<PAGE>

                                                                   EXHIBIT 10.22


                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

                                LEASE AGREEMENT

          THIS LEASE, made this 5th day of October, 2000, between JOHN
ARRILLAGA, Trustee, or his Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA
SURVIVOR'S TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor
Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as
amended, hereinafter called Landlord, and OPTI, INC., a California corporation,
hereinafter called Tenant.

                                  WITNESSETH:

          Landlord hereby leases to Tenant and Tenant hereby hires and takes
from Landlord those certain premises (the "Premises") outlined in Red on
Exhibit A, attached hereto and incorporated herein by this reference thereto
---------
more particularly described as follows:

A portion of that certain 38,318+/- square foot, one-story building located at
660 Alder Drive, Milpitas, California 95035, consisting of approximately
18,463+/- square feet of space. Said Premises is more particularly shown within
the area outlined in Red on Exhibit A attached hereto. The entire parcel, of
                            ---------
which the Premises is a part, is shown within the area outlined in Green on
Exhibit A attached. The Premises shall be improved by Landlord as shown on
---------
Exhibit B attached hereto, and is leased on an "as-is" basis, in its present
---------
condition, and in the configuration as shown in Red on Exhibit B attached
                                                       ---------
hereto.

As used herein the Complex shall mean and include all of the land outlined in
Green and described in Exhibit A attached hereto, and all of the buildings,
                       ---------
improvements, fixtures and equipment now or hereafter situated on said land. The
gross leasable area of the building shall be measured from outside of exterior
walls to outside of exterior walls, and shall include any atriums, covered
entrances or egresses and covered building loading areas.

          Said letting and hiring is upon and subject to the terms, covenants
and conditions hereinafter set forth and Tenant covenants as a material part of
the consideration for this Lease to perform and observe each and all of said
terms, covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

          1. USE. Tenant shall use the Premises only in conformance with
             ---
applicable governmental laws, regulations, rules and ordinances for the purpose
of general office, research and development, assembly and storage uses necessary
for Tenant to conduct Tenant' business, provided that such uses shall be in
accordance with all applicable governmental laws and ordinances, and for no
other purpose. Tenant shall not do or permit to be done in or about the Premises
or the Complex nor bring or keep or permit to be brought or kept in or about the
Premises or the Complex anything which is prohibited by or will in any way
increase the existing rate of (or otherwise affect) fire or any insurance
covering the Complex or any part thereof, or any of its contents, or will cause
a cancellation of any insurance covering the Complex or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises or the Complex which will in any way obstruct or interfere
with the rights of other tenants or occupants of the Complex or injure or annoy
them, or use or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises or the Complex. No sale by auction
shall be permitted on the Premises. Tenant shall not place any loads upon the
floors, walls, or ceiling which endanger the structure, or place any harmful
fluids or other materials in the drainage system of the building, or overload
existing electrical or other mechanical systems. No waste materials or refuse
shall be dumped upon or permitted to remain upon any part of the Premises or
outside of the building in which the Premises are a part, except in trash
containers placed inside exterior enclosures designated by Landlord for that
purpose or inside of the building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted to remain
outside the Premises or on any portion of the common area of the Complex. Tenant
shall not place anything or allow anything to be placed near the glass of any
window, door partition or wall which may appear unsightly from outside the
Premises. No loudspeaker or other device, system or apparatus which can be heard
outside the Premises shall be used in or at the Premises without the prior
written consent of Landlord. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises. Tenant shall indemnify, defend and hold
Landlord harmless against any loss, expense, damage, reasonable

                                                      Initial: /s/ [ILLEGIBLE]
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<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

attorneys' fees, or liability arising out of failure of Tenant to comply with
any applicable law for which Tenant is obligated to comply under the terms of
this Lease. Tenant shall comply with any covenant, condition, or restriction
("CC&R's") affecting the Premises which regulates Tenant's use of the Premises.
The provisions of this Paragraph are for the benefit of Landlord only and shall
not be construed to be for the benefit of any Tenant or occupant of the Complex.

          2. TERM.
             ----

          A.   The Term of this Lease shall be for a period of FIVE (5) years
(unless sooner terminated as hereinafter provided) and, subject to Paragraphs
2B and 3, shall commence on the 1st day of January, 2001 and end on the 31st
day of December, 2005.

          B.   Possession of the Premises shall be deemed tendered and the Term
of the Lease shall commence when the first of the following occurs:

               (a)  One day after a Certificate of Occupancy is granted by the
proper governmental agency, or, if the governmental agency having jurisdiction
over the area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed, or

               (b)  Upon the occupancy of the Premises by any of Tenant's
operating personnel; or

               (c)  When the Tenant Improvements have been substantially
completed for Tenant's use and occupancy, in accordance and compliance with
Exhibit B of this Lease Agreement; or
---------

               (d)  As otherwise agreed in writing.

     It is agreed in the event said Lease commences on a date other than the
first day of the month the Term of the Lease will be extended to account for the
number of days in the partial month. The Basic Rent during the resulting
partial month will be pro-rated (for the number of days in the partial month) at
the Basic Rent rate scheduled for the projected Commencement Date as shown in
Paragraph 4A.

     3.  POSSESSION.
         ----------

         A.    If Landlord, for any reason whatsoever, cannot deliver possession
of said Premises to Tenant at the commencement of the said Term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant
shall be affected thereby; nor shall Landlord or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom; but in that event the
commencement and termination dates of the Lease, and all other dates affected
thereby shall be revised to conform to the date of Landlord's delivery of
possession, as specified in Paragraph 2B above. The above is, however, subject
to the provision that the period of delay of delivery of the Premises shall not
exceed sixty (60) days from the Commencement Date herein (except those delays
             ----
caused by Acts of God, strikes, war, utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease.

         B.    Early Entry: Tenant and its agents and contractors shall be
               -----------
permitted to enter the Premises prior to the Commencement Date for the purpose
of installing at Tenant's sole cost and expense, Tenant's trade fixtures and
equipment, telephone equipment, security systems and cabling for computers. Such
entry shall be subject to all of the terms and conditions of this Lease, except
that Tenant shall not be ' required to pay any Rent on account thereof. Any
entry or installation work by Tenant and its agents in the Premises pursuant to
this Paragraph 3.B shall (i) be undertaken at Tenant's sole risk, (ii) not
                                                       ---------
interfere with or delay Landlord's work in the Premises, and (iii) not be
deemed occupancy or possession of the Premises for purposes of the Lease. Tenant
shall indemnify, defend, and hold Landlord harmless from any and all loss,
damage, liability, expense (including reasonable attorney's fees), claim or
demand of whatsoever character, direct or consequential, including, but without
limiting thereby the generality of the foregoing, injury to or death of persons
and damage to or loss of property arising out of the exercise by Tenant of any
early entry right granted hereunder. In the event Tenant's work in said Premises
delays the completion of the interior improvements to be provided by Landlord,
if any, or in the event Tenant has not completed construction of it's interior
improvements by the scheduled Commencement Date, it is agreed between the

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------

Multi Tenant/Complex             Page 2 of 25

<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01



parties that this Lease will commence on the scheduled Commencement Date of
regardless of the construction status of said interior improvements completed or
to be completed by Tenant or Landlord. It is the intent of the parties hereto
that the commencement of Tenant's obligation to pay Rent under the Lease not be
delayed by any of such causes or by any other act of Tenant (except as expressly
provided herein) and, in the event it is so delayed, Tenant's obligation to pay
Rent under the Lease shall commence as of the date it would otherwise have
commenced absent delay caused by Tenant.

     4.  RENT.
         ----

     A.   Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord
may designate without deduction, offset, prior notice, or demand, and Landlord
agrees to accept as Basic Rent for the Leased Premises the total sum of FIVE
MILLION FOUR HUNDRED FORTY FOUR THOUSAND SEVEN HUNDRED THIRTY EIGHT AND 70/100
Dollars ($5,444,738.70) in lawful money of the United States of America, payable
as follows:

     On January 1, 2001, the sum of TWENTY THREE THOUSAND SEVENTY EIGHT AND
75/100 DOLLARS ($23,078.75) shall be due, and a like sum due on the first day of
each month thereafter, through and including October 1, 2001.

     On November 1, 2001, the sum of TWENTY FOUR THOUSAND ONE AND 90/100
DOLLARS ($24,001.90) shall be due, and a like sum due on the first day of each
month thereafter, through and including October 1, 2002.

     On November 1, 2002, the sum of ONE HUNDRED TWENTY FIVE THOUSAND FIVE
HUNDRED FORTY EIGHT AND 40/100 DOLLARS ($125,548.40) shall be due, and a like
sum due on the first day of each month thereafter, through and including October
1, 2003.

     On November 1, 2003, the sum of ONE HUNDRED TWENTY NINE THOUSAND TWO
HUNDRED FORTY ONE AND NO/100 DOLLARS ($129,241.00) shall be due, and a like sum
due on the first day of each month thereafter, through and including October
1, 2004.

     On November 1, 2004, the sum of ONE HUNDRED THIRTY TWO THOUSAND NINE
HUNDRED THIRTY THREE AND 60/100 DOLLARS ($132,933.60) shall be due, and a like
sum due on the first day of each month thereafter, through and including October
1, 2005.

     On November 1, 2005, the sum of ONE HUNDRED THIRTY SIX THOUSAND SIX HUNDRED
TWENTY SIX AND 20/100 DOLLARS ($136,626.20) shall be due, and a like sum due on
the first day of each month thereafter, through and including December 1, 2005;
or until the entire aggregate sum of FIVE MILLION FOUR HUNDRED FORTY FOUR
THOUSAND SEVEN HUNDRED THIRTY EIGHT AND 70/100 DOLLARS ($5,444,738.70) has been
paid.

     B.   Time for Payment. Full monthly Rent is due in advance on the first day
of each calendar month. In the event that the Term of this Lease commences on a
date other than the first day of a calendar month, on the date of commencement
of the Term hereof Tenant shall pay to Landlord as Rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly Rent hereunder for the number of days between such
date of commencement and the first day of the next succeeding calendar month.
In the event that the Term of this Lease for any reason ends on a date other
than the last day of a calendar month, on the first day of the last calendar
month of the Term hereof Tenant shall pay to Landlord as Rent for the period
from said first day of said last calendar month to and including the last day of
the Term hereof that proportion of the monthly Rent hereunder for the number of
days between said first day of said last calendar month and the last day of the
Term hereof.

     C.   Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of Rent as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent Rent due, a late charge for each Rent payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each Rent payment so in
default.

                                                      Initial: /s/ [ILLEGIBLE]
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Multi Tenant/Complex             Page 3 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01


     D.   Additional Rent. Beginning with the Commencement Date of the Term of
this Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:

          (a)  Tenant's proportionate share of all Taxes relating to the Complex
and Premises as set forth in Paragraph 13, and

          (b)  Tenant's proportionate share of all insurance premiums and
deductibles relating to the Complex and Premises, as set forth in Paragraph 17,
and

          (c)  Tenant's proportionate share of expenses for the operation,
management, maintenance, and repair of the Building (including common areas of
the Building) and Common Areas of the Complex in which the Premises are located
as set forth in Paragraph 7, and

          (d)  All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
Rent.

     The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days for taxes and insurance and within thirty (30) days
for all other Additional Rent items after presentation of invoice from Landlord
or Landlord's agent setting forth such Additional Rent and/or (ii) at the option
of Landlord, Tenant shall pay to Landlord monthly, in advance, Tenant's prorata
share of an amount estimated by Landlord to be Landlord's approximate average
monthly expenditure for such Additional Rent items, which estimated amount shall
be reconciled within one hundred twenty (120) days of the end of each calendar
year or more frequently if Landlord elects to do so at Landlord's sole and
absolute discretion as compared to Landlord's actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, within thirty days after
delivery by Landlord to Tenant of a written reconciliation identifying the
amount to be paid, any amount of actual expenses expended by Landlord in excess
of said estimated amount, or Landlord crediting to Tenant (providing Tenant is
not in default in the performance of any of the terms, covenants and conditions
of this Lease) any amount of estimated payments made by Tenant in excess of
Landlord's actual expenditures for said Additional Rent Items. Within thirty
(30) days after receipt of Landlord's reconciliation, Tenant shall have the
right, at Tenant's sole expense, to audit, at a mutually convenient time at
Landlord's office, Landlord's records specifically limited to the foregoing
expenses. Such audit must be conducted by Tenant or an independent nationally
recognized accounting firm that is not being compensated by Tenant or other
third party on a contingency fee basis. Landlord shall be provided a complete
copy of said audit at no expense to Landlord. If such audit reveals that
Landlord has overcharged Tenant and the audit is not challenged by Landlord, the
amount overcharged shall be credited to Tenant's account within thirty (30) days
after the audit is concluded.

     E.   Fixed Management Fee. Commencing November 1, 2002, and throughout the
remaining Term of this Lease, Tenant shall pay to Landlord, in addition to the
Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to three percent (3%) of the Basic Rent due for each month during
the Lease Term.

     The reference to "Rent" in this Paragraph 4 includes Basic Rent, Additional
Rent, and fixed Management Fee. The respective obligations of Landlord and
Tenant under this Paragraph shall survive the expiration or other termination of
the Term of this Lease, and if the Term hereof shall expire or shall otherwise
terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the Term hereof expires
or otherwise terminates shall be determined and settled on the basis of the
statement of actual Additional Rent for such calendar year and shall be prorated
in the proportion which the number of days in such calendar year preceding such
expiration or termination bears to 365.

     F.   Place of Payment of Rent. All Rent hereunder shall be paid to Landlord
at the office of Landlord at: PEERY/ARRILLAGA, FILE 1504, BOX 60000, SAN
FRANCISCO, CA 94160, or to such other person or to such other place as Landlord
may from time to time designate in writing.

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex             Page 4 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01



     G.   Security Deposit. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of TWO HUNDRED SEVENTY THREE THOUSAND
TWO HUNDRED FIFTY TWO AND 40/100 Dollars ($273,252.40). Said sum shall be held
by Landlord as a Security Deposit for the faithful performance by Tenant of all
of the terms, covenants, and conditions of this Lease to be kept and performed
by Tenant during the Term hereof. If Tenant defaults with respect to any
provision of this Lease, including, but not limited to, the provisions relating
to the payment of Rent and any of the monetary sums due herewith, Landlord may
(but shall not be required to) use, apply or retain all or any part of this
Security Deposit for the payment of any other amount which Landlord may spend by
reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of said Deposit is so used or applied, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in the amount sufficient to
restore the Security Deposit to its original amount. Tenant's failure to do so
shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Deposit. If Tenant fully and faithfully performs
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or at Landlord's option, to the
last assignee of tenant's interest hereunder) at the expiration of the Lease
Term and after Tenant has vacated the Premises. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said Deposit to
Landlord's successor in interest whereupon Tenant agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor. Within
forty five (45) after the expiration or earlier termination of the Lease Term,
and after Tenant has vacated and surrendered the Premises, Landlord shall return
to Tenant the then current balance of Tenant's Security Deposit (except for
amounts that Landlord has deducted to cure defaults of Tenant under the Lease,
or to compensate Landlord for damages for which Tenant is liable for pursuant to
this Lease).

     5.   RULES AND REGULATIONS AND COMMON AREA. Subject to the terms and
          -------------------------------------
conditions of this Lease and such Rules and Regulations as Landlord may from
time to time prescribe, Tenant and Tenant's employees, invitees and customers
shall, in common with other occupants of the Complex in which the Premises are
located, and their respective employees, invitees and customers, and others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas, and facilities provided and designated by Landlord for the
general use and convenience of the occupants of the Complex in which the
Premises are located, which areas and facilities are referred to herein as
"Common Area". This right shall terminate upon the termination of this Lease.
Landlord reserves the right from time to time to make changes in the shape,
size, location, amount and extent of Common Area, provided, however that such
changes shall not unreasonably interfere with Tenant's use of the Premises or
its access thereto. Landlord further reserves the right to promulgate such
reasonable Rules and Regulations relating to the use of the Common Area, and any
part or parts thereof, as Landlord may deem appropriate for the best interests
of the occupants of the Complex. The Rules and Regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by
them and cooperate in their observance. Such Rules and Regulations may be
amended by Landlord from time to time, with or without advance notice, and all
amendments shall be effective upon delivery of a copy to Tenant. Landlord shall
not be responsible to Tenant for the non-performance by any other tenant or
occupant of the Complex of any of said Rules and Regulations.

     Landlord shall operate, manage, and maintain the Common Area. The manner in
which the Common Area shall be maintained and the expenditures for such
maintenance shall be at the reasonable discretion of Landlord.

     6.   PARKING. Tenant shall have the right to use with other tenants or
          -------
occupants of the Complex ninety three (93) parking spaces in the common parking
areas of the Complex. Tenant agrees that Tenant, Tenant's employees, agents,
representatives and/or invitees shall not use parking spaces in excess of said
93 spaces allocated to Tenant hereunder. Landlord shall have the right, at
Landlord's sole discretion, to specifically designate the location of Tenant's
parking spaces within the common parking areas of the Complex in the event of a
dispute among the tenants occupying the building and/or Complex referred to
herein, in which event Tenant agrees that Tenant, Tenant's employees, agents,
representatives and/or invitees shall not use any parking spaces other than
those parking spaces specifically designated by Landlord for Tenant's use. Said
parking spaces, if specifically designated by Landlord to Tenant, may be
relocated by Landlord at any time, and from time to time, Landlord reserves the
right, at Landlord's sole discretion, to rescind any specific designation of
parking spaces, thereby returning Tenant's parking spaces to the common parking
area. Landlord shall give Tenant written notice of any change in Tenant's
parking spaces. Tenant shall not, at any time, park or permit to be parked, any
trucks or vehicles adjacent to the

                                                      Initial: /s/ [ILLEGIBLE]
                                                               ---------------

Multi Tenant/Complex           Page 5 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

loading areas so as to interfere in any way with the use of such areas, nor
shall Tenant at any time park or permit the parking of Tenant's trucks or other
vehicles or the trucks and vehicles of Tenant's suppliers or others, in any
portion of the common area not designated by Landlord for such use by Tenant.
Tenant shall not park nor permit to be parked, any inoperative vehicles or
equipment on any portion of the common parking area or other common areas of the
Complex. Tenant agrees to assume responsibility for compliance by its employees
with the parking provisions contained herein. If Tenant or its employees park in
other than such designated parking areas, then Landlord may charge Tenant, as an
additional charge, and Tenant agrees to pay, Ten Dollars ($10.00) per day for
each day or partial day each such vehicle is parked in any area other than that
designated. Tenant hereby authorizes Landlord at Tenant's sole expense to tow
away from the Complex any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions, or to attach violation stickers or
notices to such vehicles. Tenant shall use the parking spaces for vehicle
parking only and shall not use the parking areas for storage.

     7.   EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS
          ----------------------------------------------------------------------
OF THE COMPLEX. As Additional Rent and in accordance with Paragraph 4D of this
--------------
Lease, Tenant shall pay to Landlord Tenant's proportionate share (calculated on
a square footage or other equitable basis as calculated by Landlord) of all
expenses of operation, management, maintenance and repair of the Common Areas of
the Complex including, but not limited to, license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water and sewer charges); all charges incurred in the maintenance and
replacement of landscaped areas, lakes, parking lots and paved areas (including
repair, replacement, resealing and restriping), sidewalks, driveways;
maintenance, repair, and replacement of all fixtures and electrical, mechanical
and plumbing systems; structural elements and exterior surfaces of the
buildings; salaries and employees benefits of personnel and payroll taxes
applicable thereto; supplies, materials, equipment and tools; the cost of
capital expenditures which have the effect of reducing operating expenses,
provided, however, that in the event Landlord makes such capital improvements,
Landlord may amortize its investment in said improvements (together with
interest at the rate of fifteen percent (15%) per annum on the unamortized
balance) as an operating expense in accordance with standard accounting
practices, provided, that such amortization is not at a rate greater than the
anticipated savings in the operating expenses.

     "Additional Rent" as used herein shall not include Landlord's debt
repayments, interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.

As Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant
shall pay its proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the cost of operation (including
common utilities), management, maintenance, and repair of the building
(including structural and common areas such as lobbies, restrooms, janitor's
closets, hallways, elevators, mechanical and telephone rooms, stairwells,
entrances, spaces above the ceilings and janitorization of said common areas) in
which the Premises are located. The maintenance items herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truck doors, main plumbing systems of the building (such as water drain
lines, sinks, toilets, faucets, drains, showers and water fountains), main
electrical systems, (such as panels and conduits), heating and air-
conditioning systems (such as compressors, fans, air handlers, ducts, boilers,
heaters), structural elements and exterior surfaces of the building; store
fronts, roof, downspouts, building common area interiors (such as wall
coverings, window coverings, floor coverings and partitioning), ceilings,
building exterior doors, skylights (if any), automatic fire extinguishing
systems, and elevators (if any); license, permit and inspection fees; security,
supplies, materials, equipment and tools; the cost of capital expenditures which
have the effect of reducing operating expenses, provided, however, that in the
event Landlord makes such capital improvements, Landlord may amortize its
investment in said improvements (together with interest at the rate of fifteen
(15%) percent per annum on the unamortized balance) as an operating expense in
accordance with standard accounting practices, provided, that such amortization
is not at a rate greater than the anticipated savings in the operating expenses.
Tenant hereby waives all rights hereunder, and benefits of, subsection 1 of
Section 1932 and Sections 1941 and 1942 of the California Civil Code and under
any similar law, statute or ordinance now or hereafter in effect.

     8.   ACCEPTANCE AND SURRENDER OF PREMISES. Subject to Paragraphs 9, 11 and
          ------------------------------------
19.B, and by entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair and accepts the building and improvements
included in the Premises in their present-condition

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex             Page 6 of 25
<PAGE>

                                                     BUILDING:    Milpitas 10
                                                     PROPERTY:    1-0210
                                                     UNIT:        2
                                                     LEASE ID:    0210-OPTI01-01

and without representation or warranty by Landlord as to the condition of such
building or as to the use or occupancy which may be made thereof. Any exceptions
to the foregoing must be by written agreement executed by Landlord and Tenant.
Tenant agrees on the last day of the Lease Term, or on the sooner termination of
this Lease, to surrender the Premises promptly and peaceably to Landlord in good
condition and repair (damage by Acts of God, fire, normal wear and tear
excepted), with all interior walls painted, or cleaned so that they appear
freshly painted, and repaired or replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed; all broken, marred or nonconforming
acoustical ceiling tiles replaced; all windows washed; the air conditioning and
heating systems serviced by a reputable and licensed service firm and in good
operating condition (provided the maintenance of such equipment has been the
Tenant's responsibility during the Term of this Lease) and repair; the plumbing
and electrical systems and lighting in good order and repair, including
replacement of any burned out or broken light bulbs or ballasts; the lawn and
shrubs in good condition including the replacement of any dead or damaged
plantings; the sidewalk, driveways and parking areas in good order, condition
and repair; together with all alterations, additions, and improvements which may
have been made, in, to, or on the Premises (except moveable trade fixtures
installed at the expense of Tenant) except that Tenant shall ascertain from
Landlord within thirty (30) days before the end of the Term of this Lease
whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, then Tenant shall restore
said Premises or such part or parts thereof before the end of this Lease at
Tenant's sole cost and expense. Tenant, on or before the end of the Term or
sooner termination of this Lease, shall remove all of Tenant's personal property
and trade fixtures from the Premises, and all property not so removed on or
before the end of the Term or sooner termination of this Lease shall be deemed
abandoned by Tenant and title to same shall thereupon pass to Landlord without
compensation to Tenant. Landlord may, upon termination of this Lease, remove all
moveable furniture and equipment so abandoned by Tenant, at Tenant's sole cost,
and repair any damage caused by such removal at Tenant's sole cost. If the
Premises be not surrendered at the end of the Term or sooner termination of this
Lease, Tenant shall indemnify Landlord against loss or liability resulting from
the delay by Tenant in so surrendering the Premises including, without
limitation, any claims made by any succeeding Tenant founded on such delay.
Nothing contained herein shall be construed as an extension of the Term hereof
or as a consent of Landlord to any holding over by Tenant. The voluntary or
other surrender of this Lease or the Premises by Tenant or a mutual cancellation
of this Lease shall not work as a merger and, at the option of Landlord, shall
either terminate all or any existing subleases or subtenancies or operate as an
assignment to Landlord of all or any such subleases or subtenancies.

     9.   "AS-IS" BASIS. Subject only to Paragraphs 8, 11 and 19.B and to
          -------------
Landlord making the improvements shown on Exhibit B attached hereto, it is
                                          ---------
hereby agreed that the Premises leased hereunder is leased strictly on an "as-
is" basis and in its present condition, and in the configuration as shown on
Exhibit B attached hereto, and by reference made a part hereof. Except as noted
---------
herein, it is specifically agreed between the parties that after Landlord makes
the interior improvements as shown on Exhibit B, Landlord shall not be required
                                     ---------
to make, nor be responsible for any cost, in connection with any repair,
restoration, and/or improvement to the Premises in order for this Lease to
commence, or thereafter, throughout the Term of this Lease, Notwithstanding
anything to the contrary within this Lease, Landlord makes no warranty or
representation of any kind or nature whatsoever as to the condition or repair of
the Premises, nor as to the use or occupancy which may be made thereof

     Punch List: In addition to and notwithstanding anything to the contrary in
     ----------
Paragraphs 8,9 and 1 of this Lease, Tenant shall have thirty (30) days after the
Commencement Date to provide Landlord with a written "punch list" pertaining to
defects in the interior improvements constructed by Landlord for Tenant, As soon
as reasonably possible thereafter, Landlord, or one of Landlord's
representatives (if so approved by Landlord), and Tenant shall conduct a joint
walk-through of the Premises (if Landlord so requires), and inspect such Tenant
Improvements, using their best efforts to agree on the incomplete or defective '
construction related to the Tenant Improvements installed for Tenant by
Landlord. After such inspection has been completed, Landlord shall prepare, and
both parties shall sign, a list of all "punch list" items which the parties
reasonably agree are (i) to be corrected by Landlord (but which shall exclude
any damage or defects caused by Tenant, its employees, agents or parties Tenant
has contracted with to work on the Premises) or (ii) if said defects and/or
damaged item(s) are not material, Landlord may elect, in its sole and absolute
discretion, not to repair such item(s), but to acknowledge in written form the
defect and/or damaged item(s); in which case, notwithstanding anything to the
contrary in said Lease Paragraph 8 ("Acceptance and Surrender of Premises"),
Tenant shall not be responsible upon Lease Termination to repair said item(s) so
noted by Landlord. Landlord shall have thirty (30) days thereafter (or longer if
necessary, ,provided Landlord is diligently pursuing the completion of the same)
to complete, at landlord's

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------

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<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

expense, the "punch list" items without the Commencement Date of the Lease and
Tenant's obligation to pay Rent thereunder being affected. Notwithstanding the
foregoing, a crack in the foundation, or exterior walls or any other defect in
the structure or Building that does not endanger the structural integrity of the
building, or which is not life-threatening, shall not be considered material,
nor shall Landlord be responsible for repair of same. This Paragraph shall be of
no force and effect if Tenant shall fail to give any such notice to Landlord
within thirty (30) days after the Commencement Date of this Lease.

     10.  ALTERATIONS AND ADDITIONS.
          -------------------------

          A.   Tenant shall not make, or suffer to be made, any alteration or
addition to the Premises, or any part thereof, without the written consent of
Landlord first had and obtained by Tenant (such consent not to be unreasonably
withheld), but at the cost of Tenant, and any addition to, or alteration of, the
Premises, except moveable furniture and trade fixtures, shall at once become a
part of the Premises and belong to Landlord. Landlord reserves the right to
approve all contractors and mechanics proposed by Tenant to make such
alterations and additions. Tenant shall retain title to all moveable furniture
and trade fixtures placed in the Premises. All heating, lighting, electrical,
air conditioning, security systems, floor to ceiling partitioning, drapery,
carpeting, and floor installations made by Tenant, together with all property
that has become an integral part of the Premises, shall not be deemed trade
fixtures. Tenant agrees that it will not proceed to make such alteration or
additions, without having obtained consent from Landlord to do so, and until
five (5) days from the receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant
shall, if required by Landlord, secure at Tenant's own cost and expense, a
completion and lien indemnity bond, satisfactory to Landlord, for such work.
Tenant further covenants and agrees that any mechanic's lien filed against the
Premises for work claimed to have been done for, or materials claimed to have
been furnished to Tenant, will be discharged by Tenant, by bond or otherwise,
within ten (10) days after notice of filing thereof, at the cost and expense of
Tenant. Any exceptions to the foregoing must be made in writing and executed by
both Landlord and Tenant.

          B.   Tenant shall have the right to reconfigure modular, non-floor-to-
ceiling walls and non-floor-to-ceiling partitions without Landlord's prior
consent, which have been installed by Tenant and paid for by Tenant.

          C.   At all times during the Lease Term, (i) Tenant shall maintain and
keep updated "as built" plans for all alterations constructed by Tenant, and
(ii) Tenant shall provide to Landlord 1/8" scale sepias of such "as built" plans
as such alterations (which alterations are subject to Landlord's prior written
consent) are made.

          D.   At all times during the Term of this Lease; Tenant shall have the
right to install and remove trade fixtures as defined in the Lease which are
installed and paid for by Tenant, so long as Tenant immediately repairs all
damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such trade fixtures and repairs
and restores any so-called "donuts" or gaps in the roof and/or floor (including
floor structure, subfloor and appropriate floor covering for said area) and/or
floor tiles and/or ceiling tiles and lighting resulting from the removal of said
trade fixtures.

     11.  TENANT MAINTENANCE. Except as otherwise provided for in Paragraphs 9
          ------------------
and 19.B, Tenant shall, at its sole cost and expense, keep and maintain the
Premises (including appurtenances) and every part thereof in a high standard of
maintenance and repair, or replacement, and in good and sanitary condition.
Tenant's maintenance and repair responsibilities herein referred to include, but
are not limited to, janitorization, all windows (interior and exterior), window
frames, plate glass and glazing (destroyed by accident or act of third parties),
truck doors, plumbing systems within the non-common areas of the Premises (such
as water and drain lines, sinks, toilets, faucets, drains, showers and water
fountains), electrical systems within the non-common areas of the Premises (such
as panels, conduits, outlets, lighting fixtures, lamps, bulbs, tubes and
ballasts), heating and air conditioning systems within the non-common areas of
the Premises (such as compressors, fans, air handlers, ducts, mixing boxes,
thermostats, time clocks, boilers, heaters, supply and return grills),
structural elements and exterior surfaces of the building, store fronts, roofs,
downspouts, all interior improvements within the Premises including but not
limited to wall coverings, window coverings, carpet, floor coverings,
partitioning, ceilings, doors (both interior and exterior), including closing
mechanisms, latches, locks, skylights (if any), automatic fire extinguishing
systems, and elevators and all other interior improvements of any nature
whatsoever. Tenant agrees to provide carpet shields under all rolling chairs or
to otherwise be responsible for wear and tear of the carpet

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex             Page 8 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPT101-01

caused by such rolling chairs if such wear and tear exceeds that caused by
normal foot traffic in surrounding areas. Areas of excessive wear shall be
replaced at Tenant's sole expense upon Lease termination. Tenant hereby waives
all rights under, and benefits of, Subsection 1 of Section 1932 and Section 1941
and 1942 of the California Civil Code and under any similar law, statute or
ordinance now or hereafter in effect. In the event any of the above maintenance
responsibilities apply to any other tenant(s) of Landlord where there is common
usage with other tenant(s), such maintenance responsibilities and charges shall
be allocated to the Leased Premises by square footage or other equitable basis
as calculated and determined by Landlord.

     Notwithstanding anything to the contrary in this Paragraph 11, Landlord
shall repair, including replacement related to, damage to the structural shell,
foundation, and roof structure (but not the interior improvements, roof
membrane, or glazing) of the building leased hereunder at Landlord's cost,
however, Landlord shall amortize the cost of the repair over the useful life of
said repair, and Tenant shall be responsible for paying to Landlord, within
thirty days of written notice from Landlord, one hundred percent (100%) of
Tenant's pro rata share of the amortization of said cost over the full Term
remaining in the Lease at the time the repair and/or replacement is made;
provided Tenant has not caused such damage, in which event Tenant shall be
responsible for 100 percent of any such costs and expense for repair and/or
replacement or damage so caused by the Tenant and shall pay such amount to
Landlord within thirty (30) days of the invoice date. For Example: In the event
(i) the roof structure is repaired at a cost of $10,000, and (ii) said repair
has a useful life of twenty years, and (iii) Tenant has one year remaining in
its Lease Term at the time said repair was made, Tenant would be charged its
prorata share of $500 ($10,000 / 20 years x 1 year = $500) as Additional Rent,
in which case said amount would be due within thirty (30) days of notice from
Landlord. Tenant hereby waives all rights under, and benefits of subsection I of
Section 1932 and Sections 1941 and 1942 of the California Civil Code and under
any similar law, statute or ordinance now or hereafter in effect.
Notwithstanding the foregoing, a crack in the foundation or exterior walls, or
any other defect in the Building that does not endanger the structural integrity
of the building for which Tenant is or is not responsible, or which is not life-
threatening, shall not be considered material, and Landlord may elect, in its
sole and absolute discretion, not to repair and/or replace the same; however,
Landlord may require Tenant to repair and/or replace the same at Tenant's sole
cost and expense, within thirty days of written notice from Landlord, if Tenant
is responsible.


In the event the Term of the Lease is extended for any reason whatsoever,
Tenant's pro rata share of the earlier repair and/or replacement cost shall be
increased to include the additional amount payable to Landlord due to the
Extended Term of the Lease. For Example: In the event: (i) the roof structure
was repaired as illustrated above; and (ii) this Lease is extended for an
additional five year period, Tenant would be liable for an additional payment to
Landlord of $2,500 as Additional Rent. Said payment would be due in full
immediately upon Tenant's execution of a Lease Amendment memorializing the
extension of the Lease Term.

     12.  UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED. As
          -----------------------------------------------------------
Additional Rent and in accordance with Paragraph 4D of this Lease Tenant shall
pay its proportionate share (calculated on a square footage or other equitable
basis as calculated by Landlord) of the cost of all utility charges such as
water, gas, electricity, sewer service, waste pick-up and any other utilities,
materials or services furnished directly to the building in which the Premises
are located, including, without limitation, any temporary or permanent utility
surcharge or other exactions whether or not hereinafter imposed.

Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

Provided that Tenant is not in default in the performance or observance of any
of the terms, covenants or conditions of this Lease to be performed or observed
by it, Landlord shall furnish to the Premises between the hours of 8:00 am and
6:00 pm, Mondays through Fridays (holidays excepted) and subject to the rules
and regulations of the Common Area hereinbefore referred to, reasonable
quantities of water, gas and electricity suitable for the intended use of the
Premises and heat and air-conditioning required in Landlord's judgment for the
comfortable use and occupation of the Premises for such purposes. Tenant agrees
that at all times it will cooperate fully with Landlord and abide by all
regulations and requirements that Landlord may prescribe for the proper
functioning and protection of the building heating, ventilating

                                                      Initial: /s/ [ILLEGIBLE]
                                                               ---------------

Multi Tenant/Complex             Page 9 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

and air-conditioning systems. Whenever heat generating machines, equipment, or
any other devices (including exhaust fans) are used in the Premises by Tenant
which affect the temperature or otherwise maintained by the air-conditioning
system, Landlord shall have the right to install supplementary air-conditioning
units in the Premises and the cost thereof, including the cost of installation
and the cost of operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord. Tenant will not, without the written consent
of Landlord, use any apparatus or device in the Premises (including, without
limitation), electronic data processing machines or machines using current in
excess of 110 Volts which will in any way increase the amount of electricity,
gas, water or air-conditioning usually furnished or supplied to premises being
used as general office space, or connect with electric current (except through
existing electrical outlets in the Premises), or with gas or water pipes any
apparatus or device for the purposes of using electric current, gas, or water.
If Tenant shall require water, gas, or electric current in excess of that
usually furnished or supplied to premises being used as general office space,
Tenant shall first obtain the written consent of Landlord, which consent shall
not be unreasonably withheld and Landlord may cause an electric current, gas or
water meter to be installed in the Premises in order to measure the amount of
electric current, gas or water consumed for any such excess use. The cost of any
such meter and of the installation, maintenance and repair thereof, all charges
for such excess water, gas and electric current consumed (as shown by such
meters and at the rates then charged by the furnishing public utility); and any
additional expense incurred by Landlord in keeping account of electric current,
gas, or water so consumed shall be paid by Tenant, and Tenant agrees to pay
Landlord therefor promptly upon demand by Landlord.

     13. TAXES.
         -----

     A.    As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord, monthly in advance or as they become due, pursuant
to statements submitted by Landlord, Tenant's proportionate share (which pro
rata share shall be allocated to the Leased Premises by square footage or other
equitable basis, as calculated by Landlord) of all Real Property Taxes relating
to the Premises accruing with respect to the Premises during the Term of this
Lease and the Extended Term (if any). The term "Real Estate Taxes" shall also
include supplemental taxes related to the period of Tenant's Lease Term whenever
levied, including any such taxes that may be levied after the Lease Term has
expired. The term "Real Property Taxes", as used herein, shall mean (i) all
taxes, assessments, levies and other charges of any kind or nature whatsoever,
general and special, foreseen and unforeseen (including all installments of
principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any
change in ownership of the Premises) now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of, all or any
portion of the Complex (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein; any
improvements located within the Complex (regardless of ownership); the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located in the Complex; or parking areas, public
utilities, or energy within the Complex; (ii) all charges, levies or fees
imposed by reason of environmental regulation or other governmental control of
the Complex and (iii) all costs and fees (including reasonable attorneys' fees)
incurred by Landlord in reasonably contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax. If at any time
during the Term of this Lease the taxation or assessment of the Complex
prevailing as of the Commencement Date of this Lease shall be altered so that in
lieu of or in addition to any Real Property Tax described above there shall be
levied, assessed or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause) an
alternate or additional tax or charge (i) on the value, use or occupancy of the
Complex or Landlord's interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Complex, on Landlord's business of leasing
the Complex, or computed in any manner with respect to the operation of the
Complex, then any such tax or charge, however designated, shall be included
within the meaning of the term "Real Property Taxes" for purposes of this Lease.
If any Real Property Tax is based upon property or rents unrelated to the
Complex, then only that part of such Real Property Tax that is fairly allocable
to the Complex shall be included within the meaning of the term "Real Property
Taxes. " Notwithstanding the foregoing, the term "Real Property Taxes" shall not
include estate, inheritance, gift or franchise taxes of Landlord or the federal
or state net income tax imposed on Landlord's income from all sources.

     B.    Taxes on Tenant's Property.

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex             Page 10 of 25
<PAGE>

                                                  BUILDING:  Milpitas 10
                                                  PROPERTY:  1-0210
                                                  UNIT:      2
                                                  LEASE ID:  0210-OPTI01-01

     (a) Tenant shall be liable for and shall pay ten days before delinquency,
taxes levied against any personal property or trade fixtures placed by Tenant in
or about the Premises. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant and if Landlord, after
written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand,
as the case may be, repay to Landlord the taxes so levied against Landlord, or
the proportion of such taxes resulting from such increase in the assessment;
provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of such taxes so paid under
protest, and any amount so recovered shall belong to Tenant.

     (b) If the Tenant improvements in the Premises, whether installed, and/or
paid for by Landlord or Tenant and whether or not affixed to the real property
so as to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which standard office improvements in
other space in the Complex are assessed, then the real property taxes and
assessments levied against the Landlord or the Complex by reason of such excess
assessed valuation shall be deemed to be taxies levied against personal property
of the Tenant and shall be governed by the provisions of 13B(a) above. If the
records of the County Assessor are available and sufficiently detailed to serve
as a basis for determining whether said Tenant improvements are assessed at a
higher valuation than standard office space improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

     14. ASSESSMENT CREDITS. The demised property herein is subject to a special
         ------------------
assessment levied by the City of Milpitas in Improvement District No. 9. As a
part of said special assessment proceedings, additional bonds were sold and
assessments levied to provide for construction contingencies and reserve funds.
Interest will be earned on such funds created for contingencies and on reserve
funds which will be credited for the benefit of said assessment district. To the
extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property
of Landlord. Notwithstanding that such surpluses may be credited on assessments
otherwise due against the demised premises, Tenant shall pay to Landlord, as
additional rent if, and at the time of any such credit of surpluses, an amount
equal to all such surpluses so credited. For example: if (i) the property is
subject to an annual assessment of $1,000.00, and (ii) a surplus of $200.00 is
credited towards the current year's assessment which reduces the assessment
amount shown on the property tax bill from $l,000.00 to $800.00, Tenant shall,
upon receipt of notice from Landlord, pay to Landlord said $200.00 credit as
Additional Rent.

     15. LIABILITY INSURANCE. Tenant, at Tenant's expense, agrees to keep in
         -------------------
force during the Term of this Lease a policy of commercial general liability
insurance with combined single limit coverage of not less than Two Million
Dollars ($2,000,000) per occurrence for injuries to or death of persons
occurring in, on, or about the Premises or the Complex and property damage. Such
insurance shall be primary and noncontributory as respects any insurance carried
by Landlord. The policy or policies affecting such insurance, certificates of
insurance of which shall be furnished to Landlord, shall name Landlord as
additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or
invitees or otherwise by any conduct or transactions of any of said persons in
or about or concerning the Premises, including any failure of Tenant to observe
or perform any of its obligations hereunder; shall be issued by an insurance
company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon
thirty (30) days' prior written notice to Landlord. A certificate of insurance
of said policy shall be delivered to Landlord. If, during the Term of this
Lease, in the considered opinion of Landlord's Lender, insurance advisor, or
counsel, the amount of insurance described in this Paragraph 15 is not adequate,
Tenant agrees to increase said coverage to such reasonable amount as Landlord's
Lender, insurance advisor, or counsel shall deem adequate.

     16.  TENANT'S PERSONAL PROPERTY INSURANCE AND WORKMAN'S COMPENSATION
          ---------------------------------------------------------------
INSURANCE. Tenant shall maintain a policy or policies of fire and property
---------
damage insurance in "all risk" form with a sprinkler leakage endorsement
insuring the personal property, inventory, trade fixtures, and leasehold
improvements within the Leased Premises for the full replacement value thereof.
The proceeds from any of such policies shall be used for the repair or
replacement of such items so insured.

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex             Page 11 of 25
<PAGE>

                                                       BUILDING:  Milpitas
                                                       PROPERTY:  1-0210
                                                       UNIT:      2
                                                       LEASE ID:  0210-OPTI01-01

     Tenant shall also maintain a policy or policies of workman's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

     17.  PROPERTY INSURANCE. Landlord shall purchase and keep in force, and as
          ------------------
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord (or Landlord's agent if so directed by Landlord) Tenant's
proportionate share (allocated to the Leased Premises by square footage or other
equitable basis as calculated and determined by Landlord) of the deductibles on
insurance claims and the cost of, policy or policies of insurance covering loss
or damage to the Premises and Complex (excluding routine maintenance and repairs
and incidental damage or destruction caused by accidents or vandalism for which
Tenant is responsible under Paragraph 11) in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risks" insurance and floor and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one
hundred (100%) percent of twelve (12) months Basic Rent, plus sums paid as
Additional Rent and any deductibles related thereto. If such insurance cost is
increased due to Tenant's use of the Premises or the Complex, Tenant agrees to
pay to Landlord the full cost of such increase. Tenant shall have no interest in
nor any right to the proceeds of any insurance procured by Landlord for the
Complex.

     Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.

     18.  INDEMNIFICATION. Landlord shall not be liable to Tenant and Tenant
          ---------------
hereby waives all claims against Landlord for any injury to or death of any
person or damage to or destruction of property in or about the Premises or the
Complex by or from any cause whatsoever, including, without limitation, gas,
fire, oil, electricity or leakage of any character from the roof, walls,
basement or other portion of the Premises or the Complex but excluding, however,
the willful misconduct or negligence of Landlord, its agents, servants,
employees, invitees or contractors of which negligence Landlord has knowledge
and reasonable time to correct. Subject to the last two sentences in Paragraph
17 and except as to injury to persons or damage to property to the extent
arising from the willful misconduct or the negligence of Landlord, its agents,
servants, employees, invitees, or contractors, Tenant shall hold Landlord
harmless from and defend Landlord against any and all expenses, including
reasonable attorneys' fees, in connection therewith, arising out of any injury
to or death of any person or damage to or destruction of property occurring in,
on or about the Premises, or any part thereof, from any cause whatsoever,
accruing and/or occurring during the Term of this Lease.

     19.  COMPLIANCE.
          ----------

          A. Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect which regulate Tenant's use of the
Premises; with the requirements of any board of fire underwriters or other
similar body now or hereafter constituted; and with any direction or occupancy
certificate issued pursuant to law by any public officer; provided, however,
that no such failure shall be deemed a breach of the provisions if Tenant,
immediately upon notification, commences to remedy or rectify said failure. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such law, statute, ordinance or governmental rule,
regulation, requirement, direction or provision, shall be conclusive of that
fact as between Landlord and Tenant. Tenant shall, at its sole cost and expense,
comply with any and all requirements pertaining to said Premises, of any
insurance organization or company, necessary for the maintenance of reasonable
fire and public liability insurance covering requirements pertaining to said
Premises.

          B. Notwithstanding anything to the contrary in Paragraph 19-A
above, any non-conformance of the improvements installed and paid for by
Landlord as set forth on Exhibit B, required to be corrected by the governing
                         ---------
agency, shall be corrected at the cost and expense of Landlord if such
non-conformance exists as of the Commencement Date of the Lease and further
provided that such governing agency's requirement to correct the non-conformance
is not initiated as a result of: (i) any future improvements made by or for
Tenant; or (ii) any permit request made to a governing agency by or for Tenant.
Any non-

                                                     Initial: /s/ [ILLEGIBLE]
                                                             ----------------
Multi Tenant/Complex             Page 12 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

conformance of the Premises occurring after the Commencement Date of
this Lease Agreement shall be the responsibility of Tenant to correct at
Tenant's cost and expense.

     20.  LIENS.  Tenant shall keep the Premises free from any liens arising out
          -----
of any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following notice of the
imposition of such lien, cause the same to be released of record, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but no obligation, to cause the same to be released by such means as it
shall deem proper, including payment of the claim giving rise to such lien. All
sums paid by Landlord for such purpose, and all expenses incurred by it in
connection therewith, shall be payable to Landlord by Tenant on demand with
interest at the prime rate of interest as quote by the Bank of America.

     21. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, transfer, or
         -------------------------
hypothecate the leasehold estate under this Lease, or any interest therein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person or entity to occupy or use the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. As a
condition for granting this consent to any assignment, transfer, or subletting,
Landlord shall require that (i) the sublease be a triple net sublease and that
the basic rent due under any such sublease be no less than the then current
market rent with annual increases at the then prevailing market rent, (ii) that
the sublease shall not provide for subtenant to have an option to extend the
term of the sublease or an option to expand the sublet space, and (iii) Tenant
to pay to Landlord, as Additional Rent, all rents and/or additional
consideration due Tenant from its assignees, transferees, or subtenants in
excess of the Rent payable by Tenant to Landlord hereunder for the assigned,
transferred and/or subleased space ("Excess Rent"). Tenant shall, by thirty (30)
days written notice, advise Landlord of its intent to assign or transfer
Tenant's interest in the Lease or sublet the Premises or any portion thereof for
any part of the Term hereof. Within thirty (30) days after receipt of said
written notice, Landlord may, in its sole discretion, elect to terminate this
Lease as to the portion of the Premises described in Tenant's notice on the date
specified in Tenant's notice by giving written notice of such election to
terminate. If no such notice to terminate is given to Tenant within said thirty
(30) day period, Tenant may proceed to locate an acceptable sublessee, assignee,
or other transferee for presentment to Landlord for Landlord's approval, all in
accordance with the terms, covenants, and conditions of this Paragraph 21. If
Tenant intends to sublet the entire Premises and Landlord elects to terminate
this Lease, this Lease shall be terminated on the date specified in Tenant's
notice. If, however, this Lease shall terminate pursuant to the foregoing with
respect to less than all the Premises, the Rent, as defined and reserved
hereinabove shall be adjusted on a pro rata basis to the number of square feet
retained by Tenant, and this Lease as so amended shall continue in full force
and effect. In the event Tenant is allowed to assign, transfer or sublet the
whole or any part of the Premises, with the prior written consent of Landlord,
no assignee, transferee or subtenant shall assign or transfer this Lease, either
in whole or in part, or sublet the whole or any part of the Premises, without
also having obtained the prior written consent of Landlord. A consent of
Landlord to one assignment, transfer, hypothecation, subletting, occupation or
use by any other person shall not release Tenant from any of Tenant's
obligations hereunder or be deemed to be a consent to any subsequent similar or
dissimilar assignment, transfer, hypothecation, subletting, occupation or use by
any other person. Any such assignment, transfer, hypothecation, subletting,
occupation or use without such consent shall be void and shall constitute a
breach of this Lease by Tenant and shall, at the option of Landlord exercised by
written notice to Tenant, terminate this Lease. The leasehold estate under this
Lease shall not, nor shall any interest there in, be assignable for any purpose
by operation of law without the written consent of Landlord. As a condition to
its consent, Landlord shall require Tenant to pay all expenses in connection
with the assignment, and Landlord shall require Tenant's assignee or transferee
(or other assignees or transferees) to assume in writing all of the obligations
under this Lease and for Tenant to remain liable to Landlord under the Lease.
Notwithstanding the above, in no event shall Landlord consent to a sub-sublease.

Notwithstanding the foregoing, Landlord and Tenant agree that it shall not be
unreasonable for Landlord to refuse to consent to a proposed assignment,
sublease or other transfer ("Proposed Transfer") if the Premises or any other
portion of the Property would become subject to additional or different
Government Requirements as a direct or indirect consequence of the Proposed
Transfer and/or the Proposed Transferee's use and occupancy of the Premises and
the Property. However, Landlord may, in its sole discretion, consent to such a
Proposed Transfer where Landlord is indemnified by Tenant and (i) Subtenant or
(ii) Assignee, in form and substance satisfactory to Landlord's counsel, by
Tenant and/or Proposed Transferee from and against any and all costs, expenses,
obligations and liability arising out of the Proposed Transfer and/or the
Proposed Transferee's use and occupancy of the Premises and the Property.

                                                     Initial: /s/ [ILLEGIBLE]
                                                              --------------

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<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

Any and all sublease agreement(s) between Tenant and any and all subtenant(s)
(which agreements must be consented to by Landlord, pursuant to the requirements
of this Lease) shall contain the following language:

          "If Landlord and Tenant jointly and voluntarily elect, for any reason
     whatsoever, to terminate the Master Lease prior to the scheduled Master
     Lease termination date, then this Sublease (if then still in effect) shall
     terminate concurrently with the termination of the Master Lease. Subtenant
     expressly acknowledges and agrees that (1) the voluntary termination of the
     Master Lease by Landlord and Tenant and the resulting termination of this
     Sublease shall not give Subtenant any right or power to make any legal or
     equitable claim against Landlord, including without limitation any claim
     for interference with contract or interference with prospective economic
     advantage, and (2) Subtenant hereby waives any and all rights it may have
     under law or at equity against Landlord to challenge such an early
     termination of the Sublease, and unconditionally releases and relieves
     Landlord, and its officers, directors, employees and agents, from any and
     all claims, demands, and/or causes of action whatsoever (collectively,
     "Claims"), whether such matters are known or unknown, latent or apparent,
     suspected or unsuspected, foreseeable or unforeseeable, which Subtenant may
     have arising out of or in connection with any such early termination of
     this Sublease. Subtenant knowingly and intentionally waives any and all
     protection which is or may be given by Section 1542 of the California Civil
     Code 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 debtor.

          The term of this Sublease is therefore subject to early termination.
     Subtenant's initials here below evidence (a) Subtenant's consideration of
     and agreement to this early termination provision, (b) Subtenant's
     acknowledgment that, in determining the net benefits to be derived by
     Subtenant under the terms of this Sublease, Subtenant has anticipated the
     potential for early termination, and (c) Subtenant's agreement to the
     general waiver and release of Claims above.

                    Initials:___________          Initials:___________"
                             Subtenant                     Tenant

     22.  SUBORDINATION AND MORTGAGES. In the event Landlord's title or
          ---------------------------
leasehold interest is now or hereafter encumbered by a deed of trust, upon the
interest of Landlord in the land and buildings in which the demised Premises are
located, to secure a loan from a lender (hereinafter referred to as "Lender") to
Landlord, Tenant shall, at the request of Landlord or Lender, execute in writing
an agreement (in form reasonably acceptable to Tenant), subordinating its
rights under this Lease to the lien of such deed of trust, or, if so requested,
agreeing that the lien of Lender's deed of trust shall be or remain subject and
subordinate to the rights of Tenant under this Lease. Notwithstanding any such
subordination, Tenant's possession under this Lease shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay all Rent and observe
and perform all of the provisions set forth in this Lease and any subordination
agreement shall reflect the agreement of the Lender to the same.

     Provided Tenant is not in default in the terms of this Lease, this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender
holding such mortgage or deed of trust enters into a written subordination, non-
disturbance and attornment agreement in which the Lender agrees that
notwithstanding any subordination of this Lease to such Lender's mortgage or
deed of trust, (i) such Lender shall recognize all of Tenant's rights under this
Lease, and (ii) in the event of a foreclosure, this Lease shall not be
terminated so long as Tenant is not in default of its obligations under this
Lease, but shall continue in effect and Tenant and such Lender (or any party
acquiring the Premises through such foreclosure) shall each be bound to perform
the respective obligations of Tenant and Landlord with respect to the Premises
arising after such foreclosure.

     23.  ENTRY BY LANDLORD. Landlord reserves, and shall at all reasonable
          -----------------
times after at least twenty four (24) hours notice (except in emergencies) have
the right to enter the Premises to inspect them;

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------

Multi Tenant/Complex              Page 14 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

to perform any services to be provided by Landlord hereunder; to make repairs or
provide any services to a contiguous tenant(s) (if any); to submit the Premises
to prospective purchasers, mortgagers or tenants; to post notices of non-
responsibility; and to alter, improve or repair the Premises and any portion of
the Complex, all without abatement of Rent, and may erect scaffolding and other
necessary structures in or through the Premises where reasonably required by the
character of the work to be performed; provided, however Landlord agrees to use
its reasonable, good faith efforts such that any entry by Landlord and/or
Landlord's agents, employees, contractors and invitees shall be performed in a
manner that the business of Tenant shall be interfered with to the least extent
that is reasonably practical. Landlord agrees to comply with any reasonable
safety and/or security regulations imposed by Tenant with respect to such entry,
and shall only enter the Premises when accompanied by Tenant or its agent (so
long as Tenant makes itself reasonably available for this purpose). Landlord may
install "for lease" signs related to the Premises only during the last 180 days
of the Lease Term. Landlord shall also have the right at any time to change the
arrangement or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, toilets or other public parts of the Complex and
to change the name, number or designation by which the Complex is commonly
known, and none of the foregoing shall be deemed an actual or constructive
eviction of Tenant, or shall entitle Tenant to any reduction of Rent hereunder.
Tenant agrees to cooperate with Landlord and Landlord's agents, employees and
contractors so that the responsibilities of Landlord under the Lease can be
fulfilled in a reasonable manner during normal business hours so that no
extraordinary costs are incurred by Landlord. Any entry to the Premises by
Landlord for the purposes provided for herein shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into or a detainer of
the Premises or an eviction, actual or constructive, of Tenant from the Premises
or any portion thereof.

     24.  BANKRUPTCY AND DEFAULT. The commencement of a bankruptcy action or
          ----------------------
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30 days
after an order for relief in a liquidation action or within thirty (30) days
after the commencement of any action.

     Within thirty (30) days after the court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of Rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.

     Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any rights or privileges hereunder be an asset
of Tenant under any bankruptcy, insolvency or reorganization proceedings.

     The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default under this Lease by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of Rent or adjustment thereto.
Tenant shall have a period of thirty (30) days from the date of written notice
from Landlord within which to cure any other non-monetary default under this
Lease; provided, however, that with respect to non-monetary defaults not
involving Tenant's failure to pay Basic Rent or Additional Rent, Tenant shall
not be in default if (i) more than thirty (30) days is required to cure such
non-monetary default and (ii) Tenant commences cure of such default as soon as
reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such cure
to completion. Upon an uncured

                                                     Initial: /s/ [ILLEGIBLE]
                                                             --------------

Multi Tenant/Complex              Page 15 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

default of this Lease by Tenant, Landlord shall have the following rights and
remedies in addition to any other rights or remedies available to Landlord at
law or in equity:

     (a)  The rights and remedies provided for by California Civil Code Section
1951.2 including but not limited to, recovery of the worth at the time of award
of the amount by which the unpaid Rent for the balance of the Term after the
time of award exceeds the amount of rental loss for the same period that Tenant
proves could be reasonably avoided, as computed pursuant to subsection (b) of
said Section 195 1.2. Any proof by Tenant under subparagraphs (2) and (3) of
Section 195 1.2 of the California Civil Code of the amount of rental loss that
could be reasonably avoided shall be made in the following manner: Landlord and
Tenant shall each select a licensed real estate broker in the business of
renting property of the same type and use as the Premises and in the same
geographic vicinity. Such two real estate brokers shall select a third licensed
real estate broker, and the three licensed real estate brokers so selected shall
determine the amount of the Rent loss that could be reasonably avoided from the
balance of the Term of this Lease after the time of award. The decision of the
majority of said licensed real estate brokers shall be final and binding upon
the parties hereto.

     (b)  The rights and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover Rent as it
becomes due, for so long as Landlord does not terminate Tenant's right to
possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord's initiative to protect its
interest under this Lease shall not constitute a termination of Tenant's right
to possession.

     (c)  The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.

     (d)  To the extent permitted by law, the right and power to enter the
Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the account
of Tenant, and to sell such property and apply such proceeds therefrom pursuant
to applicable California law. Landlord may from time to time sublet the Premises
or any part thereof for such term or terms (which may extend beyond the Term of
this Lease) and at such Rent and such other terms as Landlord in its reasonable
sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises. Upon each subletting, (i) Tenant shall be immediately
liable to pay Landlord, in addition to indebtedness other than Rent due
hereunder, the reasonable cost of such subletting, including, but not limited
to, reasonable attorneys' fees, and any real estate commissions actually paid,
and the cost of such reasonable alterations and repairs incurred by Landlord and
the amount, if any, by which the Rent hereunder for the period of such
subletting (to the extent such period does not exceed the Term hereof) exceeds
the amount to be paid as Rent for the Premises for such period or (ii) at the
option of Landlord, rents received from such subletting shall be applied first
the payment of indebtedness other than Rent due hereunder from Tenant to
Landlord; second, to the payment of any costs of such subletting and of such
alterations and repairs; third, to payment of Rent due and unpaid hereunder; and
the residue, if any, shall, be held by Landlord and applied in payment of future
Rent as the same becomes due hereunder. If Tenapt has been credited with any
Rent to be received by such subletting under option (i) and such Rent shall not
be promptly paid to Landlord by the subtenant(s), or if such rentals received
from such subletting under option (ii) during any month be less than that to be
paid during the month by Tenant hereunder, Tenant shall pay any such deficiency
to Landlord. Such deficiency shall be calculated and paid monthly. No taking
possession of the Premises by Landlord shall be construed as an election on its
part to terminate this Lease unless a written notice of such intention be given
to Tenant. Notwithstanding any such subletting without termination, Landlord may
at any time hereafter elect to terminate this Lease for such previous breach.

     (e)  The right to have a receiver appointed for Tenant upon application by
Landlord, to take possession of the Premises and to apply any rental collected
from the Premises and to exercise all other rights and remedies granted to
Landlord pursuant to subparagraph (d) above.

     25.  ABANDONMENT. Tenant shall not vacate or abandon the Premises at any
          -----------
time during the Term of this Lease and if Tenant shall abandon, vacate or
surrender said Premises, or be dispossessed by the process of law, or otherwise,
any personal property belonging to Tenant and left on the Premises shall
be deemed to be abandoned, at the option of Landlord, except such property as
may be mortgaged to Landlord. Notwithstanding the above, Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long
as (i) Tenant is performing all of its other obligations under the Lease

                                                     Initial: /s/ [ILLEGIBLE]
                                                              ---------------

Multi Tenant/Complex              Page 16 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

including the obligation to pay Rent (ii) Tenant provides on-site security
during normal business hours for those parts of the Premises left vacant, (iii)
such vacancy does not materially and adversely affect the validity or coverage
of any policy of insurance carried by Landlord with respect to the Premises, and
(iv) the utilities and heating and ventilation systems are operated and
maintained to the extent necessary to prevent damage to the Premises or its
systems.

     26.  DESTRUCTION. In the event the Premises are destroyed in whole or in
          -----------
part from any cause, except for routine maintenance and repairs and incidental
damage and destruction caused from vandalism and accidents for which Tenant is
responsible under Paragraph 11, Landlord may, at its option:

     (a)  Rebuild or restore the Premises to their condition prior to the damage
or destruction, or

     (b)  Terminate this Lease (providing that the Premises is damaged to the
 extent of 33 1/3% of the replacement cost).

     If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense except for any deductible, which is the responsibility of the Tenant,
promptly to rebuild or restore the Premises to their condition prior to the
damage or destruction. Tenant shall be entitled to a reduction in Rent from the
date of such damage or destruction, provided Tenant is not using any portion of
such damaged area, while such repair is being made in the proportion that the
area of the Premises rendered untenantable by such damage bears to the total
area of the Premises. If Landlord initially estimates that the rebuilding or
restoration will exceed 180 days or if Landlord does not complete the rebuilding
or restoration within one hundred eighty (180) days following the date of
destruction (such period of time to be extended for delays caused by the fault
or neglect of Tenant or because of Acts of God, acts of public agencies, labor
disputes, strikes, fires, freight embargos, rainy or stormy weather, inability
to obtain materials, supplies or fuels, acts of contractors or subcontractors,
or delay of the contractors or subcontractors due to such causes or other
contingencies beyond the control of Landlord), then Tenant shall have the right
to terminate this Lease by giving fifteen (15) days prior written notice to
Landlord. Notwithstanding anything herein to the contrary, Landlord's obligation
to rebuild or restore shall be limited to the building and interior improvements
constructed by Landlord as they existed as of the Commencement Date of the Lease
and shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises, which Tenant shall forthwith replace or fully repair at Tenant's sole
cost and expense provided this Lease is not canceled according to the provisions
above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives the
provision of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the
California Civil Code.

     In any event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. Notwithstanding anything to the contrary herein, Landlord may
terminate this lease in the event of an uninsured event or if insurance proceeds
are insufficient to cover one hundred percent of the rebuilding costs net of the
deductible.

     27.  EMINENT DOMAIN. If all or any part of the Premises shall be taken by
          --------------
any public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of the
Premises so taken or conveyed on the date when title vests in the condemnor,
and Landlord shall be entitled to any and all payment, income, rent, award, or
any interest therein whatsoever which may be paid or made in connection with
such taking or conveyance, and Tenant shall have no claim against Landlord or
otherwise for the value of any unexpired Term of this Lease.  Notwithstanding
the foregoing sentence, any compensation specifically awarded Tenant for loss of
business, Tenant's personal property, moving costs or loss of goodwill, shall be
and remain the property of Tenant.

     If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any part thereof, or (ii) any of the foregoing events occur with
respect to the taking of any space in the Complex not leased hereby, or if any
such spaces so taken or conveyed in lieu of such taking and Landlord shall
decide to discontinue the use and operation of the

                                                          Initial: [ILLEGIBLE]
                                                                  --------------

Multi Tenant/Complex              Page 17 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

Complex, or decide to demolish, alter or rebuild the Complex, then in any such
events Landlord shall have the right to terminate this Lease by giving Tenant
written notice thereof within sixty (60) days of the date of receipt of said
written advice, or commencement of said action or proceeding, or taking
conveyance, which termination shall take place as of the first to occur of the
last day of the calendar month next following the month in which such notice is
given or the date on which title to the Premises shall vest in the condemnor.

     In the event of such a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer reasonably conduct its business, Tenant shall have the privilege of
terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to the Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the
calendar month next following the month in which such notice is given, upon
payment by Tenant of the Rent from the date of such taking or conveyance to the
date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu
thereof and neither Landlord nor Tenant shall terminate this Lease as provided
herein, this Lease shall continue in full force and effect as to the part of the
Premises not so taken or conveyed, and the Rent herein shall be apportioned as
of the date of such taking or conveyance so that thereafter the Rent to be paid
by Tenant shall be in the ratio that the area of the portion of the Premises not
so taken or conveyed bears to the total area of the Premises prior to such
taking.

     28.  SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance
          ------------------------------
of the Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such transfer
is concerned, Tenant agrees to look solely to the responsibility of the
successor in interest of such transferor in and to the Complex and this Lease.
This Lease shall not be affected by any such sale or conveyance, and Tenant
agrees to attorn to the successor in interest of such transferor.

     Upon any sale or transfer, (i) Landlord shall not be released from any then
outstanding liability arising under this Lease during the period preceding the
date of transfer, and (ii) Landlord shall not be relieved of the obligations
under the Lease which may accrue after the date of a sale or other transfer
unless the transferee agrees in writing to assume and be bound by the terms of
this Lease and to perform all obligations of the Landlord under the Lease which
may accrue after the date of such transfer.

     29.  ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of
          -----------------------------------
Landlord in the land and buildings in which the Leased Premises are located
(whether such interest of Landlord is a fee title interest or a leasehold
interest) is encumbered by deed of trust, and such interest is acquired by the
lender or any third party through judicial foreclosure or by exercise of a power
of sale at private trustee's foreclosure sale, Tenant hereby agrees to attorn to
the purchaser at any such judicial foreclosure or foreclosure sale and to
recognize such purchaser as the Landlord under this Lease. In the event the lien
of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and
effect for the remainder of the unexpired Term hereof, at the same rental
herein reserved and upon all the other terms, conditions and covenants herein
contained.

     30.  HOLDING OVER. Any holding over by Tenant after expiration or other
          ------------
termination of the Term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the Leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of
the Term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.

     31.  CERTIFICATE OF ESTOPPEL. Tenant shall at any time upon not less than
          -----------------------
ten (10) days prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect) and the date to which the Rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
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<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or
specifying such defaults, if any, are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant that this Lease is in full force and effect, without
modification except as may be represented by Landlord; that there are no uncured
defaults in Landlord's performance, and that not more than one month's Rent has
been paid in advance.

     32.  CONSTRUCTION CHANGES. It is understood that the description of the
          --------------------
Premises and the location of ductwork, plumbing and other facilities therein are
subject to such minor changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises, and no such changes
or any changes in plans for any other portions of the Complex shall affect this
Lease or entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.

     33.  RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of
          ----------------------------
this Lease to be performed or observed by Tenant shall be performed or observed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to pay any sum of money, or other Rent, required to be paid
by it hereunder and such failure shall continue for five (5) days after written
notice thereof by Landlord or shall fail to perform any other term of covenant
hereunder on its part to be performed, and such failure shall continue for
thirty (30) days after written notice thereof by Landlord (or such longer grace
period as shall be provided under Paragraph 24), Landlord, without waiving or
releasing Tenant from any obligation of Tenant hereunder, may, but shall not be
obliged to, make any such payment or perform any such other term or covenant on
Tenant's part to be performed. All sums so paid by Landlord and all necessary
costs of such performance by Landlord together with interest thereon at the rate
of the prime rate of interest per annum as quoted by the Bank of America from
the date of such payment or performance by Landlord, shall be paid (and Tenant
covenants to make such payment) to Landlord within five (5) business days after
demand by Landlord, and Landlord shall have (in addition to any other right or
remedy of Landlord) the same rights and remedies in the event of nonpayment by
Tenant as in the case of failure by Tenant in the payment of Rent hereunder.

     34.  ATTORNEYS' FEES.
          ---------------

     A.   In the event that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease, or
because of the breach of any provision of this Lease, or for any other relief
against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.

     B.   Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including
reasonable attorney's fees.

     35.  WAIVER. The waiver by either party of the other party's failure to
          ------
perform or observe any term, covenant or condition herein contained to be
performed or observed by such waiving party shall not be deemed to be a waiver
of such term, covenant or condition or of any subsequent failure of the party
failing to perform or observe the same or any other such term, covenant or
condition therein contained, and no custom or practice which may develop between
the parties hereto during the Term hereof shall be deemed a waiver of, or in any
way affect, the right of either party to insist upon performance and observance
by the other party in strict accordance with the terms hereof.

     36.  NOTICES. All notices, demands, requests, advices or designations which
          -------
may be or are required to be given by either party to the other hereunder shall
be in writing. All notices, demands, requests, advices or designations by
Landlord to Tenant shall be sufficiently given, made or delivered if personally
served on Tenant by leaving the same at the Premises or if sent by United States
certified or registered mail, postage prepaid or by a reputable same day or
overnight courier service addressed to Tenant at the Premises. All notices,
demands, requests, advices or designations by Tenant to Landlord shall be sent
by United States certified or registered mail, postage prepaid, addressed to
Landlord at its offices at: PEERY/ARRILLAGA, 2560 MISSION COLLEGE BLVD., SUITE
101, SANTA CLARA, CA 95054. Each notice, request, demand, advice or designation
referred to in this Paragraph shall a be deemed

                                                      Initial: /s/ [ILLEGIBLE]
                                                               ---------------

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<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

received on the date of the personal service or receipt or refusal to accept
receipt of the mailing thereof in the manner herein provided, as the case may
be. Either party shall have the right, upon ten (10) days written notice to the
other, to change the address as noted herein; however, Landlord shall send
Tenant notices to only one address of Tenant as identified above.

     37.  EXAMINATION OF LEASE. Submission of this instrument for examination or
          --------------------
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.

     38.  DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
          -------------------
fails to perform obligations required of Landlord within a reasonable time, but
in no event earlier than (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.

     39.  CORPORATE AUTHORITY. If Tenant is a corporation (or a partnership),
          -------------------
each individual executing this Lease on behalf of said corporation (or
partnership) represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of said corporation (or partnership) in accordance
with the by-laws of said corporation (or partnership in accordance with the
partnership agreement) and that this Lease is binding upon said corporation (or
partnership) in accordance with its terms. If Tenant is a corporation, Tenant
shall, within thirty (30) days after execution of this Lease, deliver to
Landlord a certified copy of the resolution of the Board of Directors of said
corporation authorizing or ratifying the specific execution of this Lease by the
individual executing said Lease. In lieu of said corporate resolution, Tenant
may provide Landlord with an outside legal opinion stating that the party
executing this Lease on behalf of Tenant is authorized to do so by the Board of
Directors.

     40.  LIMITATION OF LIABILITY. In consideration of the benefits accruing
          -----------------------
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:

     (a)  the sole and exclusive remedy shall be against Landlord's interest in
the Premises leased herein;

     (b)  no partner of Landlord shall be sued or named as a party in any suit
or action (except as may be necessary to secure jurisdiction of the
partnership);

     (c)  no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);

     (d)  no partner of Landlord shall be required to answer or otherwise plead
to any service of process;

     (e)  no judgment will be taken against any partner of Landlord;

     (f)  any judgment taken against any partner of Landlord may be vacated and
set aside at any time without hearing;

     (g)  no writ of execution will ever be levied against the assets of any
partner of Landlord;

     (h)  these covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.

     41.  SIGNS. No sign, placard, picture, advertisement, name or notice shall
          -----
be inscribed, displayed or printed or affixed on or to any part of the outside
of the Premises or any exterior windows of the Premises without the written
consent of Landlord first had and obtained and Landlord shall have the

                                                     Initial: /s/ [ILLEGIBLE]
                                                              --------------

Multi Tenant/Complex              Page 20 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01


right to remove any such sign, placard, picture, advertisement, name or notice
without notice to Tenant and at the expense of Tenant. If Tenant is allowed to
print or affix or in any way place a sign in, on, or about the Premises, upon
expiration or other sooner termination of this Lease, Tenant at Tenant's sole
cost and expense shall both remove such sign and repair all damage in such a
manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.

     All approved signs or lettering on outside shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.

     Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

     42.  CONSENT. Whenever the consent of one party to the other is required
          -------
hereunder, such consent shall not be unreasonably withheld.

     43.  AUTHORITY TO EXECUTE. The parties executing this Lease Agreement
          --------------------
hereby warrant and represent that they are properly authorized to execute this
Lease Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.

     44.  HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect
          -------------------
to the existence or use of "Hazardous Materials" (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises and
the common areas of the Complex (hereinafter collectively referred to as the
"Property"):

     A.   As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste or
material, or any other unwholesome, hazardous, toxic, biohazardous, or
radioactive material, waste, chemical, mixture or byproduct, or which is listed,
regulated or restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls, or asbestos). As used herein, the term "Environmental
Laws" shall mean any applicable Federal, State of California or local government
law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement, or approval, or any determination,
judgment, directive, or order of any executive or judicial authority at any
level of Federal, State of California or local government (whether now existing
or subsequently adopted or promulgated) relating to pollution or the protection
of the environment, ecology, natural resources, or public health and safety.

     B.   Tenant shall obtain Landlord's written consent, which may be withheld
in Landlord's discretion, prior to the occurrence of any Tenant's Hazardous
Materials Activities (defined below); provided, however, that Landlord's consent
shall not be required for normal use in compliance with applicable Environmental
Laws of customary household and office supplies (Tenant shall first provide
Landlord with a list of said materials use), such as mild cleaners, lubricants
and copier toner. As used herein, the term "Tenant's Hazardous Materials
Activities" shall mean any and all use, handling, generation, storage, disposal,
treatment, transportation, discharge, or emission of any Hazardous Materials on,
in, beneath, to, from, at or about the Property, in connection with Tenant's use
of the Property, or by Tenant or by any of Tenant's agents, employees,
contractors, vendors, invitees, visitors or its future subtenants or assignees.
Tenant agrees that any and all Tenant's Hazardous Materials Activities shall be
conducted in strict, full compliance with applicable Environmental Laws at
Tenant's expense, and shall not result in any contamination of the Property or
the environment. Tenant agrees to provide Landlord with prompt written notice of
any spill or release of Hazardous Materials at the Property during the term of
the Lease of which Tenant becomes aware, and further agrees to provide Landlord
with prompt written notice of any violation of Environmental Laws in connection
with Tenant's Hazardous Materials Activities of which Tenant becomes aware. If
Tenant's Hazardous Materials Activities involve Hazardous Materials other than
normal use of customary household and office supplies, Tenant also agrees at
Tenant's expense: (i) to install such Hazardous Materials monitoring, storage
and containment devices as Landlord reasonably deems necessary (Landlord shall
have no obligation to evaluate the need for any such installation or to require
any such installation); (ii) provide Landlord with a written inventory of such
Hazardous Materials, including an update of same each year upon the anniversary
date of the Commencement Date of the Lease ("Anniversary Date"); and (iii) on
each Anniversary Date, to retain a

                                                       Initial: /s/ [ILLEGIBLE]
                                                               -----------------

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<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01


qualified environmental consultant, acceptable to Landlord, to evaluate whether
Tenant is in compliance with all applicable Environmental Laws with respect to
Tenant's Hazardous Materials Activities. Tenant, at its expense, shall submit to
Landlord a report from such environmental consultant which discusses the
environmental consultant's findings within two (2) months of each Anniversary
Date. Tenant, at its expense, shall promptly undertake and complete any and all
steps necessary, and in full compliance with applicable Environmental Laws, to
fully correct any and all problems or deficiencies identified by the
environmental consultant, and promptly provide Landlord with documentation of
all such corrections.

     C.   Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's Hazardous
Materials Activities, and (ii) fully comply with and complete all facility
closure requirements of applicable Environmental Laws regarding Tenant's
Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure
activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written concurrence that
closure has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
such closure activities.

     D.   If Landlord, in its sole discretion, believes that the Property has
become contaminated as a result of Tenant's Hazardous Materials Activities,
Landlord in addition to any other rights it may have under this Lease or under
Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the
nature and extent of such contamination. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not limited to
reasonable attorneys' fees Landlord incurs with respect to such investigation,
that discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Notwithstanding the above, Landlord may, at its option and in
its sole and absolute discretion, choose to perform remediation and obtain
reimbursement for cleanup costs as set forth herein from Tenant. Any cleanup
costs incurred by Landlord as the result of Tenant's Hazardous Materials
Activities shall be reimbursed by Tenant within thirty (30) days of presentation
of written documentation of the expense to Tenant by Landlord. Such reimbursable
costs shall include, but not be limited to, any reasonable consultant and
attorney fees incurred by Landlord. Tenant shall take all actions necessary to
preserve any claims it has against third parties, including, but not limited to,
its insurers, for claims related to its operation, management of Hazardous
Materials or contamination of the Property. Except as may be required of Tenant
by applicable Environmental Laws, Tenant shall not perform any sampling,
testing, or drilling to identify the presence of any Hazardous Materials at the
Property, without Landlord's prior written consent which may be withheld in
Landlord's discretion. Tenant shall promptly provide Landlord with copies of any
claims, notices, work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant to the
preceding sentence.

     E.   Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) releases or discharges of Hazardous Materials at the
Property, which occur during the Term of this Lease, (iii) any Hazardous
Materials contamination caused by Tenant prior to the Commencement Date of the
Lease; or (iv) the breach of any obligation of Tenant under this Paragraph 44
(collectively, "Tenant's Environmental Indemnification"). Tenant's Environmental
Indemnification shall include but is not limited to the obligation to promptly
and fully reimburse Landlord for losses in or reductions to rental income, and
diminution in fair market value of the Property. Tenant's Environmental
Indemnification shall further include but is not limited to the obligation to
diligently and properly implement to completion, at Tenant's expense, any and
all environmental investigation, removal, remediation, monitoring, reporting,
closure activities, or other environmental response action (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies of any
claims, notices, work plans, data and reports prepared, received or submitted in
connection with any Response Actions.

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------
Multi Tenant/Complex              Page 22 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

It is agreed that the Tenant's responsibilities related to Hazardous Materials
will survive the expiration or termination of this Lease and that Landlord may
obtain specific performance of Tenant's responsibilities under this Paragraph
44.

     45.  BROKERS: Tenant represents and warrants that it has not dealt with any
          -------
real estate brokers, agents, or finders in connection with the original Term of
this Lease, and knows of no real estate broker or agent who is entitled to a
commission in connection with this Lease. Tenant agrees to defend, protect,
indemnify and hold Landlord harmless from and against all claims for brokerage
commissions, finder's fees, and other compensation made by any broker, agent, or
finder as consequence of the Tenant's actions or dealings with such broker,
agent or finder. The parties hereto acknowledge that Landlord will not pay an
additional brokerage fee to any broker in the event the original Term of this
Lease is extended or the square footage leased hereunder is increased for any
reason whatsoever.

     46.  CROSS DEFAULT: It is understood that Landlord and Tenant have
          -------------
previously entered into another lease dated April 26, 1995 for premises located
at 890 Tasman Drive, Milpitas, California (the "Existing Lease"). As a material
part of the consideration for the execution of this Lease by Landlord, it is
agreed between Landlord and Tenant that a default under this Lease, or a default
under said Existing Lease may, at the option of Landlord, be considered a
default under both leases, in which event Landlord shall be entitled (but in no
event required) to apply all rights and remedies of Landlord under the terms of
one lease to both leases including, but not limited to, the right to terminate
one or both of said leases by reason of a default under said Existing Lease or
hereunder.

     47.  LANDLORD'S LIEN WAIVER: Landlord, within thirty (30) days after demand
          ----------------------
from Tenant, shall execute and deliver Landlord's standard Lien Waiver as
reasonably required by any supplier, lessor, or lender in connection with the
installation in the Premises of the Tenant's personal property or trade
fixtures.

     48.  TENANT'S OPTION TO TERMINATE LEASE: Provided Tenant is not in default
          ----------------------------------
in any of the terms, covenants and conditions of this Lease and any amendments
thereto, Landlord hereby grants to Tenant an Option to Terminate this Lease
Agreement effective October 31, 2002, subject to the following terms and
conditions:

     A.   Tenant shall give Landlord one hundred twenty (120) days prior written
notice of Tenant's exercise of said Option to Terminate this Lease, which
written notice must be received by Landlord not later than July 3, 2002. In the
event Tenant fails to timely exercise Tenant's Option to Terminate as set forth
herein in writing, Tenant shall have no further Option to Terminate this Lease
Agreement, and this Lease Agreement shall continue in full force and effect for
the full remaining term hereof, absent this Paragraph 48.

     B.   In the event Tenant timely exercises Tenant's Option to Terminate as
set forth herein, this Lease shall terminate on October 31, 2002, with Tenant
being responsible for the full performance of all terms, covenants, and
conditions of said Lease Agreement through the effective date of termination as
set forth above, subject to the payment of the termination fee as set forth in
Paragraph 48.C below.

     C.   As consideration to be paid Landlord for the privilege of the early
termination of this Lease, Tenant shall pay to Landlord a termination fee of
$150,000.00. Said fee shall be due and paid by Tenant to Landlord by September
1, 2002. In the event Tenant fails to submit said payment, said failure shall
render Tenant's notice to Landlord null and void and Tenant's Option to
Terminate said Lease shall be automatically rescinded and this Paragraph 48
shall thereafter be null and void and of no further force or effect.

     D.   In the event Tenant timely exercises Tenant's Option to Terminate as
set forth herein, Tenant agrees to surrender the Leased Premises to Landlord,
free and clear of Tenant's occupancy or the occupancy of any subtenants, as of
the early Termination Date, and shall comply with all clean-up requirements as
outlined in Paragraphs 8 ("Acceptance and Surrender of Premises"), 10
("Alterations and Additions") and 44 ("Hazardous Materials") of this Lease.

     E.   The Option rights of Tenant under this Paragraph 48 are granted for
Tenant's personal benefit and may not be assigned or transferred by Tenant,
either voluntarily or by operation of law, in any manner whatsoever. In the
event that Landlord consents to a sublease or assignment under Paragraph 21, the

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------

Multi Tenant/Complex              Page 23 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01

Option granted herein shall be void and of no force and effect, whether or not
Tenant shall have purported to exercise such Option prior to such assignment or
sublease.

     49.  MISCELLANEOUS AND GENERAL PROVISIONS.
          ------------------------------------

     A.   Use of Building Name. Tenant shall not, without the written consent of
Landlord, use the name of the building for any purpose other than as the address
of the business conducted by Tenant in the Premises.

     B.   Choice of Law; Severability. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.

     C.   Definition of Terms. The term "Premises" includes the space leased
hereby and any improvements now or hereafter installed therein or attached
thereto. The term "Landlord" or any pronoun used in place thereof includes the
plural as well as the singular and the successors and assigns of Landlord. The
term "Tenant" or any pronoun used in place thereof includes the plural as well
as the singular and individuals, firms, associations, partnerships and
corporations, and their and each of their respective heirs, executors,
administrators, successors and permitted assigns, according to the context
hereof, and the provisions of this Lease shall inure to the benefit of and bind
such heirs, executors, administrators, successors and permitted assigns.

     The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings of
this Lease are for convenience of reference only and shall have no effect upon
the construction or interpretation of any provisions hereof.

     D.   Time Of Essence. Time is of the essence of this Lease and of each and
all of its provisions.

     E.   Quitclaim. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten (10) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in the
State of California, to remove the cloud or encumbrance created by this Lease
from the real property of which Tenant's Premises are a part.

     F.   Incorporation of Prior Agreements; Amendments. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.

     G.   Recording. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.

     H.   Amendments for Financing. Tenant further agrees to execute any
reasonable amendments required by a lender to enable Landlord to obtain
financing, so long as Tenant's rights hereunder are hot materially and adversely
affected and there is no change in the Basic Rent, Additional Rent or the Term
of this Lease.

     I.   Clauses, Plats and Riders. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.

     J.   Diminution of Light, Air or View. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect this
Lease, entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant.

                                                      Initial: /s/ [ILLEGIBLE]
                                                              ----------------

Multi Tenant/Complex              Page 24 of 25
<PAGE>

                                                        BUILDING: Milpitas 10
                                                        PROPERTY: 1-0210
                                                        UNIT:     2
                                                        LEASE ID: 0210-OPTI01-01


     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.

LANDLORD:                                    TENANT:

JOHN ARRILLAGA SURVIVOR'S TRUST              OPTI, INC.
                                             a California corporation


By /s/ John Arrillaga                        By /s/ [SIGNATURE ILLEGIBLE]
  ---------------------------                   --------------------------------
  John Arrillaga, Trustee

Date: 12/4/00                                Title C.F.O
     ------------------------                     -----------------------------

                                             Type or Print Name /s/ [ILLEGIBLE]
                                                               ----------------

RICHARD T. PEERY SEPARATE
PROPERTY TRUST                               Date: 11-30-2000
                                                  -----------------------------

By /s/ Richard T. Perry
  --------------------------
  Richard T. Perry, Trustee

Date: 12/3/00
     -----------------------


                                                        Initial: /s/[ILLEGIBLE]
                                                                 ---------------

Multi Tenant/Complex              Page 25 of 25