Office Lease

OFFICE LEASE


by and between


SEOC I LIMITED PARTNERSHIP,
an Arizona limited partnership,


"LANDLORD"


and


CBT SYSTEMS USA, LTD.,
a Delaware corporation
"TENANT"


December 31, 1997


EXECUTIVE OFFICE CENTER


Scottsdale Airpark
16100 North Greenway/Hayden Loop
Scottsdale, Arizona 85260


TABLE OF CONTENTS
-----------------


Page
----


1. BASIC PROVISIONS................................................ 1 2. LEASED PREMISES; NO ADJUSTMENTS................................. 2 3. LEASE TERM; COMMENCEMENT DATE................................... 3 4. SECURITY DEPOSIT................................................ 3 5. RENT; RENT TAX; ADDITIONAL RENT................................. 4 6. OPERATING COSTS................................................. 4 7. CONDITION, REPAIRS AND ALTERATIONS.............................. 7 8. SERVICES........................................................ 8 9. LIABILITY AND PROPERTY INSURANCE................................ 9 10. RECONSTRUCTION.................................................. 11 11. WAIVER OF SUBROGATION........................................... 12 12. LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS.................. 13 13. DEFAULT AND REMEDIES............................................ 13 14. LATE PAYMENTS................................................... 15 15. ABANDONMENT AND SURRENDER....................................... 15 16. INDEMNIFICATION AND EXCULPATION................................. 15 17. ENTRY BY LANDLORD............................................... 16 18. RESERVED........................................................ 17 19. ASSIGNMENT AND SUBLETTING....................................... 17 20. USE OF LEASED PREMISES AND RUBBISH REMOVAL...................... 18 21. SUBORDINATION AND ATTORNMENT.................................... 19 22. ESTOPPEL CERTIFICATE............................................ 20 23. SIGNS........................................................... 20 24. PARKING......................................................... 20 25. LIENS........................................................... 21 26. HOLDING OVER.................................................... 21 27. ATTORNEYS' FEES................................................. 21 28. RESERVED RIGHTS OF LANDLORD..................................... 21 29. EMINENT DOMAIN.................................................. 22 30. NOTICES......................................................... 23 31. RULES AND REGULATIONS........................................... 23 32. ACCORD AND SATISFACTION......................................... 23 33. BANKRUPTCY OF TENANT............................................ 23 34. HAZARDOUS MATERIALS............................................. 25 35. MISCELLANEOUS................................................... 27


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OFFICE LEASE


1. BASIC PROVISIONS
----------------


1.1 Date: December 31, 1997
---- --
1.2 Landlord: SEOC I Limited Partnership, an Arizona limited
-------- partnership

1.3 Landlord's Address: c/o Cavan Investments, Ltd.
------------------- 15880 North Greenway/Hayden Loop, Suite 700
Phoenix, Arizona 85260
Attention: Mr. Steven E. Barger

1.4 Tenant: CBT Systems USA, Ltd., a Delaware corporation
------


1.5 Tenant's Address:
----------------


(a) Prior to Commencement
---------------------
Date: 1005 Hamilton Court
---- Menlo Park, California 94025
Attention: CFO and General Counsel


(b) Subsequent to
-------------
Commencement Date: To the address set forth in Section 1.5(a) and to:
----------------- --------------
16100 North Greenway-Hayden Loop
Suite 800 (Building E)
Scottsdale, Arizona 85260
Attention: General Manager


1.6 Project: The parcel of real estate commonly known as Executive Office
------- Center, located in Scottsdale, Maricopa County,
Arizona, legally described on Exhibit "A"
-----------
attached hereto and incorporated herein by this
reference, together with the office buildings
now or hereafter situated thereon, the
landscaping, parking facilities and all other
improvements and appurtenances thereto.


1.7 Building: That certain office building known as Executive
-------- Office Center located at 16100 North Greenway-
Hayden Loop, Scottsdale Airpark, Scottsdale,
Maricopa County, Arizona 85260, and situated on
the Project.


1.8 Leased Premises: 25,571 rentable square feet of office space commonly
--------------- known as Suite 800 (Building E), as outlined on
the Floor Plan attached hereto as Exhibit "B".


1.9 Permitted Use: General office, warehousing, research and
------------- development, shipping, receiving, and storage.


1.10 Lease Term: 5 years and 1 month.
----------


1.11 Scheduled Commencement Date
---------------------------
and Expiration Date: April 1, 1998 and April 30, 2003.
-------------------


1.12 Annual Basic Rent: LEASE MONTH 1: No charge for Basic Rent.
-----------------
LEASE MONTHS 2-37: $30,898.29 per month based
upon a rental rate of $14.50 per rentable square foot.

LEASE MONTHS 38-61: $32,496.48 per month based
upon a rental rate of $15.25 per rentable square foot.


1.13 Security Deposit: $30,898.29
----------------


1.14 Building Hours: 7:00 a.m. to 6:00 p.m., Monday through Friday, and
-------------- 8:00 a.m. to 12:00 p.m. on Saturday,
excluding recognized federal, state and local holidays.


1.15 Parking Spaces: 152 parking spaces, of which, at Tenant's election, up
-------------- to 25 are covered reserved and the balance are uncovered unreserved,
increased to 203 total spaces if the premises currently occupied by
the Mayo Clinic is vacated, and increased pro rata if Tenant leases
additional premises in the Project. Tenant shall make its election
to use the covered reserved parking spaces by executing the Parking
License in the form of Exhibit "D" attached hereto.
----------


1.16 Parking Charge: $25.00 per covered reserved space per month.
--------------


1.17 Guarantors: None.
----------


1.18 Broker: Lee & Associates and CB Commercial.
------


1.19 Exhibits: A = Legal Description of the Project
-------- B = Floor Plan
C = Memorandum of Commencement Date
D = Reserved Covered Parking License
E = Reserved.
F = Unreserved Parking License
G = Work Letter
H = Building Rules and Regulations
I = Loading Zone Site Plan


1.20 Loading Zone: 2 parking spaces designated as loading zone and
------------ depicted on the loading zone exhibit attached hereto
as Exhibit "I".
-----------


1.21 Riders: 1 = Option to Extend
------
2 = Right of First Refusal


2. LEASED PREMISES; NO ADJUSTMENTS
-------------------------------


2.1 Leased Premises. Landlord hereby leases to Tenant, and Tenant hereby
--------------- leases and accepts from Landlord, the Leased Premises, upon the terms and conditions set forth in this Lease and any modifications, supplements or addenda hereto (the "Lease"), including the Basic Provisions of Article 1 which are
----- --------- incorporated herein by this reference, together with the nonexclusive right to use, in common with Landlord and others, the Building Common Areas (defined below) and the Project Common Areas (defined below). For the purposes of this Lease, the term "Building Common Areas" means common hallways, corridors,
--------------------- walkways and footpaths, foyers and lobbies, bathrooms and janitorial closets, electrical and telephone closets, landscaped areas, and such other areas within or adjacent to the Building which are subject to or are designed or intended solely for the common enjoyment, use and/or benefit of the tenants of the Building. The term "Project Common Areas" means common walkways, footpaths,
-------------------- driveways, parking areas, service areas, landscaped areas, and such other areas within or adjacent to the Project which are subject to or are designed or intended solely for the common enjoyment, use and/or benefit of the tenants of the Project. The Building Common Areas and Project Common Areas shall consist of at least those areas that are currently designated as such by Landlord. Tenant shall have the nonexclusive right to use those spaces depicted on the Loading Zone Site Plan attached hereto as Exhibit "I".
-----------


2.2 Adjustments. The Annual Basic Rent at the Commencement Date (as
----------- hereinafter defined) is based on the Leased Premises containing the rentable square footage set forth in Article 1.8 above. If the actual rentable square
----------- footage of the Leased Premises is more or less than the square footage set forth in Article 1.8 above (to be computed in accordance with BOMA standards after
----------- completion of the Leased Premises, by McCarthy Nordberg), the Annual Basic Rent shall be increased or decreased in accordance with the rental rate set forth in
Article 1.12 above. - ------------


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3. LEASE TERM; COMMENCEMENT DATE
-----------------------------


3.1 Lease Term. The Lease Term shall begin on the Commencement Date and
---------- shall be for the period set forth in Article 1.10 above, plus any period of less
------------ than one (1) month between the Commencement Date and the first day of the next succeeding calendar month, unless sooner terminated in accordance with the further provisions of this Lease.


3.2 Commencement Date. The Commencement Date shall mean the date by which
----------------- (a) Landlord has Substantially Completed the Tenant Improvements (as defined in Exhibit "G") in accordance with this Lease, (b) Landlord has delivered - ----------- possession of the Leased Premises to Tenant in the condition required herein, and (c) Tenant has had a period of not less than seven (7) business days to install its fixtures, furniture and equipment. The Expiration Date shall be adjusted based on the actual Commencement Date.


3.3 Memorandum of Commencement Date. Landlord and Tenant shall, within
------------------------------- ten (10) days after the Commencement Date, execute a declaration in the form of Exhibit "C" attached hereto specifying the Commencement Date should the - ----------- Commencement Date be a date other than the Scheduled Commencement Date.


3.4 Delay in Commencement Date. In the event Landlord shall be unable,
-------------------------- for any reason, to deliver possession of the Leased Premises to Tenant on the Scheduled Commencement Date, Landlord shall not be liable for any loss or damage occasioned thereby, nor shall such inability affect the validity of this Lease or the obligations of Tenant. In such event, Tenant shall not be obligated to pay Annual Basic Rent or Additional Rent or perform any other obligations hereunder until the Commencement Date. In the event the Commencement Date has not occurred for any reason within thirty (30) days after the Scheduled Commencement Date, other than due to Tenant Delays, then, in addition to Tenant's other rights or remedies, the date Tenant is otherwise obligated to commence payment of Rent shall be delayed by one day for each day that the Commencement Date is delayed beyond such date, or, at Tenant's election, Tenant shall have the right to terminate this Lease by delivering written notice of termination to Landlord at any time within thirty (30) days after the expiration of such thirty (30) day period. Such termination shall be effective thirty (30) days after receipt by Landlord of Tenant's notice of termination. Upon a termination of this Lease pursuant to the provisions of this Article 3.4, the
----------- parties shall have no further obligations or liabilities to the other and Landlord shall promptly return any monies previously deposited or paid by Tenant.


3.5 Lease Year. Each "Lease Year" shall be a period of twelve (12)
---------- ---------- consecutive calendar months, the first Lease Year beginning on the Commencement Date or on the first day of the calendar month next succeeding the Commencement Date if the Commencement Date is not on the first day of a calendar month. Each Lease Year after the first Lease Year shall begin on the calendar day next succeeding the expiration of the immediately preceding Lease Year.


4. SECURITY DEPOSIT
----------------


Tenant shall pay to Landlord, upon the execution of this Lease, the Security Deposit set forth in Article 1.13 above as security for the performance
------------ by Tenant of its obligations under this Lease, which amount shall be returned to Tenant after the expiration or earlier termination of this Lease, provided that Tenant shall have fully performed all of its obligations contained in this Lease. The Security Deposit, at the election of Landlord, may be retained by Landlord as and for its full damages or may be applied in reduction of any loss and/or damage sustained by Landlord by reason of the occurrence of any Event of Default by Tenant under this Lease without the waiver of any other right or remedy available to Landlord at law, in equity or under the terms of this Lease. If any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after written notice from Landlord, deposit with Landlord immediately available funds in an amount sufficient to restore the Security Deposit to its original amount, and Tenant's failure to do so shall be a breach of this Lease. Tenant acknowledges and agrees that in the event Tenant shall file a voluntary petition pursuant to the Bankruptcy Code or any successor thereto, or if an involuntary petition is filed against Tenant pursuant to the Bankruptcy Code or any successor thereto and such involuntary petition is not dismissed within sixty (60) days, then Landlord may apply the Security Deposit towards those obligations of Tenant to Landlord which accrued prior to the filing of such petition. Tenant acknowledges further that the Security Deposit may be commingled with Landlord's other funds and that Landlord shall be entitled to retain any interest earnings thereon. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer the Security Deposit to Landlord's successor in interest, whereupon Landlord shall be released from liability by Tenant for the return of such deposit or the accounting therefore.


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5. RENT; RENT TAX; ADDITIONAL RENT
-------------------------------


5.1 Payment of Rent. Tenant shall pay to Landlord the Annual Basic Rent
--------------- set forth in Article 1.12 above, subject to adjustment as provided herein. The
------------ Annual Basic Rent shall be paid in equal monthly installments, on or before the first day of each and every calendar month during the Lease Term, in advance, without notice or demand and without abatement, deduction or offset, except as otherwise set forth herein. If the Commencement Date is other than the first day of a calendar month, the payment for the partial month following the Commencement Date shall be prorated and shall be payable on the first day of the first full calendar month of the Lease Term. The Annual Basic Rent for the first full month of the Lease Term shall be paid upon the execution of this Lease. All payments requiring proration shall be prorated on the basis of a thirty (30) day month. In addition, all payments to be made under this Lease shall be paid in lawful money of the United States of America to Landlord or its agent at the address set forth in Article 1.3 above, or to such other person or
----------- at such other place as Landlord may from time to time designate in writing.


5.2 Rent Tax. In addition to the Annual Basic Rent and Additional Rent,
-------- Tenant shall pay to Landlord, together with the monthly installments of Annual Basic Rent and payments of Additional Rent, an amount equal to any governmental taxes, including, without limitation, any sales, rental, occupancy, excise, use or transactional privilege taxes assessed or levied upon Landlord with respect to the amounts paid by Tenant to Landlord hereunder, as well as all taxes assessed or imposed upon Landlord's gross receipts or gross income from leasing the Leased Premises to Tenant, including, without limitation, transaction privilege taxes, education excise taxes, any tax now or hereafter imposed by the City of Scottsdale, the State of Arizona, any other governmental body, and any taxes assessed or imposed in lieu of or in substitution of any of the foregoing taxes. Such taxes shall not, however, include any franchise, gift, estate, inheritance, conveyance, transfer or net income tax assessed against Landlord.


5.3 Additional Rent. In addition to Annual Basic Rent, all other amounts
--------------- to be paid by Tenant to Landlord pursuant to this Lease (including amounts to be paid by Tenant pursuant to Article 6 below and parking charges to be paid by
--------- Tenant pursuant to Exhibits "D" and "F"), if any, shall be deemed to be
-------------------- Additional Rent, whether or not designated as such, and shall be due and payable within thirty (30) days after receipt by Tenant of Landlord's statement. Landlord shall have the same remedies for the failure to pay Additional Rent as for the nonpayment of Annual Basic Rent.


6. OPERATING COSTS
---------------


6.1 Tenant's Obligation. The Annual Basic Rent does not include amounts
------------------- attributable to Taxes (defined below) or amounts attributable to the cost of the use, management, repair, service, insurance, condition, operation and maintenance of the Building and the Project. Therefore, in order that the Annual Basic Rent payable throughout the Lease Term shall reflect such amounts, Tenant shall pay to Landlord, in accordance with the further provisions of this Article 6, an amount equal to the Operating Costs (as hereinafter defined) per - --------- rentable square foot of the Leased Premises.


6.2 Landlord's Estimate. Landlord shall furnish Tenant an estimate of the
------------------- Operating Costs per rentable square foot for each calendar year. In addition, Landlord may, from time to time, but no more than twice per year, furnish Tenant a revised estimate of Operating Costs should Landlord anticipate any increase in Operating Costs from that set forth in a prior estimate. Commencing with the first month to which an estimate applies, Tenant shall pay, in addition to the monthly installments of Annual Basic Rent, an amount equal to one-twelfth (1/12th) of the Operating Expenses per rentable square foot of the Leased Premises; provided, however, if less than ninety-five percent (95%) of the rentable area of the Building shall be occupied by tenants during the period covered by such estimate, the estimated Operating Costs for such period shall be, for the purposes of this Article 6, increased to an amount reasonably
--------- determined by Landlord to be equivalent to the Operating Costs that would be incurred if occupancy would be at least ninety-five percent (95%) during the entire period. Within one hundred twenty (120) days after the expiration of each calendar year or such longer period of time as may be necessary to compile such statement, but in no event longer than one hundred eighty (180) days from the beginning of the calendar year, Landlord shall deliver to Tenant a reasonably detailed and itemized statement of the actual Operating Costs for such calendar year. If the actual Operating Costs for such calendar year are more or less than the estimated Operating Costs, a proper adjustment shall be made; provided, however, if less than ninety-five percent (95%) of the rentable area of the Building shall have been occupied by tenants at any time during such period, the actual Operating Costs for such period shall be, for the purposes of this Article 6, increased to an amount reasonably determined by Landlord to be
--------- equivalent to the Operating Costs that would have been incurred had such occupancy been at least ninety-five (95%) during the entire period. Any excess


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amounts paid by Tenant shall be refunded to Tenant with such statement or, at Landlord's option, may be applied to any amounts then payable by Tenant to Landlord or to the next maturing monthly installment of Annual Basic Rent or Additional Rent. Any deficiency between the estimated and actual Operating Costs shall be paid by Tenant to Landlord within thirty (30) days of delivery of such statement. Any amount owing for a fractional calendar year in the first or final Lease Years of the Lease Term shall be prorated.


6.3 Operating Costs - Defined. For the purposes of this Lease, "Operating
------- ...