIBIT B annexed
hereto, and for no other use or uses whatsoever.

     Section 6.2 Compliance with Laws.  Tenant shall comply with all laws,
     --------------------------------
ordinances, statutes, rules, and regulations concerning the Premises or Tenant's
use of the Premises, whether the same are presently in effect or hereinafter
enacted, including, without limitation, compliance with all Environmental
Requirements (except for compliance obligations arising from Hazardous Materials
existing on or under the Premises prior to the Commencement Date), the
obligation at Tenant's cost to alter, maintain, or (subject to the terms and
conditions of Article 13 and Article 14) repair the Premises (except for repair
and maintenance obligations of Landlord hereunder) in compliance and conformity
with all laws relating to the condition, use, or occupancy of the Premises
during the Lease Term.

     Section 6.3 No Unlawful Occupancy.   Tenant shall not use or occupy the
     ---------------------------------
Premises, nor permit or suffer the Premises or any part thereof to be used or
occupied, for any unlawful or illegal business, use or purpose, nor for any
business, use or purpose reasonably deemed by Landlord disreputable or
extrahazardous, nor in such manner as to constitute a nuisance of any kind, nor
for any purpose or in any way in violation of any present or future governmental
laws, ordinances, requirements, orders, directions, rules or regulations
applicable to the Premises. Tenant shall immediately upon the discovery of any
such unlawful, illegal, disreputable or extrahazardous use take all necessary
steps, legal and equitable, to compel the discontinuance of such use and, if
necessary to discontinue such use, to oust and remove any subtenants, occupants,
or other persons guilty of such unlawful, illegal, disreputable or
extrahazardous use.

     Section 6.4 Waste; Nuisance.
     ---------------------------

          (a) Tenant shall not use the Premises in any manner that will
constitute waste, nuisance, or unreasonable annoyance (including, but without
limitation, the use of loudspeakers or sound or light apparatus that can be
heard or seen outside the Premises in violation of the CC&Rs or applicable legal
requirements) to owners or occupants of adjacent properties.

          (b) Tenant shall not use the Premises for sleeping, washing clothes,
or the preparation, manufacture, or mixing of anything that might emit any odor
or objectionable noises or lights onto adjacent properties.

          (c) No secondhand store, auction, distress or fire sale, or bankruptcy
or going-out-of-business sale may be conducted on the Premises without
Landlord's prior written consent. Tenant shall not sell or display merchandise
outside the confines of the Building.

     Section 6.5 Overloading. Tenant shall not do anything on the Premises that
     -----------------------
will cause damage to the Premises. No machinery, apparatus, or other appliance
shall be used or operated in or on the Premises that will in any manner damage
the Premises.

                                      -9-
<PAGE>

                                   ARTICLE 7

                                     TAXES

     Section 7.1    Tenant shall pay before delinquency all taxes or assessments
     -----------
that become payable during the Lease Term which are levied or assessed upon
Tenant's Personal Property.

     Section 7.2    Tenant shall be responsible to pay, reimburse and indemnify
     -----------
Landlord for all taxes, assessments, water rents, rates and charges, sewer
rents, transit taxes, excises, levies and other governmental impositions and
charges of every kind and nature whatsoever, extraordinary as well as ordinary,
foreseen or unforeseen, and each and every installment thereof which shall or
may during the Lease Term be charged, laid, levied, assessed, imposed, become
due and payable, or liens upon, or arise in connection with the use, occupancy
or possession of, or grow due or payable out of, or for, the Premises or any
part thereof, or any buildings, appurtenances or equipment thereon or therein or
any part thereof, the rent, income or other payments received from subtenants by
Tenant or anyone claiming by, through or under Tenant, any tax attributable to
the execution, delivery, or recording of this Lease or any modification thereof,
and all taxes charged, laid, levied, assessed or imposed in lieu of or in
addition to the foregoing under or by virtue of all present or future laws,
ordinances, requirements, orders, directions, rules or regulations of the
federal, state, county and municipal governments and of all other governmental
authorities whatsoever, and all fees and charges of public and governmental
authorities for construction, maintenance, occupation or use during the term of
any vault, passageway or space in, over or under any sidewalk or street on or
adjacent to the Premises, or for construction, maintenance or use during the
term of any part of any building covered hereby within the limits of any street
(all of the foregoing being collectively referred to herein as "Real Property
Taxes"). Real Property Taxes shall not, however, include any penalties,
interest, or other charges imposed or incurred by reason of Landlord's failure
to pay any Real Property Taxes as the same shall become due (unless such failure
by Landlord is due to Tenant's failure to timely pay Real Property Taxes).
Tenant shall pay before their due date, any and all of the Real Property Taxes
to Landlord within the later of ten (10) days after receipt from Landlord of a
tax bill or other evidence that the Real Property Taxes are due and payable, or
twenty (20) days before the Real Property Taxes are delinquent.

     Section 7.3    All such Real Property Taxes which shall be charged, laid,
     -----------
levied, assessed or imposed for each fiscal period in which the Lease Term
commences and terminates shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective portions of each such fiscal period
during which such Lease Term shall be in effect based on a 365 day year.
Supplementing the foregoing, Tenant shall be solely responsible for any
increases in Real Property Taxes which result from the transfer of the Premises
to the Tenant.

     Section 7.4    Nothing herein contained shall require or be construed to
     -----------
require Tenant to pay any estate, succession, transfer, gift, franchise, or
corporation income tax, that is or may be imposed upon Landlord; provided
however, that if at any time during the Lease Term the methods of taxation
prevailing at the commencement of the Lease Term shall be altered so that in
lieu of, as a substitute for, or an addition to the whole or any part of the
taxes, assessments, levies, impositions or charges now levied, assessed or
imposed on real estate and the improvements thereon, there shall be levied,
assessed and imposed, (i) a tax, assessment, levy,

                                      -10-
<PAGE>

imposition or charge, wholly or partially as a capital levy, or otherwise, on
the rents received therefrom, or (ii) a tax, assessment, levy (including but not
limited to any municipal, state or federal levy), imposition or charge measured
by or based in whole or in part upon the Premises and imposed upon Landlord, or
(iii) a license fee measured by the rent payable by Tenant under this Lease, or
(iv) a tax, assessment, levy, imposition or charge, wholly or partially
attributable to the execution, delivery, or recording of this Lease or any
modification thereof, then to the extent that such taxes, assessments, levies,
impositions, charges or license fees or the part thereof so measured or based,
would be payable if the Premises were the only property of Landlord subject
thereto, Tenant shall pay and discharge the same as herein provided. Tenant's
tax obligations shall not include any environmental assessments, charges or
liens arising in connection with remediation of Hazardous Materials existing on
the Premises prior to the Tenant taking possession.

     Tenant shall have the right, with Landlord's written approval, which
approval shall not be unreasonably withheld, at any time and at Tenant's
expense, to contest in good faith by judicial proceedings or otherwise, any real
or personal property assessment, valuation or tax reasonably deemed to be
excessive by Tenant, and in such event Tenant shall not be obligated to pay such
assessment, valuation or tax until a final judicial determination of such
contest, but shall post such bonds as required by law to protect Landlord
throughout any such contest. If a reduction of taxes is obtained for any year of
the Term during which Tenant paid such taxes, to the extent Landlord receives a
refund of such taxes, Landlord shall refund such amount to Tenant within five
(5) days after such reduction is received by Landlord, which refund obligation
shall survive the expiration or sooner termination of this Lease.

     If, by applicable law, any taxes or assessments may be paid in installments
at the option of the taxpayer, then whether or not Landlord elects to pay taxes
and assessments in such installments, Tenant's liability for such taxes and
assessments shall be computed as if such election had been made, and only the
installments thereof which would have become due during the Term shall be
included in Tenant's tax obligations.

                                   ARTICLE 8

                                   INSURANCE

     Section 8.1    Tenant, at its cost, shall maintain commercial general
     -----------
liability insurance against claims for personal injury, bodily injury, death and
property damage in or about the Premises with a liability limit in the amount of
$5,000,000 in respect of personal injury or death to any one person, and of not
less than $5,000,000 in respect of any one occurrence, and of not less than
$5,000,000 for property damage, insuring against all liability of Tenant and its
authorized representatives arising out of or in connection with Tenant's use or
occupancy of the Premises. All such liability insurance shall insure performance
by Tenant of the indemnity provisions of Section 9.1. Landlord (and, if Landlord
requests, its lender) shall be named as an additional insureds, and the policy
shall contain cross-liability endorsements, but only to the extent the insurance
insures Tenant's performance of its indemnity obligations under Section 9.1. Not
more frequently than each three (3) years, if, in the opinion of Landlord's
lender or the reasonable opinion of an insurance broker retained by Landlord,
the amount of commercial liability insurance coverage at that time is not
adequate, Tenant shall increase the liability limit

                                      -11-
<PAGE>

of the insurance coverage as reasonably recommended by either Landlord's lender
or Landlord's insurance broker. Tenant shall, at its sole cost and expense,
procure and maintain at all times when any alterations are being made, (i)
owner's contingent or protective liability insurance covering claims not covered
by or under the provisions of the above mentioned commercial general liability
insurance policy, (ii) contractual liability insurance covering the indemnity
contained in section 9.1 hereof, (iii) host liquor liability insurance, and (iv)
builder's risk completed value coverage for 100% of the contract price, deleting
all co-insurance penalties, against all risks insured against pursuant to
section 8.4 hereof.

     Section 8.2    Tenant, at its sole cost, shall maintain on all its personal
     -----------
property, tenant improvements, and alterations, in, on, or about the Premises, a
policy providing "Special Form" coverage, to the extent of 100% of their full
replacement value providing for a reasonable deductible approved annually by
Landlord.

     Section 8.3    Landlord shall maintain on the Building a policy covering
     -----------
such property on a "Special Form" basis including, at Landlord's sole election,
the perils of earthquake to the extent of 100% of full replacement value, and
containing other endorsements designated by Landlord in its sole discretion,
including, without limitation, an endorsement guaranteeing sufficient coverage
to restore the Building to building codes then in effect, and containing no
exclusion for Hazardous Materials contamination due to fire or other causes.
Tenant shall reimburse Landlord for the cost of such insurance during the term
of the Lease from time to time upon delivery of the insurance premium invoice.

     Section 8.4    Landlord shall, at its election, maintain loss of rents
     -----------
insurance insuring the minimum monthly rent and real property taxes. Said
insurance shall provide coverage for a period of one (1) year if the Building is
destroyed or rendered inaccessible by a risk insured against by the policy of
standard fire and extended coverage insurance, with related endorsements,
described in Section 8.4. Said insurance shall provide that in the event this
Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one (1) full years' loss of rent
from the date of any such loss. Tenant shall reimburse Landlord for the cost of
such insurance during the term of the Lease from time to time upon delivery of
the insurance premium invoice.

     Section 8.5    Tenant at its sole cost shall maintain Worker's Compensation
     -----------
insurance in the amounts and as required by the State of California.

     Section 8.6    The parties release each other, and their respective
     -----------
authorized representatives, from any claims for damage to any person or to the
Premises, and to the fixtures, personal property, tenant improvements, and
alterations of either Landlord or Tenant in or on the Premises that are caused
by or result from risks insured against under the fire and extended coverage
insurance policies and commercial liability policies carried by the parties and
in force at the time of any such damage. Each party shall cause each insurance
policy obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by such policy. Neither party shall be liable to the other for
any damage caused by fire or any of the risks insured against under such
insurance policy. If any such insurance policy cannot be obtained with a waiver
of subrogation,

                                      -12-
<PAGE>

the party undertaking to obtain the insurance shall give notice to the other
party of this fact. With respect to the insurance described in Sections 8.1 and
8.3 hereof, the other party shall have a period of 10 days after receiving the
notice either to place the insurance with a company that is reasonably
satisfactory to the party which gave notice and that will carry the insurance
with a waiver of subrogation, at the sole cost of Tenant, or if the insurance
cannot be obtained, the party which gave notice is relieved of the obligation to
obtain a waiver of subrogation rights with respect to the particular insurance
involved. With respect to insurance other than those policies described in
Sections 8.1 and 8.3 hereof, the other party may purchase or reimburse for the
purchase of such subrogation coverage.

     Section 8.7    All the insurance required under this Lease shall: (i) be
     -----------
issued by insurance companies admitted to do business in the State of
California, with a financial rating of at least an A-VIII status as rated in the
most recent edition of Best's Insurance Reports and consented to by Landlord;
(ii) as to coverage provided for Landlord as an additional insured, such shall
be primary to, and not contributing with any other insurance available to
Landlord. Any other insurance maintained by Landlord is excess insurance; (iii)
at the insuring party's option, be part of a blanket policy, provided that such
party shall furnish to the other party written evidence specifying the amount of
the total insurance allocated to the Premises, which shall not be less than that
required by Sections 7.2 and 7.3 hereof; (iv) contain an endorsement requiring
30 days written notice from the insurance company to both parties and to
Landlord's lender, if applicable, before cancellation or material change in the
coverage, scope, or amount of any policy; and (v) be evidenced by certificates
to be obtained by the party obtaining the insurance and delivered to the other
party within 10 days after the date such insurance is required to be in effect.
All policies of insurance provided for in Sections 7.2, 7.3, and 7.4 hereof
shall name Landlord and, to the extent required under any Landlord's
encumbrance, Landlord's lender as the insured or additional insureds, as their
respective interests may appear.

                                   ARTICLE 9

                                INDEMNIFICATION

     Section 9.1    Except for Landlord's active negligence or willful
     -----------
misconduct, or that of its agents, employees, or contractors, Tenant shall
indemnify and save harmless Landlord against and from all costs, expenses,
liabilities, losses, damages, injunctions, suits, actions, causes of action,
fines, penalties, claims and demands of every kind or nature, including without
limitation reasonable attorneys' fees and costs, by or on behalf of any person,
party or governmental authority whatsoever to the extent arising out of (a) any
failure by Tenant to perform any of the agreements, terms, covenants or
conditions of this Lease on Tenant's part to be performed, (b) any accident,
injury or damage which shall happen in or about the Premises however occurring,
and any matter or thing growing out of the condition, occupation, maintenance,
alteration, repair, use or operation of the Premises, or any part hereof during
the Lease Term, (c) any accident, injury or damage which shall happen on or
under the streets, sidewalks, curbs or vaults in front of or adjacent to the
Premises and any matter or thing growing out of the condition, occupation,
maintenance, alteration, repair, use or operation thereof during the Lease Term,
if resulting form the act, omission, negligence or misconduct of Tenant, its
agents, employees or invitees; (d) Tenant's failure to comply with any laws,
ordinances, requirements, orders, directions, rules or regulations of any
federal, state, county or city governmental authority, or (e) any mechanic's

                                      -13-
<PAGE>

lien, conditional bill of sale, chattel mortgage, security agreement or
financing statement made with respect to or filed against the Premises or any
equipment therein or any materials used in the construction or alteration of any
building or improvement thereon, made by the Tenant. Notwithstanding the
foregoing, Tenant's indemnification obligations under this Section 9.1 shall not
extend to any costs, expenses, liabilities, losses, damages, injunctions, suits,
actions, causes of action, frees, penalties, claims, or demands arising out of
(i) Landlord's failure to perform its obligations under this Lease, or (ii) any
Hazardous Materials for which Tenant is not otherwise responsible under this
Lease, except for any act by Tenant or any agent, employee, or contractor of
Tenant with respect to any Hazardous Materials present on or about the Premises
prior to the Commencement Date.

     Section 9.2    Tenant is and shall be in exclusive control and possession
     -----------
of the Premises as provided herein, and Landlord shall not in any event
whatsoever be liable for any injury or damage to any property or to any person
happening on or about the Premises, nor for any injury or damage to any property
of Tenant, or of any other person contained therein, except for injury, damage,
liability or claims caused by the negligence or willful misconduct of Landlord.
The provisions hereof permitting Landlord to enter and inspect the Premises are
made for the purpose of enabling Landlord to be informed as to whether Tenant is
complying with the agreements, terms, covenants and conditions hereof, and to do
such acts as Tenant shall fail to do following any applicable notice and cure
periods.

                                  ARTICLE 10

                             UTILITIES AND SERVICE

     Section 10.1   Tenant shall provide for and shall pay the costs
     ------------
for all water, gas, electricity, sewage, telephone and other services and
utilities supplied to the Premises, Landlord shall not be required to furnish to
Tenant any utilities or services of any kind whatsoever during the Lease Term,
such as, but not limited to, water, steam, heat, gas, hot water, electricity,
light and power. Landlord shall in no event be required to make any Alterations
or repairs (except let repairs required to be made by Landlord as set forth in
Section 12.1 hereof) during the Lease Term. At Tenant's sole cost and expense,
Landlord shall cooperate fully with Tenant in the manner and to the extent
reasonably required by Tenant in obtaining such services for the Premises during
the Lease Term. Landlord shall not be liable to Tenant for any interruption or
failure of any utility services to the Premises from any cause whatsoever nor
shall such constitute a constructive eviction or give rise to a right of rent
offset or abatement or effect the obligations of Tenant under this Lease in any
other way whatsoever.

                                  ARTICLE 11

                           CONSTRUCTION IMPROVEMENTS

     Section 11.1   Except for nonstructural Alterations not exceeding $25,000
in the aggregate, Tenant shall not make or suffer to be made any Alterations in,
on or to the Premises or any part thereof without the prior written consent of
Landlord which consent shall not be unreasonably withheld, conditioned, or
delayed. When applying for any such consent, Tenant shall furnish plans and
specifications for the Alterations. Tenant shall keep the Premises free

                                      -14-
<PAGE>

from any liens arising out of any work performed, materials furnished or
obligations incurred by Tenant in connection with such Alterations. Landlord
shall have the right to post and keep posted at the Premises any notices which
Landlord may reasonably deem proper for the protection of Landlord, the Premises
and/or the Building from such liens. Furthermore, Tenant shall not at any time
during the Lease Term make any Alteration in or to the Premises or to any
building thereon, unless:

          (a)       the same shall be performed in a professional workmanlike
manner, at Tenant's sole cost and expense, and shall not weaken or impair the
structural strength, or lessen the value, of such buildings as shall be on the
Premise at the time, or change the purposes for which such buildings may be used
(other than for the uses permitted under Section 6.1 of this Lease);

          (b)       Tenant shall pay when due or bond all claims for labor or
material furnished to or for Tenant at or for use in or on the Premises, which
claims may be secured by any mechanics or materialmen's lien against the
Premises or any interest therein; and Tenant shall hold Landlord harmless from
any and all claims, costs, or damages arising from labor or materials so
furnished or alleged to have been furnished. Tenant agrees to promptly pursue
and resolve any illegitimate claims for labor and materials and, if necessary,
Landlord shall cooperate in the resolution of such claims at Tenant's expense.
Tenant shall deliver to Landlord written notice of its intention to commence any
work on or in the Premises at least ten (10) days prior to such commencement,
and Landlord shall have the right, but not the obligation, to post a notice of
non-responsibility at the Premises as provided by law;

          (c)       before the commencement of any such work, such plans and
specifications shall be filed with and approved by all governmental departments
or authorities having jurisdiction, and any public utility company having an
interest therein, and all such work shall be done subject to and in accordance
with the requirements of law and local regulations of all governmental
departments or authorities having jurisdiction and of such public utility
company, including, without limitation, any requirements that Tenant obtain
construction permits for such work and a certificate of occupancy upon
completion; and

          (d)       furnish to Landlord a letter guaranteeing the completion of
such work, free and clear of all liens, encumbrances, chattel mortgages,
conditional bills of sale, security agreements and financing statements
according to said plans and specifications therefore. None of the foregoing
requirements shall prevent Tenant from contesting in good faith any lien against
the Premises, as long as such contest prevents foreclosure of the lien and
Tenant causes such lien to be bonded or insured over in a manner acceptable to
Landlord in its sole discretion.

     Section 11.2   Unless otherwise provided by Landlord in writing
     ------------
at the time Landlord approves Tenant's request for such Alterations, all
Alterations to the Premises made by Tenant shall become the property of Landlord
and shall remain upon the Premises at the expiration of this Lease, except that
Tenant may remove all personal property, trade fixtures, machinery and equipment
installed by Tenant, and fully restore and damage caused by such removal.
Landlord shall provide written notice to Tenant at the time when Landlord's
approval is given for such Alteration, indicating whether Landlord requires
Tenant ripen such expiration or termination of this Lease to remove any or all
such Alterations, and restore the Premises to the condition that

                                      -15-
<PAGE>

would exist except for such Alterations. For any Alterations for which the
consent of Landlord is not required under Paragraph 11.1 above, at Landlord's
sole election, (i) Tenant shall, at Tenant's sole expense, promptly remove such
Alterations upon expiration or earlier termination of this Lease and restore the
Premises to the condition existing as of the Commencement Date, normal wear and
tear excepted, or (ii) such Alterations shall become the property of Landlord
and shall remain upon the Premises at the expiration of this Lease, except that
Tenant may remove all personal property, trade fixtures, machinery and equipment
installed by Tenant, and fully restore and damage caused by such removal. Such
removal, restoration, and repair shall be completed by Tenant not later than the
expiration or sooner termination of this Lease.

                                  ARTICLE 12

                            REPAIRS AND MAINTENANCE

     Section 12.1   Except as otherwise provided in Articles 5, 6, and 12
     ------------
hereof, Tenant shall, at all times during the Lease Term, and at its own cost
and expense, keep and maintain in good order, condition, and repair, ordinary
wear and tear and damage caused by the acts of Landlord, its agents, contractors
or employees, by the failure of Landlord to perform its obligations, or by
condemnation, fire or other casualty excepted, the Building and all other
improvements on the Premises as of the Commencement Date of the Lease Term and
thereafter erected by Tenant on the Premises, or forming part thereof, and their
full equipment and appurtenances, including without limitation, all plate glass,
doors, interior non-bearing walls and partitions, ceilings and the electrical,
plumbing, lighting, heating, and air conditioning systems, and make all repairs
thereto and restorations, replacements and renewals thereof, both inside and
outside, structural and nonstructural, extraordinary and ordinary, foreseen or
unforeseen, howsoever the necessity or desirability for repairs may occur, and
whether or not necessitated by latent defects or otherwise; and shall use all
reasonable precaution to prevent waste, damage or injury. Landlord shall
maintain and repair only the Building foundation, exterior walls and windows,
parking lot foundation, and roof, provided that these items are not in any way
affected or disturbed by any tenant improvements or such maintenance and/or
repair was caused by Tenant's use of the Premises, or by the acts of Tenant, its
agents, employees, contractors, licensees, or invitees (collectively, "Tenant
Causes"). If it is determined that any such maintenance or repair is required
due to any Tenant Causes, Tenant shall be responsible for the cost of such
maintenance and/or repair, subject to Section 8.7 above and Article 13 below.
Notwithstanding the foregoing, Landlord shall bear the cost in excess of $2,500
of any single act of maintenance, repair, or replacement of any single HVAC unit
servicing all or any portion of the Premises, except where such maintenance,
repair, or replacement is made necessary by the acts or omissions of Tenant, its
agents, employees, contractors, licensees, or invitees, or by the breach by
Tenant of any of its obligations trader this Lease.

     Section 12.2   Tenant shall also, at Tenant's sole cost and expense, put,
     ------------
keep, replace and maintain in thorough repair and in good, safe and substantial
order and condition, and free from dirt, snow, ice rubbish and other
obstructions or encumbrances, the sidewalks, areas, sidewalk hoists, railings,
gutters and curbs, and all other exterior areas and shall maintain the
landscaping at the Premises in good condition.

                                      -16-
<PAGE>

     Section 12.3   All of Tenant's Personal Property shall remain the property
     ------------
of Tenant, and Tenant shall have the right to remove the same at any time during
the Lease Term or when vacating the Premises. Tenant shall repair any damage
caused to the Premises by reason of the removal of its fixtures, machinery and
equipment. At the end of the Lease Term, Tenant shall surrender the Premises to
Landlord broom clean and in good condition except for reasonable wear and tear,
any damage caused by the acts of Landlord, it agents, contractors, or employees,
by the failure of Landlord to perform its obligations hereunder, or by
condemnation or fire or other casualty and any tenant improvements.

     Section 12.4   Tenant waives the benefits of any law existing now or at any
     ------------
time during the term of this Lease and any extension thereof or thereafter
giving Tenant rights or remedies as a result of the physical condition of the
Premises, and, without limitation, Sections 1932, 1933, 1941, 1941.2, 1942, and.
1942.1 of the Civil Code of California, as well as all right to make repairs at
the expense of Landlord or to terminate this Lease as provided in said Sections
of the Civil Code or otherwise, except as expressly provided herein.

                                  ARTICLE 13

                      DESTRUCTION - FIRE OR OTHER CAUSES

     Section 13.1   If, during the Lease Term, the Building, improvements or the
     ------------
equipment (other than Tenant's Personal Property) on, in or appurtenant to the
Premises at the commencement of the Lease Term or thereafter erected thereon or
therein shall be destroyed or damaged in whole or in part by fire or other
cause, Tenant shall give to Landlord immediate notice thereof. Landlord shall
use reasonable efforts to provide Tenant with written notice of the estimated
time for repairs within thirty (30) days following the damage or destruction in
question. Provided that sufficient insurance proceeds, as reasonably estimated
by Landlord, are available for such repair, including deductibles, Landlord
shall, at its own cost and expense, use reasonable efforts to repair, replace
and rebuild the same, at least to the extent of the value and as nearly as
possible to the character of the Building and improvements and the equipment
therein existing immediately prior to such occurrence (other than Tenant's
Personal Property) as soon as reasonably possible; however, Landlord shall in no
event be called upon to repair, replace or rebuild any such buildings,
improvements or equipment, nor to pay any of the costs or expenses thereof
beyond or in excess of the insurance proceeds as herein provided.
Notwithstanding the foregoing, to the extent that the time for such repairs
shall reasonably be estimated by Landlord to exceed 180 days or if the Building
is destroyed to an extent greater than fifty percent (50.0%) of the replacement
cost, Landlord or Tenant may elect to terminated this Lease, and so long as
(where the damage or destruction has been caused by the act or omission of
Tenant, or any agent, employee, officer, contractor, licensee, or invitee of
Tenant) the Landlord receives the insurance proceeds for loss of rent for the
term remaining on this Lease at such time, Tenant may likewise elect to
terminate this Lease. Provided Landlord has received the insurance proceeds for
loss of rent (where the damage or destruction has been caused by the act or
omission of Tenant, or any agent, employee, officer, contractor, licensee, or
invitee of Tenant), if this Lease is not otherwise terminated as provided above
and Landlord thereafter fails to complete the restoration and re-deliver
possession of the damaged portions of the Premises to Tenant within two hundred
ten (210) days following the damage or destruction in question, Tenant may elect
to terminate this Lease. If Landlord does not receive the insurance proceeds for
loss of rent (where the damage or

                                      -17-
<PAGE>

destruction has been caused by the act or omission of Tenant, or any agent,
employee, officer, contractor, licensee, or invitee of Tenant), Tenant shall not
be entitled to terminate this Lease.

     Section 13.2   Except as specifically provided herein, this Lease shall not
     ------------
terminate or be affected in any manner by reason of damage to or substantial or
partial destruction of the buildings, improvements or equipment on, in or
appurtenant to the Premises at the commencement of the Lease Term or thereafter
erected thereon or therein, or by reason of the untenantability of the Premises,
or any part thereof, for or due to any reason or cause whatsoever, except that
Tenant shall be entitled to abatement of Rent in proportion to the area that is
rendered untenantable or is not reasonably usable by Tenant for its purposes by
reason of the damage or destruction in question bears to the area of the
Building as a whole, which abatement shall commence upon the occurrence of the
damage or destruction in question and shall continue until the restoration of
the Building or damaged portion thereof is completed and possession thereof is
re-delivered to Tenant, but where the damage or destruction has been caused by
the act or omission of Tenant, or any agent, employee, officer, contractor,
licensee, or invitee of Tenant, then only to the extent of payments received by
Landlord under any loss of rents insurance coverage.

     Section 13.3   Tenant waives the provisions of Civil Code Section 1932 (2)
     ------------
and Civil Code Section 1933 (4) with respect to any destruction of the Premises.

                                  ARTICLE 14

                                 CONDEMNATION

     Section 14.1   In the event that the Premises or any part hereof, shall be
     ------------
taken in condemnation proceedings or by exercise of any right of eminent domain
or by any agreement in lieu thereof, Landlord shall be entitled to collect the
entire award made in any such proceeding without deduction therefrom for any
estate hereby vested in or owned by Tenant, subject to the rights of the holder
of any mortgage to which this Lease is or shall be subject and subordinate, and
subject also to Tenant's rights as set forth below in this Article 14. Tenant
agrees to execute any and all further documents that may be reasonably required
in order to facilitate collection and distribution by Landlord of any and all
such awards.

     Section 14.2   If at any time during the Lease Term the whole of
     ------------
the Premises shall be so taken or condemned, this Lease shall terminate and
expire on the date upon which title shall vest in the condemning authority ("the
date of the taking") and the Annual Base Rent provided to be paid by Tenant
shall be apportioned and paid to such date.

     Section 14.3   If only a part of the Premises shall be so taken or
     ------------
condemned, this Lease shall be unaffected by such taking, except that Tenant may
elect to terminate this Lease, in the event of a partial taking, if the
remaining area of the Premises and/or the means of access thereto shall not be
reasonably sufficient for Tenant to continue the operation of its business.
Tenant shall give notice of such election to Landlord not later than thirty (30)
days after (i) notice of such taking is given by Landlord to Tenant, or (ii) the
date of such taking, whichever occurs sooner. Upon the giving of such notice by
Tenant, this Lease shall terminate on the date of such taking and the Annual
Base Rent shall be prorated as of such termination date. Upon such partial

                                      -18-
<PAGE>

taking and this Lease continuing in force as to any part of the Premises, the
Annual Base Rent apportioned to the part taken shall be prorated and adjusted as
of the date of taking and from such date the Annual Base Rent for the Premises
and Additional Rent shall be payable pursuant to Article 4 according to the
rentable area remaining.

     Section 14.4   Landlord shall be entitled to receive the entire award,
     ------------
subject to Tenant's rights as set forth in this Article 14.

     Section 14.5   In the event of a partial taking which shall not result in
     ------------
termination of this Lease, Landlord shall use reasonable efforts to rebuild,
repair and restore the remainder of any building on the Premises affected
thereby to a complete, independent and self-contained architectural unit, for
the purposes in use before the taking, as soon as reasonably possible, to the
extent of condemnation proceeds received by Landlord; provided, however, that in
the event insufficient or no condemnation award is available to cover the cost
of restoration of the Premises, either party may terminate this Lease if
Landlord elects not to provide additional funds for restoration and Tenant
elects not to provide the additional funds.

     Section 14.6   In case of any governmental action, not resulting in the
     ------------
taking or condemnation of any portion of the Premises but creating a right to
compensation therefor, such as, without limitation, the changing of the grade of
any street upon which the Premises abut, or if less than a fee title to all or
any portion of the Premises shall be taken or condemned by any federal, state,
municipal or governmental authority for temporary use or occupancy, unless such
taking unreasonably interferes with Tenant's use of the Premises in which case
Tenant may terminate this Lease, this Lease shall continue in full force and
effect without reduction or abatement of rent, and the rights of Landlord and
Tenant shall be unaffected by the other provisions of this Article 14 and shall
be governed by applicable law; provided, however, that:

          (a) if any such temporary taking for a period not extending beyond the
Lease Term results in changes or alterations in the Building, improvement,
equipment, required parking or utility infrastructure on the Premises which
would necessitate an expenditure to restore the same to their former condition,
or if any other such governmental action shall require alteration to be made in
the Building, improvement or equipment to adapt the same to the change of grade
or other result of such action, then any award or payment made to cover the
expenses of such restoration or alterations shall be received by Landlord and
applied thereto, or

          (b) if any such temporary taking is for a period extending beyond the
Lease Term, the amount of any award or payment allowed or retained for
restoration of any building, improvement or equipment on the Premises, shall
remain the property of Landlord if this Lease shall expire prior to the
restoration of the same to their former condition.

     Section 14.7   Each party waives any statutory right in conflict with the
     ------------
provisions hereof, including without limitation the provisions of the Code of
Civil Procedure Section 1265.130 allowing either party to petition the superior
court to terminate this Lease in the event of a partial taking of the Premises.

     Section 14.8   Notwithstanding anything contained in this Article 14 to the
     ------------
contrary, Tenant shall be entitled to seek a separate award from the condemning
authority for the taking of

                                      -19-
<PAGE>

any Tenant's Personal Property, for the interruption of Tenant's business or its
moving or other relocation costs, and for the loss of goodwill, and Landlord
shall have no right, title or interest in or to any separate award made
therefor; provided that no such award shall reduce any award made to Landlord.

                                  ARTICLE 15

                             SIGNS AND ADVERTISING

     Tenant shall not place any sign on or around the Premises without the
advance written consent of City authorities and Landlord, such consent of
Landlord not to be unreasonably delayed, conditioned, or withheld. Tenant shall
maintain any such signs to which Landlord has consented in good condition at its
sole cost and expense. Landlord may enter upon the Premises and remove any sign
not complying with the terms of this section at Tenant's expense.

                                  ARTICLE 16

                               ENTRY BY LANDLORD

     Section 16.1   Landlord and its agents shall have the right to enter into
     ------------
and upon the Premises at all reasonable times for the purpose of examining and
exhibiting the same; provided, however, that Landlord shall provide notice to
Tenant at least 48 hours in advance thereof, except in case of all emergency.
Supplementing the foregoing, Landlord and its authorized representatives shall
have the right to enter the Premises at all reasonable times for any of the
following purposes;

          (a)       To determine whether the Premises are in good condition and
whether Tenant is complying with its obligations under this Lease;

          (b)       To serve, post, or keep posted any notices required or
allowed under the provisions of this Lease;

          (c)       To post "for sale" signs at any time, and to post "for rent"
or "for lease" signs during the last six (6) months of the Lease Term, or during
any period while Tenant is in default beyond any applicable cure period;

          (d)       To show the Premises to prospective tenants at any time
during the last six (6) months of the Lease Term, and to show the Premises to
prospective brokers, agents, buyers, tenants, or persons interested in an
exchange, at any time during the Lease Term;

          (e)       To shore the foundations, footings, and walls of the
Building and other improvements that are a part of the Premises and to erect
scaffolding and protective barricades around and about the Premises, but not so
as to prevent entry to the Premises, and to do any other act or thing necessary
for the safety or preservation of the Premises if any excavation or other
construction is undertaken or is about to be undertaken on any adjacent property
on which excavation or construction is to take place and the adjacent property
owner's authorized representatives; and

                                      -20-
<PAGE>

          (f)       to conduct any tests at the Premises which Landlord deems
reasonable or necessary including, without limitation, ground water tests and
core soil tests, provided, however, that Landlord shall not unreasonably disturb
Tenant's operations and occupancy.

     Section 16.2   Landlord shall not be liable in any manner for any
     ------------
inconvenience, disturbance, loss of business, nuisance, or other damage arising
out of Landlord's entry on the Premises as provided in this Article unless due
to Landlords or its agents' acts, omissions, negligence or willful misconduct.

     Section 16.3   Tenant shall not be entitled to an abatement or reduction of
     ------------
rent if Landlord exercises any rights reserved in this Article. Landlord shall
use reasonable efforts, in the exercise of its rights under this Article 16 by
itself or its agents, to minimize interference with Tenant's use and occupancy
of the Premises.

                                  ARTICLE 17

                           ASSIGNMENT AND SUBLETTING

     Section 17.1   Tenant shall not assign or sublet the Premises or any part
     ------------
thereof, or otherwise transfer or encumber the Premises or any interest of
Tenant therein or under this Lease, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed. Any provision in this Lease to the contrary notwithstanding, Landlord's
consent shall not be required for an assignment or sublease to any person or
entity who controls, is controlled by or is under common control with Tenant, or
which merges with Tenant, results from a consolidation of Tenant and another
entity or entities, or purchases substantially all of the assets of Tenant as a
going concern ("Tenant Affiliate"), provided that, with respect to an assignment
of this Lease to a Tenant Affiliate, before such assignment shall be effective,
(i) said Tenant Affiliate shall assume, in full together with the Tenant, the
obligations of Tenant thereafter accruing under this Lease, (ii) Landlord shall
be given not less than thirty (30) days prior written notice of such assignment
and assumption, (iii) the use of the Premises by the Tenant Affiliate shall be
as set forth in Section 6.1, and (iv) Tenant remains fully obligated on this
Lease for the entire Lease Term. For purposes of this paragraph, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management, affairs and policies of anyone, whether
through the ownership of voting securities, by contract or otherwise. Tenant
shall not mortgage this Lease or execute and deliver to a trustee, a deed of
trust affecting this Lease. The sale of capital stock through any public
exchange or issuances for the sole purpose of raising financing shall not be
deemed an assignment, subletting or any other transfer of this Lease or
Premises. Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation or alter the primary liability of Tenant
to pay the rent and to perform all other obligations to be performed by Tenant
hereunder, and no subsequent subletting or assignment shall release any such
assignor or sublessor of its obligations or alter its primary liability to pay
rent and perform all other obligations to be performed by Tenant hereunder. In
lieu of consenting to a proposed sublease of the entire Premises for the
remainder of the Lease Term, Landlord may, at its sole election, terminate this
Lease. Such election to terminate shall be made by Landlord's giving written
notice thereof to Tenant. Any such termination shall be effective on the later
of the scheduled

                                      -21-
<PAGE>

commencement date of the proposed sublease or thirty (30) days after Landlord's
notice of termination.

     Section 17.2   No interest of Tenant in this Lease shall be assignable by
     ------------
operation of law. Each of the following acts shall be considered an involuntary
assignment.

          (a)       If Tenant is or becomes bankrupt or insolvent, makes and
assignment for the benefit of creditors, or institutes a proceeding under the
federal bankruptcy laws in which Tenant is the bankrupt; of, if Tenant is a
partnership or consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt of insolvent, or
makes and assignment for the benefit of creditors;

          (b)       If a writ of attachment or execution is levied on this
Lease;

          (c)       If, in any proceeding or action to which Tenant is a party,
a receiver is appointed with authority to take possession of the Premises.

          (d)       An involuntary assignment shall constitute a default by
Tenant and Landlord shall have the right to elect to terminate this Lease, in
which case this Lease shall not be treated as an asset of Tenant. If a writ of
attachment or execution is levied on this Lease, Tenant shall have ten (10) days
in which to cause the attachment or execution to be removed. If any involuntary
proceeding in bankruptcy is brought against Tenant, or if a receiver is
appointed, Tenant shall have thirty (30) days in which to have the involuntary
proceeding dismissed or the receiver removed.

     Section 17.3   Regardless of Landlord's consent, no subletting or
     ------------
assignment shall release Tenant of Tenant's obligations hereunder or alter the
primary liability of Tenant to pay the Rent and to perform all other obligations
to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any
other person or entity shall not be deemed to be a waiver by Landlord of any
provision hereof. Consent to one assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting. In the event of default by
any assignees of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee or successor. Landlord
may consent to subsequent assignments or subletting of this Lease or amendments
or modifications to this Lease with assignees of Tenant upon obtaining its or
their consent thereto and such action shall not relieve Tenant of liability
under this Lease. Tenant hereby agrees, and expressly waives any rights it may
have under Civil Code Section 711 or otherwise, to claim that the provisions of
this Article 17 or Landlord's exercise of its rights in accordance herewith
constitute an unreasonable restraint on alienation or a breach of any duty of
good faith and fair dealing, it being understood and agreed that the leasehold
estate of Tenant hereunder is expressly limited by the restrictive provisions of
this Article 17.

     Section 17.4   In the event Tenant shall assign or sublet the Premises or
     ------------
request the consent of Landlord to any assignment or subletting or if Tenant
shall request the consent of Landlord for any act the Tenant proposes to do,
then Tenant shall pay Landlord's reasonable

                                      -22-
<PAGE>

attorneys' fees (based upon actual time spent provided such time is reasonable
and the attorneys' regular hourly rate) and any other expense incurred in
connection therewith.

     Section 17.5   No assignment made with Landlord's consent or as hereinabove
     ------------
permitted, shall be effective until there shall have been delivered to Landlord
an executed counterpart of such assignment containing an agreement, executed by
the assignor and the proposed assignee, wherein and whereby such assignee
assumes due performance of the obligations on the assignor's part thereafter to
be performed under this Lease to the end of the term hereof.

     Section 17.6
     ------------

          (a)       If at any time during the Lease Term Tenant desires either
to sublet all or a portion of the Premises or to assign this Lease which
requires Landlord's consent, Tenant shall give notice to Landlord setting forth
the identity of the subtenant and the terms of the sublease, or the assignee and
the terms of the assignment, as the case may be, together with a copy of the
subtenant's or assignee's financial statements for the post three fiscal years
and a copy of the proposed sublease or assignment agreement, as well as any
other information reasonably requested by Landlord. Landlord shall approve or
disapprove the proposed subletting or assignment within fifteen (15) days from
receipt of all such items. In the event that Landlord fails to approve or
disapprove the proposed subletting or assignment within such fifteen (15) day
period, Landlord shall be deemed to have disapproved the subletting or
assignment in question.

          (b)       Any sublease permitted hereunder shall be subject and
subordinated to the right of Landlord hereunder and shall contain substantially
the following provision:

                    "Subtenant has been informed and understands that
                    Sublandlord is the lessee under an underlying lease of the
                    entire building of which the Subleased Premises form a part.
                    In the event of any proceeding to terminate such underlying
                    lease, or in the event of any action or proceeding for the
                    exercise of a power of sale under a deed of trust or for the
                    foreclosure of any mortgage to which this lease or such
                    underlying lease is subordinate, Subtenant acknowledges that
                    this lease shall be terminable by reason of any termination
                    of such underlying lease, unless the lessor thereunder or
                    the purchaser at a sale does not elect to terminate this
                    lease, in which event Sublessor shall attorn to the lessor
                    thereunder or to the purchaser at the sale on any such
                    foreclosure."

          (c)       Tenant shall furnish Landlord with fully executed or
photocopies of all subleases of space in the Premises and with such information
with respect thereto as Landlord may reasonably require.

     Section 17.7   Effective as of the date of the happening of an Event of
     ------------
Default or breach of this Lease (as described in Article 19 hereof) and after
any applicable notice and cure period, but subject to the rights of the holder
of any mortgage to which this Lease is subject and subordinate, Tenant hereby
assigns to Landlord all of its right, title and interest in and to all present
and future subleases and all rents due and to become due thereunder. After the
effective date of such assignment, Landlord shall apply any net amount collected
by it from subtenants to

                                      -23-
<PAGE>

the Annual Base Rent or Additional Rent due hereunder. In the event of the
failure of any subtenant to pay subrent to Landlord pursuant to the foregoing
assignment alter the happening of any such Event of Default or breach of this
Lease, any such rent thereafter collected by Tenant shall be deemed to
constitute a trust fund for the benefit of Landlord.

     Section 17.8   If Tenant requests Landlord to consent to a proposed
     ------------
assignment or subletting, Tenant shall pay to Landlord upon demand, whether or
not consent is ultimately given, Landlord's reasonable attorney's fees,
accountant's fees, and other reasonable expenses incurred in connection with
each such request, as additional rent. Following an assignment or subletting
consented to by Landlord, Tenant or the assignee or subtenant shall remit
directly to Landlord, payable as additional rent, fifty percent (50%) of all
sums (including the value of consideration other than money or its equivalent)
due to Tenant by said assignee or subtenant as consideration for said assignment
or sublease, whether payable before, after or throughout the term of such
assignment or sublease, to the extent said sums exceed the Annual Base Rent and
other amounts then due hereunder for the affected space, and any applicable
broker's commissions and reasonable attorneys' fees. Tenant (or assignee or
subtenant) shall pay such sums to Landlord as the same fall due. No sums due or
paid to Landlord pursuant to this Section 17.8 shall be credited against Annual
Base Rent or Additional Rent (including additional amounts pursuant to this
Section 17.8). The provisions of this Section 17.8 shall not, however, apply to
any assignment or subletting to a Tenant Affiliate.

                                  ARTICLE 18

                                 SUBORDINATION

     Section 18.1   This Lease and all rights of Tenant hereunder are and shall
     ------------
be subject and subordinate to any mortgage, deed of trust or other instrument of
security (including any renewals, modifications, consolidations, replacement and
extension thereof) existing as of the date of this Lease or hereafter placed
upon the Premises, the Building, or any portion of any of the foregoing, by
Landlord; provided, however, as to any future encumbrancers, that the holder of
such instrument enters into an agreement with Tenant, its successors and
assigns, in which such holder agrees not to disturb the possession and other
rights of Tenant under this Lease for so long as Tenant continues to perform its
obligations hereunder and is not in default hereunder beyond any applicable
grace and cure period, and, in the event of acquisition of title by such holder
through foreclosure proceedings or otherwise, to accept Tenant as tenant of the
Premises under the terms and conditions of this Lease, and to perform the
Landlord's obligations hereunder. Tenant agrees to recognize and attorn to any
person or entity acquiring title to the Premises as Landlord by purchase,
foreclosure, or otherwise.

     Section 18.2   Tenant shall upon demand at any time or times execute,
     ------------
acknowledge and deliver to Landlord any and all reasonable instruments that may
be necessary, proper or desirable to subordinate this Lease and all rights
hereunder to the lien of any such mortgage or mortgages and each such renewal,
modification, consolidation, replacement and extension. Upon full execution of
this Lease, Landlord shall request from its current lender secured by the
Premises a non-disturbance agreement with respect to this Lease. No failure of
such lender to honor such request shall, however, be deemed a default by
Landlord under this Lease.

                                      -24-
<PAGE>

                                  ARTICLE 19

                                    DEFAULT

     Section 19.1   If any of the following events shall occur herein referred
     ------------
to individually as an "Event of Default" and collectively as "Events of
Default"), Tenant shall be deemed to be materially in default under this Lease:

          (a)       If Tenant shall fail to pay any Rent or Additional Rent when
and as the same becomes due and payable and such failure is not cured within
three (3) business days after the delivery of notice from Landlord specifying
such failure to pay; provided, however, that such notice shall be in lieu of and
not in addition to any notice required under Section 1161 of the California Code
of Civil Procedure and provided further, that if twice within any twelve month
period the Tenant fails to pay any Rent or other sum when and as the same
becomes due and payable, the cure provision set forth herein shall be reduced
from three (3) business days to three (3) calendar days;

          (b)       If Tenant shall fail to perform any of the other non-
monetary duties required to be performed by Tenant under this Lease (and unless
a different time period is specified in this Lease), and such failure shall
continue for more than thirty (30) days after discovery thereof by Tenant;
provided, however, that if such duty cannot reasonably be performed within such
thirty (30) day period, Tenant shall have such additional time (up to sixty (60)
days) as is reasonably necessary to perform such duty provided Tenant commences
in good faith to perform such duty and thereafter diligently proceeds therewith
to completion;

          (c)       If Tenant shall make a general assignment for the benefit of
creditors, or shall be unable to pay its debts generally as they become due file
a petition in bankruptcy, be adjudicated bankrupt, file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation,
consent to, or acquiesce in, the appointment of a receiver, liquidator, trustee,
custodian or other similar official of itself or of the whole or any substantial
part of its properties or assets;

          (d)       If, without Tenant's consent or acquiescence, (i) a court of
competent jurisdiction shall enter an order, judgment or decree appointing a
receiver, liquidator, trustee, custodian or other similar official of Tenant, or
of the whole or any substantial part of the property or assets of Tenant and
such order, judgment or decree shall remain unvacated, or not set aside, or
unstayed, for thirty (30) days, or (ii) an involuntary case under said
Bankruptcy Code shall be commenced against Tenant or a petition shall be filed
against it seeking similar relief under any other present or future insolvency
act or other applicable law relating, to bankruptcy, insolvency, reorganization
or relief of debtors and such case of petition shall remain undismissed for
thirty (30) days, or (iii) under the provisions of any other law for the relief
or aid of debtors, any court of competent jurisdiction shall assume custody or
control of Tenant or of the whole or any substantial part of its property or
assets and such custody or control shall remain unterminated or unstayed for
thirty (30) days;

                                      -25-
<PAGE>

          (e)       If, in Landlord's reasonable judgment, Tenant shall vacate
the Premises for such length of time and in such a manner as to endanger the
security or proper maintenance of the Premises or if Tenant shall abandon the
Premises;

          (f)       If this Lease or the estate of Tenant hereunder shall be
encumbered, mortgaged, transferred or shall pass to or devolve upon any other
person or party, except in a manner permitted under Article 17 hereof.

     Section 19.2   At any time after the occurrence of a default (Tenant hereby
     ------------
waiving its right under Section 1161, subsection 2 of the California Code of
Civil Procedure to have Landlord serve notice of default on Tenant within one
year after rent becomes due), Landlord may serve Tenant with a notice of
default, provided that nothing herein shall be deemed to require a notice as a
condition to Landlord's right to utilize a remedy where notice is not otherwise
required by law. Notices given under this Section 19.2 shall specify the alleged
default and shall demand that Tenant, (i) if the default is one described in
subsection 19.1(a) or 19.1(b) hereof, either quit the Premises or pay the rent
or other amount that is due within three (3) days; or (ii) if the default is one
described in subsection 19.1(d), 19.1(e), or 19.1(f) hereof, quit the Premises;
or (iii) of the default is one described in subsection 19.1(c) hereof, either
quit the Premises or cure the default within 30 days. No such notice shall be
deemed a forfeiture or a termination of this Lease unless Landlord so elects in
the notice. The notice requirements set forth in this Section 19.2 shall be in
lieu of and deemed to satisfy the notice requirements of the unlawful detainer
statutes of California, and Tenant waives any right it may have to any further
or other notice of its default as a condition to Landlord's right to its
remedies described hereunder including, without limitation, any right under
Civil Code Section 1011 or any other law to delay performance due to service by
mail.

     Section 19.3   Landlord shall have the remedies set forth in this Article
     ------------
19 if Tenant commits a default and, in the case of those defaults described in
subsections 19.1 (a) and 19.1 (b), fails to cure same within the time provided
in the notice of default (unless a default described in subsection 19.1(b) is
excused for up to 60 days as provided in subsection 19.1(b)). These remedies are
not exclusive; they are cumulative in addition to any remedies now or later
allowed by law, equity or agreement of the parties. Landlord shall have the
remedy described in California Civil Code section 1951.4 (lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations).

     Section 19.4
     ------------

          (a)       Upon the occurrence of a default by Tenant, Landlord may
continue this Lease in full force and effect, and this Lease shall continue in
effect as long as Landlord does not terminate Tenant's right to possession, and
Landlord shall have the right to collect rent and other sums when due. During
the period Tenant is in default, Landlord may enter the Premises and relet them,
or any part of them, to third parties for Tenant's account, provided that
Landlord uses its reasonable good faith efforts to maximize the rent for the
Premises, and, if Tenant has ceased to occupy the Premises, Landlord may alter
or install locks and other security devices at the Premises. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, attorneys' fees, brokers' commissions,

                                      -26-
<PAGE>

expenses of remodeling the Premises required by the reletting, and like costs.
Reletting may be for a period equal to, shorter or longer than the remaining
term of this Lease.

          (b)       No act by Landlord allowed by this Section 19.4 shall
terminate this Lease unless Landlord notifies Tenant that Landlord elects to
terminate this Lease. After Tenant's default and for as long as Landlord does
not terminate Tenant's right to possession of the Premises, if Tenant obtains
Landlord's consent (which shall not be unreasonably withheld) Tenant shall have
the right to assign or sublet its interest in this Lease, but Tenant shall not
be released from liability. Any such proposed assignment or subletting shall be
subject to the provisions of Article 17 and Landlord's insistence on full
compliance herewith as a condition far its consent shall be deemed not
unreasonable.

          (c)       If Landlord elects to relet the Premises as provided in the
foregoing subsection 19.4(a), rent that Landlord receives from reletting shall
be applied to the payment of: (i) first, any indebtedness from Tenant to
Landlord other than rent due from Tenant; (ii) second, all costs incurred by
Landlord in reletting, including, without limitation, brokers' fees or
commissions for the reletting of the whole or any part of the Premises; the cost
of removing and storing the property of Tenant or any other occupant, and the
costs of repairing, altering, maintaining, remodeling or otherwise putting the
Premises into condition acceptable to a new Tenant or Tenants; and (iii) third,
rent due and unpaid under this Lease. After deducting the payments referred to
in this subsection 19.4(e), any sum remaining from the rent Landlord receives
from reletting shall be held by Landlord and applied in payment of future rent
and other amounts as rent and such amounts become due under this Lease. In no
event shall Tenant be entitled to any excess rent received by Landlord. If, on a
date rent or other amount is due under this Lease, the rent received as of such
date from the reletting is less than the rent or other amount due on that date,
or if any costs, including without limitation for maintenance, which Landlord
incurred in reletting remain after applying the rent received from the reletting
as provided in this subsection 19.4(c), Tenant shall pay to Landlord upon
demand, in addition to the remaining rent or other amount due, all such costs.

          (d)       Tenant shall pay to Landlord the rent due tinder this Lease
on the dates the rent is due, less the rent Landlord has received from any
reletting which exceeds all costs and expenses of Landlord incurred in
connection with Tenant's default and the reletting.

     Section 19.5   Upon the occurrence of a default by Tenant, Landlord may
     ------------
terminate Tenant's right to possession of the Premises or this Lease or both at
any time after a default by Tenant by giving notice to Tenant of Landlord's
election to do so and such termination shall be effective on the date set forth
in such notice (subject only to any cure period provided by Section 19.1). Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver
on Landlord's initiative to protect Landlord's interest under this Lease shall
not constitute a termination of Tenant's right to possession. No act by Landlord
other than giving notice to Tenant shall terminate this Lease. On such
termination of this Lease, Landlord has the right to recover from Tenant:

          (a)       The worth, at the time of the award; of the unpaid rent that
had been earned at the time of termination of this Lease;

                                      -27-
<PAGE>

          (b)       The worth, at the time of the award, of the amount by which
the unpaid rent that would have been earned after the date of termination of
this Lease until the time of award exceeds the amount of the loss of rent that
Tenant proves could have been reasonably avoided;

          (c)       The worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been reasonably
avoided, and

          (d)       Any other amount, and court costs, necessary to compensate
Landlord for all detriment proximately caused by Tenant's default, or which in
the ordinary course of things would be likely to result therefrom, including,
without limitation, brokers' fees or commissions and attorneys' fees incurred by
Landlord in connection with reletting the whole or any part of the Premises; the
costs of removing and storing the property of Tenant or of any other occupant;
and the costs of repairing, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant or tenants.

          (e)       "The worth, at the time of the award," as used in
subsections 19.5(a) and 19.5(b) hereof, is to be computed by allowing interest
at 10% or such higher maximum rate then permitted by law. "The worth, at the
time of the award," as referred to in subsection 19.5(e) is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus 1%.

     Section 19.6   Tenant hereby expressly waives any and all rights to recover
     ------------
or regain possession of the Premises or to reinstate or redeem this Lease to
which it may be entitled by or under any present or future law or decisions
including without limitation, Sections 1174 and 1179 of the California Code of
Civil Procedure. In addition, Tenant hereby expressly waives any and all right
to bring any action whatsoever against any tenant taking possession of the
Premises after Tenant has been dispossessed or evicted hereunder, or to make any
such tenant a party to any action brought by Tenant against Landlord.

     Section 19.7   Any personal property of Tenant or of any subtenant or
     ------------
occupant or other person which shall remain in, on or about the Premises after
the expiration or termination of the term and Tenant's removal from the Premises
shall be deemed to have been abandoned by Tenant and either may be retained by
Landlord as its property or may be disposed of in such manner as Landlord may
see fit; or, at Landlord's option, Landlord may require Tenant forthwith to
remove any or all of Tenant's property. If Tenant fails to do so, Landlord may
remove any such property and place such property in storage in a public
warehouse at the cost and risk of Tenant. If such personal property or any part
hereof shall be sold, Landlord may receive and retain the proceeds of such sale
and apply the same, at its option, against the expenses of the sale, the cost of
moving and storage, any arrears of rent or other stuns payable hereunder and any
damages to which Landlord may be entitled reader this Article 19 or pursuant to
law, in the manner provided in Civil Code Sections 1980 -1991, or in any other
lawful manner. Tenant waives all claims against Landlord with respect to any
disposition of property permitted hereunder and shall hold Landlord harmless as
to any loss, claim, damage or injury of any other person in connection with such
disposition.

                                      -28-
<PAGE>

     Section 19.8
     ------------

          (a)       Tenant hereby waives the requirement that any notice of
default served pursuant to this Article 19 or trader the California unlawful
detainer statutes shall be required to be served on any subtenant in possession
or actual occupation of the Premises.

          (b)       For purposes of Code of Civil Procedure Section 1011,
concerning services of notices or papers during litigation, "residence" of
Tenant shall mean and be the address for notices to Tenant under this Lease.

          (c)       If Landlord commences any proceeding for possession of the
Premises, Tenant may interpose in good faith any defenses Tenant may have to
Landlord's action to recover possession, but Tenant shall not interpose any
counterclaim or cross-complaint of whatever nature or description in any such
proceedings for so long as Tenant maintains a right to possession of the
Premises. Tenant's covenants to pay rent shall be independent of each and every
other covenant of this Lease and Tenant hereby expressly waives any right Tenant
may have to deduct Tenant's damages for Landlord's breach or default from rent
or right to set off such damages for purposes of determining whether any rent is
due in any unlawful detainer action brought on a basis of unpaid rent or other
amount due hereunder. This shall not, however, be construed as a waiver of the
right of Tenant to assert such claims in any separate action or actions brought
by Tenant.

          (d)       If Tenant fails to immediately commence and diligently and
continuously prosecute to completion repairs or any of its other obligations
hereunder required of Tenant after 10 days written notice by Landlord that it do
so (or if Tenant fails to act promptly after such notice in the case of an
emergency), then Landlord, in addition to all other remedies available hereunder
or by law and equity, and without waiving any alternative remedies, including
the right to declare Tenant in breach and default of this Lease, may make or
perform the same, and in that event, Tenant shall reimburse Landlord, upon
demand, as additional rent, for all costs Landlord incurs in taking steps to
perform such obligations or repairs regardless of which party actually completes
the same, together with interest from the date Landlord incurs the cost until
paid at 10% per annum or if greater, the maximum rate permitted by law.

                                  ARTICLE 20

                                    NOTICES

     All notices which are required to be given by either party hereunder shall
be in writing, sent by certified mail, postage prepaid, return receipt
requested, or by express mail courier ("Courier") for next day delivery (i.e.
Federal Express, DHL, etc.) and addressed to the parties it the following
addresses:

Landlord:

     First State Realty of America, Inc.
     P.O. Box 703
     New Canaan, CT 06840-0703

                                      -29-
<PAGE>

with copies to:

     Peter S. Gummo, Esq.                    Ross G. Adler, Esq.
     46 Westchester Avenue        and        Hopkins & Carley
     Pound Ridge, NY 10576                   P.O. Box 1469
                                             San Jose, CA 95109-1469

Tenant:

     InterTrust Technologies Corporation
     4750 Patrick Henry Drive
     Santa Clara, CA 95054
     attention: Erwin Lenowitz

with a copy to:

     Garth E. Pickett, Esq.
     Hopkins & Carley
     P.O. Box 1469
     San Jose, CA 95109-1469

or to such other addresses and to such other persons as the parties may from
time to time designate in writing, by notice as aforesaid. The time of giving of
any such notice shall be deemed to be the earlier of (i) actual delivery; (ii)
the date upon which delivery is attempted and said delivery is refused or
rejected; (iii) one (1) day after sending by Courier; or (iv) two (2) days after
mailing by certified mail; provided, however, that change of address notices
shall be effective only upon actual receipt.

                                  ARTICLE 21

                             BROKER'S COMMISSIONS

     Landlord acknowledges and agrees that it shall pay the brokerage
commissions of Colliers International and Cornish & Carey pursuant to a separate
written agreement between Landlord and such brokers. Landlord and Tenant
represent one to another that each has dealt only with Colliers International
and Cornish & Carey as brokers in connection with this Lease. In the event of a
breach of the foregoing representation, Tenant and Landlord shall indemnify and
defend each other against, and hold one another harmless from, may and all
claims, demands, liabilities, losses, lawsuits, judgments, damages, costs and
expenses (including, but not limited to, attorneys' fees and court costs,
whether incurred at the trial, appellate or administrative levels), which the
other party may incur or suffer, or to which the other party may be subjected,
as a result of such breach. Any liability hereunder shall survive the expiration
or earlier termination of this Lease.

                                      -30-
<PAGE>

                                  ARTICLE 22

                          MECHANIC'S AND OTHER LIENS

     Section 22.1   Tenant shall not cause any lien, mortgage or other
     ------------
encumbrance upon the reversion or other estate of Landlord, or upon any interest
of Landlord in the Premises or in the buildings or improvements thereon; it
being agreed that should Tenant cause any Alterations or repairs to be made to
the Premises, or cause any labor to be performed or material to be furnished
therein, thereon or thereto, neither Landlord nor the Premises shall under any
circumstances be liable for the payment of any expense incurred or for the value
of any work done or material furnished, but all such Alterations and repairs,
and labor and material, shall be made, furnished and performed at Tenant's
expense, and Tenant shall be solely and wholly responsible to contractors,
laborers and materialmen furnishing and performing such labor and material.

     Section 22.2   If, because of any act or omission (or alleged act or
     ------------
omission) of Tenant, any mechanic's or other lien, charge or order for the
payment of money shall be filed against the Premises or any building or
improvements thereon or against Landlord, or any conditional bill of sale,
chattel mortgage, security agreement or financing statement shall be made or
filed for or affecting any equipment or any materials used in the construction
or alteration of, or installed in, any such building or improvement (whether or
not such lien, charge or order, conditional bill of sale, chattel mortgage,
security agreement or financing statement, is valid or enforceable as such),
Tenant shall, at its own cost and expense, cause the same to be canceled and
discharged of record or bonded within fifteen (15) days after notice of filing
thereof. Tenant shall have the right to contest the correctness or the validity
of any such lien if, immediately on demand by Landlord, Tenant procures and
records a lien release bond issued by a corporation authorized to issue surety
bonds in California, in an amount equal to one and one-half (1 1/2) times the
amount of the claim of lien. The bond shall meet the requirement of Civil Code
Section 3143, and shall provide for the payment of any sum that the claimant may
recover on the claim (together with costs of suit, if it recovers in the
action).

                                  ARTICLE 23

                     NO RENT ABATEMENT AND QUIET ENJOYMENT

     Section 23.1   No abatement, diminution or reduction of Rent, charges or
     ------------
other compensation shall be claimed by or allowed to Tenant, or any persons
claiming under it, except as may be specified in this Lease, whether for
inconvenience, discomfort, interruption of business, or otherwise, arising from
the making of Alterations or repairs to any buildings now on or which may
hereafter be erected on the Premises, by virtue or because of any present or
future governmental laws, ordinances, requirements, orders, directions, rules or
regulations or arising from any other cause or reason.

     Section 23.2   As long as Tenant is not in default of this Lease beyond any
     ------------
applicable cure period, Tenant shall quietly enjoy the Premises without
disturbance by Landlord, or by anyone claiming a right to possession by or
through Landlord, subject to the covenants,

                                      -31-
<PAGE>

agreements, terms, provisions, and conditions of this Lease. This covenant of
Landlord is in lieu of any covenant of quiet enjoyment implied by law.

                                  ARTICLE 24

                                  END OF TERM

     Section 24.1  Tenant shall, on the last day of the Lease Term, or upon the
     ------------
sooner termination of the Lease Term, peaceably and quietly surrender and
deliver the Premises to Landlord free of subtenancies (unless Landlord shall
consent to the continuance thereof), broom-clean, including all buildings and,
subject to Section 11.3 herein, Alterations constructed, erected, added or
placed by Tenant thereon, with all equipment in or appurtenant thereto, except
Tenant's Personal Property in good order, condition and repair, reasonable wear
and tear and damage caused by the acts of Landlord, its agents, contractors, or
employees, by Landlord's failure to perform its obligations or by condemnation,
fire, or other casualty excepted.

     Section 24.2  Any trade fixtures or personal property not used in
     ------------
connection with the operation of the Premises and belonging to Tenant or any
assignee or subtenant, if not removed upon surrender of possession or
abandonment by Tenant or such assignee or subtenant shall, if Landlord shall so
elect or unless Landlord shall consent to the continuance of such subtenancy, be
deemed abandoned and become the property of Landlord without any payment or
offset therefor. If Landlord shall not so elect, Landlord may remove such
fixtures or property from the Premises and store them at Tenant's risk and
expense. Except for Landlord's gross negligence and willful misconduct, Tenant
shall repair and restore, and save Landlord harmless from, all damage to the
Premises caused by the removal therefrom, whether by Tenant or by Landlord, of
all such trade fixtures and personal property.

     Section 24.3  Upon surrendering the Premises to Landlord as provided
     ------------
herein, Tenant will pay to Landlord all deposits or other security and all
unapplied prepaid rents received from subtenants and other occupants whose
tenancies may continue beyond the last day of the term of this Lease or the
sooner termination thereof and will deliver to Landlord all original subleases
and modifications thereof, and copies of all lease files, plans, records,
registers and all other papers and documents which may be required for the
proper operation and management of the Premises and are then in Tenant's
possession. It is agreed that Landlord will suffer irreparable injury if such
records, papers and documents are not so delivered and that Landlord shall be
entitled to mandatory injunction (including a temporary mandatory injunction
pendente lite) to enforce such delivery. Tenant shall have access to any
-------- ----
records, papers and documents so delivered to such extent and at such times as
the same may be reasonably required after the last day of the Lease Term or such
sooner termination thereof. Nothing herein shall require Landlord to recognize
any such existing sublease as continuing in effect after such last day or sooner
termination.

     Section 24.4  The provisions of this Article 24 shall survive the
     ------------
expiration or sooner termination of this Lease.

                                      -32-
<PAGE>

                                  ARTICLE 25

                             ESTOPPEL CERTIFICATE

     Section 25.1  Tenant shall, without charge, at any time and from time to
     ------------
time hereafter, within ten (10) days after delivery to Tenant of a request by
Landlord, certify by a written instrument duly executed and acknowledged to any
mortgagee or purchaser, or any other person, firm or corporation specified by
Landlord, as to the validity and force and effect of this Lease, in accordance
with its tenor, as then constituted, as to the existence of any default on the
part of any party thereunder, as to the existence of rely offsets, counterclaims
or defenses thereto on the part of Tenant, and as to any other matters which may
be reasonably requested by Landlord or such mortgagee, purchase, or other
person.

                                  ARTICLE 26

                             HAZARDOUS SUBSTANCES

     Section 26.1  Tenant represents and warrants that it is not currently in
     ------------
violation of any Environmental Requirement regarding Hazardous Materials and has
not received any notice of violation, lien, complaint, suit, order or other
notice with respect to any Environmental Requirement and that the Tenant's
current operations are in full compliance with all Environmental Requirements.

     Section 26.2  Except with respect to any Hazardous Materials present on the
     ------------
Premises prior to the Commencement Date and undisturbed at any time by Tenant or
Tenant's agents, employees, contractors, licensees, or invitees, Tenant shall
comply in all respects with all Environmental Requirements at the Premises and
will not generate, store, handle, process or dispose of or otherwise use
Hazardous Materials at, in, on, under or about the Premises, in violation of any
Environmental Requirements. If at any time it is determined that Tenant is in
violation of this Section 26.2, the Tenant will take such action as is necessary
in accordance with relevant Environmental Requirements, at its sole cost and
expenses, to remedy such violation. If the undersigned fails to do so following
notice from Landlord, Landlord may, but shall not be obligated to, take such
action it deems is necessary or desirable to remedy such violation at the
expense of the Tenant. All stuns so expended shall be immediately due and
payable on demand and shall bear interest at the highest rate permitted by law.

     Section 26.3  Tenant will defend, indemnify and hold harmless Landlord from
     ------------
and against any and all claims, demands, penalties, causes of action, fines,
losses, liabilities, settlements, damages, costs, or expenses of whatever kind
or nature, known or unknown, foreseen or unforeseen, contingent or otherwise,
including without limitation, reasonable counsel and consultant fees and
expenses, court costs and litigation expenses, arising out of or in anyway
related to any breach of this Article 26, any damage or injury resulting from
any such Hazardous Material stored, generated, disposed of or used by Tenant or
its agents, employees or contractors in, on or about the Premises and/or any
related violation of any Environmental Requirement by Tenant or its agents,
employees, or contractors.

                                      -33-
<PAGE>

     Section 26.4  The obligations and liabilities of the Tenant under this
     ------------
Article 26 shall survive the termination of the Lease and shall continue in full
force and effect.

     Section 26.5  Notwithstanding anything contained in this Lease to the
     ------------
contrary, Tenant shall have no responsibility with respect to any Hazardous
Materials located at, in, on, under, or about the Premises prior to the
Commencement Date that were not caused by Tenant, its agents, employees, or
contractors, except to the extent any such Hazardous Materials are disturbed by
any act of Tenant, or its agents, employees, contractors, licensees, or
invitees.

                                  ARTICLE 27

                             PARKING ENTITLEMENTS

     Section 27.1  Tenant's Parking Entitlements.  Tenant shall be entitled to
     -------------------------------------------
the exclusive use of the entire parking area improvements located on the
Premises on the Effective Date of this Lease, including, without limitation, the
non-striped parking areas of the Premises, such as the concrete apron, during
the Term. With the prior written consent of the Landlord, Tenant may reconfigure
the existing parking spaces on the Premises and add parking spaces in accordance
with all applicable laws and regulations, including, without limitation, the
Americans with Disabilities Act, and Tenant shall be entitled to install signage
in conformance with Landlord-approved plans indicating parking spaces for
Tenant's visitor parking and other reserved parking. Landlord shall have no
responsibility for policing or otherwise enforcing parking rights in the
Premises.

                                  ARTICLE 28

                                 MISCELLANEOUS

     Section 28.1  The covenants and conditions contained in this Lease shall be
     ------------
binding upon and inure to the benefit of the successors and assigns of the
parties hereto.

     Section 28.2  Time is of the essence in each and every provision of this
     ------------
Lease.

     Section 28.3  This Lease shall not be recorded without the prior written
     ------------
consent of Landlord.

     Section 28.4  If any provision of this Lease or the application thereof to
     ------------
any persons or circumstances shall to any extent be held to be invalid or
unenforceable, neither the remainder of this Lease nor the application of such
provision to persons or circumstances other than those as to whom or which it is
held to be invalid or unenforceable shall be affected thereby, and every
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.

     Section 28.5  In the event of any litigation or other proceedings involving
     ------------
the parties hereto for the enforcement of any of the provisions of this Lease,
or any right of Landlord or Tenant in such litigation or other proceedings, the
unsuccessful party in such litigation or other proceedings hereby agrees to pay
to the successful party all costs and expenses, including reasonable attorney's
fees and court costs (whether incurred at the trial, appellate or administrative
levels), incurred by the successful party in such litigation or other
proceedings, all

                                      -34-
<PAGE>

of which may be included in, and is a party of, any judgment or decision
rendered in such litigation or other proceedings.

     Section 28.6   This Lease shall be construed and enforced in accordance
     ------------
with the laws of the State of California, without reference to choice of law
rules.

     Section 28.7   All references herein to a "mortgage" shall be deemed to
     ------------
include a deed of trust and all references to a "mortgagee" shall be deemed to
include the holder era deed of trust.

     Section 28.8   The terms of this Lease are intended by the parties hereto
     ------------
as a final expression of their agreement with respect to the subject matter
hereof, and may not be contradicted by evidence or any prior or contemporaneous
agreement. The parties further intend that this Lease constitute the complete
and exclusive statement of its terms, and that no extrinsic evidence whatsoever
may be introduced in any proceedings, if any (judicial or otherwise), other than
by written agreement, executed by all of the parties hereto or their successors
in interest.

     Section 28.9   The headings of the various articles of this Lease are
     ------------
intended solely for means of reference, and are not intended for any purposes
whatsoever to modify, explain or place any construction on any of the provisions
of this Lease.

     Section 28.10  Tenant shall provide Landlord copies of all engineering,
     -------------
architectural and inspections reports it obtains for the Premises and shall
provide Landlord with a corporate resolution authorizing Tenant to enter into
this transaction, or other evidence satisfactory to Landlord of the authority of
Tenant to enter into this transaction.

     Section 28.11  This Lease may be executed in two or more identical
     -------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                      -35-
<PAGE>

     Section 28.12  Tenant agrees that if Landlord shall fail to perform any
     -------------
covenant or obligation on its part to be performed, and as a consequence
thereof, or if on any other claim by Tenant concerning the Premises or this
Lease, Tenant shall recover a money judgment against Landlord, then such
judgment shall be satisfied only out of Landlord's estate in the Premises or
insurance maintained by Landlord, and Landlord shall have no personal or further
liability whatsoever with respect to any such default or judgment.

     IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
dates set forth below and it shall be effective as of the later of such dates.

                         LANDLORD:
                         ---------

                         FIRST STATE REALITY OF AMERICA, INC.

                         By:  /s/ Peter S. Gummo
                              ---------------------------------
                              Peter S. Gummo, President

                         TENANT:
                         -------

                         INTERTRUST TECHNOLOGIES CORPORATION

                         By:  /s/ Erwin N. Lenowitz
                              ---------------------------------

                         Its: CFO
                              ---------------------------------

                         By:___________________________________

                         Its:__________________________________

                                      -36-
<PAGE>

                                   EXHIBIT A

Situated in the State of California, County of Santa Clara, City of Santa Clara
and is described as follows:

All of Parcel 19, as shown upon that certain Map entitled, "Parcel Map being a
Resubdivision of Parcels 1, 3, 4, 5, and 9 and areas A, B and D, as shown on
Parcel Map 3399, recorded in Book 368 of Maps, at pages 36 and 37, Santa Clara
County Records", which Map was filed for record in the office of the Recorder of
the County of Santa Clara, State of California on December 29, 1976 in Book 386
of Maps, at pages 4 and 5.

<PAGE>

                                   EXHIBIT B

1.   A Bond No. 52A, Assessment No. 9, for Marriott Business Park Unit 1.

2.   A Bond No. 50R, Assessment No. 445, for Bayshore North Improvement.

3.   Covenants, conditions and restrictions in the declaration,
     Executed by:   Marriott Corporation, a Delaware corporation
     Recorded:      March 15, 1976 in Book B915, at page 228, of official
                    records said covenants, conditions and restrictions were
                    modified by instrument:
     Recorded:      November 16, 1977 in Book D281, at page 411, official
                    records

4.   An easement for the purposes shown and incidental purposes as contained in
     the instrument,
     In favor of:   The City of Santa Clara, California, a municipal
                    corporation
     Purpose:       Underground electrical easements
     Affects:       Said land
     Recorded:      December 1, 1976 in Book C444, at page 600, official records

5.   Agreement For: The installation and maintenance of landscape improvements
     Dated:         December 14, 1976
     Executed By:   The City of Santa Clara, a Municipal Corporation
     Recorded:      December 17, 1976 in Book C484, at page 109, official
                    records

6.   Easement in
     favor of:      City of Santa Clara
     Purpose:       Installation and repair of underground electrical systems
                    together with right of way
     Affects;       The northerly 10 feed of the southerly 38 feet of the
                    westerly 243 feet of the easterly 253 feet of parcel 19 of
                    that parcel map filed for record December 29, 1976 in book
                    386 of maps at pages 4 and 5, Santa Clara records

     Recorded:      April 11, 1979, in book E409, at page 558, official records

     Any matters arising subsequent to April 13, 1982 provided the same do not
materially interfere with Tenant's intended use of the Premises.

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