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Exhibit 10.76  

  
 

    ROYALTY BUY-OUT AGREEMENT    
  

    This Royalty Buy-Out Agreement (this "Agreement") is entered into as of this 30th day of May, 2000, by and between Staar Surgical Company
(hereinafter "Staar") and Bausch & Lomb Surgical, Inc. (hereinafter "B&L Surgical"), collectively referred to herein as the "Parties." 

 
 

RECITALS    
  

    WHEREAS Staar and Chiron Ophthalmics, Inc., (predecessor to B&L Surgical) are parties to a License Agreement made effective March 9, 1990 (hereinafter
the "License Agreement"), a copy of which is attached hereto as Exhibit A and incorporated herein by this reference; 

    WHEREAS,
the License Agreement provides, among other things, for the payment of certain royalties by B&L Surgical, as successor to Chiron Ophthalmics, Inc., to Staar; 

    WHEREAS,
Staar and Chiron Vision Corporation ("CVC"), predecessor to B&L Surgical, are parties to a Term Sheet made effective February 6, 1998, a copy of which is attached
hereto as Exhibit B and incorporated herein by this reference, which provides B&L Surgical, as successor to CVC, with a prepaid royalty credit, the balance of which is One Hundred Thousand Dollars
($100,000.00) as of the date hereof (the "Royalty Credit"); 

    WHEREAS,
a dispute has arisen between Staar and B&L Surgical (hereinafter, the "Dispute") concerning the amount of royalties due and owing Staar pursuant to the License Agreement; 

    WHEREAS,
on or about December 2, 1999, Staar filed a lawsuit styled Staar Surgical Company v. Bausch & Lomb Surgical, in Los
Angeles County Superior Court (Case No. BC 221000) (hereinafter, the "Action"); 

    WHEREAS,
the Parties desire to resolve their Dispute concerning the amount of royalties owed to Staar and for B&L Surgical to buy out any past, present and future royalties that may
become owed to Staar; 

    Now,
therefore, for valuable consideration, the receipt of which is hereby acknowledged, Staar and B&L Surgical agree as follows: 

    1.  Royalty Buy-Out.  B&L Surgical shall buy out all past, present and future royalties owed to Staar
under the License Agreement for the sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) (the "Royalty Buy-Out Amount"). Payment of the Royalty Buy-Out in the form of a corporate
check shall be delivered to Staar's attorney, Frank Frisenda Jr., Esq., 11755 Wilshire Boulevard, 10th Floor, Los Angeles, CA 90025, within ten (10) days from the date that this
Agreement is executed by Staar, and a copy is delivered to and received by Mark M. Tomaino, Bausch & Lomb Surgical, 555 W. Arrow Highway, Claremont, CA 91711. By payment of the Royalty Buy-Out Amount,
B&L Surgical shall have a fully paid-up and irrevocable license, to the Licensed Technology Rights, and to sell Licensed Products, pursuant to the License Agreement, and B&L Surgical shall be fully
and forever discharged and relieved of any and all obligations under the License Agreement for past, present and future payments of royalties to Staar. Therefore, Staar expressly waives any right to
terminate the License Agreement. 

    2.  No Further Accounting Obligations.  As a result of this Agreement, B&L Surgical shall have no further
obligations to Staar under Section 4 of the License Agreement, including but not limited obligations to keep records or make reports, and Staar fully and forever discharges and relieves B&L
Surgical from any such obligations. 

    3.  Other Terms and Provisions of License Agreement.  All other terms and provisions of the License
Agreement, except those expressly discharged herein, shall remain in full force and effect. 

 

    4.  Dismissal With Prejudice.  Within five (5) days of receipt by Staar of the payment described in
paragraph 1 of this Agreement, Staar shall cause its counsel to file with the court a Dismissal with Prejudice of the Action in its entirety. 

    5.  Release of Claims.  Staar expressly agrees fully, completely and forever to release and discharge all
claims which were, and which could have been, asserted against B&L Surgical in the Action. Subject to
Section 6 hereof, B&L Surgical expressly agrees fully, completely and forever to release and discharge Staar of any claims which could have been asserted against Staar under the License
Agreement prior to the date hereof, including claims related to the Royalty Credit. Staar and B&L Surgical have had the benefit of counsel, have been advised of, understand, and knowingly and
specifically waive their respective rights under California Civil Code Section 1542 which provides as follows: 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR. 

    6.  Indemnity.  

    a.  Staar
agrees to defend, indemnify and hold harmless B&L Surgical and its affiliates from and against any and all causes of action, demands, liabilities, costs,
damages or expenses arising as a result of or in connection with any allegation by Canon-Staar Co., Inc. ("Canon-Staar") or its affiliates that B&L Surgical or its affiliates infringe any of the
Japanese patents and patent applications listed on Exhibit A attached to the Term Sheet effective as of February 6, 1998 between CVC and Cannon-Staar, a copy of which is incorporated
herein by reference, attached hereto as Exhibit C. 

    b.  B&L
Surgical shall offer Staar reasonable cooperation in the defense of any and all claims and causes of action arising as a result or in connection with any
allegation by Canon-Staar or its affiliates that B&L Surgical or its affiliates infringe any of the foregoing Japanese patents; provided that B&L Surgical shall not be required to incur any
out-of-pocket costs. Staar shall at all times have full and final control of B&L Surgical's defense including the right to unilaterally make all decisions regarding such defense and any settlement of
such claims and causes of action; provided that in no event shall Staar agree to any settlement that does not provide B&L Surgical with a royalty-free and/or paid-up license to practice under the
foregoing Japanese patents. B&L Surgical hereby agrees to provide advance notice to Staar of any significant action it intends to take with respect to any allegations by Canon-Staar or its affiliates
and B&L Surgical shall not take any such action without Staar's consent, which shall not be unreasonably withheld. B&L Surgical agrees to give prompt notice to Staar of any settlement offer made by
Canon-Staar with respect to such allegations and agrees not to make any settlement offer without first receiving Staar's approval of the offer, which shall not be unreasonably withheld. 

    7.  Compromise and Denial of Liability.  This Agreement is the result of a compromise among the Parties
and shall never at any time or for any purpose be considered as an admission of liability and/or responsibility on the part of any party herein released, nor shall the payment of any sum of money in
consideration for the execution of this Agreement constitute or be construed as an admission of any
liability whatsoever by any party herein released, each of which continues to deny such liability and disclaim such responsibility. 

    8.  Authority.  Each person and entity executing this Agreement does hereby personally represent that
he/she has the authority to execute this Agreement on behalf of, and fully bind, such purported principal and further warrants and represents that is has not assigned, transferred or pledged any of
the 

2

 

claims being released hereunder and that it is the sole owner of all such claims and has full power and authority to enter into this Agreement. 

    9.  Governing Law.  This Agreement shall in all respects be interpreted, enforced and governed by and
under the laws of the State of California. 

    10.  Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective predecessors, successors, assigns, partners, partnerships, joint ventures, parents, subsidiaries, affiliated and related entities, officers, directors, principals, agents,
servants, employees, representatives and all persons, firms, associations, and/or corporations connected with them. 

    11.  Counterparts.  This Agreement may be executed in counterparts, and all such counterparts shall
constitute one Agreement, which shall be binding upon all Parties hereto, notwithstanding that the signatures of the Parties' designated representatives do not appear on the same page. 

    12.  Additional Documents.  The Parties agree to cooperate fully and execute any and all supplementary
documents and to take all additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Agreement. 

    13.  Press Release.  Neither Party hereto shall issue any press release concerning the subject matter of
this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld. 

    14.  Entire Agreement.  This Agreement, including all exhibits attached hereto, constitutes the entire
understanding between and among the Parties with regard to the matters herein set forth. There are no
representations, warranties, arrangements, or undertakings, oral or written, between or among the Parties relating to the subject matter of this Agreement which are not fully expressed. 

	 
	 	 
	 	 

	DATED:  May 30, 2000	 	STAAR SURGICAL COMPANY
	

 	
 	

By:	
 	

/s/ WILLIAM C. HUDDLESTON   

	

 	
 	

Title:	
 	

President and CEO

	

DATED:  May 31, 2000	
 	
BAUSCH & LOMB SURGICAL, INC.

	

 	
 	

By:	
 	

/s/ ILLEGIBLE   

	

 	
 	

Title:	
 	

President

3

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ROYALTY BUY-OUT AGREEMENT

RECITALS<PAGE>

                                                                   Exhibit 10.16

                                 LEASE AGREEMENT
                                    (NNN R&D)
                             BASIC LEASE INFORMATION

LEASE DATE:                         February 12, 2000

LANDLORD:                           LEGACY-RECP SORRENTO OPCO, LLC,
                                    A DELAWARE LIMITED LIABILITY COMPANY

LANDLORD'S ADDRESS:                 C/O LEGACY PARTNERS COMMERCIAL, INC.
                                    6480 WEATHERS PLACE, SUITE 245
                                    SAN DIEGO, CA 92121

TENANT:                             WEBSENSE, INC.,
                                    A DELAWARE CORPORATION

TENANT'S ADDRESS:                   10240 SORRENTO VALLEY ROAD, SUITE 200
                                    SAN DIEGO, CA 92121

PREMISES:                           Approximately 7,493 rentable square feet as
                                    shown on EXHIBIT A

PREMISES ADDRESS:                   10240 SORRENTO VALLEY ROAD, SUITE 150,
                                    SAN DIEGO, CA 92121

                                    BUILDING 102401:  Approximately 65,217
                                    rentable square feet
                                    LOT (BUILDING'S TAX PARCEL): APN 343-130-17
                                    PARK [LEGACY CREEKSIDE]:  Approximately
                                    122,172 rentable square feet

TERM:                               The Commencement Date shall be the earlier
                                    of (i) the date Tenant commences business in
                                    the Premises, or (ii) One Hundred (100) days
                                    after the date of full execution and
                                    delivery of this Lease by Landlord to
                                    Tenant. The Expiration Date shall be the
                                    date which is Thirty-Six (36) months
                                    following the Commencement Date.

BASE RENT (PARA 3):                 NINE THOUSAND EIGHT HUNDRED NINETY-ONE
                                    DOLLARS ($9,891.00) per month

ADJUSTMENTS TO BASE RENT:           MONTHS 2-4                BASE RENT ABATED
                                    MONTHS 5:             $ 7,913.00 PER MONTH
                                    MONTHS 6-12:          $ 9,891.00 PER MONTH
                                    MONTHS 13-24:         $10,286.00 PER MONTH
                                    MONTHS 25-36:         $10,698.00 PER MONTH

SECURITY DEPOSIT (PARA 41):         NINE THOUSAND EIGHT HUNDRED NINETY-ONE
                                    DOLLARS ($9,891.00)

LETTER OF CREDIT (PARA 4):          FORTY-NINE THOUSAND THREE HUNDRED DOLLARS
                                    ($49,300.00) as further described in
                                    Section 4 of the Lease.

<TABLE>

<S>                                                        <C>
*TENANT'S SHARE OF OPERATING EXPENSES (PARA 6.1):          11.5% of Building 10240 and 6.1% of the Park
*TENANT'S SHARE OF TAX EXPENSES (PARA 6.2):                 6.1% of the Park
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (PARA 7):      6.1% of the Park
*TENANT'S SHARE OF UTILITY EXPENSES (PARA 7):              11.5% of Building 10240 and 6.1% of the Park

</TABLE>

* The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

PERMITTED USES (PARA 9):            General office, software development and
                                    customer support, but only to the extent
                                    permitted by the City of San Diego and all
                                    agencies and governmental authorities having
                                    jurisdiction thereof.

UNRESERVED
PARKING SPACES:                     TWENTY-NINE (29) non-exclusive and
                                    non-designated spaces.

BROKER (PARA 38):                   CB RICHARD ELLIS FOR TENANT COLLIERS
                                    INTERNATIONAL FOR LANDLORD

EXHIBITS:                           EXHIBIT A - PREMISES, BUILDING, LOT AND/OR
                                                PARK
                                    EXHIBIT B - TENANT IMPROVEMENTS
                                    EXHIBIT C - RULES AND REGULATIONS
                                    EXHIBIT D - INTENTIONALLY OMITTED

<PAGE>

Exhibit E -                         HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE -
                                    EXAMPLE
Exhibit F -                         CHANGE OF COMMENCEMENT DALE - EXAMPLE
Exhibit G -                         TENANT'S INITIAL HAZARDOUS MATERIALS
                                    DISCLOSURE CERTIFICATE
Exhibit H -                         SIGN CRITERIA

Addenda:                            ADDENDUM 1:  OPTION TO EXTEND THE LEASE

                                       2
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                                                                        PAGE
-------                                                                                                        ----
<S>                                                                                                            <C>
1.       PREMISES.................................................................................................5

2.       ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES...............................................5

3.       RENT.....................................................................................................5

4.       COLLATERAL FOR PERFORMANCE OF LEASE OBLIGATIONS..........................................................6

5.       TENANT IMPROVEMENTS......................................................................................7

6.       ADDITIONAL RENT..........................................................................................7

7.       UTILITIES...............................................................................................10

8.       LATE CHARGES............................................................................................11

9.       USE OF PREMISES.........................................................................................12

10.      ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES....................................................13

11.      REPAIRS AND MAINTENANCE.................................................................................13

12.      INSURANCE...............................................................................................14

13.      WAIVER OF SUBROGATION...................................................................................15

14.      LIMITATION OF LIABILITY AND INDEMNITY...................................................................15

15.      ASSIGNMENT AND SUBLEASING...............................................................................16

16.      AD VALOREM TAXES........................................................................................17

17.      SUBORDINATION...........................................................................................17

18.      RIGHT OF ENTRY..........................................................................................18

19.      ESTOPPEL CERTIFICATE....................................................................................18

20.      TENANT'S DEFAULT........................................................................................19

21.      REMEDIES FOR TENANT'S DEFAULT...........................................................................19

22.      HOLDING OVER............................................................................................20

23.      LANDLORD'S DEFAULT......................................................................................21

24.      PARKING.................................................................................................21

25.      SALE OF PREMISES........................................................................................21

26.      WAIVER..................................................................................................21

27.      CASUALTY DAMAGE.........................................................................................21

28.      CONDEMNATION............................................................................................22

29.      ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS...............................................................22

30.      FINANCIAL STATEMENTS....................................................................................24

31.      GENERAL PROVISIONS......................................................................................25

32.      SIGNS...................................................................................................26

33.      MORTGAGEE PROTECTION....................................................................................26

</TABLE>

                                       3
<PAGE>

<TABLE>

<S>                                                                                                            <C>
34.      QUITCLAIM...............................................................................................27

35.      MODIFICATIONS FOR LENDER................................................................................27

36.      WARRANTIES OF TENANT....................................................................................27

37.      COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT.........................................................27

38.      BROKERAGE COMMISSION....................................................................................28

39.      QUIET ENJOYMENT.........................................................................................28

40.      LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS..........................................28

41.      SECURITY DEPOSIT........................................................................................28

42.      SATELLITE DISH..........................................................................................29

</TABLE>

                                       4
<PAGE>

                                 LEASE AGREEMENT

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

1.       PREMISES

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

2.       ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES

         2.1      If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the Lease Term and the obligation
to pay Rent shall commence on the date possession is tendered and the Expiration
Date and the dates for the adjustments to Base Rent shall be extended
commensurately. In the event the commencement date and/or the expiration date of
this Lease is other than the Commencement Date and/or Expiration Date specified
in the Basic Lease Information, as the case may be, Landlord and Tenant shall
execute a written amendment to this Lease, substantially in the form of EXHIBIT
F hereto, wherein the parties shall specify the actual commencement date,
expiration date, the date on which Tenant is to commence paying Rent, and the
dates for the adjustments to Base Rent. The word "Term" whenever used herein
refers to the initial term of this Lease and any extension thereof. By taking
possession of the Premises, Tenant shall be deemed to have accepted the Premises
in good condition and state of repair; however, Landlord shall deliver the
Premises with the existing building operating systems including electrical,
mechanical and plumbing systems in good working condition as of the Commencement
Date of the Lease and Tenant shall have a review period of thirty (30) days to
confirm such condition. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives has made any representations
or warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose.

         2.2      Landlord shall permit Tenant to access the Premises for the
sole purposes of installing telephone and computer wiring and systems, and
installing cubicles on thirty (30) days prior to Substantial Completion of the
Tenant Improvements (prior to the Commencement Date) and such access shall be at
Tenant's sole risk and subject to all the provisions of this Lease, including,
but not limited to, the requirement to pay the Security Deposit and deliver to
Landlord the Letter of Credit, and to obtain the insurance required pursuant to
this Lease and to deliver insurance certificates as required herein. In addition
to the foregoing, Landlord shall have the right to impose such additional
reasonable conditions on Tenant's early entry as Landlord shall deem
appropriate. Tenant shall not be responsible for paying Base Rent or Tenant's
Share of Operating Expenses, Tax Expenses, Common Area Utility Costs, or Utility
Expenses during such early access period. However, if; at any time, Tenant is in
default of any term, condition or provision of this Lease, any such waiver by
Landlord of Tenant's requirement to pay rental payments shall be null and void
and Tenant shall immediately pay to Landlord all rental payments so waived by
Landlord.

3.       RENT

         On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent specified in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month

                                       5
<PAGE>

throughout the balance of the Term of the Lease. In addition to the Base Rent
set forth in the Basic Lease Information, Tenant shall pay Landlord in advance
on the Commencement Date and thereafter on the first (1st) day of each month
throughout the balance of the Term of this Lease, as Additional Rent, Tenant's
Share of Operating Expenses, Tax Expenses, Common Area Utility Costs, and
Utility Expenses. Tenant shall also pay to Landlord as Additional Rent
hereunder, within ten (10) days after receipt of Landlord's written demand
therefor, any and all costs and expenses incurred by Landlord to enforce the
provisions of this Lease, including, but not limited to, costs associated with
the delivery of notices, delivery and recordation of notice(s) of default,
attorneys' fees, expert fees, court costs and filing fees (collectively, the
"Enforcement Expenses"). The term "Rent" whenever used herein refers to the
aggregate of all these amounts. If Landlord permits Tenant to occupy the
Premises without requiring Tenant to pay rental payments for a period of time,
the waiver of the requirement to pay rental payments shall only apply to waiver
of the Base Rent and Tenant shall otherwise perform all other obligations of
Tenant required hereunder, except Tenant shall not be responsible for paying
Tenant's Share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
or Utility Expenses during the early access period described in Section 2.2
above. The Rent for any fractional part of a calendar month at the commencement
or termination of the Lease term shall be a prorated amount of the Rent for a
full calendar month based upon a thirty (30) day month. The prorated Rent shall
be paid on the Commencement Date and the first day of the calendar month in
which the date of termination occurs, as the case may be.

4.       COLLATERAL FOR PERFORMANCE OF LEASE OBLIGATIONS

         Prior to Tenant's early access under Section 2.2, Tenant shall deliver
to Landlord, as collateral for the full and faithful performance by Tenant of
all of its obligations under this Lease and for all losses and damages Landlord
may suffer as a result of any default by Tenant under this Lease, an irrevocable
and unconditional negotiable letter of credit, in the form and containing the
terms required herein, payable in the City of San Diego, California running in
favor of Landlord issued by a solvent bank under the supervision of the
Superintendent of Banks of the State of California, or a National Banking
Association, in the original amount of Forty-nine Thousand Three Hundred Dollars
($49,300.00) (the "Letter of Credit"); provided, however, the amount of the
Letter of Credit shall be increased by Tenant within fifteen (15) days following
Landlord's written demand therefore by an amount equal to the portion of Excess
Tenant Improvement Costs which are amortized over the initial term of the Lease
pursuant to Section 10 of Exhibit B to this Lease (and, thereafter, the term
"Letter of Credit" as used in this Lease shall mean and refer to the Letter of
Credit as increased by such principal amount). The Letter of Credit shall be (a)
at sight and irrevocable, (1)) except as set forth in this Section 4, maintained
in effect, whether through replacement, renewal or extension, for the entire
Lease Term (the "Letter of Credit Expiration Date") and Tenant shall deliver a
new Letter of Credit or certificate of renewal or extension to Landlord at least
thirty (30) days prior to the expiration of the Letter of Credit, without any
action whatsoever on the part of Landlord, (c) subject to the Uniform Customs
and Practices for Documentary Credits (1993-Rev) International Chamber of
Commerce Publication #500, (d) acceptable to Landlord in its sole discretion,
(e) fully assignable by Landlord by amendment thereto in accordance with
customary letter of credit practice, and (f) permit partial draws. In addition
to the foregoing, the form and terms of the Letter of Credit (and the bank
issuing the same) shall be acceptable to Landlord, in Landlord's reasonable
discretion, and shall provide, among other things, in effect that: (1) Landlord,
or its then managing agent, shall have the right to draw down an amount up to
the face amount of the Letter of Credit upon the presentation to the issuing
bank of Landlord's (or Landlord's then managing agent's) statement that such (A)
amount is due to Landlord under the terms and conditions of this Lease, it being
understood that if Landlord or its managing agent be a corporation, partnership
or other entity, then such statement shall be signed by an officer (if a
corporation), a general partner (if a partnership), or any authorized party (if
another entity), and (B) an event of default has occurred under this Lease and
all applicable notice and cure periods have elapsed; (2) the Letter of Credit
will be honored by the issuing bank without inquiry as to the accuracy thereof
and regardless of whether the Tenant disputes the content of such statement; and
(3) in the event of a transfer of Landlord's interest in the Building, Landlord
shall transfer the Letter of Credit, in whole or in part (or cause a substitute
letter of credit to be delivered, as applicable), to the transferee and
thereupon the Landlord shall, without any further agreement between the parties,
be released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole or
any portion of said Letter of Credit to a new Landlord. If, as a result of any
such application of all or any part of the Letter of Credit, the amount of the
Letter of Credit shall be less than Forty-nine Thousand Three Hundred Dollars
($49,300.00), Tenant shall within five (5) days thereafter provide Landlord with
additional letter(s) of credit in an amount equal to the deficiency (or a
replacement letter of credit in the total amount of Forty-nine Thousand Three
Hundred Dollars ($49,300.00) and each such additional (or replacement) letter of
credit shall comply with all of the provisions of this Section 4, and if Tenant
fails to do so, the same shall constitute an incurable default by Tenant. Tenant
further covenants and warrants that it will neither assign nor encumber the
Letter of Credit or any part thereof and that neither Landlord nor its
successors or assigns will be b any such assignment, encumbrance, attempted
assignment or attempted encumbrance. Without limiting the generality of the
foregoing, if the Letter of Credit expires earlier than the Letter of Credit
Expiration Date Landlord will accept a renewal thereof or substitute letter of
credit (such renewal or substitute letter of credit to be in effect not later
than twenty (20) days prior to the expiration thereof), which shall be
irrevocable and automatically renewable as above provided through the Letter of
Credit Expiration Date upon the same terms as the expiring letter of credit or
such other terms as may be acceptable to Landlord

                                       6
<PAGE>

in its reasonable discretion. However, if the Letter of Credit is not timely
renewed or a substitute letter of credit is not timely received, or if Tenant
fails to maintain the Letter of Credit in the amount and terms set forth in this
Section 4, Landlord shall have the right to present such Letter of Credit to the
bank in accordance with the terms of this Section 4, and the entire sum
evidenced thereby shall be paid to and held by Landlord as collateral for
performance of all of Tenant's obligations under this Lease and for all losses
and damages Landlord may suffer as a result of any default by Tenant under this
Lease. If there shall occur a default under this Lease as set forth in Section
20 6f this Lease, Landlord may, but without obligation to do so, draw upon the
Letter of Credit, in part or in whole, to cure any default of Tenant and/or to
compensate Landlord for any and all damages of any kind or nature sustained or
which may be sustained by Landlord resulting from Tenant's default. Tenant
agrees not to interfere in any way with payment to Landlord of the proceeds of
the Letter of Credit, either prior to or following a "draw" by Landlord of any
portion of the Letter of Credit, regardless of whether any dispute exists
between Tenant and Landlord as to Landlord's right to draw from the Letter of
Credit. No condition or term of this Lease shall be deemed to render the Letter
of Credit conditional to justify the issuer of the Letter of Credit in failing
to honor a drawing upon such Letter of Credit in a timely manner. Landlord and
Tenant acknowledge and agree that in no event or circumstance shall the Letter
of Credit or any renewal thereof or substitute therefor be (i) deemed to be or
treated as a "security deposit" within the meaning of California Civil Code
Section 1950.7, (ii) subject to the terms of such Section 1950.7, or (iii)
intended to serve as a "security deposit" within the meaning of such Section
1950.7. The parties hereto (x) recite that the Letter of Credit is not intended
to serve as a security deposit and such Section 1950.7 and any and all other
laws, rules and regulations applicable to security deposits in the commercial
context ("Security Deposit Laws") shall have no applicability or relevancy to
the Letter of Credit and (y) waive any and all rights, duties and obligations
either party may now or, in the future, will have relating to or arising from
the Security Deposit Laws. After the expiration of six (6) months following the
Commencement Date and after the expiration of each six (6) month period
thereafter, provided Tenant is not then in default under this Lease, Tenant
shall have the right to reduce the amount of the Letter of Credit by an amount
equal to Nine Thousand Eight Hundred Sixty Dollars ($9,860.00), if and when
Tenant provides to Landlord financial statements in the form required by Section
30 of this Lease which demonstrate, over the previous three (3) calendar
quarters, that the quotient of the following, on a percentage basis, equals or
exceeds eight percent (8%): Tenant's EBITDA (Earnings Before Interest, Taxes and
Depreciation), divided by Tenant's gross revenues.

5.       TENANT IMPROVEMENTS

         Tenant hereby accepts the Premises as suitable for Tenant's intended
use and as being in good operating order, condition and repair, "AS IS", except
as specified in Exhibit B attached hereto. Landlord or Tenant, as the case may
be, shall install and construct the Tenant Improvements (as such term is defined
in Exhibit B hereto) in accordance with the terms, conditions, criteria and
provisions set forth in Exhibit B. Landlord and Tenant hereby agree to and shall
be bound by the terms, conditions and provisions of Exhibit B. Tenant
acknowledges and agrees that neither Landlord nor any of Landlord's agents,
representatives or employees has made any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant's business or for
any other purpose, including without limitation, any storage incidental thereto.
Any exception to the foregoing provisions must be made by express written
agreement by both parties.

6.       ADDITIONAL RENT

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

         6.1      OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay Tenant's Share, which is specified in the Basic
Lease Information, of all Operating Expenses as Additional Rent. The term
"Operating Expenses" as used herein shall mean the total amounts paid or payable
by Landlord in connection with the ownership, maintenance, repair and operation
of the Premises, the Building and the Lot, and where applicable, of the Park
referred to in the Basic Lease Information. The amount of Tenant's Share of
Operating Expenses shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. These Operating Expenses
may include, but are not limited to:

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

                  6.1.2    Landlord's cost of maintaining the outside paved
area, landscaping and other common areas for the Park. The term "Common Areas"
shall mean all areas and facilities within the Park exclusive of the Premises
and the other portions of the Park leasable exclusively to other tenants. The

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Common Areas include, but are not limited to, interior lobbies, mezzanines,
parking areas, access and perimeter roads, sidewalks, landscaped areas and
similar areas and facilities;

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

                  6.1.4    Landlord's cost of: (i) modifications and/or new
improvements to the Building, the Common Areas and/or the Park occasioned by any
rules, laws or regulations effective subsequent to the date on which the
Building was originally constructed, but excluding Landlord's cost of
modifications and/or new improvements to the Building, the Common Areas and/or
the Park required by the Americans with Disabilities Act as in effect as of the
date of the Lease; (ii) reasonably necessary replacement improvements to the
Building, the Common Areas and the Park after the Commencement Date; and (iii)
new improvements to the Building, the Common Areas and/or the Park that reduce
operating costs or improve life/safety conditions, all as reasonably determined
by Landlord, in its sole discretion; provided, however, if any of the foregoing
are in the nature of capital improvements, then the cost of such capital
improvements shall be amortized on a straight-line basis over a reasonable
period, which shall not be less than the lesser of fifteen (15) years or the
reasonable estimated useful life of such modifications, new improvements or
replacement improvements in question (at an interest rate as reasonable
determined by Landlord), and Tenant shall pay Tenant's Share of the monthly
amortized portion of such costs (including interest charges) as part of the
Operating Expenses herein;

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

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

                  6.1.7    Intentionally Omitted;

                  6.1.8    Intentionally Omitted;

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

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

                  6.1.11   Landlord's cost for the management and administration
of the Premises, the Building and/or Park or any part thereof, including,
without limitation, a property management fee, accounting, auditing, billing,
postage, salaries and benefits for clerical and supervisory employees, whether
located on the Park or off-site, payroll taxes and legal and accounting costs
and all fees, licenses and permits related to the ownership, operation and
management of the Park. Landlord covenants that said costs shall be allocated
uniformly throughout the Park, and shall not be in excess of those costs charged
by unaffiliated third-party management companies in the San Diego area;

                  6.1.12   In the event Landlord elects, at Landlord's sole
discretion, to employ (or contract with a vendor for) a concierge for the
Building (which concierge shall perform such services for the Building as
Landlord shall reasonably request of such concierge), Landlord's cost of
providing such concierge, including without limitation, vendor charges, salary
costs, employment taxes, health insurance costs and other costs typically
incurred in the employment of personnel; and

                  6.1.13   Despite anything to the contrary in this Lease, the
following items shall be excluded from the calculation of Operating Expenses,
and Tenant shall not have a responsibility for any portion of the cost thereof:

                                       8
<PAGE>

                           (a)      Cost of repairs or other work occasioned by
the exercise eminent domain;

                           (b)      Leasing commissions, attorneys' fees, costs
and disbursements and other expenses which are incurred in connection with
negotiations or disputes with tenants, other occupants or prospective tenants;

                           (c)      Cost of renovating or otherwise improving or
decorating, painting or redecorating leased space for tenants or other occupants
or vacant tenant space, other than ordinary maintenance provided to all tenants,
except in all Common Areas;

                           (d)      If applicable, Landlord's costs of
electricity and other services sold separately to tenants for which Landlord is
entitled to be reimbursed by such tenants as an additional charge over and above
the Base Rent and Operating Expenses or other rental adjustments payable under
the Lease with such tenant, and domestic water submetered and separately billed
to tenants;

                           (e)      Depreciation;

                           (f)      Costs incurred due to violation by Landlord
or any tenant of the terms and conditions of any lease;

                           (g)      Overhead and profit paid to subsidiaries or
affiliates of Landlord for services on or to the Building and/or Premises, to
the extent only that the costs of such services exceed competitive costs for
such services were they not so rendered by a subsidiary or affiliate;

                           (h)      Ground rents, principal payments, or any
interest expense on any loans secured by mortgages placed upon the Building and
Lot (or a leasehold interest therein);

                           (i)      Any compensation paid to clerks, attendants
or other persons in commercial concessions operated by Landlord, except to the
extent that such compensation exceeds the revenue earned from such commercial
concession. In such event, the revenue earned from such commercial concession
shall first be applied to the cost of such compensation;

                           (j)      Any particular items and services for which
Tenant otherwise reimburses Landlord by direct payment over and above Base Rent
and Operating Expenses;

                           (k)      Advertising and promotional expenditures;

                           (l)      Any fines or penalties incurred due to
violations by Landlord of any governmental law, ordinance, rule or authority;

                           (m)      Any expense for which Landlord is
compensated through proceeds of insurance; and

                           (n)      Expenses in connection with services or
other benefits of a type which Tenant is not entitled to receive under the Lease
but which are provided to another tenant or occupant

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

                                       9
<PAGE>

shall not include any franchise, estate, inheritance, net income, or excess
profits tax imposed upon Landlord.

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

         6.4      ANNUAL RECONCILIATION: By June 30th of each calendar year, or
as soon thereafter as reasonably possible, Landlord shall furnish Tenant with an
accounting of actual Operating Expenses and Tax Expenses. Within thirty (30)
days of Landlord's delivery of such accounting, Tenant shall pay to Landlord the
amount of any underpayment. Notwithstanding the foregoing, failure by Landlord
to give such accounting by such date shall not constitute a waiver by Landlord
of its right to collect any of Tenant's underpayment at any time. Landlord shall
credit the amount of any overpayment by Tenant toward the next estimated monthly
installment(s) falling due, or where the Term of the Lease has expired, refund
the amount of overpayment to Tenant together with such accounting. If the Term
of the Lease expires prior to the annual reconciliation of expenses Landlord
shall have the right to reasonably estimate Tenant's Share of such expenses, and
if Landlord determines that an underpayment is due, Tenant hereby agrees that
Landlord shall be entitled to deduct such underpayment from Tenant's Security
Deposit, provided Landlord delivers such accounting described herein. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's Share of such expenses or to otherwise perform such
reconciliation of expenses, including without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the Term of the Lease or at any time after the expiration or
earlier termination of this Lease.

         6.5      AUDIT: After delivery to Landlord of at least twenty (20) days
prior written notice, Tenant, at its sole cost and expense through any
accountant designated by it, shall have the right to examine and/or audit the
books and records evidencing such costs and expenses for the previous one (1)
calendar year, during Landlord's reasonable business hours but not more
frequently than once during any calendar year. Any such accounting firm
designated by Tenant may not be compensated on a contingency fee basis. The
results of any such audit (and any negotiations between the parties related
thereto) shall be maintained strictly confidential by Tenant and its accounting
firm and shall not be disclosed, published or otherwise disseminated to any
other party other than to Landlord and its authorized agents. Landlord and
Tenant shall use their best efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant in the accounting
of such costs and expenses.

         6.6      AFTER-HOURS HVAC: Landlord shall install at its expense
equipment to enable Tenant to activate and control heating, air conditioning
and/or ventilation to the Premises during all hours which are non-building
standard hours for operation ("After-Hours HVAC"). Heating, air conditioning
and/or ventilation utilized at anytime outside of the hours of 7:00 a.m. to 6:00
p.m. on Monday through Friday and 8:00 a.m. to 1:00 p.m. on Saturday (including
legal holidays) shall be considered After-Hours HVAC use. Tenant shall pay to
Landlord within ten (10) days of Landlord's written demand therefor, as
additional rent, (i) Landlord's actual cost of supplying such After-Hours HVAC,
plus (ii) an amount reasonably determined by Landlord to be the depreciation and
ordinary wear-and-tear of the HVAC system attributable to Tenant's additional
usage of such system, plus an amount equal to fifteen percent (15%) of (i) and
(ii) above as Landlord's administrative fee. As of the date of this Lease, the
cost for After-Hours HVAC use is estimated to be $15.18 per hour, but is subject
to change as reasonably determined by Landlord.

7.       UTILITIES

         Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent. In
addition to the Base Rent set forth in Section 3 hereof, Tenant shall pay the
cost of all water, sewer use, sewer discharge fees and sewer connection fees,
gas, heat, electricity, refuse pickup, janitorial service, telephone and other
utilities billed or metered separately to the Premises and/or Tenant. Tenant
shall also pay Tenant's Share (as set forth in the Basic Lease Information) of
any assessments or charges for utility or similar purposes included within any
tax bill for the Lot on which the Premises are situated, including, without
limitation, entitlement fees, allocation unit fees, and/or any similar fees or
charges, and any penalties related thereto. For any such

                                       10
<PAGE>

utility fees or use charges that are not billed or metered separately to Tenant,
including without limitation, electricity serving the Premises and water and
refuse pick up charges, Tenant shall pay to Landlord, as Additional Rent,
without prior notice or demand, on the Commencement Date and thereafter on the
first (1st) day of each month throughout the balance of the Term of this Lease
the amount which is attributable to Tenant's use of the utilities or similar
services, as reasonably estimated and determined by Landlord based upon factors
such as size of the Premises in relation to the size of the Building and/or Park
and intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord Tenant's Share of any Common Area utility
costs, fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay
to Landlord one-twelfth (1/12th) of the estimated amount of Tenant's Share of
the Common Area Utility Costs on the Commencement Date and thereafter on the
first (1st) day of each month throughout the balance of the Term of this Lease
and any reconciliation thereof shall be substantially in the same manner as
specified in Section 6.4 above. The amount of Tenant's Share of Common Area
Utility Costs shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. Tenant acknowledges that
the Premises may become subject to the rationing of utility services or
restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed
upon. Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall
in no event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof. Notwithstanding
anything to the contrary contained herein, if permitted by applicable Laws,
Landlord shall have the right at any time and from time to time during the Term
of this Lease to either contract for service from a different company or
companies (each such company shall be referred to herein as an "Alternate
Service Provider") other than the company or companies presently providing
electricity service for the Building or the Park (the "Electric Service
Provider") or continue to contract for service from the Electric Service
Provider, at Landlord's sole discretion. Tenant hereby agrees to cooperate with
Landlord, the Electric Service Provider, and any Alternate Service Provider at
all times and, as reasonably necessary, shall allow Landlord, the Electric
Service Provider, and any Alternate Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises. In the event any of the utility services essential to the
use and occupancy of the Premises shall be interrupted (such that any of such
services shall not be available for Tenant's use and occupancy of the Premises)
for a period in excess of thirty (30) days, such interruption shall not have
been caused in whole or in part by the acts or omissions of Tenant or Tenant's
Representatives, such interruption shall not have been the result of or arise
out of a Casualty or Condemnation contained within the terms of Sections 27 or
28, such interruption shall have had a material and adverse effect on Tenant's
use and occupancy of the Premises and the business interruption insurance
required to be carried by Tenant hereunder shall have been exhausted by such
interruption or such business interruption insurance shall not cover such
utility interruption, Tenant shall receive an abatement of one (1) day of Base
Rent for each day subsequent to the expiration of such thirty (30) day period
that such utility interruption continues and the Term of this Lease shall be
extended by one (1) day for each day of such abatement. Tenant shall not be
entitled to any abatement or to exercise any termination rights based on such
interruption in the event Tenant is in default of this Lease.

8.       LATE CHARGES

         Any and all sums or charges set forth in this Section 8 are considered
part of Additional Rent. Tenant acknowledges that late payment (the fifth day of
each month or any time thereafter) by Tenant to Landlord of Base Rent, Tenant's
Share of Operating Expenses, Tax Expenses, Common Area Utility Costs, and
Utility Expenses or other sums due hereunder, will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such costs being extremely
difficult and impracticable to fix. Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Landlord by the terms of any note secured by any encumbrance against the
Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any
other sum due from Tenant is not received by Landlord within five (5) days of
when due, Tenant shall promptly pay to Landlord all of the following, as
applicable: (a) an additional sum equal to five percent (5%) of such delinquent
amount plus interest on such delinquent amount at the rate equal to the prime
rate plus three percent (3%) for the time period such payments are delinquent as
a late charge for every month or portion thereof that such sums remain unpaid,
(b) the amount of seventy-five dollars ($75) for each three-day notice prepared
for, or served on, Tenant, (c) the amount of fifty dollars ($50) relating to
checks for which there are not sufficient funds. If Tenant delivers to Landlord
a check for which not sufficient funds, Landlord may, at its sole option,
require Tenant to replace such check with a cashier's check for the amount of
such check and all other charges payable

                                       11
<PAGE>

hereunder. The parties agree that this late charge and the other charges
referenced above represent a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant. Acceptance of any late
charge or other charges shall not constitute a waiver by Landlord of Tenant's
default with respect to the delinquent amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord for any
other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or electronic funds transfer.

9.       USE OF PREMISES

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

         9.2      PROHIBITION ON USE: Tenant shall not use the Premises or
permit anything to be done in or about the Premises nor keep or bring anything
therein which will in any way conflict with any of the requirements of the Board
of Fire Underwriters or similar body now or hereafter constituted or in any way
increase the existing rate of or affect any policy of fire or other insurance
upon the Building or any of its contents, or cause a cancellation of any
insurance policy. No auctions may be held or otherwise conducted in, on or about
the Premises, the Building, the Lot or the Park without Landlord's written
consent thereto, which consent may be given or withheld in Landlord's sole
discretion. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of
Landlord, other tenants or occupants of the Building, other buildings in the
Park, or other persons or businesses in the area, or injure or annoy other
tenants or use or allow the Premises to be used for any unlawful or
objectionable purpose, as determined by Landlord, in its reasonable discretion,
for the benefit, quiet enjoyment and use by Landlord and all other tenants or
occupants of the Building or other buildings in the Park; nor shall Tenant
cause, maintain or permit any private or public nuisance in, on or about the
Premises, Building, Park and/or the Common Areas, including, but not limited to,
any offensive odors, noises, fumes or vibrations. Tenant shall not damage or
deface or otherwise commit or suffer to be committed any waste in, upon or about
the Premises. Tenant shall not place or store, nor permit any other person or
entity to place or store, any property, equipment, materials, supplies, personal
property or any other items or goods outside of the Premises for any period of
time. Tenant shall not permit any non-service animals, including, but not
limited to, any household pets, to be brought or kept in or about the Premises.
Tenant shall place no loads upon the floors, walk, or ceilings in excess of the
maximum designed load permitted by the applicable Uniform Building Code or which
may damage the Building or outside areas; nor place any harmful liquids in the
drainage systems; nor dump or store waste materials, refuse or other such
materials, or allow such to remain outside the Building area, except for any
non-hazardous or non-harmful materials which may be stored in refuse dumpsters
or in any enclosed trash provided. Tenant shall honor the terms of all Recorded
Matters relating to the Premises, the Building, the Lot and/or the Park. Tenant
shall honor the Rules and Regulations. If Tenant fails to comply with such Laws,
Recorded Matters, Rules and Regulations or the provisions of this Lease,
Landlord shall have the right to collect from Tenant a reasonable sum as a
penalty, in addition to all rights and remedies of Landlord hereunder including,
but not limited to, the payment by Tenant to Landlord of all Enforcement

                                       12
<PAGE>

Expenses and Landlord's costs and expenses, if any, to cure any of such failures
of Tenant, if Landlord, at its sole option, elects to undertake such cure.

10.      ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES

         10.1     ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord, which consent shall
not be unreasonably withheld, conditioned, or delayed. If any such alteration or
addition is expressly permitted by Landlord, Tenant shall deliver at least
fifteen (15) days prior notice to Landlord, from the date Tenant intends to
commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. Ml alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant.

         10.2     SURRENDER OF PREMISES: Upon the termination of this Lease,
whether by forfeiture, lapse of time or otherwise, or upon the termination of
Tenant's right to possession of the Premises, Tenant will at once surrender and
deliver up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in good condition and
repair (including, but not limited to, replacing all light bulbs and ballasts
not in good working condition) and in the condition in which the Premises
existed as of the Commencement Date, except for casualty under Section 27 or
reasonable wear and tear. Reasonable wear and tear shall not include any damage
or deterioration to the floors of the Premises arising from the use of forklifts
in, on or about the Premises (including, without limitation, any marks or stains
of any portion of the floors), and any damage or deterioration that would have
been prevented by proper maintenance by Tenant or Tenant otherwise performing
all of its obligations under this Lease. Upon such termination of this Lease,
Tenant shall remove all tenant signage, trade fixtures, furniture, furnishings,
personal property, additions, and other improvements unless Landlord requests,
in writing, that Tenant not remove some or all of such fixtures (other than
trade fixtures), additions or improvements installed by, or on behalf of Tenant
or situated in or about the Premises. By the date which is twenty (20) days
prior to such termination of this Lease, Landlord shall notify Tenant in writing
of those fixtures (other than trade fixtures), alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises. Tenant shall repair any damage caused by the installation or removal
of such signs, trade fixtures, furniture, furnishings, fixtures, additions and
improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord fails to so notify Tenant at least twenty (20) days prior to such
termination of this Lease, then Tenant shall remove all tenant signage,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements (other than the Tenant Improvements) installed in or about the
Premises by, or on behalf of Tenant. Tenant shall ensure that the removal of
such items and the repair of the Premises will be completed prior to such
termination of this Lease.

11.      REPAIRS AND MAINTENANCE

         11.1     TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises in good, clean and safe condition and repair to the
reasonable satisfaction of Landlord including, but not limited to, repairing any
damage caused by Tenant or Tenant's Representatives and replacing any property
so damaged by Tenant or Tenant's Representatives. Without limiting the
generality of the foregoing, Tenant shall be solely responsible for maintaining,
repairing and replacing (a) all plumbing, electrical wiring and equipment
exclusively serving the Premises, (b) all interior lighting (including, without
limitation, light bulbs and/or ballasts) serving the Premises, (c) all glass,
windows, window frames, window casements, skylights, interior and exterior
doors, door frames and door closers, (d) all tenant signage, (e) security
systems, (f) all partitions, fixtures, equipment, interior painting, and
interior walls and floors of the Premises and every part thereof (including,
without limitation, any demising walls contiguous to any portion of the
Premises). Tenant shall be responsible for providing janitorial service for the
Premises at its sole cost.

         11.2     REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to
the provisions of Sections 6 and 9 of this Lease and except for (i) the
obligations of Tenant set forth in Section 11.1 above, (ii) the obligations of
Landlord set forth in Section 11.3 below, and (iii) the repairs rendered
necessary the intentional or negligent acts or omissions of Tenant or any of
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair all mechanical
systems, heating, ventilation and air conditioning Systems exclusively serving
the Premises, sprinkler Systems and fire protection Systems, the plumbing and
mechanical Systems exterior to the Premises, the roof, roof membranes, exterior
walls of the Building, signage (exclusive of tenant signage),

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<PAGE>

and exterior electrical wiring and equipment, exterior lighting, exterior glass,
exterior doors/entrances and door closers, exterior window casements, exterior
painting of the Building (exclusive of the Premises), and underground utility
and sewer pipes outside the exterior walls of the Building. For purposes of this
Section 11.2, the term "exterior" shall mean outside of and not exclusively
serving the Premises. Landlord shall procure and maintain (a) the heating,
ventilation and air conditioning systems preventative maintenance and repair
contract(s), and (b) the fire and sprinkler protection services and preventative
maintenance and repair contract(s) (including, without limitation, monitoring
services). Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above.

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

         11.4     TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE
OBLIGATIONS: Except for normal maintenance and repair of the items described
above and subject to Section 42 below, Tenant shall have no right of access to
or right to install any device on the roof of the Building nor make any
penetrations of the roof of the Building without the express prior written
consent of Landlord. If Tenant refuses or neglects to repair and maintain the
Premises and the adjacent areas properly as required herein and to the
reasonable satisfaction of Landlord, Landlord may, but without obligation to do
so, at any time after providing ten (10) days prior written notice of its intent
to do so (except in the event of an emergency, in which case such notice is not
required), make such repairs and/or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's costs
for making such repairs and/or maintenance, plus twenty percent (20%) for
overhead, upon presentation of a bill therefor, plus any Enforcement Expenses.
The obligations of Tenant hereunder shall survive the expiration of the Term of
this Lease or the earlier termination thereof. Tenant hereby waives any right to
repair at the expense of Landlord under any applicable Laws now or hereafter in
effect respecting the Premises.

12.      INSURANCE

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

         12.2     INSURANCE POLICIES: Insurance required to be maintained by
Tenant shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder

                                       14
<PAGE>

shall not exceed Five Thousand Dollars ($5,000). Tenant shall deliver to
Landlord certificates of insurance and true and complete copies of any and all
endorsements required herein for all insurance required to be maintained by
Tenant hereunder prior to Tenant's early access in accordance with Section 2.2.
Tenant shall, at least thirty (30) days prior to expiration of each policy,
furnish Landlord with certificates of renewal or "binders" thereof. Each
certificate shall expressly provide that such policies shall not be cancelable
or otherwise subject to modification except after thirty (30) days prior written
notice to the parties named as additional insureds as required in this Lease
(except for cancellation for nonpayment of premium, in which event cancellation
shall not take effect until at least ten (10) days' notice has been given to
Landlord). Tenant shall have the right to provide insurance coverage which it is
obligated to carry pursuant to the terms of this Lease under a blanket insurance
policy, provided such blanket policy expressly affords coverage for the Premises
and for Landlord as required by this Lease.

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

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

13.      WAIVER OF SUBROGATION

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

14.      LIMITATION OF LIABILITY AND INDEMNITY

         Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, Tenant agrees
to protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord's lenders, partners, members, property management com (if other than
Landlord), agents, directors, officers, employees, representatives, contractors,
successors and assigns and each of their respective partners, members, directors
representatives, agents, contractors, shareholders, successors and assigns
(collectively, the "Indemnitees") harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, (i) Tenant's or Tenant's Representatives' use of the Premises,
Building and/or the Park, (ii) the conduct of Tenant's business, (iii) from any
activity, work or thing done, permitted or

                                       15
<PAGE>

suffered by Tenant in or about the Premises, (iv) in any way connected with the
Premises or with the improvements or personal property therein, including, but
not limited to, any liability for injury to person or property of Tenant,
Tenant's Representatives, or third party persons, and/or (v) Tenant's failure to
perform any covenant or obligation of Tenant under this Lease. Tenant agrees
that the obligations of Tenant herein shall survive the expiration or earlier
termination of this Lease.

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

15.      ASSIGNMENT AND SUBLEASING

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

                                       16
<PAGE>

or subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease. Tenant hereby acknowledges and agrees that it understands that
Landlord's accounting department may process and accept Rent payments without
verifying that such payments are being made by Tenant, a permitted sublessee or
a permitted assignee in accordance with the provisions of this Lease. Although
such payments may be processed and accepted by such accounting department
personnel, any and all actions or omissions by the personnel of Landlord's
accounting department shall not be considered as acceptance by Landlord of any
proposed' assignee or sublessee nor shall such actions or omissions be deemed to
be a substitute for the requirement that Tenant obtain Landlord's prior written
consent to any such subletting or assignment, and any such actions or omissions
by the personnel of Landlord's accounting department shall not be considered as
a voluntary relinquishment by Landlord of any of its rights hereunder nor shall
any voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers) which
results in a change of more than fifty percent (50%) in the direct or indirect
ownership of Tenant shall be deemed to be an assignment within the meaning of
this Section 15 and shall be subject to all the provisions hereof. Except with
respect to any Related Entity (as defined below), any and all options (except
for the Option to Extend the Lease described in Addendum One of this Lease),
first rights of refusal, tenant improvement allowances and other similar rights
granted to Tenant in this Lease, if any, shall not be assignable by Tenant
unless expressly authorized in writing by Landlord.

         15.2     EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the
event of any sublease or assignment of all or any portion of the Premises where
the rent or other consideration provided for in the sublease or assignment
either initially or over the term of the sublease or assignment exceeds the Rent
or pro rata portion of the Rent, as the case may be, for such space reserved in
the Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the
same time as the monthly installments of Rent are payable hereunder, after
deduction for reasonable attorneys' fees (in an amount not to exceed $2,500) and
brokerage commissions (but without deduction for any Tenant Improvement Costs
incurred by Tenant) fifty percent (50%) of the excess of each such payment of
rent or other consideration in excess of the Rent called for hereunder.

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

         15.4     RELATED ENTITIES: Notwithstanding anything to the contrary
contained in this Section 15, so long as Tenant delivers to Landlord (1) at
least fifteen (15) business days prior written notice of its intention to assign
or sublease the Premises to any Related Entity, which notice shall set forth the
name of the Related Entity, (2) a copy of the proposed agreement pursuant to
which such assignment or sublease shall be effectuated, and (3) such other
information concerning the Related Entity as Landlord may reasonably require,
including without limitation, information regarding any change in the proposed
use of any portion of the Premises and any financial information with respect to
such Related Entity, and so long as any change in the proposed use of the
subject portion of the Premises is in conformance with the uses permitted to be
made under this Lease and do not involve the use or storage of any Hazardous
Materials (other than nominal amounts of ordinary household cleaners, office
supplies and janitorial supplies which' are not regulated by any Environmental
Laws), then Tenant may assign this Lease or sublease any portion of the Premises
to any Related Entity, or in connection with any merger, consolidation or sale
of substantially all of the assets of Tenant, without having to obtain the prior
written consent of Landlord thereto. For purposes of this Lease the term
"Related Entity" shall mean and refer to any corporation or entity which
controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry.

16.      AD VALOREM TAXES

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

17.      SUBORDINATION

                                       17
<PAGE>

         Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of
Landlord or any bona fide mortgagee or deed of trust beneficiary with a lien on
all or any portion of the Premises or any ground lessor with respect to the land
of which the Premises are a part, the rights of Tenant under this Lease and this
Lease shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, the Lot, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof; then not more than three months' Rent; or
(d) liable to Tenant for any Security Deposit not actually received by such
successor in interest to the extent any portion or all of such Security Deposit
has not already been forfeited by, or refunded to, Tenant. Landlord shall be
liable to Tenant for all or any portion of the Security Deposit not forfeited
by, or refunded to Tenant, until and unless Landlord transfers such Security
Deposit to the successor in interest. Tenant covenants and agrees to execute
(and acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within ten (10) days of a demand or request by Landlord and in the
commercially reasonable form requested by Landlord, ground lessor, mortgagee or
beneficiary, any additional documents-evidencing the priority or subordination
of this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. Tenant's failure to timely execute
and deliver such additional documents shall, at Landlord's option, constitute a
material default hereunder. It is further agreed that Tenant shall be liable to
Landlord, and shall indemnify Landlord from and against any loss, cost, damage
or expense, incidental, consequential, or otherwise, arising or accruing
directly or indirectly, from any failure of Tenant to execute or deliver to
Landlord any such additional documents, together with any and all Enforcement
Expenses.

         Tenant's agreement to subordinate this Lease to any future ground or
underlying lease or any future deed of trust or mortgage pursuant to the
foregoing provisions of this Section 17 is conditioned upon Landlord delivering
to Tenant from the Lessor under such future ground or underlying lease or the
holder of any such deed of trust, a non-disturbance agreement in a commercially
reasonable form agreeing, among other things, that Tenant's right to possession
of the Premises pursuant to the terms and conditions of this Lease shall not be
disturbed provided Tenant is not in default under this Lease beyond the
applicable notice and cure periods hereunder.

18.      RIGHT OF ENTRY

         Tenant grants Landlord or its agents the right to enter the Premises at
all reasonable times upon one (1) business day notice (except in the event of an
emergency, in which ease such notice is not required) for purposes of
inspection, exhibition, posting of notices, repair or alteration. At Landlord's
option, Landlord shall at all times have and retain a key with which to unlock
all the doors in, upon and about the Premises, excluding Tenant's vaults and
safes. It is further agreed that Landlord shall have the right to use any and
all means Landlord deems necessary to enter the Premises in an emergency.
Landlord shall have the right to place "for rent" or "for lease" signs on the
outside of the Premises, the Building and m the Common Areas. Landlord shall
also have the right to place "for sale" signs on the outside of ~ and in the
Common Areas. Tenant hereby waives any claim from damages or for inconvenience
to or interference with Tenant's business, or any other loss occasioned thereby
except for any claim for any of the foregoing arising out of the sole active
gross negligence or willful misconduct of Landlord or its authorized
representatives.

19.      ESTOPPEL CERTIFICATE

         Tenant shall execute (and acknowledge if required by any lender or
ground lessor) and deliver to Landlord, within ten (10) days after Landlord
provides such to Tenant, a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification), the date to which the Rent and other charges are paid in
advance, if any, acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder or specifying such defaults
as are claimed, and such other matters as Landlord may reasonably require. Any
such statement may be conclusively relied upon by Landlord and any prospective
purchaser or

                                       18
<PAGE>

encumbrancer of the Premises. Tenant's failure to deliver such statement within
such time shall be conclusive upon the Tenant that (a) this Lease is in full
force and effect, without modification except as may be represented by Landlord;
(b) there are no uncured defaults in Landlord's performance; and (c) not more
than one month's Rent has been paid in advance, except in those instances when
Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then not
more than three month's Rent has been paid in advance. Failure by Tenant to so
deliver such certified estoppel certificate shall be a material default of the
provisions of this Lease. Tenant shall be liable to Landlord, and shall
indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such certified estoppel certificate, together with any and all Enforcement
Expenses.

20.      TENANT'S DEFAULT.

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

         20.1     The abandonment of the Premises by Tenant or, after five (5)
business days written notice to Tenant, the vacation of the Premises by Tenant
which would cause any insurance policy to be invalidated or otherwise lapse.
Tenant agrees to notice and service of notice as provided for in this Lease and
waives any right to any other or further notice or service of notice which
Tenant may have under any statute or law now or hereafter in effect;

         20.2     The failure by Tenant to make any payment of Rent, Additional
Rent or any other payment required hereunder within three (3) business days
after Landlord's delivery of written notice to Tenant that said payment is past
due. Tenant agrees that any such written notice delivered by Landlord shall, to
the fullest extent permitted by law, serve as the statutorily required notice
under applicable law. In addition to the foregoing, Tenant agrees to notice and
service of notice as provided for in this Lease;

         20.3     The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
fifteen (15) days after notice from Landlord. If such failure is susceptible of
cure but cannot reasonably be cured within the aforementioned time period (if
any), as reasonably determined by Landlord, Tenant shall promptly commence the
cure of such failure and thereafter diligently prosecute such cure to completion
within the time period specified by Landlord in any written notice regarding
such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than thirty (30) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion); notwithstanding the foregoing, the failure of Tenant to
deliver the Letter of Credit to Landlord as and when set forth in Section 4 of
this Lease shall constitute a material default hereunder;

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

         20.5     Tenant's use or storage of Hazardous Materials in, on or about
the Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below which is not cured within five
(5) business days' notice from Landlord; or

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

         20.7     The occurrence of any one or more of the defaults set forth in
Section 20 of that certain Lease Agreement dated June 21, 1999 by and between
Landlord, as Landlord, and WebSENSE, Inc. (formerly know as NetPartners Internet
Solutions, Inc.).

21.      REMEDIES FOR TENANT'S DEFAULT

         21.1     LANDLORD'S RIGHTS: In the event of Tenant's material default
under this Lease, Landlord may terminate Tenant's right to possession of the
Premises by any lawful means in which case upon delivery of written notice by
Landlord this Lease shall terminate on the date specified by Landlord in such

                                       19
<PAGE>

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

         21.2     DAMAGES RECOVERABLE: If Tenant breaches this Lease and
abandons the Premises before the end of the Term, or if Tenant's right to
possession is terminated by Landlord because of a breach or default under this
Lease, then in either such case, Landlord may recover from Tenant all damages
suffered by Landlord as a result of Tenant's failure to perform its obligations
hereunder, including, but not limited to, the cost of any Tenant Improvements
constructed by or on behalf of Tenant pursuant to EXHIBIT B hereto, the portion
of any broker's or leasing agent's commission incurred with respect to the
leasing of the Premises to Tenant for the balance of the Term of the Lease
remaining after the date on which Tenant is in default of its obligations
hereunder, and all Reletting Costs, and the worth at the time of the award
(computed in accordance with paragraph (3) of Subdivision (a) of Section 1951.2
of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease Term exceeds the amount of such loss of
Rent for the same period which Tenant proves could be reasonably avoided by
Landlord and in such case, Landlord prior to the award, may relet the Premises
for the purpose of mitigating damages suffered by Landlord because of Tenant's
failure to perform its obligations hereunder; provided, however, that even
though Tenant has abandoned the Premises following such breach, this Lease shall
nevertheless continue in full force and effect for as long as Landlord does not
terminate Tenant's right of possession, and until such termination, Landlord
shall have the remedy described in Section 1951.4 of the California Civil Code
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations) and may enforce all
its rights and remedies under this Lease, including the right to recover the
Rent from Tenant as it becomes due hereunder. The "worth at the time of the
award" within the meaning of Subparagraphs (a)(1) and (a)(2) of Section 1951.2
of the California Civil Code 5 be computed by allowing interest at the rate of
ten percent (10%) per annum. Tenant waives redemption or relief from forfeiture
under California Code of Civil Procedure Sections 1174 and 1179, or under any
other present or future law, in the event Tenant is evicted or Landlord takes
possession of the Premises by reason of any default of Tenant hereunder.

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

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

                                       20
<PAGE>

22.      HOLDING OVER

         If Tenant holds possession of the Premises after the expiration of the
Term of this Lease with Landlord's consent, Tenant shall become a tenant from
month-to-month upon the terms and provisions of this Lease, provided the monthly
Base Rent during such hold over period shall be 125% of the Base Rent due on the
last month of the Lease Term, payable in advance on or before the first day of
each month. Acceptance by Landlord of the monthly Base Rent without the
additional twenty-five percent (25%) increase of Base Rent shall not be deemed
or construed as a waiver by Landlord of any of its rights to collect the
increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted wider the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.

23.      LANDLORD'S DEFAULT

         Landlord shall not be deemed in breach or default of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be
performed by Landlord hereunder. For purposes of this provision, a reasonable
time shall not be less than thirty (30) days after receipt by Landlord of
written notice specifying the nature of the obligation Landlord has not
performed; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days, after receipt of written notice, is
reasonably necessary for its performance, then Landlord shall not be in breach
or default of this Lease if performance of such obligation is commenced within
such thirty (30) day period and thereafter diligently pursued to completion. In
providing notice to Landlord hereunder, Tenant shall also comply with any notice
requirements under Section 33 below.

24.      PARKING

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

25.      SALE OF PREMISES

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

26.      WAIVER

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

27.      CASUALTY DAMAGE

         If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case
the Building shall be so damaged by fire or other

                                       21
<PAGE>

casualty that substantial alteration or reconstruction of the Building shall, in
Landlord's reasonable opinion, be required (whether or not the Premises shall
have been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by noticing Tenant in writing of such termination within
ninety (90) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease, and provided insurance proceeds and any contributions from Tenant,
if necessary, are available to fully repair the damage, Landlord shall within
one hundred twenty (120) days after the date of such damage commence to repair
and restore the Building and shall proceed with reasonable diligence to restore
the Building (except that Landlord shall not be responsible for delays outside
its control) to substantially the same condition in which it was immediately
prior to the happening of the casualty; provided, Landlord shall not be required
to rebuild, repair, or replace any part of Tenant's furniture, furnishings,
fixtures and/or equipment removable by Tenant or any improvements, alterations
or additions installed by or for the benefit of Tenant under the provisions of
this Lease. Landlord shall not in any event be required to spend for such work
an amount in excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except to
the extent caused by Landlord's gross negligence or willful misconduct, and
except that, subject to the provisions of the next sentence, Landlord shall
allow Tenant a fair diminution of Rent during the time and to the extent the
Premises are unfit for occupancy. Notwithstanding anything to the contrary
contained herein, if the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, (i) the Rent
shall not be diminished during the repair of such damage, (ii) Tenant shall not
have any right to terminate this Lease due to the occurrence of such casualty or
damage, and (iii) Tenant shall be liable to Landlord for the cost and expense of
the repair and restoration of all or any portion of the Building caused thereby
(including, without limitation, any deductible) to the extent such cost and
expense is not covered by insurance proceeds. In the event the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within thirty
(30) days after the date of notice to Tenant of any such event, whereupon all
rights and obligations shall cease and terminate hereunder except for those
obligations expressly intended to survive any such termination of this Lease.
Except as otherwise provided in this Section 27, Tenant hereby waives the
provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of the California Civil
Code.

28.      CONDEMNATION

         If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose ("Condemned"), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation assert
any claim against Landlord or the condemning authority for any compensation
because of such condemnation, and Landlord shall be entitled to receive the
entire amount of any award without deduction for any estate of interest or other
interest of Tenant; provided, however, the foregoing provisions shall not
preclude Tenant, at Tenant's sole cost and expense, from obtaining any separate
award to Tenant for loss of or damage to Tenant's trade fixtures and removable
personal property or for damages for cessation or interruption of Tenant's
business provide such award is separate from Landlord's award and provided
further such separate award neither diminishes nor impairs the award otherwise
payable to Landlord. In addition to the foregoing, Tenant shall be entitled to
seek compensation for the relocation costs recoverable by Tenant pursuant to the
provisions of California Government Code Section 7262. If neither party elects
to terminate this Lease, Landlord shall, if necessary, promptly proceed to
restore the Premises or the Building to substantially its same condition prior
to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
reasonably determined by Landlord, for the Rent corresponding to the time during
which, and to the part of the Premises of which, Tenant is deprived on account
of such partial condemnation and restoration. Landlord shall not be required to
spend fluids for restoration in excess of the amount received by Landlord as
compensation awarded.

29.      ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS

         29.1     HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as EXHIBIT G and incorporated
herein by this reference. Tenant covenants, represents and warrants to Landlord
that the information on the Initial HazMat Certificate is true and correct and
accurately describes the use(s) of Hazardous Materials which will be made and/or
used on the Premises by Tenant. Tenant shall commencing with the date which is
one year from the Commencement Date and continuing every year

                                       22
<PAGE>

thereafter, complete, execute, and deliver to Landlord, a Hazardous Materials
Disclosure Certificate ("the "HazMat Certificate") describing Tenant's present
use of Hazardous Materials on the Premises, and any other reasonably necessary
documents as requested by Landlord. The HazMat Certificate required hereunder
shall be in substantially the form as that which is attached hereto as EXHIBIT
E.

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

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

         29.4     TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to
Landlord immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed so long as such actions
would not potentially have a material adverse long-term or short-term effect on
any portion of the Premises, the Building, the Lot or the Park. Notwithstanding
the foregoing, Tenant shall be entitled to respond immediately to an emergency
without first obtaining Landlord's prior written consent. Tenant, at its sole
cost and expense, shall conduct and perform, or cause to be conducted and
performed, all closures as required by any Environmental Laws or any agencies or
other governmental authorities having jurisdiction thereof. If Tenant fails to
so promptly investigate, clean up, remove, restore, provide closure

                                       23
<PAGE>

or otherwise so remediate, Landlord may, but without obligation to do so, take
any and all steps necessary to rectify the same and Tenant shall promptly
reimburse Landlord, upon demand, for all costs and expenses to Landlord of
performing investigation, clean up, removal, restoration, closure and
remediation work. All such work undertaken by Tenant, as required herein, shall
be performed in such a manner so as to enable Landlord to make full economic use
of the Premises, the Building, the Lot and the Park after the satisfactory
completion of such work.

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

         29.6     SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord's reasonable discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.

         EXCULPATION OF TENANT: Tenant shall not be liable to Landlord (either
directly or as an Operating Expense) for nor otherwise obligated to Landlord
under any provision of the Lease with respect to the following: (i) any claim,
remediation, obligation, investigation, obligation, liability, cause of action,
attorney's fees, consultants' cost, expense or damage resulting from any
Hazardous Materials present in, on or about the Premises or the Buildings to the
extent not caused or otherwise permitted, directly or indirectly, by Tenant or
Tenant's Representatives; or (ii) the removal, investigation, monitoring or
remediation of any Hazardous Material present in, on or about the Premises or
the Building caused by any source, including third parties, other than Tenant or
Tenant's Representatives; provided, however, Tenant shall be fully liable for
and otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including
without limitation, attorneys' and experts' fees and costs) and losses to the
extent (a) Tenant or any of Tenant's Representatives contributes to the presence
of such Hazardous Materials, or Tenant and/or any of Tenant's Representatives
exacerbates the conditions caused by such Hazardous Materials, or (b) Tenant
and/or Tenant's Representatives allows or permits persons over which Tenant or
any of Tenant's Representatives has control, and/or for which Tenant or any of
Tenant's Representatives are legally responsible for, to cause such Hazardous
Materials to be present in, on, under, through or about any portion of the
Premises, the Common Areas, the Building or the Park, or (c) Tenant and/or any
of Tenant's Representatives does not take all reasonably appropriate actions to
prevent such persons over which Tenant or any of Tenant's Representatives has
control and/or for which Tenant or any of Tenant's Representatives are legally
responsible from causing the presence of Hazardous Materials in, on, under,
through or about any portion of the Premises, the Common Areas, the Building or
the Park.

30.      FINANCIAL STATEMENTS

         Tenant, for the reliance of Landlord, any lender holding or anticipated
to acquire a lien upon the Premises, the Building or the Park or any portion
thereof, or any prospective purchaser of the Building or

                                       24
<PAGE>

the Park or any portion thereof, within ten (10) days after Landlord's request
therefor, but not more often than once annually so long as Tenant is not in
default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant. If
Landlord so requests, Tenant shall deliver to Landlord an opinion of a certified
public accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied. Any and all options granted to
Tenant hereunder shall be subject to and conditioned upon Landlord's reasonable
approval of Tenant's financial condition at the time of Tenant's exercise of any
such option. In the event Tenant shall remain a privately held company, Landlord
shall not disclose any of Tenant's financial statements without Tenant's
consent, which consent shall not be unreasonably withheld, conditioned or
delayed, except Landlord may disclose such financial statements to its joint
venture partners, lenders, attorneys, accountants, prospective buyers and
lenders, agents, employees, and property manager without Tenant's consent.

31.      GENERAL PROVISIONS

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

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

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

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

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

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

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

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

         31.9     WARRANTY OF AUTHORITY. On the date that each party executes
this Lease, each party shall deliver to the other an original certificate of
status for itself issued by the California Secretary of State or statement of
partnership for itself recorded in the county in which the Premises &e located,
as applicable. Each person executing this Lease on behalf of a party represents
and warrants that (1) such

                                       25
<PAGE>

person is duly and validly authorized to do so on behalf of the entity it
purports to so bind, and (2) if such party is a partnership, corporation or
trustee, that such partnership, corporation or trustee has full right and
authority to enter into this Lease and perform all of its obligations hereunder.
Tenant hereby warrants that this Lease is valid and binding upon Tenant and
enforceable against Tenant in accordance with its terms.

         31.10    NOTICES. Any and all notices and demands required or permitted
to be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (1,)by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises. Notice and/or demand shall
be deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Any notice or requirement of service required
by any statute or law now or hereafter in effect, including, but not limited to,
California Code of Civil Procedure Sections 1161, 1161.1, and 1162 (including
any amendments, supplements or substitutions thereof), is hereby waived by
Tenant.

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

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

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

         31.14    INTENTIONALLY OMITTED.

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

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

32.      SIGNS

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

33.      MORTGAGEE PROTECTION

         Upon any default on the part of Landlord, Tenant will give written
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has requested such notice and
provided Tenant with notice of their interest together with an address for
receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days nor more than one hundred twenty (120)

                                       26
<PAGE>

days), including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary to effect a cure. If such
default cannot be cured within such time period, then such additional time as
may be necessary will be given to such beneficiary or mortgagee to effect such
cure so long as such beneficiary or mortgagee has commenced the cure within the
original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being
diligently pursued. Tenant agrees that each lender to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof. Tenant shall
not make any prepayment of Rent more than one (1) month in advance without the
prior written consent of each such lender, except if Tenant is required to make
quarterly payments of Rent in advance pursuant to the provisions of Section 8
above. Tenant waives the collection of any deposit from such lender(s) or any
purchaser at a foreclosure sale of such lender(s)' deed of trust unless the
lender(s) or such purchaser shall have actually received and not refunded the
deposit. Tenant agrees to make all payments under this Lease to the lender with
the most senior encumbrance upon receiving a direction, in writing, to pay said
amounts to such lender. Tenant shall comply with such written direction to pay
without determining whether an event of default exists under such lender's loan
to Landlord.

34.      QUITCLAIM

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

35.      MODIFICATIONS FOR LENDER

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

36.      WARRANTIES OF TENANT

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

37.      COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT

         Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq.,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly comply with all requirements of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the Common Areas or the Park under the
ADA, then such work shall be the responsibility of Landlord; provided, if such
work is required under the ADA as a result of Tenant's use of the Premises or
any work or alteration made to the Premises by or on behalf of Tenant, then such
work shall be performed by Landlord at the sole cost and expense of Tenant.
Except as otherwise expressly provided in this provision, Tenant shall be
responsible at its sole cost and expense for fully and faithfully complying with
all applicable requirements of the ADA, including without limitation, not
discriminating against any disabled persons in the operation of Tenant's
business in or about the Premises, and offering or otherwise providing auxiliary
aids and services as, and when, required by the ADA. Within ten (10) days after
receipt, Landlord and Tenant shall advise the other party in writing, and
provide the other with copies of (as applicable), any notices alleging violation
of the ADA relating to any portion of the

                                       27
<PAGE>

Premises or the Building; any claims made or threatened in writing regarding
noncompliance with the ADA and relating to any portion of the Premises or the
Building; or any governmental or regulatory actions or investigations instituted
or threatened regarding noncompliance with the ADA and relating to any portion
of the Premises or the Building. Tenant shall and hereby agrees to protect,
defend (with counsel acceptable to Landlord) and hold Landlord and the other
indemnitees harmless and indemnify the indemnitees from and against all
liabilities, damages, claims, losses, penalties, judgments, charges and expenses
(including reasonable attorneys' fees, costs of court and expenses necessary m
the prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.

38.      BROKERAGE COMMISSION

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

39.      QUIET ENJOYMENT

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

40.      LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS

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

41.      SECURITY DEPOSIT

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

                                       28
<PAGE>

the amount initially deposited with Landlord. As soon as practicable but no
later than thirty (30) days after the termination of this Lease, Landlord shall
return the Security Deposit to Tenant, less such amounts as are reasonably
necessary, as determined solely by Landlord, to remedy Tenant's default(s)
hereunder or to otherwise restore the Premises to a clean and safe condition,
reasonable wear and tear excepted. If the cost to restore the Premises exceeds
the amount of the Security Deposit, Tenant shall promptly deliver to Landlord
any and all of such excess sums as reasonably determined by Landlord. Landlord
shall not be required to keep the Security Deposit separate from other fluids,
and, unless otherwise required by law, Tenant shall not be entitled to interest
on the Security Deposit. In no event or circumstance shall Tenant have the right
to any use of the Security Deposit and, specifically, Tenant may not use the
Security Deposit as a credit or to otherwise offset any payments required
hereunder, including, but not limited to, Rent or any portion thereof.

42.      SATELLITE DISH

         Tenant shall have the right (but only to the extent permitted by the
City of San Diego and all agencies and governmental authorities having
jurisdiction thereof), at Tenant's sole cost and expense, to install and operate
a satellite or microwave dish or dishes and related equipment ("Satellite
Dishes") along with any necessary cables ("Cables") on a portion of the roof of
the Building to be designated by Landlord ("Roof Space") for the Term of the
Lease (the Satellite Dishes and Cables are hereinafter collectively referred to
as the "Equipment"). The location and size of the Equipment shall be subject to
Landlord's approval, not to be unreasonably withheld and which best promotes the
safety, aesthetics and efficiency of the Equipment; provided, all of the
Equipment and any modifications thereto or placement thereof shall (i) be at
Tenant's sole cost and expense, (ii) be contained visually within a roof screen
to be at Tenant's sole cost and expense, (iii) be installed and operated to
Landlord's reasonable specifications, (iv) installed, maintained, operated and
removed in accordance with all Recorded Matters, applicable Laws, and the
provisions of Section 10 of this Lease, and (v) not affect any of the structural
components or any of the systems of the Building. For purposes hereof, the
Equipment shall be construed as part of the Tenant's Property and shall be
removed by Tenant at the expiration or earlier termination of this Lease.
Landlord shall cooperate reasonably with Tenant to modify the roof screen
placement (subject to all applicable Laws and Recorded Matters) if required for
signal quality, reconfiguration due to the installation of any HVAC systems and
other reasonable considerations; provided, the cost of all such modifications
shall be solely the responsibility of Tenant. All modifications to the Building,
including the Roof Space, if any, shall be approved by Landlord prior to
commencement of any work with respect to the Equipment. No additional rent shall
be paid by Tenant for use of the Roof Space and operation of the Equipment. The
Equipment shall remain the property of Tenant and Tenant shall remove the
Equipment upon the expiration or earlier termination of the Lease in accordance
with the provisions of Section 10 of this Lease. Tenant shall restore the Roof
Space and any other portion of the Building affected by the Equipment to its
original condition, excepting ordinary wear and tear and/or damage or
destruction due to fire or other casualty not caused directly or indirectly by
Tenant, its agents, employees, contractors or the Equipment or any part thereof.
Notwithstanding anything to the contrary contained herein, Tenant may not
assign, lease, rent, sublet or otherwise transfer any of its interest in the
Roof Space or the Equipment. Each of the other provisions of this Lease shall be
applicable to the Equipment and the use of the Roof Space by Tenant, including
without limitation, Sections 12 and 14 of this Lease. The Equipment shall comply
with all rules and regulations of the Federal Communications Commission and all
other agencies having jurisdiction thereof if applicable, Tenant shall provide
to Landlord a copy of (i) the Federal Communications Commission (or other
agency) grant which has awarded frequencies to Tenant and (ii) a list of
Tenant's frequencies. Anything to the contrary contained herein notwithstanding,
if; during the Lease Term, as such Term may be extended, Landlord, in its
reasonable judgment, believes that the Equipment poses a threat to human health
or otherwise may be an environmental hazard that cannot be remediated or has not
been remediated within ten (10) days after Tenant has been notified thereof,
then Tenant shall immediately cease all operations of the Equipment and Tenant
shall remove all of the Equipment within thirty (30) days thereafter. To the
best of Tenant's knowledge, Tenant represents to Landlord that the Equipment
shall not emit or project any electro-magnetic fields which pose a threat to
human health or otherwise may be an environmental hazard. In addition, Tenant
shall be solely responsible for insuring the Equipment and Landlord shall have
no responsibility therefor. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord) and hold harmless Landlord and the other
Indemnitees from and against any and all claims, demands, liabilities, damages,
judgments, losses, penalties, costs and expenses (including reasonable
attorneys' fees) Landlord may suffer or incur arising out of or related to the
installation, use, operation, maintenance, replacement and/or removal of the
Equipment or any portion thereof, including without limitation the cost of
repairs and replacements to the roof of the Building occasioned by the
installation, maintenance, repairs and removal of the Equipment.

                                       29
<PAGE>

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

TENANT:

WEBSENSE, INC.,
A DELAWARE CORPORATION

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

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

Date:
     ---------------------------------------

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

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

Date:
     ---------------------------------------

LANDLORD:

LEGACY-RECP SORRENTO OPCO, LLC
A DELAWARE LIMITED LIABILITY COMPANY

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

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

Date:
     ---------------------------------------

                                       30
<PAGE>

                              EXHIBIT A - PREMISES

This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain Lease Agreement dated February 12, 2000 (the "Lease"), by and between
Legacy-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord") and WEBSENSE, Inc., a Delaware corporation ("Tenant") for the
leasing of certain premises at 10240 Sorrento Valley Road, Suite 150, San Diego,
California (the "Premises").

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

                                    [PICTURE]

<PAGE>

                          EXHIBIT B TO LEASE AGREEMENT
                               TENANT IMPROVEMENTS

This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated February 12, 2000 (the "Lease"), by and
between Lincoln-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord"), and WEBSENSE, INC., a Delaware corporation ("Tenant"), for the
leasing of certain premises located at 10240 Sorrento Valley Road, Suite 150,
San Diego, California (the "Premises"). The terms, conditions and provisions of
this EXHIBIT B are hereby incorporated into and are made a part of the Lease.
Any capitalized terms used herein and not otherwise defined herein shall have
the meaning ascribed to such terms as set forth in the Lease:

1.       TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Subject to the provisions
below, Tenant shall be solely responsible for the planning, construction and
completion of the interior tenant improvements ("Tenant Improvements") to the
Premises in accordance with the terms and conditions of this EXHIBIT B. The
Tenant Improvements shall not include any of Tenant's personal property, trade
fixtures, furnishings, equipment or similar items.

2.       TENANT IMPROVEMENT PLANS.

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

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

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

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

         E.       CONSTRUCTION AGREEMENTS. Tenant hereby covenants and agrees
that a provision shall be included in each and every agreement made with the
Architect and the Contractor with respect to the Tenant Improvements specifying
that Landlord shall be a third party beneficiary thereof; including without
limitation, a third party beneficiary of all covenants, representations,
indemnities and warranties made by the Architect and/or Contractor.

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

4.       CONSTRUCTION.

         A.       Tenant shall be solely responsible for the construction,
installation and completion of the Tenant Improvements in accordance with the
Construction Documents approved by Landlord and is solely responsible for the
payment of all amounts when payable in connection therewith without any cost or
expense to Landlord, except for Landlord's obligation to contribute the Tenant
Improvement Allowance in accordance with the provisions of Paragraph 5 below.
Tenant shall diligently proceed with the construction, installation and
completion of the Tenant Improvements in accordance with the Construction
Documents and the completion schedule reasonably approved by Landlord. No
material changes shall be made to the Construction Documents and the completion
schedule approved by Landlord without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed.

         B.       Tenant at its sole cost and expense (subject to the provisions
of Paragraph 5 below) shall employ a licensed, insured and bonded general
contractor ("Contractor".) to construct the Tenant Improvements in accordance
with the Construction Documents. The construction contracts between Tenant and
the Contractor and between the Contractor and subcontractors shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed. Proof that the Contractor is licensed in California, is
bonded as required under California law, and has the insurance specified in
EXHIBIT B-1, attached hereto and incorporated herein by this reference, shall be
provided to Landlord at the time that Tenant requests approval of the Contractor
from Landlord. Tenant shall comply with or cause the Contractor to comply with
all other terms and provisions of EXHIBIT B-1.

         C.       Prior to the commencement of the construction and installation
of the Tenant Improvements, Tenant shall provide the following to Landlord, all
of which shall be to Landlord's reasonable satisfaction:

                  (i)      An estimated budget and cost breakdown for the Tenant
Improvements.

                  (ii)     Estimated completion schedule for the Tenant
Improvements.

                  (iii)    Copies of all required approvals and permits from
governmental agencies having jurisdiction or authority for the construction and
installation of the Tenant Improvements; provided, however, if prior to
commencement of the construction and installation of Tenant Improvements Tenant
has not received the electrical, plumbing or mechanical permits, Tenant shall
only be required to provide Landlord with evidence that Tenant has made
application therefor, and, upon receipt by Tenant of such permits, Tenant shall
promptly provide Landlord with copies thereof.

                  (iv)     Evidence of Tenant's procurement of insurance
required to be obtained pursuant to the provisions of Paragraphs 4.B and 4.G.

         D.       Landlord shall at all reasonable times have a right to inspect
the Tenant Improvements (provided Landlord does not materially interfere with
the work being performed by the Contractor or its subcontractors) and Tenant
shall immediately cease work upon written notice from Landlord if the Tenant
Improvements are not in compliance with the Construction Documents approved by
Landlord. If Landlord shall give notice of faulty construction or any other
deviation from the Construction Documents, Tenant shall cause the Contractor to
make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements constructed in accordance with the
Construction Documents.

         E.       Subject to Landlord complying with its obligations in
Paragraph 5 below, Tenant shall pay and discharge promptly and fully all claims
for labor done and materials and services furnished in connection with the
Tenant, Improvements. The Tenant Improvements shall not be commenced until five
(5) business days after Landlord has received notice from Tenant stating the
date the construction of the Tenant Improvements is to commence so that Landlord
can post and record any appropriate Notice of Non-responsibility.

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         F.       Tenant acknowledges and agrees that the agreements and
covenants of Tenant in Sections 10 and 9 of the Lease shall be fully applicable
to Tenant's construction of the Tenant Improvements.

         G.       Tenant shall maintain, and cause to be maintained, during the
construction of the Tenant Improvements, at its sole cost and expense, insurance
of the types and in the amounts specified in EXHIBIT B-1 and in Section 12 of
the Lease, together with builders' risk insurance for the amount of the
completed value of the Tenant Improvements on an all-risk non-reporting form
covering all improvements under construction, including building materials, and
other insurance in amounts and against such risks as the Landlord shall
reasonably require in connection with the Tenant Improvements.

         H.       No materials, equipment or fixtures shall be delivered to or
installed upon the Premises pursuant to any agreement by which another party has
a security interest or rights to remove or repossess such items, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.

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

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

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

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

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

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

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

                  (vi)     A true and complete copy of all as-built plans and
drawings for the Tenant Improvements.

5.       TENANT IMPROVEMENT ALLOWANCE.

         A.       Subject to Tenant's compliance with the provisions of this
EXHIBIT H, Landlord shall provide to Tenant an allowance in the amount of
Fifty-nine Thousand Nine Hundred Forty-four dollars ($59,944.00) (the "Tenant
Improvement Allowance") to construct and install only the Tenant Improvements.
The Tenant Improvement Allowance shall be used to design, prepare, plan, obtain
the approval of, construct and install the Tenant Improvements and for no other
purpose. Except as otherwise expressly provided herein, Landlord shall have no
obligation to contribute the Tenant Improvement Allowance unless and until the
Construction Documents have been approved by Landlord and Tenant has complied
with all requirements set forth in Paragraph 4.C. of this EXHIBIT R. In addition
to the foregoing, Landlord shall have no obligation to disburse all or any
portion of the Tenant Improvement Allowance to Tenant unless Tenant makes a
progress payment request pursuant to the terms and conditions of Section 5.B.
below prior to that date which is six (6) months after the Lease Commencement
Date (as such term is defined in the Basic Lease Information and Section 2 of
the Lease). The costs to be paid out of the Tenant Improvement Allowance shall
include all reasonable costs and expenses associated with the design,
preparation, approval, planning, construction and installation of the Tenant
Improvements (the "Tenant Improvement Costs"), including all of the following:

                  (i)      All costs of the Preliminary Plans and
Specifications, the Final Plans and Specifications, and the Construction
Documents, and engineering costs associated with completion of the State of
California energy utilization calculations under Title 24 legislation:

                  (ii)     All costs of obtaining building permits and other
necessary authorizations from local governmental authorities;

                  (iii)    All costs of interior design and finish schedule
plans and specifications including as-built drawings, if applicable;

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                  (iv)     All direct and indirect costs of procuring,
constructing and installing the Tenant Improvements in the Premises, including,
but not limited to, the construction fee for overhead and profit and the cost of
all on-site supervisory and administrative staff; office, equipment and
temporary services rendered by the Contractor in connection with the
construction of the Tenant Improvements; provided, however, that the
construction fee for overhead and profit, the cost of all on-site supervisory
and administrative staff, office, equipment and temporary services shall not
exceed amounts which are reasonable and customary for such items in the local
construction industry;

                  (v)      All fees payable to the Architect and any engineer if
they are required to redesign any portion of the Tenant Improvements following
Tenant's and Landlord's approval of the Construction Documents;

                  (vi)     Utility connection fees;

                  (vii)    Inspection fees and filing fees payable to local
governmental authorities, if any;

                  (viii)   All costs of all permanently affixed equipment and
non-trade fixtures provided for in the Construction Documents, including the
cost of installation; and

                  (ix)     A construction management fee payable to Landlord in
the amount of percent (5%) [THREE (3%)] [HAND WRITTEN CHANGE] of the aggregate
of the principal amount of the Amortized Excess TI Costs (defined below) and e
Tenant Improvement Allowance (the "CM Fee").

The Tenant Improvement Allowance shall be the maximum contribution by Landlord
for the Tenant Improvement Costs, and the disbursement of the Tenant Improvement
Allowance is subject to the terms contained hereinbelow.

         B.       Except for payment of the CM Fee, and subject to Section 5.A.
above, Landlord will make payments to Tenant from the Tenant Improvement
Allowance to reimburse Tenant for Tenant Improvement Costs paid or incurred by
Tenant. Payment of the CM Fee shall be the first payment from the Tenant
Improvement Allowance and shall be made by means of a deduction or credit
against the Tenant Improvement Allowance. All other payments of the Tenant
Improvement Allowance shall be by progress payments not more frequently than
once per month and only after satisfaction of the following conditions
precedent: (a) receipt by Landlord of conditional mechanics' lien releases for
the work completed and to be paid by said progress payment, conditioned only on
the payment of the sums set forth in the mechanics' lien release, executed by
the Contractor and all subcontractors, labor suppliers and materialmen; (b)
receipt by Landlord of unconditional mechanics' lien releases from the
Contractor and all subcontractors, labor suppliers and materialmen for all work
other than that being paid by the current progress payment previously completed
by the Contractor, subcontractors, labor suppliers and materialmen and for which
Tenant has received fluids from the Tenant Improvement Allowance to pay for such
work; (c) receipt by Landlord of any and all documentation reasonably required
by Landlord detailing the work that has been completed and the materials and
supplies used as of the date of Tenant's request for the progress payment,
including, without limitation, invoices, bills, or statements for the work
completed and the materials and supplies used; and (d) completion by Landlord or
Landlord's agents of any inspections of the work completed and materials and
supplies used as deemed reasonably necessary by Landlord. Except for the CM Fee
payment (credit), Tenant Improvement Allowance progress payments shall be paid
to Tenant within fourteen (14) days from the satisfaction of the conditions set
forth in the immediately preceding sentence. The preceding notwithstanding, all
Tenant Improvement Costs paid or incurred by Tenant prior to Landlord's approval
of the Construction Documents in connection with the design and planning of the
Tenant Improvements by Architect shall be paid from the Tenant Improvement
Allowance, without any retention, within fourteen (14) days following Landlord's
receipt of invoices, bills or statements from Architect evidencing such costs.
Notwithstanding the foregoing to the contrary, Landlord shall be entitled to
withhold and retain five percent (5%) of the Tenant Improvement Allowance or of
any Tenant Improvement Allowance progress payment until the lien-free expiration
of the time for filing of any mechanics' liens claimed or which might be filed
on account of any work ordered by Tenant or the Contractor or any subcontractor
in connection with the construction and installation of the Tenant Improvements.

         C.       Landlord shall not be obligated to pay any Tenant Improvement
Allowance progress payment or the Tenant Improvement Allowance retention if on
the date Tenant is entitled to receive the Tenant Improvement Allowance progress
payment or the Tenant Improvement Allowance retention Tenant is in default of
this Lease. Such payments shall resume upon Tenant curing any such default
within the time periods which may be provided for in the Lease.

         D.       Should the total cost of constructing the Tenant Improvements
be less than the Tenant Improvement Allowance, the Tenant Improvement Allowance
shall be automatically reduced to the amount equal to said actual cost.

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         E.       The term "Excess Tenant Improvement Costs" as used herein
shall mean and refer to the aggregate of the amount by which the actual Tenant
Improvement Costs exceed the Tenant Improvement Allowance. A portion of the
Excess Tenant Improvement Costs up to a maximum amount of Twenty-two Thousand
Four Hundred Seventy-nine dollars ($22,479.00) shall be paid by Landlord in the
same manner as the Tenant Improvement Allowance and such Excess Tenant
Improvement Costs will then be amortized over the initial term of the Lease at
the rate of eleven percent (11%) per annum and such amortized amount (including
interest charges) shall be paid by Tenant to Landlord with, and as part of, the
Base Rent for the Premises in accordance with the provisions and requirements of
Section 3 of the Lease (the "Amortized Excess TI Costs"). Notwithstanding any
provision to the contrary, however, Tenant shall pay to Landlord such amortized
amount during the entire initial term of the Lease, regardless if Base Rent is
or is not abated. Within two (2) weeks after the Tenant Improvements have been
substantially completed and the actual Tenant Improvement Costs are known, the
parties shall execute and deliver a written amendment to the Lease, in the form
acceptable to the parties, wherein there shall be specified, INTER ALIA, the
amount of the Base Rent payable by Tenant during the initial term of the Lease
after taking into account the amount of the Amortized Excess TI Costs. Tenant
shall promptly pay any and all Excess Tenant Improvement Costs in excess of the
principal amount of the Amortized Excess TI Costs.

6.       TERMINATION. If the Lease is terminated prior to the date on which the
Tenant Improvements are completed, for any reason due to the default of Tenant
hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs incurred by
Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned,
installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant
Improvements and restoration costs related thereto. Subject to the provisions of
Section 10.2 of the Lease, upon the expiration or earlier termination of the
Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered
incorporated into the Building.

7.       LEASE PROVISIONS; CONFLICT. The terms and provisions of the Lease,
insofar as they are applicable, in whole or in part, to this EXHIBIT B, are
hereby incorporated herein by reference, and specifically including all of the
provisions of Section 29 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have remedies available to it as provided for in the Lease.

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                                   EXHIBIT B-1
                       CONSTRUCTION INSURANCE REQUIREMENTS

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

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

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

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

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

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

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

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

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

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

E.       Equipment and Installation coverages in the broadest form available
covering Contractor's tools and equipment and material not accepted by Tenant.
Tenant will provide Builders Risk Insurance on all accepted and installed
materials.

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

<PAGE>

                          EXHIBIT C TO LEASE AGREEMENT
                               RULES & REGULATIONS

This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated February 12, 2000 (the "Lease"), by and
between Legacy-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord") and WEBSENSE, Inc., a Delaware corporation ("Tenant") for the
leasing of certain premises located at 10240 Sorrento Valley Road, Suite 150,
San Diego, California (the "Premises"). The terms, conditions and provisions of
this EXHIBIT C are hereby incorporated into and are made a part of the Lease.
Any capitalized terms used herein and not otherwise defined herein shall have
the meaning ascribed to such terms as set forth in the Lease:

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

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

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

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

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

6.       Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord, unless said door
is part of a private office, in which case Landlord's prior consent is not
required.

7.       Tenant agrees not to make any duplicate keys without the prior consent
of Landlord, unless said key operates a lock installed on a private office door,
in which ease Landlord's prior consent is not required.

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

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

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

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

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

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

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

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

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

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

18.      Tenant may permit motor vehicles to be washed, but only in an exact
location approved in writing by Landlord, within the Common Areas of the Park.
Tenant shall not permit mechanical work or maintenance (other than washing) of
motor vehicles to be performed on any portion of the Premises or in the Common
Areas of the Park.

19.      Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to assure the most effective operation
of the Building's heating, ventilation and air conditioning and to comply with
any governmental energy-saving rules, laws or regulations of which Tenant has
notice, and shall refrain from attempting to adjust controls other than room
thermostats installed for Tenant's use. Tenant shall keep corridor doors closed,
and shall close window coverings at the end of each business day. Heat and air
conditioning shall be provided during ordinary business hours of generally
recognized business days, but not less than the hours of 7:00 a.m. to 6:00 p.m.
on Monday through Friday and 3:00 a.m. to 1:00 p.m. on Saturday (excluding in
any event Sundays and legal holidays).

20.      Tenant shall have access to the Premises at all times. However,
Landlord reserves the right to exclude from the Building (unless Tenant leases
the entire Building) between the hours of 6:00 p.m. and 7:00 a.m. the following
day, or such other hours as may be established from time to time by Landlord,
and on Saturdays, Sundays and legal holidays, any person unless that person is
known to the person or employee in charge of the Building, has a pass, is
properly identified, or has been authorized by Tenant (as long as Tenant has
notified Landlord in advance). Tenant shall be responsible for all persons for
whom it requests passes and shall be liable to Landlord for all acts or
omissions of such persons. Landlord shall not be liable for damages for any
error with regard to the admission to or exclusion from the Building of any
person. Landlord reserves the right to prevent access to the Building in case of
invasion, mob, riot, public excitement or other commotion by closing the doors
or by other appropriate action. Should Landlord install a security card key
access system, Tenant shall pay Landlord Landlord's actual cost for each
security card issued to Tenant (including new and replacement cards).

21.      Tenant shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus, and, except with regard to
Tenant's computers and other equipment which requires utilities on a twenty-four
hour basis, all electricity, gas or air outlets before Tenant and its employees
leave the Premises. Tenant shall be responsible for any damage or injuries
sustained by other tenants or occupants of the Building or by Landlord for
noncompliance with this rule.

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

23.      Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Building.

24.      Tenant shall not use in any space or in the public halls of the
Building any mail carts or hand trucks except those equipped with rubber tires
and side guards or such other material handling equipment as Landlord may
approve. Tenant shall not bring any other vehicles of any kind into the Building
except as provided in the Parking Rules and Regulations.

25.      Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

26.      Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises dos

27.      Landlord reserves the right to make such other and reasonable Rules and
Regulations (including Parking Rules and Regulations) as, in its judgment, may
from time to time be needed for safety and security, for care and cleanliness of
the Building and for the preservation of good order therein. Tenant agrees to
abide by all such Rules and Regulations hereinabove stated and any additional
rules and regulations which are adopted.

28.      Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, representatives, contractors, consultants,
clients) customers, invitees, guests, subtenants and assignees.

                                       2
<PAGE>

                                    EXHIBIT E
                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

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

Lessor's Agent:            Legacy Partners Commercial, Inc.
                           6480 Weathers Place, Suite 245
                           San Diego, California 92121
                           Phone:  (619) 4534800

Name of (Prospective) Lessee:
                             ---------------------------------------------------

Mailing Address:
                ----------------------------------------------------------------

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

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

Address of (Prospective) Premises:
                                  ----------------------------------------------

Length of (Prospective) initial Term:
                                     -------------------------------------------

1.       GENERAL INFORMATION:

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

2.       USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

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

                  Wastes                             Yes |_|        No |_|
                  Chemical Products                  Yes |_|        No |_|
                  Other                              Yes |_|        No |_|

                  If Yes is marked, please explain:
                                                   -----------------------------

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

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

         If Yes is marked in Section 2.1, attach a list of any Hazardous
         Materials to be used, generated, stored or disposed of in, on or about
         the Premises, including the applicable hazard class and an estimate of
         the quantities of such Hazardous Materials at any given time; estimated
         annual throughput; the proposed location(s) and method of storage
         (excluding nominal amounts of ordinary household cleaners and
         janitorial supplies which are not regulated by any Environmental Laws);
         and the proposed location(s) and method of disposal for each Hazardous
         Material, including, the estimated frequency, and the proposed
         contractors or subcontractors. Existing lessees should attach a list
         setting forth the information requested above and such list should

                                       1
<PAGE>

         include actual data from on-going operations and the identification of
         any variations in such information from the prior year's certificate.

3.       STORAGE TANKS AND SUMPS

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

                  Yes |_|           No |_|

                  If yes, please explain:
                                         ---------------------------------------

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

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

4.       WASTE MANAGEMENT

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

                  Yes |_|           No |_|

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

                  Yes |_|           No |_|

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

5.       WASTEWATER TREATMENT AND DISCHARGE

         5.1      Will your company discharge wastewater or other wastes to:

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

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

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

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

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

                  Yes |_|           No |_|

                  If yes, describe the type of treatment proposed to he
                  conducted. Existing lessees should describe the actual
                  treatment conducted.

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

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

6.       AIR DISCHARGES

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

                  Yes |_|           No |_|

                  If yes, please describe:
                                           -------------------------------------

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

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

                                       2
<PAGE>

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

                           Spray booth(s)             Incinerator(s)
                  --------                  ---------
                           Dip tank(s)                Other (Please describe)
                  --------                  ---------
                           Drying oven(s)             No Equipment Requiring Air
                  --------                  --------- Permits

                  If yes, please describe:
                                           -------------------------------------

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

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

7.       HAZARDOUS MATERIALS DISCLOSURES

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

                  Yes |_|           No |_|

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

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

                  Yes |_|           No |_|

                  If yes, please explain:
                                           -------------------------------------

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

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

8.       ENFORCEMENT ACTIONS AND COMPLAINTS

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

                  Yes |_|           No |_|

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

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

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

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

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

                  Yes |_|           No |_|

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

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

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

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

                                       3
<PAGE>

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

                  Yes |_|           No |_|

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

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

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

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

9.       PERMITS AND LICENSES

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

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

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

TENANT

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

Title:
      --------------------------------------

Date:
     ---------------------------------------

                                       4
<PAGE>

                                    EXHIBIT F
                       FIRST AMENDMENT TO LEASE AGREEMENT
                           CHANGE OF COMMENCEMENT DATE

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

         RECITALS

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

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

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

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

         2.       The Commencement Date of the Lease shall be __________________

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

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

                  for the period _________ to ________ the monthly Base Rent
                  shall be $_____________ for the period _________ to ________
                  the monthly Base Rent shall be $__________; and for the period
                  _________ to ________ the monthly Base Rent shall be
                  $_____________.

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

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

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

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

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

TENANT:

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

For:
      --------------------------------------

Date:
       -------------------------------------

LANDLORD:
LEGACY PARTNERS COMMERCIAL, INC.

By:
     ---------------------------------------
         Terry Thompson, Vice President

Date:
       --------------------

                                       1
<PAGE>

                           EXHIBIT G (TENANT/LANDLORD)
           TENANT'S INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

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

Lessor:           Legacy-RECP Sorrento OPCO, LLC
                  c/o Legacy Partners Commercial, Inc.
                  6480 Weathers Place, Suite 245
                  San Diego, California 92121
                  Phone:   (619) 4534800

Name of (Prospective) Lessee:  WEBSENSE, Inc.

Mailing Address:
                ----------------------------------------------------------------

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

Contact Person, Tide and Telephone Number(s):
                                             -----------------------------------

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

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

Address of (Prospective) Premises: 10240 Sorrento Valley Road, 2 and 3 Floors,
San Diego, CA

Length of (Prospective) initial Term:  Three (3) years

1.       GENERAL INFORMATION:

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

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

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

2.       USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

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

                  Wastes                             Yes |_|         No |_|
                  Chemical Products                  Yes |_|         No |_|
                  Other                              Yes |_|         No |_|

                  If Yes is marked, please explain:
                                                   -----------------------------

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

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

         2.2      If Yes is marked in Section 2.1, attach a list of any
                  Hazardous Materials to be used, generated, stored or disposed
                  of in, on or about the Premises, including the applicable
                  hazard class and an estimate of the quantities of such
                  Hazardous Materials at any given time; estimated annual
                  throughput; the proposed location(s) and method of storage
                  (excluding nominal amounts of ordinary household cleaners and
                  janitorial supplies which are not regulated by any
                  Environmental Laws); and the proposed location(s) and method
                  of disposal for each Hazardous Material, including, the
                  estimated frequency, and the proposed contractors or
                  subcontractors. Existing tenants should attach a list setting
                  forth

                                       1
<PAGE>

                  the information requested above and such list should include
                  actual data from on-going operations and the identification of
                  any variations in such information from the prior year's
                  certificate.

3.       STORAGE TANKS AND SUMPS

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

                  Yes |_|               No |_|

                  If yes, please explain:
                                         ---------------------------------------

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

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

4.       WASTE MANAGEMENT

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

                  Yes |_|               No |_|

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

                  Yes |_|               No |_|

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

5.       WASTEWATER TREATMENT AND DISCHARGE

         5.1      Will your company discharge wastewater or other wastes to:

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

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

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

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

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

                  Yes |_|               No |_|

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

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

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

6.       AIR DISCHARGES

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

                  Yes |_|               No |_|

                  If yes, please describe:
                                          --------------------------------------

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

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

                                       2
<PAGE>

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

                           Spray booth(s)             Incinerator(s)
                  --------                  ---------
                           Dip tank(s)                Other (Please describe)
                  --------                  ---------
                           Drying oven(s)             No Equipment Requiring Air
                  --------                  --------- Permits

                  If yes, please describe:
                                           -------------------------------------

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

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

7.       HAZARDOUS MATERIAL DISCLOSURES

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

                  Yes |_|               No |_|

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

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

                  Yes |_|               No |_|

                  If yes, please explain:
                                         ---------------------------------------

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

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

8.       ENFORCEMENT ACTIONS AND COMPLAINTS

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

                  Yes |_|               No |_|

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

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

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

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

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

                  Yes |_|               No |_|

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

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

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

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

                                       3
<PAGE>

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

                  Yes |_|               No |_|

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

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

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

9.       PERMITS AND LICENSES

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

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

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

TENANT:

WEBSENSE, Inc.

Signature:
          -------------------------------------------

Title:
        ---------------------------------------------

Date:
       ----------------------------------------------

                                       4
<PAGE>

                                    EXHIBIT H
                                  SIGN CRITERIA

Tenant shall be entitled to display its business name on a sign to be mounted in
the following locations, provided such exact locations shall be subject to
Landlord's reasonable approval:

(A)      Tenant's name and logo adjacent to Tenant's Premises entry doors on the
first floors.

Notwithstanding the above, all aspects of said signage (including, but not
limited to, size, font, color, location, etc.) shall be subject to Landlord's
reasonable approval, and must meet governmental and quasi-governmental
regulations. Furthermore, all signage shall be non-exclusive and may be shared
by other tenants.

The fabrication and installation of all Tenant signage shall be at Tenant's sole
expense. The removal of said signage and repair of any damage caused by such
removal at the end of the Term shall also be at Tenant's sole expense.

<PAGE>

                                  ADDENDUM ONE
                           OPTION TO EXTEND THE LEASE

This ADDENDUM ONE ("Addendum") is incorporated as a part of that certain Lease
Agreement dated FEBRUARY 12, 2000 (the "Lease"), by and between LEGACY-RECP
SORRENTO OPCO, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Landlord") and
WEBSENSE, INC., A DELAWARE CORPORATION ("Tenant") for the leasing of certain
premises located at 10240 SORRENTO VALLEY ROAD, SUITE 150, SAN DIEGO, California
as more particularly described in EXHIBIT A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.

1.       GRANT OF EXTENSION OPTION. Subject to the provisions of this Addendum,
if Tenant has not at any time been in default of its obligations beyond
applicable cure periods more than three (3) times during any twelve (12) month
period of the initial term of this Lease (a "Chronic Default"), or is not in
default in the performance of any of its obligations under this Lease beyond
applicable cure periods at the time of Tenant's exercise of this option to
extend the initial term of this Lease, Tenant shall have the right, at its
option (the "Option"), to extend the initial term of the Lease for one (1)
additional Three (3) year period (the "Extended Term").

2.       TENANT'S OPTION NOTICE. If Landlord does not receive written notice
from Tenant of its exercise of this Option on a date which is not more than two
hundred seventy (270) days nor less than one hundred eighty (180) days prior to
the end of the initial term of the Lease ("Option Notice"), all rights under
this Option shall automatically lapse and terminate and shall be of no further
force or effect. Time is of the essence herein.

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

If Landlord and Tenant are unable to agree on the Fair Rental Value for the
Extended Term within ten (10) days of receipt by Landlord of the Option Notice,
Landlord and Tenant each, at its cost and by giving notice to the other party,
shall appoint a competent and disinterested commercial real estate MM appraiser
(hereinafter "appraiser") with at least ten (10) years' full-time commercial
real estate appraisal experience in the geographical area of the Premises to set
the Fair Rental Value for the Extended Term. If either Landlord or Tenant does
not appoint an appraiser within ten (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 Rental Value for the Extended Term. If two
(2) appraisers are appointed by Landlord and Tenant as stated in this paragraph,
they shall meet promptly and attempt to set the Fair Rental Value. If the two
(2) appraisers are unable to agree within ten (10) days after the second
appraiser has been appointed, they shall attempt to select a third appraiser,
meeting the qualifications stated in this paragraph within ten (10) days after
the last day the two (2) appraisers are given to set the Fair Rental Value. If
they are unable to agree on the third appraiser, either Landlord or Tenant by
giving ten (10) days' notice to the other party, can apply to the Presiding
Judge of the Superior Court of the county in which the Premises is located for
the selection of a third appraiser who meets the qualifications stated in this
paragraph. Landlord and Tenant each shall bear one-half (14) of the cost of
appointing the third appraiser and of paying the third appraiser's fee. The
third appraiser, however selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant. Within fifteen (15) days
after the selection of the third appraiser, the third appraiser shall determine
the Fair Rental Value for the Extended Term, which Fair Rental Value shall not
be higher than the highest Fair Rental Value nor lower than the lowest Fair
Rental Value submitted by the first two appraisers as the Fair Rental Value for
the Extended Term. If either of the first two appraisers fails to submit their
opinion of the Fair Rental Value, then the single Fair Rental Value submitted
shall automatically be the monthly Base Rent for the Extended Term.

Upon determination of the initial monthly Base Rent for the Extended Term,
pursuant to the terms outlined above, Landlord and Tenant shall immediately
execute an amendment to the Lease. Such amendment, shall set forth among other
things, the initial monthly Base Rent for the Extended Term, and the actual
commencement date and expiration date of the Extended Term, and shall otherwise
be on the same terms and provisions of the Lease to the extent then applicable
(by way of example only, the provisions of Exhibit B to the Lease may not be
applicable during the Extended Term). Tenant shall have no other right to
further extend the term of the Lease under this Addendum unless Landlord and
Tenant otherwise expressly agree in writing.

<PAGE>

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

5.       LIMITATIONS ON, AND CONDITIONS TO, EXTENSION OPTION. At Landlord's
option, all rights of Tenant. under this Option shall terminate and be of no
force or effect if any of the following individual events occur or any
combination thereof occur: (1) Tenant has been in Chronic Default at any time
during the initial term of the Lease, or is in default in the performance of any
of its obligations under this Lease beyond any applicable cure periods at the
time of Tenant's exercise of this Option; and/or (2> Tenant's financial
condition is unacceptable to Landlord at the time of Tenant's delivery to
Landlord of the Option Notice (provided, however, if there is not any
substantial adverse change in Tenant's net profits during the prior three (3)
fiscal quarters of Tenant's operations then Tenant's then existing financial
condition shall be acceptable to Landlord); and/or (3) Tenant has failed to
exercise properly the Option described in this Addendum in a timely manner in
strict accordance with the provisions of this Addendum; and/or (4) Tenant no
longer has lawful possession of the Premises under the Lease, or if the Lease
has been terminated earlier, pursuant to the terms of the Lease.

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

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