<PAGE>
 
                                                                   EXHIBIT 10.53

                           Standard Industrial Lease
                                     (Net)
                            Basic Lease Information

<TABLE> 
<S>                                                                                     <C> 
Effective Date: July 25, 1996

Landlord: San Tomas Investors II

Tenant: Internex Information Services, Inc., 
        a California corporation
                                                                                        Lease Reference
Premises and Building

Address: 2306 Walsh Ave.                                                                Paragraph 1
         Santa Clara, CA 95051

Term Commencement: August 15, 1996                                                      Paragraph 2

Term Expiration: May 31, 2000                                                           Paragraph 2

Base Rent: 8-15-96 through 8-14-97   $3,206.00 per month                                Paragraph 3 (a)
           8-15-97 through 5-31-00   3,384.00 per month
 
Tenant's Percentage Share: 2.29%                                                        Paragraphs 4 and 5

Property Taxes and Operating Expenses

Use: Engineering, administration, sales, light                                          Paragraph 6
     assembly, and warehousing.
 
Utilities (Monthly)                                                                     Paragraph 7

     Water/Sewer: NNN

     Trash: NNN

Space plan returned to Landlord By: n/a                                                 Paragraph 23
 
Work Completion Date: n/a                                                               Paragraph 23
 
Security Deposit: $3,384.00                                                             Paragraph 18

Non-refundable Cleaning Deposit: $100.00

Total amount due upon lease execution: $3,484.00
</TABLE> 
<PAGE>
 
<TABLE> 
<S>                                                                                     <C> 
Tenant's Address for                                                                    Paragraph 22

Notices:  2302 Walsh Ave.
          Santa Clara, CA 95051

Landlord's Address for Payments and

Notices:

     c/o Commerce Communities Corp.
     2316 Walsh Ave.
     Santa Clara, CA 95051

Broker(s): Commerce Communities Corp.                                                   Paragraph 24(m)
</TABLE> 

Exhibits and Addendum:

     Exhibit A - Diagram showing premises
     Exhibit B - Rules and Regulations
     Addendum


In the event of any conflict between any Basic Lease Information and the Lease,
the latter shall control.

<TABLE> 
<CAPTION> 
TENANT Internex Information Services, Inc.       LANDLORD      San Tomas Investors II
     <S>                                                       <C>   
     /s/ Glen C. Wahl                                          /s/ 
     --------------------------                                -------------------------------
     7/29/96                                                   8/2/96
     --------------------------                                -------------------------------
</TABLE> 
<PAGE>
 
                           STANDARD INDUSTRIAL LEASE

                                     (Net)


                               Table of Contents
                               -----------------

<TABLE>
<CAPTION> 
                                                                            Page
                                                                            ----
<S>                                                                         <C>
 1.  Premises.............................................................   1
 2.  Term.................................................................   1
 3.  Rent.................................................................   1
 4.  Taxes................................................................   2
 5.  Operating Expenses...................................................   2
 6.  Use..................................................................   3
 7.  Utilities............................................................   3
 8.  Maintenance, Repairs.................................................   3
 9.  Alterations and Window Coverings.....................................   4
10.  Insurance and Indemnity..............................................   5
11.  Damage or Destruction................................................   6
12.  Eminent Domain.......................................................   6
13.  Assignment and Subletting............................................   7
14.  Rules & Regulations..................................................   8
15.  Default by Tenant....................................................   8
16.  Landlord's Right to Cure Defaults....................................   9
17.  Default by Landlord..................................................   9
18.  Security Deposit.....................................................  10
19.  Estoppel Certificate.................................................  10
20.  Subordination........................................................  10
21.  Attorneys' Fees......................................................  10
22.  Notices..............................................................  10
23.  Landlord's Scope of Work.............................................  10
24.  General Provisions...................................................  10
25.  Exhibits.............................................................  12
</TABLE>

Exhibits and Addendum

     Exhibit A - Diagram of Premises
     Exhibit B - Rules and Regulations
<PAGE>
 
                           STANDARD INDUSTRIAL LEASE
                                     (NET)

     THIS LEASE is made and entered as of the Effective Date, July 25, 1996 by
and between SAN TOMAS INVESTORS II ("Landlord") and Internex Information
Services, Inc., a California Corporation ("Tenant")


                                  WITNESSETH


     1.   Premises.
          --------

          (a) Landlord hereby leases to Tenant, and Tenant hereby leases from
landlord for the term of this Lease and at the rental and upon the conditions
set forth below, the premises described in the Basic Lease Information and
identified on the space plan attached hereto as Exhibit A. Subject to any
                                                ---------    
obligations of Landlord as set forth in an exhibit to this Lease covering
initial improvement of the premises, Tenant shall accept the premises in its 
"as-is" condition at the commencement of the term. Other than as expressly set
forth in this Lease, there are no implied warranties of merchantability,
habitability, fitness for a particular purpose or otherwise with respect to the
premises. The premises are located within the building commonly known as
described in the Basic Lease information (the "Building"). Landlord further
reserves the exclusive right to the roof and exterior surface of sidewalls and
appurtenances except as provided in the Lease. Landlord reserves the right from
time to time to relocate and alter the configuration of parking and Common Area
within and adjacent to the Building. The premises, the Building and the legal
parcel(s) on which the Building and related parking areas and structures and
other appurtenances are located, are collectively, the "Property".

          (b) At the expiration of the tenancy created, Tenant shall surrender
the premises in the same condition as the premises were in upon delivery of
possession thereto under this Lease, reasonable wear and tear excepted, and
shall surrender all keys for the premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the premises. Tenant shall remove all its trade
fixture, and at Landlord's sole option, any alterations or improvements made by
Tenant before surrendering the premises as aforesaid and shall repair any damage
to the premises caused thereby. Tenant's obligations to observe or perform this
covenant shall survive the expiration or other termination of the term of this
Lease.

     2.   Term. The term of this Lease shall commence and, unless sooner
          ----
terminated as hereinafter provided, shall end on the dates respectively
specified in the Basic Lease Information. If Landlord, for any reason
whatsoever, cannot deliver possession of the premises to Tenant on the Date of
Term Commencement, this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom, but in that
event, subject to any contrary provisions in any agreement with Landlord
covering initial improvement of the premises, rental shall be waived for the
period between commencement of the term and the time when Landlord can deliver
possession. Any delay in delivery of possession of the premises shall not extend
the expiration date of this lease.

     3.   Rent.
          ----
 
          (a) Tenant shall pay to Landlord as rental the amount specified in the
Basic Lease Information as the Base Rent, payable upon Tenant's execution of
this Lease and in advance on or before the first day of each and every
successive calendar month following commencement of the term during the term. If
the term commences on other than the first day of a calendar month, the first
payment of rent shall be appropriately prorated on the basis of a 30-day month.

          (b) Effective as of each anniversary date of the commencement of the
term, the Base Rent shall be increased to equal the sum of (i) the Base Rent as
specified in the Basic Lease Information, plus (ii) the product obtained by
multiplying such amount by the percentage increase in the Consumer Price Index
measured from the measuring month two months preceding the commencement of the
term to the measuring month two months preceding the anniversary date in
question. As used herein, the term "Consumer Price Index" shall mean the United
States Department of Labor's Bureau of Labor Statistics' Consumer Price Index,
All Urban Consumers, All Items, San Francisco-Oakland-San Jose, California
(1982-84 equals 100), or the successor of such Index. Tenant shall continue
paying the current Base Rate until the increased Base Rent has been calculated.
Upon such calculation, Landlord shall give notice to tenant of the amount of the
new Base Rent which shall be due and payable effective as of the anniversary
date and Tenant shall upon the giving of such notice pay Landlord any shortage
in Base Rent accruing between the current anniversary date and the date of the
notice.

          (c) Tenant shall pay, as additional rent, all amounts of money
required to be paid to Landlord by Tenant hereunder in addition to monthly rent,
whether or not the same be designated "additional rent." If such amounts are not
paid at the time provided in this Lease, they shall nevertheless be collectible
as additional rent with the next installment of monthly rent thereafter falling
due, but nothing herein contained shall be deemed to suspend or delay the
payment of any amount of money at the time the same becomes due and payable
hereunder, or limit any other remedy of Landlord.

                                       1
<PAGE>
 
          (d) Tenant hereby acknowledges that late payment by Tenant to Landlord
of rent and other amounts due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain.  Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any loan secured by the Building.  Accordingly, if any installment of
rent or any other sums due from Tenant shall not be received by Landlord within
five days following the date due, Tenant shall pay to Landlord a late charge
equal to ten percent (10%) of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Landlord
will incur by reason of late payment by Tenant. Acceptance of such late charge
by Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of the
other rights and remedies granted hereunder.
 
          (e) Any amount due to Landlord, if not paid when due, shall bear
interest from the date due until paid at the rate of 10% per.  Provided that
interest shall not be payable on late charges incurred by Tenant to the extent
such interest would cause the total interest to be in excess of that legally
permitted.
 
          (f) All payments due from Tenant to Landlord hereunder shall be made
to Landlord without deduction or offset in lawful money of the United States of
America at the address for payment set forth in the Basic Lease Information, or
to such other person or at such other place as Landlord may from time to time
designate by notice to Tenant.

     4.   Taxes.
          -----

          (a) Tenant shall pay before delinquency any and all taxes,
assessments, license fees, and public charges levied, assessed, or imposed, and
which become payable during the term upon Tenant's fixtures, improvements,
alterations, or additions, furniture, appliances and personal property installed
or located in the premises.
 
          (b) Tenant shall pay upon demand during the term hereof it's
percentage share, as specified in the Basic Lease Information, of all Real
Property Taxes, gross rental receipts taxes and general or special assessments
over Base Property Taxes.
 
          (c) The term "Real Property Taxes" shall mean all real property taxes
and personal property taxes, licenses, charges and assessments which are levied,
assessed or imposed by any governmental or quasi-governmental authority,
improvement or assessment district with respect to the Property, any other
fixtures, improvements, equipment or other property of Landlord, real or
personal, located in the project and used in connection with the operation
thereof, whether or not now customary or within the contemplation of the parties
hereto, including, without limitation, any taxes, charges or assessments for
public improvements, services or benefits, irrespective of when commenced or
completed, transit fees, parking charges or fees, housing funds, education
funds, street, highway or traffic fees, as well as any tax which shall be
levied or assessed in addition to or in lieu of such taxes, any charge upon
Landlord's business of leasing of the project and any costs or expenses of
contesting any such taxes, licenses, charges or assessments, but excluding any
federal or state income or gift tax or any franchise, capital stock, estate or
inheritance taxes. In the event that it shall not be lawful for Tenant to
reimburse Landlord for Tenant's percentage share of any property tax, as
defined herein, the rent payable to Landlord under this Lease shall be revised
to yield to Landlord the same net rent from the premises after imposition of
any such tax upon landlord as would have been received by Landlord hereunder
prior to the imposition of any such tax. Base Property Taxes shall be those
assessed during the Base Year set forth in the Basic Lease Information.

     5.   Operating Expenses.
          ------------------

          (a) Tenant agrees to pay upon demand during the term of the Lease and
subject to the limitation as hereinafter set forth, as further additional rent,
Tenant's Percentage Share of all Operating Expenses paid or incurred by Landlord
over and above the Base Operating Expenses.
 
          (b) Said Percentage Share of Operating Expenses shall he paid to
Landlord, (a) upon presentation of invoice setting forth such share of Operating
Expenses and/or (b) at the option of Landlord, paid to Landlord monthly, in
advance, Tenant's share of an amount estimated by Landlord, which estimated
amount shall be reconciled at the end of each calendar year as compared with
Landlord's actual expenditure for Operating Expenses as provided in paragraph.
(d).
 
          (c) For purposes of this Section 5. "Operating Expenses, shall mean
the total cost and expense incurred in operating and
maintaining the Property, including, without limitation: (a) all license, permit
and inspection fees, (b) premiums for any insurance maintained by Landlord with
respect to the Property including property damage, extended coverage, earthquake
and flood insurance, and such other endorsements covering hazards normally
insured by commercial property owners; (c) repairs; (d) line painting; (e)
lighting; (f) signing; (g) sanitary control; (h) supplies; (i) removal of
trash, rubbish, garbage and other refuse; (j) security services; (k) reasonable
reserves for replacements and repairs; (1) the cost of any capital improvement
made to structures or added to the common areas due to governmental requirements
amortized over a reasonable period with interest at ten percent(10%) per annum
on the unamortized cost; (m) management; (n) bookkeeping; and (o) the costs of
personnel to implement such services and to direct parking and otherwise
regulate, maintain and repair the building(s) and the common
facilities;(p)utilities;(q)janitorial, heating, ventilating and air conditioning
services; (r) increased interest expense caused by rate increases on Landlord's
debt service; (s)wages, salaries, fringe benefits and payroll burden of
employees; (t) project office rent or rental value; (u) depreciation on personal
property; and (v) the cost of capital improvements to the Building or Common
Areas anticipated to reduce other Operating Expenses; and (w) gardening and
landscaping.  "Common Areas" shall mean all areas, spaces, equipment and special
services provided by Landlord for common or joint use or benefit of the
occupants of the Building, their employees, agents and customers, including
without limitation, parking areas, driveways, landscaped areas, sidewalks,
restrooms, retaining walls, etc.

          (d) Tenant shall pay to Landlord each month at the same time and in
the same manner as monthly rent, 1/12th of Landlord's estimate of Tenant's share
of Operating Expenses for the current calendar year payable by Tenant.  Within
90 days after the close of each calendar year, or as soon after such 90-day
period as practicable, Landlord shall deliver to Tenant a statement of actual
Operating Expenses for such calendar year. If on the basis of such statement
Tenant owes an amount that is less than the estimated payments for such calendar
year previously made by Tenant, Landlord shall credit such excess against
Operating Expenses subsequently payable by Tenant.  If on the basis of such
statement Tenant owes an amount that is more than the 

                                       2
<PAGE>
 
estimated payments for such calendar year previously made by Tenant, Landlord
shall credit such excess against Operating Expenses subsequently payable by
Tenant. If on the basis of such statement Tenant owes an amount that is more
than the estimated payments for such calendar year previously made by Tenant,
Tenant shall pay the deficiency to Landlord within 15 days after delivery of the
statement. The obligations of Landlord and Tenant under this subparagraph with
respect to the reconciliation between estimated payments and actual Operating
Expenses for the last year of the term shall survive the termination of the
Lease.

     6.   Use.
          ---

          (a) The premises shall be used and occupied by Tenant for the use set
forth in the Basic Lease Information and in accordance with the Rules and
Regulations attached to this Lease as Exhibit B and for no other purpose.
                                      ---------
Tenant shall, at Tenant's expense, comply promptly with all applicable statutes,
ordinances, rules, regulations, orders and requirements in effect during the
term regulating the use by Tenant of the premises including the installation of
additional facilities as required for the conduct and continuance of Tenant's
business. Tenant shall not use or permit the use of the premises or Common Area
in any manner that will tend to create waste or a nuisance, or which tends or
does unreasonably disturb other tenants of the Building or adjacent buildings,
nor shall Tenant, its employees, agents or invites damage the premises, the
Building or related improvements, nor place or maintain any signs on or visible
from the exterior of the premises without Landlord's written consent, or use any
corridors, sidewalks or other areas outside of the premises for storage or any
purpose other than access to the premises. Notwithstanding any other provision
of this Lease, Tenant shall not use, keep or permit to be used or kept on the
premises any foul or noxious gas, article or substance, nor shall Tenant do or
permit to be done anything in and about the premises, either in connection with
activities hereunder expressly permitted or otherwise, which are not permitted
would cause an increase in premiums payable under, or a cancellation of, any
policy of insurance maintained by Landlord in connection with the premises or
the Building or which would violate the terms of any covenants, conditions or
restrictions affecting the Building or the land on which it is located.

          (b) Without Landlord's prior consent, which may be withheld in its
absolute discretion, Tenant shall not cause, or allow anyone else to cause, any
Hazardous Materials to be used, generated, stored, or disposed of on or about
the premises or the Building other than reasonable quantities of office and
cleaning supplies in their retail containers. Tenant shall strictly comply with
all statutes, laws, ordinances, rules, regulations, and precautions now or
hereafter mandated or advised by any federal, state, local or other governmental
agency with respect to the use, generation, storage, or disposal of hazardous,
toxic, or radioactive materials (collectively, "Hazardous Materials").  As
herein used, Hazardous Materials shall include, but not be limited to, those
materials identified in Sections 66680 through 66685 of Title 22 of the
California Code of Regulations, Division 4, Chapter 30, as amended from time to
time, and those substances defined as "hazardous substances," "hazardous
materials, "hazardous wastes," "chemicals known to cause cancer or reproductive
toxicity," "radioactive materials," or other similar designations in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., 33 U.S.C. Section 1251 et
seq., 42 U.S.C. Section 300(f) et seq., 42 U.S.C. 7401 et seq., California
Health and Safety Code Section 25249.5 et seq., California Water Code Section
13000 et seq., California Health and Safety Code Section 39000 et seq. and any
other governmental statutes, ordinances, rules, regulations, and precautions
adopted pursuant to the preceding laws or other similar laws, regulations and
guidelines now or hereafter in effect. Tenant shall defend (with counsel
approved by Landlord), indemnify and hold Landlord, its employees and agents,
any entity having a security interest in the premises or the Building, and its
and their employees and agents (collectively, "Indemnities") harmless from and
against, and shall reimburse the Indemnities for, all liabilities, claims,
costs, damages, and depreciation of property value, including all foreseeable
and unforeseeable consequential damages, directly or indirectly arising out of
the use, generation, storage, or disposal of Hazardous Materials by Tenant or
any person claiming under Tenant, including, without limitation, the cost of any
required or necessary investigation, monitoring, repair, cleanup, or
detoxification and the preparation of any closure or other required plans,
whether such action is required or necessary prior to or following the
termination of this Lease, as well as penalties, fines and claims for
contribution to the full extent that such action is attributable, directly or
indirectly, to the use, generation, storage, or disposal of Hazardous Materials
by Tenant or any person claiming under Tenant. Neither the consent by Landlord
to the use, generation, storage, or disposal of Hazardous Materials nor the
strict compliance by Tenant with all statutes, laws, ordinances, rules,
regulations, and precautions pertaining to Hazardous Materials shall excuse
Tenant from Tenant's obligation of indemnification set forth above. Tenant's
obligations under this paragraph 6 shall survive expiration or termination of
this Lease.

          (c) Tenant shall not place or suffer to be placed or maintained, on
any exterior door, wall or window of the premises, on any part of the real
property upon which the premises are located, any sign, awning or canopy, or
advertising matter or other thing of any kind, and will not place or maintain
any decoration, lettering or advertising matter on the glass of any window or
door of the premises without first obtaining Landlord's written approval and
consent.  Tenant further agrees to maintain such sign, awning, canopy,
decoration, lettering, advertising matter or thing as may be approved, in good
condition and repair at all times.  Tenant agrees, at Tenant's sole cost, to
obtain a sign in strict conformance with Landlord's sign criteria as to design,
material, color, location, size, letter style, and method of installation as
provided in Exhibit "E" hereof.

     7.   Utilities.  Tenant shall pay for all water, sewer, gas, electricity,
          ---------
heat, cooling energy, telephone, refuse collection and other utility-type
services furnished to Tenant or the premises, together with any related
installation or connection charges or deposits. Whenever it is practical to do
so, such services shall be separately metered or charged to Tenant by the
provider thereof and paid for by Tenant. To the extent any of the foregoing
services are provided by Landlord, Tenant shall reimburse Landlord for all costs
incurred by Landlord in the amounts specified in the Basic Lease Information.
Landlord may bill Tenant on a monthly or other periodic basis for such services
and payment shall be made by Tenant within five (5) days after submittal of
Landlord's statement. Landlord shall not be liable in damages, consequential or
otherwise, nor shall there be any rent abatement, arising out of any curtailment
or interruption whatsoever in utility services.

     8.   Maintenance & Repairs of Leased Premises.
          ----------------------------------------

          (a) Tenant shall, at its sole cost, keep and maintain the premises and
appurtenances and every part thereof (exception exterior surface of walls and
roof which Landlord agrees to repair at Tenant's expense under the provisions of
paragraph 5 

                                       3
<PAGE>
 
(herein) including windows, doors and all door hardware, any store front and the
interior of the premises, including electrical, plumbing, lighting, heating and
air conditioning systems, in good and sanitary order, condition and repair.
Tenant shall, at its sole cost, keep and maintain all utilities, fixtures and
mechanical equipment used by Tenant in good order, condition, and repair. In the
case of equipment installed by Landlord for Tenant where Tenant is responsible
for maintenance of the equipment, such maintenance will be provided by a
reputable maintenance service company acceptable to Landlord at Tenant's
expense. Tenant shall deliver evidence of the execution and continuance of such
service contract will be provided to Landlord within thirty (30) days after
commencement of Lease.
 
          (b) Tenant hereby acknowledges that the late delivery by Tenant to
Landlord of a copy of a mechanical equipment maintenance contract referred to
above will cause Landlord to incur costs not contemplated by this lease, the
exact amount of which will be extremely difficult to ascertain.  Accordingly, if
such evidence of a contract required to be delivered by Tenant to Landlord
within the time prescribed above Tenant shall pay to Landlord a charge in the
sum of $300.00. The parties of this Lease hereby agree that such charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of a late delivery by Tenant and acceptance of such charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
late delivery nor prevent Landlord from exercising any of the other rights and
remedies available to Landlord as a result of such default.
 
          (c) If Tenant refuses or neglects to make repairs properly as required
hereunder and to the reasonable satisfaction of Landlord, as soon as reasonably
possible after written demand, Landlord may make such repairs without liability
to Tenant for any loss or damage that may accrue to Tenant's merchandise,
fixtures, or other property, or to Tenant's business by reason thereof, and upon
completion thereof, Tenant shall pay Landlord's costs for making such repairs
plus twenty percent (20%) per annum on said costs from the date of completion of
repairs by Landlord.

     9.   Alterations and Window Coverings.  Tenant shall not, without
          --------------------------------
Landlord's prior consent, make any alterations, improvement or additions in or
about the premises. As a condition to giving such consent, Landlord may require,
among other things, reasonable changes to drawings and specifications, that
Tenant remove any such alterations, improvements or additions at the expiration
or earlier termination of the term and restore the premises to their prior
condition and that Tenant provide "as-built" drawings and specifications of the
work. In no event shall any alterations or improvements affect the structure of
the Building. Before commencing any work relating to alterations, additions or
improvements affecting the premises, Tenant shall notify Landlord of the
expected date of commencement thereof and of the anticipated cost thereof, and
shall furnish complete drawings and specifications describing such work as well
as such information as shall reasonably be requested by Landlord substantiating
Tenant's ability to pay for such work. Landlord shall then have the right at any
time and from time to time to post and maintain on the premises such notices as
Landlord reasonably deems necessary to protect the premises, the Building and
Landlord from mechanics' liens or any other liens. In any event, Tenant shall
pay when due all claims for labor or materials furnished to or for Tenant at or
for use in the premises. Tenant shall not permit any mechanics' liens to be
levied against the premises for any labor or materials furnished to Tenant or
claimed to have been furnished to

                                       4
<PAGE>
 
Tenant or to Tenant's agents or contractors in connection with work of any
character performed or claimed to have been performed on the premises by or at
the direction of Tenant.  All alterations, improvements or additions in or about
the premises performed by or on behalf of Tenant shall be done by contractors
designated or approved by Landlord, in a first-class, workmanlike manner which
does not disturb or interfere with other tenants and in compliance with all
applicable laws, ordinances, regulations and orders of any governmental
authority having jurisdiction thereover, as well as the requirements of insurers
of the premises and the Building.  Prior to the commencement of any such work,
if Landlord so requests, Tenant shall furnish to Landlord performance and
payments bonds in a form and issued by a surety reasonably acceptable to
Landlord in an amount equal to the cost of such work of alteration,
improvement or addition, and evidence that any contractor(s) retained by
Tenant have adequate insurance. Notwithstanding anything in this paragraph 9
to the contrary, upon Landlord's request, Tenant shall remove any contractor,
subcontractor or material supplier from the premises and the Building if the
work or presence of such person or entity results in labor disputes in or
about the Building or damage to the premises or the Building. Upon completion
of work performed for Tenant, at Landlord's request Tenant shall deliver to
Landlord evidence of full payment therefor and full and unconditional waivers
and releases of liens for all labor, services and/or materials used. Unless
Landlord requires their removal, as set forth above, all alterations,
improvements or additions which may be made on the premises shall become the
property of Landlord and remain upon and be surrendered with the premises at
the termination or expiration of the term; provided, however, that Tenant's
machinery, equipment and trade fixtures, other than any which may be affixed
to the premises so that they cannot be removed without material damage to the
premises, shall remain the property of Tenant and shall be removed by Tenant.
Landlord shall select a standard window covering and color, throughout the
Building(s) and Tenant shall use and maintain this standard material for any
windows which shall be covered.

     10.  Insurance and Indemnity.
          -----------------------

          (a) Tenant shall obtain and maintain during the term of this Lease
commercial general liability insurance covering the premises and Common Area
with a combined single limit for personal injury and property damage in an
amount not less than $2,000,000, and employer's liability and workers'
compensation insurance as required by law.  Tenant's commercial general
liability insurance policy shall be endorsed to provide (1) that it may not be
cancelled or altered in such a manner as adversely to affect the coverage
afforded thereby without 30 days' prior written notice to Landlord, (2) Landlord
is named as additional insured, (3) the insurer acknowledges acceptance of the
mutual waiver of claims by Landlord and Tenant pursuant to subparagraph (b)
below, (4) that such insurance is primary with respect to Landlord and its
property manager and that any other insurance maintained by Landlord or such
property manager is excess and noncontributing with such insurance. (5) a cross-
liability endorsement or severability of interest clause, (6) for blanket
contractual obligations coverage, broad form property damage coverage and
products and completed operations coverage (where applicable), (7) for
employee's automobile non-ownership liability, and (8) for coverage on an
occurrence, rather than claims-made basis.  If, in the opinion of Landlord's
insurance adviser, based on a substantial increase in recovered liability claims
generally, the specified amounts of coverage are no longer adequate, within 30
days following Landlord's request, such coverage shall be appropriately
increased.  Tenant shall also obtain and maintain insurance ("Personal Property
Insurance") covering leasehold improvements paid for by Tenant and Tenant's
personal property and fixtures from to time in, on, or at the premises, in an
amount not less than 100% of the full replacement cost, without deduction for
depreciation, providing protection against events protected under "All Risk
Coverage," as well as against sprinkler damage, vandalism, and malicious
mischief.  Any proceeds from the Personal Property Insurance shall be used for
the repair or replacement of the property damaged or destroyed, unless this
Lease is terminated under an applicable provision herein.  If the

                                       5
<PAGE>
 
premises are not repaired or restored following damage or destruction in
accordance with other provisions herein, Landlord shall receive any proceeds
from the Personal Property Insurance allocable to Tenant's leasehold
improvements. Prior to the commencement of the term, Tenant shall deliver to
Landlord duplicates of such policies or certificates thereof with endorsements,
and at least 30 days prior to the expiration of such policy or any renewal
thereof, Tenant shall deliver to Landlord replacement or renewal binders,
followed by duplicate policies or certificates within a reasonable time
thereafter. Tenant hereby acknowledges that the late delivery by Tenant to
Landlord of the insurance certificates or policies referred to above will cause
Landlord to incur costs not contemplated by this lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and penalties which may be imposed
on Landlord by the terms of any mortgage or trust deed covering the premises.
Accordingly, if any insurance certificate or policy required to be delivered by
Tenant above shall not be received by Landlord at the time prescribed above,
Tenant shall pay to Landlord a charge in the sum of $300.00. The parties hereby
agree that such charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late delivery by Tenant, and acceptance of such
charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such late delivery, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord as a result of such default.
If Tenant fails to obtain such insurance or to furnish Landlord any such
duplicate policies or certificates as herein required, Landlord may, at its
election, without notice to Tenant and without any obligation so to do, procure
and maintain such coverage and Tenant shall reimburse Landlord on demand as
additional rent for any premium so paid by Landlord. Tenant shall have the right
to provide all insurance coverage required herein to be provided by Tenant
pursuant to blanket policies so long as such coverage is expressly afforded by
such policies.

          (b) Landlord hereby waives all claims against Tenant, and Tenant's
officers, directors, partners, employees, agents and representatives for loss or
damage to the extent that such loss or damage is insured against under any valid
and collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy, and Tenant waives
all claims against Landlord including Landlord's trustees, officers, directors,
partners, employees, agents and representatives for loss or damage to the extent
such loss or damage is insured against under any valid and collectable insurance
policy insuring Tenant or required to be maintained by Tenant under this Lease,
or would have been insured against but for any deductible amount under any such
policy.

          (c) As insurance is available to protect it, and to the extent such
waiver does not violate public policy, Tenant hereby waives all claims against
Landlord for damage to any property or injury to or death of any person in, upon
or about the premises or the Building arising at any time and from any cause,
and Tenant shall hold Landlord harmless from and defend Landlord against (i) all
claims for damage to any property or injury to or death of any person arising in
or from the use of the premises by Tenant, except as to Landlord or any of its
agents, employees or contractors, such as is caused by the sole negligence or
willful misconduct of Landlord, its agents, employees or contractors otherwise
entitled to indemnification, or (ii) arising from the negligence or willful
misconduct of Tenant, its employees, agents or contractors in, upon or about
those portions of the Building other than the premises.  The foregoing indemnity
obligation of Tenant shall include attorneys' fees, investigation costs and all
other costs and expenses incurred by Landlord from the first notice that any
claim or demand is to be made or may be made.  The provisions of this paragraph
10 shall survive the expiration or termination of this Lease with respect to any
damage, injury or death occurring prior to such time.

     11.  Damage or Destruction.
          ---------------------

          (a) If during the term the premises are totally or partially
destroyed, or any other portion of the Building is damaged in such a way that
Tenant's use of the premises is materially interfered with, from a risk which is
wholly covered by insurance proceeds made available to Landlord for such
purpose, Landlord shall proceed with reasonable diligence to repair the damage
or destruction and this Lease shall not be terminated; provided, however, that
if in the opinion of Landlord's architect or contractor the work of repair
cannot be completed in 90 days following such damage or destruction, Landlord
may at its election terminate the Lease by notice given to Tenant within 30 days
following the event or such longer period as may reasonably be necessary to
obtain information from its architect or contractor.

          (b) If during the term the premises are totally or partially
destroyed, or any other portion of the Building is damaged in such a way that
Tenant's use of the premises is materially interfered with, from a risk which is
not wholly covered by insurance proceeds made available to Landlord for repair
or reconstruction, Landlord may at its election by notice to Tenant given within
30 days following the event or such longer period as may reasonably be necessary
for Landlord to obtain information from its architect or contractor, either
restore the premises or terminate this Lease.
 
          (c) In case of destruction or damage which materially interferes with
Tenant's use of the premises, if this Lease is not terminated as above provided,
rent shall be abated during the period required for the work of repair based
upon the degree of interference with Tenant's use of the premises.  Except for
abatement of rent, Tenant shall have no claim against Landlord for any loss
suffered by Tenant due to damage or destruction of the premises or any work of
repair undertaken as herein provided.  Tenant expressly waives the provisions of
Section 1932 and Section 1933(4) of the California Civil Code which are
superseded by this paragraph 11.

     12.  Eminent Domain.  If all or any part of the premises shall be taken as
          --------------
a result of the exercise of the power of eminent domain or sold by Landlord
under threat thereof, this Lease shall terminate as to the part so taken as of
the date of taking or sale and, in the case of a partial taking, either Landlord
or Tenant shall have the right to terminate this Lease as to the balance of the
premises by notice to the other within 30 days after such date if the portion of
the premises taken shall be of such extent and nature as substantially to
handicap, impede or impair Tenant's use of the balance of the premises for
Tenant's purposes. In the event of any taking or such sale, Landlord shall be
entitled to any and all compensation, damages, income, rent, awards, or any
interest therein whatsoever which may be paid or made in connection therewith,
and Tenant shall have no claim against Landlord for the value of any unexpired
term of this Lease or otherwise. In the event of a partial taking of the
premises which does not result in a termination of this Lease, the monthly
rental thereafter to be paid shall be equitably reduced on a square footage
basis.

                                       6
<PAGE>
 
     13.  Assignment and Subletting.
          -------------------------

          (a) Tenant shall not assign this Lease or any interest herein or
sublet the premises or any part thereof without the prior consent of Landlord,
which consent shall not be unreasonably withheld.  Tenant shall not hypothecate
this Lease or any interest herein or permit the use of the premises by any party
other than Tenant without the prior consent of Landlord, which consent may be
withheld by Landlord in its absolute discretion.  This Lease shall not, nor
shall any interest herein, be assignable as to the interest of Tenant by
operation of law without the consent of Landlord.  Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord,
terminate this Lease.  In connection with each consent requested by Tenant,
Tenant shall submit to Landlord the terms of the proposed transaction, the
identity of the parties to the transaction, the proposed documentation for the
transaction, current financial statements of any proposed assignee or subleases
and all other information reasonably requested by Landlord concerning the
proposed transaction and the parties involved therein.  As a further condition
to any consent granted by Landlord, the proposed assignee or subleases shall
agree in writing to perform for the benefit of Landlord all of the Tenant's
obligations under this Lease or so much thereof as are allocable to any portion
of the premises proposed to be sublet.

          (b) Without limiting the other instances in which it may be reasonable
for Landlord to withhold its consent to an assignment or subletting, Landlord
and Tenant acknowledge that it shall be reasonable for Landlord to withhold its
consent in the following instances:
 
               (1) the proposed assignee or subtenant is a governmental agency;
 
               (2) in Landlord's reasonable judgment, the use of the premises
     would entail any alterations which would lessen the value of the leasehold
     improvements in the premises, or would require increased services by
     Landlord;
 
               (3) in Landlord's reasonable judgment, the financial worth of the
     proposed assignee or subtenant does not meet the credit standards applied
     by Landlord for other tenants under leases with comparable terms, or the
     character, reputation or business of the proposed assignee or sublessee is
     not consistent with the quality of the other tenancies in the Building;
 
               (4) in Landlord's reasonable judgment, the proposed assignee or
     subtenant does not have a good reputation as a tenant of property;
 
               (5) Landlord has received from any prior landlord to the proposed
     assignee or subtenant a negative report concerning such prior landlord's
     experience with the proposed assignee or subtenant;
 
               (6) Landlord has experienced previous defaults by or is in
     litigation with the proposed assignee or subtenant;
 
               (7) in Landlord's reasonable judgment, the premises, or the
     relevant part thereof, will be used in a manner that will violate any
     negative covenant as to use contained in any other lease of space in the
     Building;

               (8) the use of the premises by the proposed assignee or subtenant
     will violate any applicable law, ordinance or regulation;
 
               (9) the proposed assignment or sublease will create a vacancy
     elsewhere in the Building;
 
               (10) the proposed assignee or subtenant is a person with whom
     Landlord is negotiating to lease space in the Building or is currently a
     tenant in the Building;
 
               (11) the proposed assignment or sublease fails to include all of
     the terms and provisions required to be included therein pursuant to this
     paragraph 13;
 
               (12)  Tenant is in default of any obligation of Tenant under this
     Lease, or Tenant has defaulted under this lease on three or more occasions
     during the 12 months preceding the date that Tenant shall request consent;
     or
 
               (13) in the case of a subletting of less than the entire
     premises, if the subletting would result in the division of the premises
     into more than two subparcels or would require access to be provided
     through space leased or held for lease to another tenant or improvements to
     be made outside of the premises.

          (c) If at any time or from time to time during the term of this Lease
Tenant desires to sublet all or any part of the premises, Tenant shall give
notice to Landlord setting forth the terms of the proposed subletting and the
space so proposed to be sublet.  Landlord shall have the option, exercisable by
notice given to Tenant within 20 days after Tenant's notice is given, either to
sublet from Tenant such space at the rental and other terms set forth in
Tenant's notice, or, if the proposed subletting is for the entire premises for a
sublet term ending within the last year of the term of this Lease, to terminate
this Lease.  In either case, effective as of the date of the proposed subletting
if Landlord so terminates this Lease, Landlord may enter into a lease with the
proposed subtenant.  If Tenant proposes to assign this Lease, Landlord may, by
notice given within 20 days of Tenant's notice, elect to terminate this lease as
of the date of the proposed assignment.  If Landlord so terminates this lease,
Landlord may if it elects, enter into a new lease covering the premises or a
portion thereof with the intended assignee or subtenant on such terms as
Landlord and such person may agree, or enter into a new lease covering the
premises or a portion thereof with any other person; in such event, Tenant shall
not be entitled to any portion of the profit, if any, which Landlord may realize
on account of such termination and reletting.  Landlord's exercise of its
aforesaid option shall not be construed to impose any liability upon Landlord
with respect to any real estate brokerage commission(s) or any other costs or

                                       7
<PAGE>
 
expenses incurred by Tenant in connection with its proposed subletting or
assignment.  If Landlord does not exercise its options to terminate the Lease or
sublet the premises, Tenant shall be free to sublet such space to any third
party on the same terms set forth in the notice given to Landlord, subject to
obtaining Landlord's prior consent as hereinabove provided.

          (d) As used in this Paragraph 13, the term "assign" or "assignment"
shall include, without limitation, any sale, transfer or other disposition of
all or any portion of Tenant's estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise including any of the
following:

               (1) If Tenant is a corporation: (i) any dissolution, merger,
     consolidation or other reorganization of Tenant, or (ii) a sale of more
     than 50% of the value of the assets of Tenant, or (iii) if Tenant is a
     corporation with fewer than 500 shareholders, sale or other transfer of a
     controlling percentage of the capital stock of Tenant. The phrase
     "controlling percentage" means the ownership of, and the right to vote,
     stock possessing at least 5O% of the total combined voting power of all
     classes of Tenant's stock issued, outstanding and permitted to vote for the
     election of directors;
 
               (2) If Tenant is a trust, the transfer of more than 50% of the
     beneficial interest of Tenant, or the dissolution of the trust;
 
               (3) If Tenant is a partnership or joint venture, the withdrawal,
     or the transfer of the interest of any general partner or joint venturer or
     the dissolution of the partnership or joint venture; or
 
               (4) If Tenant is composed of tenants-in-common, the transfer of
     interest of any co-tenants, or the partition or dissolution of the co-
     tenancy.

          (e) No sublessee (other than Landlord if it exercises its option
pursuant to subparagraph (c) above) shall have a right further to sublet, and
any assignment by a sublessee of its sublease shall be subject to Landlord's
prior consent in the same manner as if Tenant were entering into a new sublease.
 
          (f) In the case of an assignment, all sums or other economic
consideration received by Tenant as a result of such assignment shall be paid to
Landlord after first deducting the unamortized cost of leasehold improvements
paid for by Tenant, and the cost of any real estate commissions incurred in
connection with such assignment.  In the event such consideration is received by
Tenant in installments, the portion of each installment to be paid to Landlord
shall be determined by subtracting from the installment an amount equal to the
total amount of the foregoing permitted deductions divided by the total number
of installments.
 
          (g) In the case of a subletting, all sums or economic consideration
received by Tenant as a result of such subletting shall be paid to Landlord
after first deducting (1) the rental due hereunder, prorated to reflect only
rental allocable to the sublet portion of the premises, (2) the cost of
leasehold improvements made to the sublet portion of the premises at Tenant's
cost, amortized over the term of this Lease except for leasehold improvements
made for the specific benefit of the sublessee, which shall be amortized over
the term of the sublease, and (3) the cost of any real estate commissions
incurred in connection with such subletting, amortized over the term of the
sublease.
 
          (h) Regardless of Landlord's consent, no subletting or assignment
shall release Tenant of Tenant's obligations or alter the primary liability of
Tenant to pay the rental and to perform all other obligations to be performed by
Tenant hereunder.  The acceptance of rental by Landlord from any other person
shall not be deemed to be a waiver by Landlord of any provision hereof.  Consent
to one assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting.  In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.  Landlord may consent to subsequent
assignments or subletting of this Lease or amendments or modifications to this
Lease with assignees of Tenant, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto and such action shall
not relieve Tenant of liability under this Lease.

          (i) If Tenant shall assign or sublet the premises or request the
consent of Landlord to any assignment or subletting or if Tenant shall request
the consent of Landlord for any act that Tenant proposes to do, then Tenant
shall pay Landlord's reasonable attorneys' fees incurred in connection
therewith.

     14.  Rules & Regulations.  Tenant shall faithfully observe and comply with
          --------------------
the rules and regulations attached to this Lease as Exhibit B, and, after notice
                                                    ---------
thereof; all reasonable modifications thereof and additions thereto from time to
time promulgated in writing by Landlord. Landlord shall not be responsible to
Tenant for the nonperformance by any other tenant or occupant of the Building of
any of said rules and regulations, but Landlord shall use good faith efforts to
enforce the rules and regulations consistently.

     15.  Default by Tenant.
          -----------------

          (a) Any of the following events shall constitute events of default
under this Lease:

               (1) a default by Tenant in the payment of any rent or other sum
     payable hereunder when due;
 
               (2) a default by Tenant in the performance of any of the other
     terms, covenants, agreements or conditions contained herein and, if the
     default is curable, the continuation of such default for a period of 10
     days after notice by Landlord or beyond the time reasonably necessary for
     cure if the default is of the nature to require more than 10 days to
     remedy, provided that if Tenant has defaulted in the performance of the
     same obligation more than one time in any twelve-month period and notice of
     such default has been given by Landlord in such instance, no cure period
     shall thereafter be applicable hereunder;

                                       8
<PAGE>
 
               (3) the bankruptcy or insolvency of Tenant, any transfer by
     Tenant in fraud of creditors, assignment by Tenant for the benefit of
     creditors, or the commencement of any proceedings of any kind by or against
     Tenant under any provision of the Federal Bankruptcy Act or under any other
     insolvency, bankruptcy or reorganization act unless, in the event any such
     proceedings are involuntary, Tenant is discharged from the same within 60
     days thereafter; the appointment of a receiver for a substantial part of
     the assets of Tenant; or the levy upon this Lease or any estate of Tenant
     hereunder by any attachment or execution; or
 
               (4) the abandonment of the premises which for the purpose of this
     sub-paragraph shall be deemed to occur when Tenant allows the premises to
     be unoccupied by Tenant or its employees for a period longer than ten (10)
     consecutive days during the term of this Lease.

          (b) Upon the occurrence of any event of default by Tenant hereunder,
     Landlord may, at its option and without any further notice or demand, in
     addition to any other rights and remedies given hereunder or by law, do any
     of the following:

               (1) Landlord shall have the right, so long as such default
     continues, to give notice of termination to Tenant, and on the date
     specified in such notice this Lease shall terminate.
 
               (2) In the event of any such termination of this Lease, Landlord
     may then or at any time thereafter, re-enter the premises and remove
     therefrom all persons and property and again repossess and enjoy the
     premises, without prejudice to any other remedies that Landlord may have by
     reason of Tenant's default or of such termination.
 
               (3) In the event of any such termination of this Lease, and in
     addition to any other rights and remedies Landlord may have, Landlord shall
     have all of the rights and remedies of a landlord provided by Section
     1951.2 of the California Civil Code.  The amount of damages which Landlord
     may recover in event of such termination shall include, without limitation,
     (i) the worth at the time of award (computed by discounting such amount at
     the discount rate of the Federal Reserve Bank of San Francisco at the time
     of award plus one percent) of the amount by which the unpaid rent for
     balance of the term after the time of award exceeds the amount of rental
     loss that Tenant proves could be reasonably avoided, (ii) all legal
     expenses and other related costs incurred by Landlord following Tenant's
     default, (iii) all costs incurred by Landlord in restoring the premises to
     good order and condition, or in remodeling, renovating or otherwise
     preparing the premises for reletting, and (iv) all costs (including,
     without limitation, any brokerage commissions) incurred by Landlord in
     reletting the premises.
 
               (4) For the purpose of determining the unpaid rent in the event
     of a termination of this Lease, or the rent due hereunder in the event of a
     reletting of the premises, the monthly rent reserved in this Lease shall be
     deemed to be the sum of the rental due under paragraph 3 above and the
     amounts last payable by Tenant pursuant to paragraph 4 and 5 above and any
     concessions by Landlord as an inducement for Tenant to enter into this
     Lease.
 
               (5) Landlord's acceptance of payment from Tenant of less than the
     amount of rent then due shall not constitute a waiver of any rights of
     Landlord or Tenant including, without limitation, any right of Landlord to
     recover possession of the premises.
 
               (6) After terminating this Lease, Landlord may remove any and all
     personal property located in the premises and place such property in a
     public or private warehouse or elsewhere at the sole cost and expense of
     Tenant.

          (c) Even though Tenant has breached this Lease and abandoned the
     premises, this Lease shall continue in effect for so long as Landlord does
     not terminate Tenant's right to possession, and Landlord may enforce all
     its rights and remedies under this Lease, including the right to recover
     rental as it becomes due under this Lease. Acts of maintenance or
     preservation, efforts to relet the premises, or the appointment of a
     receiver upon initiative of Landlord to protect Landlord's interest under
     this Lease, shall not constitute a termination of Tenant's right to
     possession.
 
          (d) Tenant hereby waives all rights under California Code of Civil
     Procedure Section 1179 and California Civil Code Section 3275 providing for
     relief from forfeiture, and any other right now or hereafter existing to
     redeem the premises or reinstate this Lease after termination pursuant to
     this Paragraph 15 or by order or judgment of any court or by any legal
     process.
 
          (e) Landlord and Tenant hereby waive trial by jury in any action,
     proceeding or counterclaim brought by either of the parties hereby against
     the other on any matters not relating to personal injury or property damage
     but otherwise arising out of or in any way connected with this Lease, the
     relationship of Landlord and Tenant, Tenant's use or occupancy of the
     premises, and any emergency statutory or any other statutory remedy.

          (f) The remedies provided for in this Lease are in addition to any
     other remedies available to Landlord at law or in equity, by statute or
     otherwise.

     16.  Landlord's Right to Cure Defaults.  If Tenant shall fail to pay any
          ---------------------------------
sum of money, other than rental, required to be paid by it hereunder or shall
fail to perform any other act on its part to be performed hereunder and such
failure shall continue for 30 days after notice thereof by Landlord, Landlord
may, but shall not be obligated so to do, and without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant's part to be made or performed as in this Lease provided.
All sums so paid by Landlord and all necessary incidental costs shall be deemed
additional rent hereunder and shall be payable to Landlord on demand, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of rental.

     17.  Default by Landlord.  Landlord shall not be in default under this
          --------------------
Lease unless Landlord fails to perform obligations required of Landlord
hereunder within a reasonable time, but in no event later than 3O days after
notice by Tenant to Landlord specifying wherein Landlord has failed to perform
such obligation; provided, however, that if the nature of Landlord's obligation
is such that more

                                       9
<PAGE>
 
than 30 days are required for performance, then Landlord shall not be in default
if Landlord commences performance within such 30 day period and thereafter
diligently prosecutes the same to completion.

     18.  Security Deposit.  On execution of this Lease Tenant shall deposit
          ----------------  
with Landlord the sum specified in the Basic Lease Information (the "Deposit") .
The Deposit shall be held by Landlord as security for the performance by Tenant
of all of the provisions of this Lease. Following an event of default by Tenant
under this Lease, Landlord may use, apply or retain all or any portion of the
Deposit for the payment of any rent or other charge in default, or the payment
of any other sum to which Landlord may become obligated by Tenant's default, or
to compensate Landlord for any loss or damage which Landlord may suffer thereby.
If Landlord so uses or applies all or any portion of the Deposit, then within 5
days after demand therefor Tenant shall deposit cash with Landlord in an amount
sufficient to restore the Deposit to the full amount thereof, and Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep the Deposit separate from its general accounts. If Tenant
performs all of Tenant's obligations hereunder, the Deposit, except that portion
designated as a non-refundable cleaning deposit or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest for its use, to Tenant (or, at Landlord's option, to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the term hereof,
and after Tenant has vacated the premises. No trust relationship is created
herein between Landlord and Tenant with respect to the Deposit.

     19.  Estoppel Certificate.
          --------------------

          (a) Tenant shall at any time within 10 days following request from
Landlord execute, acknowledge and deliver to Landlord a statement certifying (1)
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), (2) the date to which the rent, security
deposit, and other sums payable hereunder have been paid, (3) acknowledging that
there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults, if any, which are claimed, and
(4) such other matters as may reasonably be requested by Landlord.  Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Building and other real property of which it is a part.

          (b) Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant: (1) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (2) that there
are no uncured defaults in Landlord's performance, and (3) that not more than
one month's rent has been paid in advance.

          (c) If Landlord desires to finance or refinance the Building, within
10 days of Landlord's request, Tenant shall deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender.  All such financial statements shall be received by Landlord in
confidence and shall be used for the purposes herein set forth.

     20.  Subordination.  This Lease, at Landlord's option, shall be subordinate
          -------------
to any ground lease , mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the Building and to any and all advances
made on the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. If any mortgagee, beneficiary, trustee or
ground lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give notice thereof to Tenant, this
Lease shall be deemed prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior to or subsequent to the date of said mortgage,
deed of trust or ground lease or the date of recording thereof. If any mortgage
or deed of trust to which this Lease is subordinate is foreclosed or a deed in
lieu of foreclosure is given to the mortgagee or beneficiary, Tenant shall
attorn to the purchaser at the foreclosure sale or to the grantee under the deed
in lieu of foreclosure; if any ground lease to which this Lease is subordinate
is terminated, Tenant shall attorn to the ground lessor. Tenant agrees to
execute any documents required to effectuate such subordination or to make this
Lease prior to the lien of any mortgage, deed of trust or ground lease, as the
case may be, or to evidence such attornment.

     21.  Attorneys' Fees.  If either party commences an action or proceeding
          ---------------
against the other party arising out of or in connection with this Lease, or
institutes any proceeding in a bankruptcy or similar court which has
jurisdiction over the other party or any or all of its property or assets, the
prevailing party in such action or proceeding and in any appeal in connection
therewith shall be entitled to have and recover from the unsuccessful party
reasonable attorneys' fees, court costs, expenses and other costs of
investigation and preparation. If such prevailing party recovers a judgment in
any such action, proceeding, or appeal, such attorneys' fees, court costs and
expenses shall be included in and as a part of such judgment.

     22.  Notices.  All communications from one party to the other given
          -------
pursuant to the terms of this Lease shall be in writing and shall be deemed to
have been fully given when served personally at the premises, deposited in the
United States mail postage prepaid, or delivered to a generally recognized
overnight courier service, charges prepaid, and addressed as follows: to Tenant
at the address specified in the Basic Lease Information or to such other place
as Tenant may from time to time designate in a notice to Landlord; to Landlord
at the address specified in the Basic Lease Information, or to such other place
and with such other copies as Landlord may from time to time designate in a
notice to Tenant; or, in the case of Tenant, delivered to Tenant at the
premises.

     23.  Landlord's Scope of Work.  Attached hereto as Exhibit "A" and by this
          ------------------------
reference made a part hereof, is a space plan of the premises with any notations
indicating the finishing work to be performed by Landlord.  Said plan is to be
approved, signed, and returned to Landlord by on or before the date specified in
the Basic Lease Information whereupon said work shall commence and be completed
in substantial compliance with the requirements of said Exhibit and in a good
and workmanlike manner on or before the date specified in the Basic Lease
Information subject only to delays occasioned by fire, insurrection, war and
other causes beyond the control of Landlord, in which event the provisions of
Paragraph 1 of the Lease shall apply.

     24.  General Provisions.
          ------------------

          (a) This Lease shall be governed by and construed in accordance with
the laws of the State of California.

                                      10
<PAGE>
 
          (b) The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
 
          (c) This Lease contains all agreements of the parties with respect to
any matter mentioned herein and supersedes any verbal and any prior written
understanding, conditions, representations, agreements or covenants, and may be
modified in writing only, signed by the parties.
 
          (d) No waiver by Landlord of any provision hereof shall be deemed a
waiver of any other provision or of any subsequent breach by Tenant of the same
or any other provision.  Landlord's consent to or approval of any act shall not
be deemed to render unnecessary the obtaining of Landlord's consent to or
approval of any subsequent act by Tenant.  The acceptance of rent or any partial
payment hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular rent accepted, regardless of Landlord's knowledge of such preceding
breach at the time of acceptance of such rent.  

          (e) If Tenant remains in possession of the premises or any part
thereof after the expiration of the term with the consent of Landlord such
occupancy shall be a tenancy from month to month at a rental in the amount of
two times the last month's rental during the term plus all other charges payable
hereunder, and upon all of the terms hereof.
 
          (f) Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their personal
representatives, successors and assigns.

          (g) Landlord and Landlord's agents shall have the right to enter the
premises at reasonable times for the purpose of inspecting the same, posting
notices, showing the same to prospective purchasers or lenders, and making such
alterations, repairs, improvements or additions to the premises or to the
Building as Landlord may deem necessary or desirable.  Landlord may at any time
during the last 120 days of the term place on or about the premises any ordinary
"For Lease" sign.

          (h) Tenant shall not conduct any auction at the premises.

          (i) The voluntary or other surrender of this Lease by Tenant, the
mutual cancellation thereof or the termination of this lease by Landlord as a
result of Tenant's default shall, at the option of Landlord, terminate all or
any existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

          (j) If Tenant is a corporation, each individual executing this Lease
on behalf of Tenant represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors and that this Lease is binding
upon the corporation in accordance with its terms.

          (k) The term "Landlord" as used herein means the then owner of the
Building and in the event of a sale of the Building the selling owner shall be
automatically relieved of all obligations of Landlord hereunder, except for acts
or omissions of Landlord theretofore occurring.
 
          (1) Any liability which way arise as a consequence of the execution of
this Lease by or on behalf of Landlord shall be a liability of Landlord and not
the personal liability of any trustee, partner, corporate officer or corporate
officer of a trustee or partner, nor of an employee or beneficiary of Landlord,
its trustees or partners.  Notwithstanding anything to the contrary set forth in
this Lease, Tenant agrees that there shall be absolutely no personal liability
on the part of Landlord with respect to any of the obligations of Landlord under
this Lease, and Tenant shall look solely to the equity, if any, of Landlord in
the Building for the

                                      11
<PAGE>
 
satisfaction of any liability of Landlord to Tenant.  Tenant's exculpation of
personal liability of Landlord is absolute and without any exception whatsoever.

          (m) Tenant warrants that it has had no dealings with any real estate
broker or agent other than the Broker(s) identified in the Basic Lease
Information in connection with the premises or this Lease.  Tenant shall
indemnify Landlord and hold it harmless from and against all claims, demands,
costs or liabilities (including, without limitation, attorneys' fees) asserted
by any party other than Broker(s) based upon dealings of that party with Tenant
in connection with the premises or this Lease.  Landlord shall incur no
obligation to compensate Tenant's agent or representative should this lease be
renewed or extended.
 
          (n) Within 10 days of Landlord's request therefore, Tenant shall
execute and deliver such amendments of this Lease as shall have been required by
Landlord's lender in connection with the making of a loan to be secured by the
premises or the Building, provided such amendment does not increase the
obligations of Tenant under this Lease or materially and adversely affect
Tenant's leasehold interest.
 
          (o) Time is of the essence of this Lease and all of its provisions.
 
          (p) No diminution or shutting off of light, air or view by any
structure which may be erected on or adjacent to the Property shall in any way
affect this tease or impose any liability on Landlord.

     25.  Exhibits.  The exhibits and addendum, if any, specified in the Basic
          --------
Lease Information are attached to this Lease and by this reference made a part
hereof.

                                      12
<PAGE>
 
     If this Lease has been filled in, it has been prepared for submission to
your attorney for approval.  No representation or recommendation is made by the
real estate broker or its agents or employees as to the legal sufficiency, legal
effect or tax consequences of this Lease or the transaction relating thereto.
The submission of this Lease for examination does not constitute a reservation
of or option for the Leased Premises and this Lease becomes effective as a Lease
only upon execution and delivery thereof by Landlord and Tenant.


          IN WITNESS WHEREOF, the parties have executed this Lease on the
respective dates indicated below.



TENANT:   Internex Information Services, Inc.  LANDLORD: San Tomas Investors 11
          a California Corporation


By:  /s/                            By:  /s/ 

By:                                 By:

Date of Execution  7/29/96          Date of Execution
by Tenant:                          by Landlord: 8/2/96

                                      13
<PAGE>
 
EXHIBIT "A" 

Internex Information Services, Inc.              INITIALS:

2306 Walsh Ave.                                  LANDLORD: /s/
                                                           ---------------------
Santa Clara, CA 95051                            TENANT:  /s/
                                                          ----------------------


                        [MAP OF PREMISES APPEARS HERE]
<PAGE>
 
                                   EXHIBIT B
                                   ---------


                             Rules and Regulations


1.   No advertisements, pictures or signs of any sort shall be displayed on or
     outside the Premises without the prior written consent of Landlord.  This
     prohibition shall include any portable signs or vehicles placed within the
     parking lot, common areas or on streets adjacent thereto for the purpose of
     advertising or display.  Landlord shall have the right to remove any such
     unapproved item without notice and at Tenant's expense.

2.   Tenant shall not park or store motor vehicles, trailers or containers
     outside of the Premises after the conclusion of normal daily business
     activity except in approved areas specifically designated by Landlord.

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

4.   All window coverings and window films or coatings installed by Tenant and
     visible from outside of the building require the prior written approval of
     Landlord.  Except for dock shelters and seals as may be expressly permitted
     by Landlord, no awnings or other projections shall be attached to the
     outside walls of the building.

5.   Tenant shall not use, keep or permit to be used or kept any foul or noxious
     gas or substance on, in or around the Premises unless approved by Landlord.
     Tenant shall not use, keep or permit to be used or kept any flammable or
     combustible materials without proper governmental permits and approvals.

6.   Tenant shall comply with all reasonable requirements of the Landlord's
     insurance underwriters, which do not conflict with its rights under the
     Lease.

7.   Tenant shall not use, keep or permit to be used or kept food or other
     edible materials in or around the Premises in such a manner as to attract
     rodents, vermin or other pests.  Tenant shall not permit cooking in or
     about the Premises.

8.   Tenant shall not use or permit the use of the Premises for lodging or
     sleeping, for public assembly, or for any illegal or immoral purpose.

9.   Tenant shall not alter any lock or install any new locks or bolts on any
     door at the Premises without the prior written consent of Landlord.

10.  Tenant shall park motor vehicles only in those general parking areas as
     designated by Landlord except for active loading and containers. Tenant
     shall not unreasonably interfere with traffic flow within the Industrial
     Park and loading and unloading areas of other tenants.

11.  Storage of forklift and propane tanks shall be in secure and protected
     storage enclosures approved by the local fire department and shall be
     located in areas specifically designated by Landlord.  Safety equipment,
     including eye wash stations and approved neutralizing agents, shall be
     provided in areas used for the maintenance and charging of lead-acid
     batteries.  Tenant shall protect electrical panels, asphalt paving areas
     and building mechanical equipment from damage from forklift trucks.

12.  Tenant shall not disturb, solicit or canvas any occupant of the building or
     the Property and shall cooperate to prevent same.

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

14.  No animals, fish or birds of any kind may be brought into or kept in or
     about the Premises.

15.  Machinery, equipment and apparatus belonging to Tenant which cause noise or
     vibration that may be transmitted to the structure of the Building, to such
     a degree as to be objectionable to Landlord or other tenants or to cause
     harm to the Building, shall be placed and maintained by Tenant, at Tenants
     expense, on vibration eliminators or other devices sufficient to eliminate
     the transmission of such noise and vibration.  Tenant shall cease using any
     such machinery which causes objectionable noise and vibration which cannot
     be sufficiently mitigated.

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

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

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

19.  Tenant is responsible for the safe storage and removal of all pallets.
     Pallets shall be stored behind screened enclosures at locations approved by
     the Landlord. If pallets are stored within the Premises, storage shall
     comply with safe practices as described in Factory Mutual Loss Prevention
     Data Sheet 8-24.

20.  Tenant is responsible for the safe storage and removal of all trash and
     refuse. All such trash and refuse shall be contained in suitable
     receptacles stored behind screened enclosures at locations approved by
     Landlord. Landlord reserves the right to remove, at Tenant's expense
     without further notice, any trash or refuse left elsewhere outside of the
     Premises or in the Industrial Park.

21.  Tenant shall not store or permit the storage or placement of goods or
     merchandise in or around the common areas surrounding the Premises. No
     displays or sales of merchandise shall be allowed in the parking lots or
     other common areas.

22.  Tenant shall appoint an Emergency Coordinator who shall be responsible for
     assuring notification of the local fire department in the event of an
     emergency, assuring that sprinkler valves are kept open, and implementing
     the Factory Mutual "Red Tag Alert" system including weekly visual
     inspection of all sprinkler system valves on or within the Premises.

23.  No loudspeakers, televisions, phonographs, radios or other devices shall be
     used in such a manner as to be heard or seen outside of the premises
     without the prior written consent of the Landlord.

24.  Tenant shall use at Tenant's cost such pest extermination contractor as 
     Landlord may direct and at such intervals as Landlord may require.

25.  The Tenant will protect carpeting from undue wear by providing carpet
     protectors under chairs with casters, and protective covering in carpeted
     areas where spillage or excessive wear may occur.
<PAGE>
 
           ADDENDUM TO THAT CERTAIN LEASE DATED JULY 25, 1996 BY AND
            BETWEEN SAN TOMAS INVESTORS II (LANDLORD) AND INTERNEX
         INFORMATION SERVICES,, INC. (TENANT) FOR THE PREMISES AT 2306
                    WALSH AVENUE, SANTA CLARA, CALIFORNIA.


The subject lease is amended and clarified as follows:

Paragraph 3. (b) Rent: Under this paragraph the monthly rental shall be first
---------------------
adjusted, upward only, at the start of the third lease year (August 15, 1998) by
comparing the then current CPI, as defined in paragraph 3. (b), with the CPI
figure for the same month of 1997.

Paragraph 23 Landlord's Scope of Work: Landlord agrees to perform the following
-------------------------------------
work on the leased premises:

     1.  Recarpet the office area of the Premises with building standard
     carpeting.
     2.  Clean, patch, and paint interior walls.


                                                  Initials:    

                                                  Landlord: /s/
                                                            --------------------
                                                  Tenant:   /s/
                                                            --------------------