<PAGE>   1
                                                                   EXHIBIT 10.14




                                      LEASE

                                 BY AND BETWEEN

                         iSTAR SUNNYVALE PARTNERS, L.P.,
                         A DELAWARE LIMITED PARTNERSHIP

                                   AS LANDLORD

                                       AND

                           TRIDENT MICROSYSTEMS, INC.,
                             A DELAWARE CORPORATION

                                    AS TENANT

                                  MAY 16, 2001

                             1090 East Arques Avenue
                              SUNNYVALE, CALIFORNIA







<PAGE>   2

                                      LEASE

        THIS LEASE, dated May 16, 2001 for reference purposes only, is made by
and between iSTAR SUNNYVALE PARTNERS, L.P., a Delaware limited partnership
("Landlord"), and TRIDENT MICROSYSTEMS, INC., a Delaware corporation ("Tenant"),
to be effective and binding upon the parties as of the date the last of the
designated signatories to this Lease shall have executed this Lease (the
"Effective Date of this Lease").

                                    ARTICLE 1

                                    REFERENCE

1.1 REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

<TABLE>
        <S>                                 <C>
        Tenant's Address for Notice:        Prior to Lease Commencement Date:
                                            Trident Microsystems, Inc.
                                            2450 Walsh Ave.
                                            Santa Clara, CA 95051
                                            Attention: Carmen Chang

                                            From and after Lease Commencement Date:
                                            Trident Microsystems, Inc.
                                            1090 East Arques Avenue
                                            Sunnyvale, California  94086
                                            Attention:  Carmen Chang

        Tenant's Representative:            Carmen Chang


        Landlord's Address for Notices:     c/o iStar Financial, Inc.
                                            One Embarcadero Center
                                            Suite 3300
                                            San Francisco, CA 94111
                                            Attn:  Asset Management

        Landlord's Representative:          Erich Stiger

        Phone Number:                       (415) 391-4300

        Intended Commencement Date:         July 1, 2001

        Intended Term:                      Five (5) years

        Lease Expiration Date:              Five (5) Years from the Lease Commencement Date (as
                                            hereinafter defined), unless earlier terminated by
                                            Landlord in accordance with the terms of this
                                            Lease, or extended by Tenant pursuant to Article
                                            15.

        Options to Renew:                   One (1) option to renew for a term of five (5) years.

        First Month's Prepaid Rent:         $109,739.50

        Tenant's Security Deposit:          $125,928.60
</TABLE>



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<PAGE>   3

<TABLE>
        <S>                                 <C>
        Late Charge Amount:                 Five Percent (5%) of the delinquent amount

        Tenant's Required Liability

        Coverage:                           $3,000,000 combined single limit

        Tenant's Broker(s):                 Colliers International's agents Steve Gibson and
                                            Duffy D'Angelo

        Property:                           That certain real property situated in the City of
                                            Sunnyvale, County of Santa Clara, State of
                                            California, together with all buildings, easements
                                            and improvements thereon, which real property is
                                            shown on the Site Plan attached hereto as Exhibit
                                            "A" and is commonly known as or otherwise described
                                            as follows: 1060-1090 East Arques Avenue,
                                            Sunnyvale, California.

        Building:                           That certain building within the Property in which
                                            the Leased Premises are located, which building is
                                            shown outlined on Exhibit "A" hereto (the
                                            "Building"). The Building is commonly known as or
                                            otherwise described as follows: 1090 East Arques
                                            Avenue, Sunnyvale, California.

        Outside Areas:                      The "Outside Areas" shall mean all areas within the
                                            Property which are located outside the buildings,
                                            such as pedestrian walkways, parking areas,
                                            landscaped area, open areas and enclosed trash
                                            disposal areas.

        Leased Premises:                    All the interior space within the Building,
                                            including stairwells, connecting walkways, and
                                            atriums, consisting of approximately 33,766 square
                                            feet and, for purposes of this Lease, agreed to
                                            contain said number of square feet.

        Base Monthly Rent:                  The term "Base Monthly Rent" shall mean the following:

                                            $109,739.50 per month from the Lease Commencement
                                            Date for a period of 12 months. On the first day
                                            following the end of such 12 month period, and on
                                            the same date during each subsequent year of the
                                            Lease Term (each an "Adjustment Date"), Base
                                            Monthly Rent shall be increased to an amount equal
                                            to one hundred three and one-half percent (103.5%)
                                            of the Base Monthly Rent in effect immediately
                                            prior to such Adjustment Date.

        Use:                                General office, research & development, marketing,
                                            light storage and all other legal uses, subject to
                                            Section 4.2.

        Tenant's Project
        Proportionate Share:                15.67%

        Tenant's Building
        Proportionate Share:                100%

        Exhibits:                           The term "Exhibits" shall mean the Exhibits of this
                                            Lease which are described as follows:

                                            Exhibit "A" - Site Plan showing the Property and
                                            delineating the Building in which the Leased
                                            Premises are located.
</TABLE>



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<PAGE>   4

<TABLE>
        <S>                                 <C>
                                            Exhibit "B" - [Intentionally Omitted]

                                            Exhibit "C" - Construction Drawings

                                            Exhibit "D" - Form of Tenant Estoppel
</TABLE>


                                    ARTICLE 2

                      LEASED PREMISES, TERM AND POSSESSION


2.1 DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for Tenant's own use in the conduct of Tenant's
business and not for purposes of speculating in real estate, for the Lease Term
and upon the terms and subject to the conditions of this Lease, that certain
interior space described in Article 1 as the Leased Premises, reserving and
excepting to Landlord the right to fifty percent (50%) of all assignment
consideration and excess rentals as provided in Article 7 below. Tenant's lease
of the Leased Premises, together with the appurtenant right to use the Outside
Areas as described in Paragraph 2.2 below, shall be conditioned upon and be
subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws (as hereinafter defined) governing the
use of the Leased Premises and the Property, (iii) all Private Restrictions (as
hereinafter defined), easements and other matters now of public record
respecting the use of the Leased Premises and Property, and (iv) all reasonable
rules and regulations from time to time established by Landlord.

2.2 RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant's right to the
use and occupancy of the Leased Premises, Tenant shall have the non-exclusive
right, in common with other occupants and users of the Property, to use the
Outside Areas in conjunction with its use of the Leased Premises solely for the
purposes for which they were designated and intended and for no other purposes
whatsoever. Tenant's right to so use the Outside Areas shall be subject to the
limitations on such use as set forth in this Lease and shall terminate
concurrently with any termination of this Lease.

2.3 LEASE COMMENCEMENT DATE AND LEASE TERM. Subject to Paragraph 2.4 below, the
term of this Lease shall begin, and the Lease Commencement Date shall be deemed
to have occurred, on the Intended Commencement Date as set forth in Article 1
or, if later, on the date of actual delivery of the Leased Premises with the
Improvement Work (as hereinafter defined) substantially completed (the "Lease
Commencement Date"). Unless extended pursuant to Article 15, the term of this
Lease shall in all events end on the Lease Expiration Date (as set forth in
Article 1). Unless extended pursuant to Article 15, the Lease Term shall be that
period of time commencing on the Lease Commencement Date and ending on the Lease
Expiration Date (the "Lease Term").

2.4 DELIVERY OF POSSESSION; EARLY ACCESS. Landlord shall deliver to Tenant
possession of the Leased Premises at such time as the Improvement Work (as
defined in Paragraph 2.5 below) is substantially completed. If Landlord is
unable to so deliver possession of the Leased Premises to Tenant in the agreed
condition on or before the Intended Commencement Date, Landlord shall not be in
default under this Lease, nor shall this Lease be void, voidable or cancelable
by Tenant; except that (a) if Landlord is unable to deliver to Tenant possession
of the Leased Premises in the agreed condition on the Intended Commencement Date
(which date shall be extended one day for each day of delay in substantial
completion of the Improvement Work caused by Force Majeure or the actions or
inactions of Tenant), then Tenant shall be entitled to a credit against rent
next becoming due equal to the lesser of (i) one hundred nine thousand seven
hundred thirty-nine and 40/100 dollars ($109,739.40)), or (ii) the amount Tenant
is required to pay, and does pay, its current sublessor due to Tenant's holding
over under its current sublease (and Tenant agrees to use commercially
reasonable efforts to minimize its holdover rent obligation); and (b) if
Landlord is unable to deliver possession of the Leased Premises in the agreed
condition to Tenant within ninety (90) days after the Intended Commencement Date
(which 90-day period shall be extended one day for each day of delay in
substantial completion of the Improvement Work caused by Force Majeure or the
actions or inactions of Tenant), then Tenant's sole remedy shall be to terminate
this Lease, and in no event shall Landlord be liable in damages to Tenant for
such delay. Tenant may not so terminate this Lease at any time after the date
Landlord notifies Tenant that the Leased Premises have been put into the agreed
condition and are available for delivery to Tenant, unless Landlord's notice is
not given in good faith. For purposes of this Section 2.4 and Section 2.5, the
term "Force



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<PAGE>   5

Majeure" shall include any delay due to building permits for the Improvement
Work being issued more than eight (8) business days after an application for
such building permits is submitted to the issuing agency.

        Landlord grants Tenant permission to access the Leased Premises
commencing on June 20, 2001 for the purpose of preparing the Leased Premises for
Tenant's occupancy, provided that Tenant has provided Landlord with satisfactory
proof of insurance in accordance with the requirements Article 9, and provided
further that Tenant shall not interfere with any ongoing performance of the
Improvement Work. During such early access period, until Landlord actually
delivers possession of the Leased Premises to Tenant in the agreed condition,
Tenant shall not be obligated to pay any Base Monthly Rent or Additional Rent
(as hereinafter defined), but Tenant shall be obligated to comply with all other
terms and conditions of this Lease.

2.5 PERFORMANCE OF IMPROVEMENT WORK; ACCEPTANCE OF POSSESSION. Landlord shall
perform the work in the Leased Premises substantially as set forth in the
construction drawings attached hereto as Exhibit C (such work hereinafter
referred to as the "Improvement Work"). The Improvement Work shall (i) include
re-painting the interior walls of the Leased Premises and re-carpeting or tiling
the floors of the Leased Premises with paint and carpet or tile that are
mutually selected by Landlord and Tenant and (ii) be done in compliance with all
applicable city, state and other governmental rules and regulations (including
the Americans with Disabilities Act and Title 24). The following items of the
Improvement Work shall not be required for "substantial completion" to be
attained: (a) installation of Herculite glass doors, and (b) addition of new
5-ton A/C unit in server room. If any dispute arises as to whether the Leased
Premises are substantially completed and ready for Tenant's occupancy, a
certificate furnished by the contractor performing the Improvement Work
reasonably certifying the date of substantial completion shall be conclusive of
that fact and date and binding upon Landlord and Tenant. Without limiting the
foregoing, Landlord agrees to deliver in good working order and condition all
building systems, including the roof and all existing plumbing, lighting,
heating, ventilating and air conditioning, fire sprinklers, electrical (outlets
and panels), doors (loading and personnel) and ceiling tiles within the Leased
Premises and the parking lot. In addition, (a) Landlord agrees to deliver the
Leased Premises with the drop ceiling appearing consistent throughout the Leased
Premises and (b) Landlord represents that as of the Lease Commencement Date, the
roof of the Building is in good condition and repair and contains no leaks. It
is agreed that by occupying the Leased Premises, Tenant formally accepts same
and acknowledges that the Leased Premises are in the condition called for
hereunder, subject to (a) building system problems identified by Tenant within
one hundred twenty (120) days of such occupancy as provided in the first
sentence of Paragraph 5.1(b) and (b) other normal punchlist items specified by
Tenant to Landlord in writing within ten (10) days of such occupancy.

2.6 SURRENDER OF POSSESSION. Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's signs from
the exterior of the Building and shall remove all of Tenant's equipment, trade
fixtures, furniture, supplies, wall decorations and other personal property from
within the Leased Premises, the Building and the Outside Areas, and shall vacate
and surrender the Leased Premises, the Building, the Outside Areas and the
Property to Landlord in the same condition, broom clean, as existed at the Lease
Commencement Date, reasonable wear and tear excepted. Tenant shall repair all
damage to the Leased Premises, the exterior of the Building and the Outside
Areas caused by Tenant's removal of Tenant's property. Tenant shall patch and
refinish, to Landlord's reasonable satisfaction, all penetrations made by Tenant
or its employees to the floor, walls or ceiling of the Leased Premises, whether
such penetrations were made with Landlord's approval or not. Tenant shall repair
or replace all stained or damaged ceiling tiles, wall coverings and floor
coverings to the reasonable satisfaction of Landlord. Tenant shall repair all
damage caused by Tenant to the exterior surface of the Building and the paved
surfaces of the Outside Areas and, where necessary, replace or resurface same.
Additionally, to the extent that Landlord shall have notified Tenant in writing
at the time the improvements were completed that it desired to have certain
improvements removed at the expiration or sooner termination of the Lease,
Tenant shall, upon the expiration or sooner termination of the Lease, remove any
such improvements constructed or installed by Landlord or Tenant and repair all
damage caused by such removal. If the Leased Premises, the Building, the Outside
Areas and the Property are not surrendered to Landlord in the condition required
by this paragraph at the expiration or sooner termination of this Lease,
Landlord may, at Tenant's expense, so remove Tenant's signs, property and/or
improvements not so removed and make such repairs and replacements not so made
or hire, at Tenant's expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises, the Building and the Outside Areas to the
required condition, together with interest on all costs so incurred from the
date paid by Landlord at the then maximum rate of interest not prohibited or
made usurious by law until paid. In addition to Tenant's obligations set forth
in Paragraph 13.2, Tenant shall pay to



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Landlord the amount of all costs so incurred plus such interest thereon, within
twenty (20) days of Landlord's billing Tenant for same. Tenant shall indemnify
Landlord against loss or liability resulting from delay by Tenant in
surrendering the Leased Premises, including, without limitation, any claims made
by any succeeding Tenant or any losses to Landlord with respect to lost
opportunities to lease to succeeding tenants.

                                    ARTICLE 3

                    RENT, LATE CHARGES AND SECURITY DEPOSITS

3.1 BASE MONTHLY RENT. Commencing on the Lease Commencement Date (as determined
pursuant to Article 2 above) and continuing throughout the Lease Term, Tenant
shall pay to Landlord, without prior demand therefor, in advance on the first
day of each calendar month, the amount set forth as "Base Monthly Rent" in
Article 1 (the "Base Monthly Rent").

3.2 ADDITIONAL RENT. Commencing on the Lease Commencement Date (as determined
pursuant Article 2 above) and continuing throughout the Lease Term, in addition
to the Base Monthly Rent and to the extent not required by Landlord to be
contracted for and paid directly by Tenant, Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:

        (a) An amount equal to all Property Operating Expenses (as defined in
Paragraph 13.12) incurred by Landlord. Payment shall be made by whichever of the
following methods (or combination of methods) is (are) from time to time
designated by Landlord:

                (i) Landlord may forward invoices or bills for such expenses to
Tenant, and Tenant shall, no later than ten (10) days prior to the due date, pay
such invoices or bills and deliver satisfactory evidence of such payment to
Landlord, and/or

                (ii) Landlord may bill to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of expenses) as
paid or incurred by Landlord, and Tenant shall pay to Landlord the amount of
such expenses within ten days after receipt of a written bill therefor from
Landlord, and/or

                (iii) Landlord may deliver to Tenant Landlord's reasonable
estimate of any given expense (such as Landlord's Insurance Costs or Real
Property Taxes), or group of expenses, which it anticipates will be paid or
incurred for the ensuing calendar or fiscal year, as Landlord may determine, and
Tenant shall pay to Landlord an amount equal to the estimated amount of such
expenses for such year in equal monthly installments during such year with the
installments of Base Monthly Rent.

Landlord reserves the right to change from time to time the methods of billing
Tenant for any given expense or group of expenses or the periodic basis on which
such expenses are billed.

        (b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.

        (c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and

        (d) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.

Notwithstanding the foregoing, Landlord may elect by written notice to Tenant to
have Tenant pay Real Property Taxes or any portion thereof directly to the
applicable taxing authority, in which case Tenant shall make such payments and
deliver satisfactory evidence of payment to Landlord no later than ten (10) days
before such Real Property Taxes become delinquent.

3.3 YEAR-END ADJUSTMENTS; AUDITS. If Landlord shall have elected to bill Tenant
for the Property Operating Expenses (or any group of such expenses) on an
estimated basis in accordance with the provisions of Paragraph



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3.2(a)(iii) above, Landlord shall furnish to Tenant within three months
following the end of the applicable calendar or fiscal year, as the case may be,
a statement setting forth (i) the amount of such expenses paid or incurred
during the just ended calendar or fiscal year, as appropriate, and (ii) the
amount that Tenant has paid to Landlord for credit against such expenses for
such period. If Tenant shall have paid more than its obligation for such
expenses for the stated period, Landlord shall, at its election, either (i)
credit the amount of such overpayment toward the next ensuing payment or
payments of Additional Rent that would otherwise be due or (ii) refund in cash
to Tenant the amount of such overpayment. If such year-end statement shall show
that Tenant did not pay its obligation for such expenses in full, then Tenant
shall pay to Landlord the amount of such underpayment within ten (10) days from
Landlord's billing of same to Tenant. The provisions of this Paragraph shall
survive the expiration or sooner termination of this Lease. In the event Tenant
objects in writing to any such year-end statement or other billing for
Additional Rent within sixty (60) days after receipt of such statement or
billing, then Tenant shall have the right, during the six (6) month period
following delivery of such statement or billing, at Tenant's sole cost, to
review in Landlord's offices Landlord's records relevant to such statement or
billing. Such review shall be carried out only by a "Big Five" accounting firm
(i.e., PricewaterhouseCoopers, KMPG Peat Marwick, Ernst & Young, Deloitte &
Touche and Arthur Andersen or their successors), or another person or entity
approved in advance by Landlord, and not by any other person, and shall be
subject to Landlord's reasonable audit procedures. No person conducting such an
audit shall be compensated on a "contingency" or other incentive basis. If, as
of the date sixty (60) days after Tenant's receipt of such year-end statement or
billing, Tenant shall not have objected thereto in writing, or if, during the
six (6) month period following delivery of such statement or billing, Tenant
shall not have carried out a review of Landlord's records, then such year-end
statement or billing, as the case may be, shall be final and binding upon
Landlord and Tenant, and Tenant shall have no further right to object to such
statement or billing. If Tenant timely delivers a written objection to a
year-end statement or billing and, within such six (6) month period, Tenant
conducts an audit and delivers to Landlord a written statement specifying
objections to such annual statement, then Tenant and Landlord shall meet to
attempt to resolve such objection within ten (10) days after delivery of the
objection statement. If such objection is not resolved within such ten (10) day
period, then either party shall have the right, at any time within sixty (60)
days after the expiration of such ten (10) day period, to require that the
dispute be submitted to binding arbitration under the rules of the American
Arbitration Association. If neither Landlord nor Tenant commences an arbitration
proceeding within such sixty (60) day period, then the year-end statement or
other billing in question shall be final and binding on Landlord and Tenant.
Notwithstanding that any such dispute remains unresolved, Tenant shall be
obligated to pay Landlord all amounts payable in accordance with this Paragraph
3 (including any disputed amount). The audit and arbitration procedures set
forth in this Paragraph 3.3 shall be Tenant's exclusive remedy with respect to
the calculation of the amount of Tenant's obligations under Paragraph 3.2.
Notwithstanding the foregoing, if Tenant follows the audit and arbitration
procedures of this Paragraph 3.3 and such procedures result in a determination
that Landlord billed Tenant and Tenant paid Landlord more than one hundred three
percent (103%) of Tenant's total obligations for Property Operating Expenses for
such year, Landlord shall give Tenant a credit in the amount of the reasonable
audit costs incurred by Tenant.

3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges that the
late payment by Tenant of any monthly installment of Base Monthly Rent or any
Additional Rent will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent is not received by
Landlord from Tenant within ten (10) calendar days after the same becomes due,
Tenant shall immediately pay to Landlord a late charge in an amount equal to the
amount set forth in Article 1 as the "Late Charge Amount," and if any Additional
Rent is not received by Landlord within ten (10) calendar days after same
becomes due, Tenant shall immediately pay to Landlord a late charge in an amount
equal to 5% of the Additional Rent not so paid. Landlord and Tenant agree that
this late charge represents a reasonable estimate of such costs and expenses and
is fair compensation to Landlord for the anticipated loss Landlord would suffer
by reason of Tenant's failure to make timely payment. In no event shall this
provision for a late charge be deemed to grant to Tenant a grace period or
extension of time within which to pay any rental installment or prevent Landlord
from exercising any right or remedy available to Landlord upon Tenant's failure
to pay each rental installment due under this Lease when due, including the
right to terminate this Lease. If any rent remains delinquent for a period in
excess of ten (10) calendar days, then, in addition to such late charge, Tenant
shall pay to Landlord interest on any rent that is not so paid from the date due
until paid at the then maximum rate of interest not prohibited or made usurious
by Law.



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3.5 PAYMENT OF RENT. Except as specifically provided otherwise in this Lease,
all rent shall be paid in lawful money of the United States, without any
abatement, reduction or offset for any reason whatsoever, to Landlord at such
address as Landlord may designate from time to time. Tenant's obligation to pay
Base Monthly Rent and all Additional Rent shall be appropriately prorated at the
commencement and expiration of the Lease Term. The failure by Tenant to pay any
Additional Rent as required pursuant to this Lease when due shall be treated the
same as a failure by Tenant to pay Base Monthly, and Landlord shall have the
same rights and remedies against Tenant as Landlord would have had Tenant failed
to pay the Base Monthly Rent when due.

3.6 PREPAID RENT AND REIMBURSEMENT. Tenant shall, upon execution of this Lease,
pay to Landlord: (a) the amount set forth in Article 1 as "First Month's Prepaid
Rent" as prepayment of rent for credit against the first payment of Base Monthly
Rent due hereunder; and (b) ten thousand dollars ($10,000), representing
Tenant's commitment to advance $30,000 to accelerate construction, minus $20,000
Landlord has agreed to reimburse Tenant for design costs incurred.

3.7 SECURITY DEPOSIT. Upon Tenant's execution of this Lease, Tenant shall
deposit with Landlord the amount set forth in Article 1 as the "Security
Deposit" as security for the performance by Tenant of the terms of this Lease to
be performed by Tenant, and not as prepayment of rent. Landlord may apply such
portion or portions of the Security Deposit as are reasonably necessary for the
following purposes: (i) to remedy any default by Tenant in the payment of Base
Monthly Rent or Additional Rent or a late charge or interest on defaulted rent,
or any other monetary payment obligation of Tenant under this Lease; (ii) to
repair damage to the Leased Premises, the Building or the Outside Areas caused
or permitted to occur by Tenant; (iii) to clean and restore and repair the
Leased Premises, the Building or the Outside Areas following their surrender to
Landlord if not surrendered in the condition required pursuant to the provisions
of Article 2, and (iv) to remedy any other default of Tenant to the extent
permitted by Law including, without limitation, paying in full on Tenant's
behalf any sums claimed by materialmen or contractors of Tenant to be owing to
them by Tenant for work done or improvements made at Tenant's request to the
Leased Premises. In this regard, Tenant hereby waives any restriction on the
uses to which the Security Deposit may be applied as contained in Section
1950.7(c) of the California Civil Code and/or any successor statute. In the
event the Security Deposit or any portion thereof is so used, Tenant shall pay
to Landlord, promptly upon demand, an amount in cash sufficient to restore the
Security Deposit to the full original sum. If Tenant fails to promptly restore
the Security Deposit and if Tenant shall have paid to Landlord any sums as "Last
Month's Prepaid Rent," Landlord may, in addition to any other remedy Landlord
may have under this Lease, reduce the amount of Tenant's Last Month's Prepaid
Rent by transferring all or portions of such Last Month's Prepaid Rent to
Tenant's Security Deposit until such Security Deposit is restored to the amount
set forth in Article 1. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary business
and shall not be required to segregate it from Landlord's general accounts.
Tenant shall not be entitled to any interest on the Security Deposit. If
Landlord transfers the Building or the Property during the Lease Term, Landlord
may pay the Security Deposit to any subsequent owner in conformity with the
provisions of Section 1950.7 of the California Civil Code and/or any successor
statute, in which event the transferring landlord shall be released from all
liability for the return of the Security Deposit. Tenant specifically grants to
Landlord (and Tenant hereby waives the provisions of California Civil Code
Section 1950.7 to the contrary) a period of ninety (90) days following a
surrender of the Leased Premises by Tenant to Landlord within which to inspect
the Leased Premises, make required restorations and repairs, receive and verify
workmen's billings therefor, and prepare a final accounting with respect to the
Security Deposit. In no event shall the Security Deposit or any portion thereof,
be considered prepaid rent.

                                    ARTICLE 4

                     USE OF LEASED PREMISES AND OUTSIDE AREA

4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Premises solely
for the "Permitted Use" as set forth in Article 1 and for no other purpose
whatsoever. Tenant shall have the right to use the Outside Areas in conjunction
with its Permitted Use of the Leased Premises solely for the purposes for which
they were designed and intended and for no other purposes whatsoever.

4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity



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of the Building or (ii) cause damage to any part of the Leased Premises, the
Building, the Outside Areas or the Property. Tenant shall not operate any
equipment within the Leased Premises which does or could (i) injure, vibrate or
shake the Leased Premises or the Building, (ii) damage, overload or impair the
efficient operation of any electrical, plumbing, heating, ventilating or air
conditioning systems within or servicing the Leased Premises or the Building, or
(iii) damage or impair the efficient operation of the sprinkler system (if any)
within or servicing the Leased Premises or the Building. Tenant shall not
install any equipment or antennas on or make any penetrations of the exterior
walls or roof of the Building, except that, with Landlord's approval of plans
for the installation and operation of an antenna, Tenant may install an antenna
for its own use on the roof of the Building, subject to Section 6.1 below.
Tenant shall not affix any equipment to or make any penetrations or cuts in the
floor, ceiling, walls or roof of the Leased Premises. Tenant shall not place any
loads upon the floors, walls, ceiling or roof systems which could endanger the
structural integrity of the Building or damage its floors, foundations or
supporting structural components. Tenant shall not place any explosive,
flammable or harmful fluids or other waste materials in the drainage systems of
the Leased Premises, the Building, the Outside Areas or the Property. Tenant
shall not drain or discharge any fluids in the landscaped areas or across the
paved areas of the Property. Tenant shall not use any of the Outside Areas for
the storage of its materials, supplies, inventory or equipment and all such
materials, supplies, inventory or equipment shall at all times be stored within
the Leased Premises. Tenant shall not commit nor permit to be committed any
waste in or about the Leased Premises, the Building, the Outside Areas or the
Property. Tenant shall not use, or permit the use of, the Leased Premises for
any pornographic or obscene purposes, any commercial sex establishment, any
pornographic, obscene, nude or semi-nude performances, modeling, materials,
activities or sexual conduct.

4.3 NOISE AND EMISSIONS. All noise generated by Tenant in its use of the Leased
Premises shall be confined or muffled so that it does not interfere with the
businesses of or annoy the occupants and/or users of adjacent properties. All
dust, fumes, odors and other emissions generated by Tenant's use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental
practice and exhausted from the Leased Premises in such a manner so as not to
interfere with the businesses of or annoy the occupants and/or users of adjacent
properties, or cause any damage to the Leased Premises, the Building, the
Outside Areas or the Property or any component part thereof or the property of
adjacent property owners.

4.4 TRASH DISPOSAL. Tenant shall provide trash bins or other adequate garbage
disposal facilities within the trash enclosure areas provided or permitted by
Landlord outside the Leased Premises sufficient for the interim disposal of all
of its trash, garbage and waste. All such trash, garbage and waste temporarily
stored in such areas shall be stored in such a manner so that it is not visible
from outside of such areas, and Tenant shall cause such trash, garbage and waste
to be regularly removed from the Property in a clean, safe and neat condition
free and clear of all trash, garbage, waste and/or boxes, pallets and containers
containing same at all times.

4.5 PARKING. Tenant shall have the nonexclusive right to park on the legal
parcel on which the Building is located as shown on the site plan attached as
Exhibit A hereto and in no other location on the Property. Tenant shall not, at
any time, park or permit to be parked any recreational vehicles, inoperative
vehicles or equipment in the Outside Areas or on any portion of the Property.
Tenant agrees to assume responsibility for compliance by its employees and
invitees with the parking provisions contained herein. If Tenant or its
employees park any vehicle within the Property in violation of these provisions,
then Landlord may, upon prior written notice to Tenant giving Tenant one (1) day
(or any applicable statutory notice period, if longer than one (1) day) to
remove such vehicle(s), in addition to any other remedies Landlord may have
under this Lease, charge Tenant, as Additional Rent, and Tenant agrees to pay,
as Additional Rent, One Hundred Dollars ($100) per day for each day or partial
day that each such vehicle is so parked within the Property. Tenant shall have
the right to designate visitor parking at the entrance of the Building.

4.6 SIGNS. Tenant shall have the right, subject to approval by the City of
Sunnyvale, at Tenant's sole cost and expense, to install one (1) sign on the
exterior of the Building. Otherwise, (a) Tenant shall not place or install on or
within any portion of the Leased Premises, the exterior of the Building, the
Outside Areas or the Property any sign, advertisement, banner, placard, or
picture which is visible from the exterior of the Leased Premises, and (b)
Tenant shall not place or install on or within any portion of the Leased
Premises, the exterior of the Building, the Outside Areas or the Property any
business identification sign which is visible from the exterior of the Leased
Premises until Landlord shall have approved in writing and in its sole
discretion the location, size, content, design, method of attachment and
material to be used in the making of such sign; provided, however, that so long
as such signs are normal and customary business directional or identification
signs within the Building, Tenant shall not be required



                                     - 8 -
<PAGE>   10

to obtain Landlord's approval. Any sign, once approved by Landlord, shall be
installed at Tenant's sole cost and expense and only in strict compliance with
Landlord's approval, using a person approved by Landlord to install same.
Landlord may remove any signs (which have not been approved in writing by
Landlord), advertisements, banners, placards or pictures so placed by Tenant on
or within the Leased Premises, the exterior of the Building, the Outside Areas
or the Property and charge to Tenant the cost of such removal, together with any
costs incurred by Landlord to repair any damage caused thereby, including any
cost incurred to restore the surface (upon which such sign was so affixed) to
its original condition. Tenant shall remove all of Tenant's signs, repair any
damage caused thereby, and restore the surface upon which the sign was affixed
to its original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.

4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS. Tenant shall abide by and
shall promptly observe and comply with, at its sole cost and expense, all Laws
and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Building, the Outside Areas or the Property including, without
limitation, all Laws governing the use and/or disposal of hazardous materials,
and shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant's failure to so
abide, observe, or comply. Tenant's obligations hereunder shall survive the
expiration or sooner termination of this Lease. Notwithstanding the foregoing,
Tenant shall not be responsible for any non-compliance of Laws existing at the
Leased Premises on the Lease Commencement Date, except to the extent that such
non-compliance results from the action or inaction of Tenant.

4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with the
provision of this Lease, copies of which have been or will, upon Tenant's
written request therefor, be provided to Tenant, Tenant shall not conduct nor
permit any other person to conduct any activities nor keep, store or use (or
allow any other person to keep, store or use) any item or thing within the
Leased Premises, the Building, the Outside Areas or the Property which (i) is
prohibited under the terms of any such policies, (ii) could result in the
termination of the coverage afforded under any of such policies, (iii) could
give to the insurance carrier the right to cancel any of such policies, or (iv)
could cause an increase in the rates (over standard rates) charged for the
coverage afforded under any of such policies. Tenant shall comply with all
requirements of any insurance company, insurance underwriter, or Board of Fire
Underwriters which are necessary to maintain, at standard rates, the insurance
coverages carried by either Landlord or Tenant pursuant to this Lease.

4.9 LANDLORD'S RIGHT TO ENTER. Landlord and its agents shall have the right to
enter the Leased Premises during normal business hours after giving Tenant
reasonable notice and subject to Tenant's reasonable security measures for the
purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or, within the last six (6) months of the
Lease Term, tenants; (iii) making necessary alterations, additions or repairs;
and (iv) performing any of Tenant's obligations when Tenant has failed to do so.
Landlord shall have the right to enter the Leased Premises during normal
business hours (or as otherwise agreed), subject to Tenant's reasonable security
measures, for purposes of supplying any maintenance or services agreed to be
supplied by Landlord. Landlord shall have the right to enter the Outside Areas
during normal business hours for purposes of (i) inspecting the exterior of the
Building and the Outside Areas; (ii) posting notices of nonresponsibility (and
for such purposes Tenant shall provide Landlord at least thirty days' prior
written notice of any work to be performed on the Leased Premises); and (iii)
supplying any services to be provided by Landlord. Any entry into the Leased
Premises or the Outside Areas obtained by Landlord in accordance with this
paragraph shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Leased Premises, or an
eviction, actual or constructive of Tenant from the Leased Premises or any
portion thereof.

4.10 USE OF OUTSIDE AREAS. Tenant, in its use of the Outside Areas, shall at all
times keep the Outside Areas in a safe condition free and clear of all
materials, equipment, debris, trash (except within existing enclosed trash
areas), inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas by
reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
extent then allowed by Law, such unauthorized use, and shall initiate such
appropriate proceedings as may be required to so restrain such use.

4.11 ENVIRONMENTAL PROTECTION. Tenant's obligations under this Section 4.11
shall survive the expiration or termination of this Lease.



                                     - 9 -
<PAGE>   11

        (a) As used herein, the term "Hazardous Materials" shall mean any toxic
or hazardous substance, material or waste or any pollutant or infectious or
radioactive material, including but not limited to those substances, materials
or wastes regulated now or in the future under any of the following statutes or
regulations and any and all of those substances included within the definitions
of "hazardous substances," "hazardous materials," "hazardous waste," "hazardous
chemical substance or mixture," "imminently hazardous chemical substance or
mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant," or
"solid waste" in the (a) Comprehensive Environmental Response, Compensation and
Liability Act of 1990 ("CERCLA" or "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. Section 9601 et
seq., (b) Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.
Section 6901 et seq., (c) Federal Water Pollution Control Act ("FSPCA"), 33
U.S.C. Section 1251 et seq., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401
et seq., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 et
seq., (f) Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act ("California
Superfund"), Cal. Health & Safety Code Section 25300 et seq., (h) California
Hazardous Waste Control Act, Cal. Health & Safety code Section 25100 et seq.,
(i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal. Water
Code Section 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal.
Health & Safety codes Section 25220 et seq., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code Section
25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety code Section 25280 et seq., (m) Air Resources Law, Cal. Health &
Safety Code Section 39000 et seq., and (n) regulations promulgated pursuant to
said laws or any replacement thereof, or as similar terms are defined in the
federal, state and local laws, statutes, regulations, orders or rules. Hazardous
Materials shall also mean any and all other biohazardous wastes and substances,
materials and wastes which are, or in the future become, regulated under
applicable Laws for the protection of health or the environment, or which are
classified as hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials
and wastes that are harmful to or may threaten human health, ecology or the
environment.

        (b) Notwithstanding anything to the contrary in this Lease, Tenant, at
its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; provided, however, that Tenant shall not be
responsible for contamination of the Leased Premises by Hazardous Materials
existing as of the date the Leased Premises are delivered to Tenant (whether
before or after the Scheduled Delivery Date) unless caused by Tenant. Tenant
shall not store, use or dispose of any Hazardous Materials except for those
Hazardous Materials listed in a Hazardous Materials management plan ("HMMP")
which Tenant shall deliver to Landlord upon execution of this Lease and update
at least annually with Landlord ("Permitted Materials") which may be used,
stored and disposed of provided (i) such Permitted Materials are used, stored,
transported, and disposed of in strict compliance with applicable laws, (ii)
such Permitted Materials shall be limited to the materials listed on and may be
used only in the quantities specified in the HMMP, and (iii) Tenant shall
provide Landlord with copies of all material safety data sheets and other
documentation required under applicable Laws in connection with Tenant's use of
Permitted Materials as and when such documentation is provided to any regulatory
authority having jurisdiction, in no event shall Tenant cause or permit to be
discharged into the plumbing or sewage system of the Building or onto the land
underlying or adjacent to the Building any Hazardous Materials. Tenant shall be
solely responsible for and shall defend, indemnify, and hold Landlord and its
agents harmless from and against all claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection with Tenant's
storage, use and/or disposal of Hazardous Materials. If the presence of
Hazardous Materials on the Leased Premises caused or permitted by Tenant results
in contamination or deterioration of water or soil, then Tenant shall promptly
take any and all action necessary to clean up such contamination, but the
foregoing shall in no event be deemed to constitute permission by Landlord to
allow the presence of such Hazardous Materials. At any time prior to the
expiration of the Lease Term if Tenant has a reasonable basis to suspect that
there has been any release or the presence of Hazardous Materials in the ground
or ground water on the Premises which did not exist upon commencement of the
Lease Term, Tenant shall have the right to conduct appropriate tests of water
and soil and to deliver to Landlord the results of such tests to demonstrate
that no contamination in excess of permitted levels has occurred as a result of
Tenant's use of the Leased Premises. Tenant shall further be solely responsible
for, and shall defend, indemnify, and hold Landlord and its agents harmless from
and against all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with any removal, cleanup and restoration
work and materials required hereunder to return the Leased Premises and any
other property of whatever nature to their condition existing prior to the
appearance of the



                                     - 10 -
<PAGE>   12

Hazardous Materials, but only with respect to such Hazardous Materials not
existing as of the date the Leased Premises are delivered to Tenant unless
caused or permitted by the action or inaction of Tenant.

        (c) Upon termination or expiration of the Lease, Tenant at its sole
expense shall cause all Hazardous Materials placed in or about the Leased
Premises, the Building and/or the Property by Tenant, its agents, contractors,
or invitees, and all installations (whether interior or exterior) made by or on
behalf of Tenant relating to the storage, use, disposal or transportation of
Hazardous Materials to be removed from the property and transported for use,
storage or disposal in accordance and compliance with all Laws and other
requirements respecting Hazardous Materials used or permitted to be used by
Tenant. Tenant shall apply for and shall obtain from all appropriate regulatory
authorities (including any applicable fire department or regional water quality
control board) all permits, approvals and clearances necessary for the closure
of the Property and shall take all other actions as may be required to complete
the closure of the Building and the Property. In addition, prior to vacating the
Premises, Tenant shall undertake and submit to Landlord an environmental site
assessment from an environmental consulting company reasonably acceptable to
Landlord which site assessment shall evidence Tenant's compliance with this
Paragraph 4.11.

        (d) At any time prior to expiration of the Lease term, subject to
reasonable prior notice (not less than forty-eight (48) hours) and Tenant's
reasonable security requirements and provided such activities do not
unreasonably interfere with the conduct of Tenant's business at the Leased
Premises, Landlord shall have the right to enter in and upon the Property,
Building and Leased Premises in order to conduct appropriate tests of water and
soil to determine whether levels of any Hazardous Materials in excess of legally
permissible levels has occurred as a result of Tenant's use thereof. Landlord
shall furnish copies of all such test results and reports to Tenant and, at
Tenant's option and cost, shall permit split sampling for testing and analysis
by Tenant. Such testing shall be at Tenant's expense if Landlord has a
reasonable basis for suspecting and confirms the presence of Hazardous Materials
in the soil or surface or ground water in, on, under, or about the Property, the
Building or the Leased Premises, which has been caused by or resulted from the
activities of Tenant, its agents, contractors, or invitees.

        (e) Landlord may voluntarily cooperate in a reasonable manner with the
efforts of all governmental agencies in reducing actual or potential
environmental damage. Tenant shall not be entitled to terminate this Lease or to
any reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with the requirements
and recommendations of governmental agencies regulating, or otherwise involved
in, the protection of the environment.

4.12 RULES AND REGULATIONS. In the event Trident Microsystems, Inc. is no longer
the sole tenant of the Leased Premises, Landlord shall have the right from time
to time to establish reasonable rules and regulations and/or amendments or
additions thereto respecting the use of the Leased Premises and the Outside
Areas for the care and orderly management of the Property. Upon delivery to
Tenant of a copy of such rules and regulations or any amendments or additions
thereto, Tenant shall comply with such rules and regulations. A violation by
Tenant of any of such rules and regulations shall constitute a default by Tenant
under this Lease. If there is a conflict between the rules and regulations and
any of the provisions of this Lease, the provisions of this Lease shall prevail.
Landlord shall not be responsible or liable to Tenant for the violation of such
rules and regulations by any other tenant of the Property.

                                    ARTICLE 5

                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or destruction of
the Leased Premises, the Building, the Outside Areas or the Property caused by
an act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities
with respect to the repair and maintenance of the Leased Premises, the Building,
the Outside Areas, and the Property.

        (a) TENANT'S OBLIGATIONS. Except as expressly provided in Section 5.1(b)
below, Tenant shall, at all times during the Lease Term and at its sole cost and
expense, regularly clean and continuously keep and maintain in the same
condition as received (reasonable wear and tear excepted) the Leased Premises
and every part thereof



                                     - 11 -
<PAGE>   13

including, without limiting the generality of the foregoing, (i) all interior
walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all
electrical wiring, conduits, connectors and fixtures, (iv) all plumbing, pipes,
sinks, toilets, faucets and drains, (v) all lighting fixtures, bulbs and lamps
and all heating, ventilating and air conditioning equipment, and (vi) all
entranceways to the Leased Premises. Tenant, if requested to do so by Landlord,
shall hire, at Tenant's sole cost and expense, a licensed heating, ventilating
and air conditioning contractor to regularly and periodically (not less
frequently than every three months) inspect and perform required maintenance on
the heating, ventilating and air conditioning equipment and systems serving the
Leased Premises, or alternatively, Landlord may, at its election, contract in
its own name for such regular and periodic inspections of and maintenance on
such heating, ventilating and air conditioning equipment and systems and charge
to Tenant, as Additional Rent, the cost thereof. Tenant, if requested to do so
by Landlord, shall hire, at Tenant's sole cost and expense, a licensed roofing
contractor to regularly and periodically (not less frequently than every three
months) inspect and perform required maintenance on the roof of the Leased
Premises, or alternatively, Landlord may, at its election, contract in its own
name for such regular and periodic inspections of and maintenance on the roof
and charge to Tenant, as Additional Rent, the cost thereof. Tenant shall, at all
times during the Lease Term, keep in a clean and safe condition the Outside
Areas. Tenant shall regularly and periodically sweep and clean the driveways and
parking areas. Tenant shall, at its sole cost and expense, repair all damage to
the Leased Premises, the Building, the Outside Areas or the Property caused by
the activities of Tenant, its employees, invitees or contractors promptly
following written notice from Landlord to so repair such damages. If Tenant
shall fail to perform the required maintenance or fail to make repairs required
of it pursuant to this paragraph within a reasonable period of time following
notice from Landlord to do so, then Landlord may, at its election and without
waiving any other remedy it may otherwise have under this Lease or at law,
perform such maintenance or make such repairs and charge to Tenant, as
Additional Rent, the costs so incurred by Landlord for same. All glass within or
a part of the Leased Premises, both interior and exterior, is at the sole risk
of Tenant and any broken glass shall promptly be replaced by Tenant at Tenant's
expense with glass of the same kind, size and quality.

        (b) LANDLORD'S OBLIGATION. During the first one hundred twenty (120)
days of the Lease Term, if Tenant provides Landlord with written notice of a
problem with any of the existing building systems (except any such system that
has been installed by Tenant), including the roof and all existing plumbing,
lighting, heating, ventilating and air conditioning, fire sprinklers, electrical
(outlets and panels), doors (loading and personnel) and ceiling tiles within the
Leased Premises, Landlord shall, at its sole cost and expense, make any
necessary repairs or replacements to correct such problem (except to the extent
such problem has been caused by the action or inaction of Tenant). Landlord
shall, at all times during the Lease Term and at its sole cost and expense,
maintain in good condition and repair the foundation, structural exterior walls
and structural roof elements of the Building.

5.2 UTILITIES. Tenant shall arrange at its sole cost and expense and in its own
name, for the supply of gas and electricity to the Leased Premises. In the event
that such services are not separately metered, Tenant shall, at its sole
expense, cause such meters to be installed. Landlord shall maintain the water
meter(s) in its own name; provided, however, that if at any time during the
Lease Term Landlord shall require Tenant to put the water service in Tenant's
name, Tenant shall do so at Tenant's sole cost. Tenant shall be responsible for
determining if the local supplier of water, gas and electricity can supply the
needs of Tenant and whether or not the existing water, gas and electrical
distribution systems within the Building and the Leased Premises are adequate
for Tenant's needs. Tenant shall be responsible for determining if the existing
sanitary and storm sewer systems now servicing the Leased Premises and the
Property are adequate for Tenant's needs. Tenant shall pay all charges for
water, gas, electricity and storm and sanitary sewer services as so supplied to
the Leased Premises, irrespective of whether or not the services are maintained
in Landlord's or Tenant's name.

5.3 SECURITY. Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Building, the
Outside Areas or the Property and, accordingly, Landlord is not responsible for
the security of same or the protection of Tenant's property or Tenant's
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.

5.4 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate in a
reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property.
Tenant shall not be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation. Tenant agrees at
all times to cooperate fully with Landlord and to abide



                                     - 12 -
<PAGE>   14

by all reasonable rules established by Landlord (i) in order to maximize the
efficient operation of the electrical, heating, ventilating and air conditioning
systems and all other energy or other resource consumption systems with the
Property and/or (ii) in order to comply with the requirements and
recommendations of utility suppliers and governmental agencies regulating the
consumption of energy and/or other resources.

5.5 LIMITATION OF LANDLORD'S LIABILITY. Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant's property or loss of Tenant's business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord's failure to provide security services or systems within
the Property for the protection of the Leased Premises, the Building or the
Outside Areas, or the protection of Tenant's property or Tenant's employees,
invitees, agents or contractors, or (ii) Landlord's failure to perform any
maintenance or repairs to the Leased Premises, the Building, the Outside Areas
or the Property until Tenant shall have first notified Landlord, in writing, of
the need for such maintenance or repairs, and then only after Landlord shall
have had a reasonable period of time following its receipt of such notice within
which to perform such maintenance or repairs, or (iii) any failure,
interruption, rationing or other curtailment in the supply of water, electric
current, gas or other utility service to the Leased Premises, the Building, the
Outside Areas or the Property from whatever cause (other than Landlord's sole
active negligence or willful misconduct), or (iv) the unauthorized intrusion or
entry into the Leased Premises by third parties (other than Landlord).
Notwithstanding the foregoing, if any such services are interrupted as a result
of Landlord's sole active negligence, gross negligence or willful misconduct and
such interruption caused Tenant to cease substantially all of its business
operations for period of more than five (5) consecutive business days, then rent
shall abate during the entire period of such interruption.

                                    ARTICLE 6

                          ALTERATIONS AND IMPROVEMENTS

6.1 BY TENANT. Tenant shall not make any alterations to or modifications of the
Leased Premises or construct any improvements within the Leased Premises until
Landlord shall have first approved, in writing, the plans and specifications
therefor, which approval shall not be unreasonably withheld. Landlord shall
respond to Tenant's written request to make any such alterations or
modifications within ten (10) calendar days after receipt of such request.
Without limiting the generality of the foregoing, Tenant acknowledges that it
shall be reasonable for Landlord to withhold its consent to any modification,
alteration or improvement if, in Landlord's reasonable judgment, such
modification, alteration or improvement would adversely affect the structure of
the Building, any of the Building's systems, the appearance of the Building or
the value or utility of the Building or the Property. All such modifications,
alterations or improvements, once so approved, shall be made, constructed or
installed by Tenant at Tenant's expense (including all permit fees and
governmental charges related thereto), using a licensed contractor first
approved by Landlord, in substantial compliance with the Landlord-approved plans
and specifications therefor. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality. Tenant shall not commence the making of any such
modifications or alterations or the construction of any such improvements until
(i) all required governmental approvals and permits shall have been obtained,
(ii) all requirements regarding insurance imposed by this Lease have been
satisfied, (iii) Tenant shall have given Landlord at least five (5) business
days prior written notice of its intention to commence such work so that
Landlord may post and file notices of non-responsibility, and (iv) if requested
by Landlord, Tenant shall have obtained contingent liability and broad form
builder's risk insurance in an amount satisfactory to Landlord in its reasonable
discretion to cover any perils relating to the proposed work not covered by
insurance carried by Tenant pursuant to Article 9. In no event shall Tenant make
any modification, alterations or improvements whatsoever to the Outside Areas or
the exterior or structural components of the Building including, without
limitation, any cuts or penetrations in the floor, roof or exterior walls of the
Leased Premises. As used in this Article, the term "modifications, alterations
and/or improvements" shall include, without limitation, the installation of
additional electrical outlets, overhead lighting fixtures, drains, sinks,
partitions, doorways, or the like. Notwithstanding the foregoing, Tenant,
without Landlord's prior written consent (but subject to the other terms and
conditions of this Article 6), shall be permitted to make alterations to the
Leased Premises which do not affect the structure of the Building or the Leased
Premises, do not affect the plumbing, electrical, mechanical or other systems of
the Building and do not affect the appearance of the Leased Premises viewed from
the exterior, provided that: (a) such alterations do not exceed $25,000
individually or $100,000 in the aggregate,



                                     - 13 -
<PAGE>   15

(b) Tenant shall timely provide Landlord the notice required pursuant to
Paragraph 4.9 above, (c) Tenant shall notify Landlord in writing within thirty
(30) days of completion of the alteration and deliver to Landlord a set of the
plans and specifications therefor, either "as built" or marked to show
construction changes made, and (d) Tenant shall, upon Landlord's request, remove
the alteration at the termination of the Lease and restore the Leased Premises
to their condition prior to such alteration.

6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and improvements
made or added to the Leased Premises by Tenant (other than Tenant's inventory,
equipment, movable furniture, wall decorations and trade fixtures) shall be
deemed real property and a part of the Leased Premises, but shall remain the
property of Tenant during the Lease. Any such modifications, alterations or
improvements, once completed, shall not be altered or removed from the Leased
Premises during the Lease Term without Landlord's written approval first
obtained in accordance with the provisions of Paragraph 6.1 above. At the
expiration or sooner termination of this Lease, all such modifications,
alterations and improvements other than Tenant's inventory, equipment, movable
furniture, wall decorations and trade fixtures, shall automatically become the
property of Landlord and shall be surrendered to Landlord as part of the Leased
Premises as required pursuant to Article 2, unless Landlord shall require Tenant
to remove any of such modifications, alterations or improvements in accordance
with the provisions of Article 2, in which case Tenant shall so remove same.
Landlord shall have no obligations to reimburse Tenant for all or any portion of
the cost or value of any such modifications, alterations or improvements so
surrendered to Landlord. All modifications, alterations or improvements which
are installed or constructed on or attached to the Leased Premises by Landlord
and/or at Landlord's expense shall be deemed real property and a part of the
Leased Premises and shall be property of Landlord. All lighting, plumbing,
electrical, heating, ventilating and air conditioning fixtures, partitioning,
window coverings, wall coverings and floor coverings installed by Tenant shall
be deemed improvements to the Leased Premises and not trade fixtures of Tenant.

6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that are
required by any Law because of (i) Tenant's use or occupancy of the Leased
Premises, the Building, the Outside Areas or the Property, (ii) Tenant's
application for any permit or governmental approval, or (iii) Tenant's making of
any modifications, alterations or improvements to or within the Leased Premises.
Subject to the immediately foregoing sentence, if Landlord shall, at any time
during the Lease Term, be required by any governmental authority to make any
modifications, alterations or improvements to the Building or the Property, and
such modifications, alterations or improvements were not so required prior to
the Lease Commencement Date, the cost incurred by Landlord in making such
modifications, alterations or improvements, including interest at a rate equal
to the greater of (a) 12%, or (b) the sum of that rate quoted by Wells Fargo
Bank, N.T. & S.A. from time to time as its prime rate, plus two percent (2%)
("Wells Prime Plus Two"), shall be amortized by Landlord over the useful life of
such modifications, alterations or improvements, as determined in accordance
with generally accepted accounting principles, and the monthly amortized cost of
such modifications, alterations and improvements as so amortized shall be
considered a Property Maintenance Cost.

6.4 LIENS. Tenant shall keep the Property and every part thereof free from any
lien, and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within ten days after the same has been recorded. Tenant's failure to
do so shall be conclusively deemed a material default under the terms of this
Lease.

                                    ARTICLE 7

                       ASSIGNMENT AND SUBLETTING BY TENANT

7.1 BY TENANT. Tenant shall not sublet the Leased Premises or any portion
thereof or assign its interest in this Lease, whether voluntarily or by
operation of law, without Landlord's prior written consent which shall not be
unreasonably withheld. Any attempted subletting or assignment without Landlord's
prior written consent, at Landlord's election, shall constitute a default by
Tenant under the terms of this Lease. The acceptance of rent by Landlord from
any person or entity other than Tenant, or the acceptance of rent by Landlord
from Tenant with knowledge of a violation of the provisions of this paragraph,
shall not be deemed to be a waiver by Landlord of any



                                     - 14 -
<PAGE>   16

provision of this Article or this Lease or to be a consent to any subletting by
Tenant or any assignment of Tenant's interest in this Lease. Without limiting
the circumstances 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:

        (a) the proposed assignee or sublessee is a governmental agency;

        (b) in Landlord's reasonable judgment, the use of the Leased Premises by
the proposed assignee or sublessee would involve occupancy by other than
primarily general office or software engineering personnel, would entail any
alterations which would substantially lessen the value of the leasehold
improvements in the Premises, or would require increased services by Landlord;

        (c) in Landlord's reasonable judgment, the financial worth of the
proposed assignee is less than that of Tenant or does not meet the reasonable
credit standards applied by Landlord;

        (d) the proposed assignee or sublessee (or any of its affiliates) has
been in material default under a lease, has been in litigation with a previous
landlord, or in the ten years prior to the assignment or sublease has filed for
bankruptcy protection, has been the subject of an involuntary bankruptcy, or has
been adjudged insolvent;

        (e) Landlord has experienced a previous material default by or is in
litigation with the proposed assignee or sublessee;

        (f) the Leased Premises, or the relevant part thereof, will be used in a
manner that will violate any negative covenant as to use contained in this
Lease;

        (g) the use of the Leased Premises by the proposed assignee or sublessee
will violate any applicable law, ordinance or regulation;

        (i) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this Article 7;
or

        (j) Tenant is in default beyond all applicable notice and cure periods
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.

Notwithstanding anything to the contrary contained herein, a transfer, sublease
or assignment to any person or entity controlled by, controlling or under common
control with Tenant shall not require Landlord's consent.

7.2 MERGER, REORGANIZATION, OR SALE OF ASSETS. Any dissolution, merger,
consolidation, recapitalization or other reorganization of Tenant, or the sale
or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant (excluding transfers over a national
securities exchange), or the sale or transfer of all or a substantial portion of
the assets of Tenant, shall be deemed a voluntary assignment of Tenant's
interest in this Lease; provided that, a merger, consolidation,
recapitalization, reorganization or sale of assets shall not require Landlord's
consent hereunder if: (i) Tenant's tangible net worth (determined in accordance
with generally accepted accounting principles) immediately after such
transaction is at least equal to Tenant's tangible net worth immediately prior
to such transaction; (ii) in the event of a merger, if required by Landlord, the
surviving entity assumes all obligations of Tenant under this Lease; and (iii)
in the event of a sale of assets or stock of Tenant, if required by Landlord,
the parent entity assumes in writing all obligations of Tenant under this Lease.
The phrase "controlling percentage" means the ownership of and the right to vote
stock possessing more than fifty percent of the total combined voting power of
all classes of Tenant's capital stock issued, outstanding and entitled to vote
for the election of directors. If Tenant is a partnership, a withdrawal or
change, voluntary, involuntary or by operation of



                                     - 15 -
<PAGE>   17

Law, of any general partner, or the dissolution of the partnership, shall be
deemed a voluntary assignment of Tenant's interest in this Lease.


7.3 LANDLORD'S ELECTION. If Tenant shall desire to assign its interest under the
Lease or to sublet the Leased Premises, Tenant must first notify Landlord, in
writing, of its intent to so assign or sublet, at least thirty (30) days in
advance of the date it intends to so assign its interest in this Lease or sublet
the Leased Premises but not sooner than one hundred eighty days in advance of
such date, specifying in detail the terms of such proposed assignment or
subletting, including the name of the proposed assignee or sublessee, the
proposed assignee's or sublessee's intended use of the Leased Premises, current
financial statements (including a balance sheet, income statement and statement
of cash flow, all prepared in accordance with generally accepted accounting
principles) of such proposed assignee or sublessee, the form of documents to be
used in effectuating such assignment or subletting and such other information as
Landlord may reasonably request. Landlord shall have a period of ten (10)
business days following receipt of such notice and the required information
within which to do one of the following: (i) consent to such requested
assignment or subletting subject to Tenant's compliance with the conditions set
forth in Paragraph 7.4 below, or (ii) refuse to so consent to such requested
assignment or subletting, provided that such consent shall not be unreasonably
refused, or (iii) if more than fifty-one percent (51%) of the Leased Premises is
the subject of the proposed assignment or subletting, to terminate this Lease as
to such portion (including all) of the Leased Premises. During such ten (10)
business day period, Tenant covenants and agrees to supply to Landlord, promptly
upon request, all necessary or relevant information which Landlord may
reasonably request respecting such proposed assignment or subletting and/or the
proposed assignee or sublessee.

7.4 CONDITIONS TO LANDLORD'S CONSENT. If Landlord elects to consent, or shall
have been ordered to so consent by a court of competent jurisdiction, to such
requested assignment or subletting, such consent shall be expressly conditioned
upon the occurrence of each of the conditions below set forth, and any purported
assignment or subletting made or ordered prior to the full and complete
satisfaction of each of the following conditions shall be void and, at the
election of Landlord, which election may be exercised at any time following such
a purported assignment or subletting but prior to the satisfaction of each of
the stated conditions, shall constitute a material default by Tenant under this
Lease until cured by satisfying in full each such condition by the assignee or
sublessee. The conditions are as follows:

        (a) Landlord having approved in form and substance the assignment or
sublease agreement and any ancillary documents, which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.

        (b) Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant which relate to space being subleased or assigned.

        (c) Tenant having fully and completely performed all of its obligations
under the terms of this Lease through and including the date of such assignment
or subletting.

        (d) Tenant having reimbursed to Landlord all reasonable costs and
reasonable attorneys' fees incurred by Landlord in conjunction with the
processing and documentation of any such requested subletting or assignment.

        (e) Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement or assignment agreement (as
applicable) and all related agreements.

        (f) Tenant having paid, or having agreed in writing to pay as to future
payments, to Landlord fifty percent (50%) of all assignment consideration or
excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:

                (i) If Tenant assigns its interest under this Lease and if all
or a portion of the consideration for such assignment is to be paid by the
assignee at the time of the assignment, that Tenant shall have paid to



                                     - 16 -
<PAGE>   18

Landlord and Landlord shall have received an amount equal to fifty percent (50%)
of the assignment consideration so paid or to be paid (whichever is the greater)
at the time of the assignment by the assignee; or

                (ii) If Tenant assigns its interest under this Lease and if
Tenant is to receive all or a portion of the consideration for such assignment
in future installments, that Tenant and Tenant's assignee shall have entered
into a written agreement with and for the benefit of Landlord satisfactory to
Landlord and its counsel whereby Tenant and Tenant's assignee jointly agree to
pay to Landlord an amount equal to fifty percent (50%) of all such future
assignment consideration installments to be paid by such assignee as and when
such assignment consideration is so paid.

                (iii) If Tenant subleases the Leased Premises, that Tenant and
Tenant's sublessee shall have entered into a written agreement with and for the
benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and
Tenant's sublessee jointly agree to pay to Landlord fifty percent (50%) of all
excess rentals to be paid by such sublessee as and when such excess rentals are
so paid.

7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED. For purposes of this
Article, including any amendment to this Article by way of addendum or other
writing, the term "assignment consideration" shall mean all consideration to be
paid by the assignee to Tenant or to any other party on Tenant's behalf or for
Tenant's benefit as consideration for such assignment, with deduction only for
basic marketing expenses incurred specifically and only for market real estate
commissions and reasonable legal fees (not to exceed $1,500 per occurrence)
actually incurred by Tenant in connection with such assignment, and the term
"excess rentals" shall mean all consideration to be paid by the sublessee to
Tenant or to any other party on Tenant's behalf or for Tenant's benefit for the
sublease of the Leased Premises in excess of the rent due to Landlord under the
terms of this Lease for the same period, with deduction only for basic marketing
expenses incurred specifically and only for market real estate commissions and
reasonable legal fees (not to exceed $1,500 per occurrence) actually incurred by
Tenant in connection with such sublease. Tenant agrees that the portion of any
assignment consideration and/or excess rentals arising from any assignment or
subletting by Tenant which is to be paid to Landlord pursuant to this Article
now is and shall then be the property of Landlord and not the property of
Tenant.

7.6 PAYMENTS. All payments required by this Article to be made to Landlord shall
be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct.

7.7 GOOD FAITH. The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this covenant, Landlord may
immediately declare Tenant to be in default under the terms of this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a material default by
Tenant under this Lease.

7.8 EFFECT OF LANDLORD'S CONSENT. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation
to pay rent and to perform all of the other obligations to be performed by
Tenant hereunder. Consent by Landlord to one or more assignments of Tenant's
interest in this Lease or to one or more sublettings of the Leased Premises
shall not be deemed to be a consent to any subsequent assignment or subletting.
If Landlord shall have been ordered by a court of competent jurisdiction to
consent to a requested assignment or subletting, or such an assignment or
subletting shall have been ordered by a court of competent jurisdiction over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Paragraph 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.



                                     - 17 -
<PAGE>   19

7.9 OPTIONS PERSONAL. If Landlord consents to an assignment or subletting
hereunder and this Lease contains any renewal options, expansion options, rights
of first refusal, rights of first negotiation or any other rights or options
pertaining to additional space in the Building or the Property, such rights
and/or options shall not run to the assignee or subtenant, it being agreed by
the parties hereto that any such rights and options are personal to the original
Tenant named herein and may not be transferred.

7.10 TENANT'S REMEDIES. Notwithstanding any contrary provision of law, including
California Civil Code section 1995.310, Tenant shall have no right, and Tenant
hereby waives and relinquishes any right, to cancel or terminate this Lease in
the event Landlord is determined to have unreasonably withheld or delayed its
consent to a proposed Transfer.

                                    ARTICLE 8

                LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE. Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners, principals,
members, officers, agents, employees, lenders, attorneys, and consultants from,
any and all liability, whether in contract, tort or on any other basis, for any
injury to or any damage sustained by Tenant, Tenant's agents, employees,
contractors or invitees, any damage to Tenant's property, or any loss to
Tenant's business, loss of Tenant's profits or other financial loss of Tenant
resulting from or attributable to the condition of, the management of, the
repair or maintenance of, the protection of, the supply of services or utilities
to, the damage in or destruction of the Leased Premises, the Building, the
Property or the Outside Areas, including without limitation (i) the failure,
interruption, rationing or other curtailment or cessation in the supply of
electricity, water, gas or other utility service to the Property, the Building
or the Leased Premises; (ii) the vandalism or forcible entry into the Building
or the Leased Premises; (iii) the penetration of water into or onto any portion
of the Leased Premises; (iv) the failure to provide security and/or adequate
lighting in or about the Property, the Building or the Leased Premises, (v) the
existence of any design or construction defects within the Property, the
Building or the Leased Premises; (vi) the failure of any mechanical systems to
function properly (such as the HVAC systems); (vii) the blockage of access to
any portion of the Property, the Building or the Leased Premises, except that
Tenant does not so release Landlord from such liability to the extent such
damage was proximately caused by Landlord's active negligence, willful
misconduct, or Landlord's failure to perform an obligation expressly undertaken
pursuant to this Lease after a reasonable period of time shall have lapsed
following receipt of written notice from Tenant to so perform such obligation.
In this regard, Tenant acknowledges that it is fully apprised of the provisions
of Law relating to releases, and particularly to those provisions contained in
Section 1542 of the California Civil Code which reads as follows:

                "A general release does not extend to claims which the creditor
                does not know or suspect to exist in his favor at the time of
                executing the release, which if known by him must have
                materially affected his settlement with the debtor."

Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
paragraph is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.

8.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall defend with competent
counsel satisfactory to Landlord any claims made or legal actions filed or
threatened against Landlord with respect to the violation of any Law, or the
death, bodily injury, personal injury, property damage, or interference with
contractual or property rights suffered by any third party occurring within the
Leased Premises or resulting from Tenant's use or occupancy of the Leased
Premises, the Building or the Outside Areas, or resulting from Tenant's
activities in or about the Leased Premises, the Building, the Outside Areas or
the Property, and Tenant shall indemnify and hold Landlord, Landlord's partners,
principals, members, employees, agents and contractors harmless from any loss
liability, penalties, or expense whatsoever (including any loss attributable to
vacant space which otherwise would have been leased, but for such



                                     - 18 -
<PAGE>   20

activities) resulting therefrom, except to the extent proximately caused by the
active negligence or willful misconduct of Landlord. This indemnity agreement
shall survive the expiration of this Lease.

                                    ARTICLE 9

                                    INSURANCE

9.1 TENANT'S INSURANCE. Tenant shall maintain insurance complying with all of
the following:

        (a) Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following:

                (i) Commercial general liability insurance insuring Tenant
against liability for personal injury, bodily injury, death and damage to
property occurring within the Leased Premises, or resulting from Tenant's use or
occupancy of the Leased Premises, the Building, the Outside Areas or the
Property, or resulting from Tenant's activities in or about the Leased Premises
or the Property, with coverage in an amount equal to Tenant's Required Liability
Coverage (as set forth in Article 1), which insurance shall contain a "broad
form liability" endorsement insuring Tenant's performance of Tenant's
obligations to indemnify Landlord as contained in this Lease.

                (ii) Fire and property damage insurance in so-called "fire and
extended coverage" form insuring Tenant against loss from physical damage to
Tenant's personal property, inventory, trade fixtures and improvements within
the Leased Premises with coverage for the full actual replacement cost thereof;

                (iii) Plate glass insurance, at actual replacement cost;

                (iv) Pressure vessel insurance, if applicable;

                (v) Product liability insurance (including, without limitation,
if food and/or beverages are distributed, sold and/or consumed within the Leased
Premises, to the extent obtainable, coverage for liability arising out of the
distribution, sale, use or consumption of food and/or beverages (including
alcoholic beverages, if applicable) at the Leased Premises for not less than
Tenant's Required Liability Coverage (as set forth in Article 1);

                (vi) Workers' compensation insurance and any other employee
benefit insurance sufficient to comply with all laws; and

                (vii) With respect to making of alterations or the construction
of improvements or the like undertaken by Tenant, contingent liability and
builder's risk insurance, in an amount and with coverage reasonably satisfactory
to Landlord.

        (b) Each policy of liability insurance required to be carried by Tenant
pursuant to this paragraph or actually carried by Tenant with respect to the
Leased Premises or the Property: (i) shall, except with respect to insurance
required by subparagraph (a)(vi) above, name Landlord, and such others as are
designated by Landlord, as additional insureds; (ii) shall be primary insurance
providing that the insurer shall be liable for the full amount of the loss, up
to and including the total amount of liability set forth in the declaration of
coverage, without the right of contribution from or prior payment by any other
insurance coverage of Landlord; (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to Landlord
with Best's ratings of at least A and XI; (v) shall provide that such policy
shall not be subject to cancellation, lapse or change except after at least
thirty days prior written notice to Landlord, and (vi) shall contain a so-called
"severability" or "cross liability" endorsement. Each policy of property
insurance maintained by Tenant with respect to the Leased Premises or the
Property or any property therein (i) shall provide that such policy shall not be
subject to cancellation, lapse or change except after at least thirty days prior
written notice to Landlord and (ii) shall contain a waiver and/or a permission
to waive by the insurer of any right of subrogation against Landlord, its
partners, principals, members, officers, employees, agents and contractors,
which might arise by reason of any payment under such policy or by



                                     - 19 -
<PAGE>   21

reason of any act or omission of Landlord, its partners, principals, members,
officers, employees, agents and contractors.

        (c) Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to Landlord, with respect to each policy of
insurance required to be carried by Tenant pursuant to this Article, a copy of
such policy (appropriately authenticated by the insurer as having been issued,
premium paid) or a certificate of the insurer certifying in form satisfactory to
Landlord that a policy has been issued, premium paid, providing the coverage
required by this Paragraph and containing the provisions specified herein. With
respect to each renewal or replacement of any such insurance, the requirements
of this Paragraph must be complied with not less than thirty days prior to the
expiration or cancellation of the policies being renewed or replaced. Landlord
may, at any time and from time to time, inspect and/or copy any and all
insurance policies required to be carried by Tenant pursuant to this Article. If
Landlord's Lender, insurance broker, advisor or counsel reasonably determines at
any time that the amount of coverage set forth in Paragraph 9.1(a) for any
policy of insurance Tenant is required to carry pursuant to this Article is not
adequate, then Tenant shall increase the amount of coverage for such insurance
to such greater amount as Landlord's Lender, insurance broker, advisor or
counsel reasonably deems adequate.

9.2 LANDLORD'S INSURANCE. With respect to insurance maintained by Landlord:

        (a) Landlord shall maintain, as the minimum coverage required of it by
this Lease, fire and property damage insurance in so-called "fire and extended
coverage" form insuring Landlord (and such others as Landlord may designate)
against loss from physical damage to the Building with coverage of not less than
one hundred percent (100%) of the full actual replacement cost thereof and
against loss of rents for a period of not less than six months. Such fire and
property damage insurance, at Landlord's election but without any requirements
on Landlord's behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; and/or (iv) may provide coverage for loss of rents for a period of up to
twelve months. Landlord shall not be required to cause such insurance to cover
any of Tenant's personal property, inventory, and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises. Landlord shall use commercially reasonable efforts
to obtain such insurance at competitive rates.

        (b) Landlord shall maintain commercial general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Three Million Dollars ($3,000,000). Landlord may carry such greater
coverage as Landlord or Landlord's Lender, insurance broker, advisor or counsel
may from time to time determine is reasonably necessary for the adequate
protection of Landlord and the Property.

        (c) Landlord may maintain any other insurance which in the opinion of
its insurance broker, advisor or legal counsel is prudent in carry under the
given circumstances, provided such insurance is commonly carried by owners of
property similarly situated and operating under similar circumstances.

9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and Tenant
hereby releases Landlord and its respective partners, principals, members,
officers, agents, employees and servants, from any and all liability for loss,
damage or injury to the property of the other in or about the Leased Premises or
the Property which is caused by or results from a peril or event or happening
which is covered by insurance actually carried and in force at the time of the
loss by the party sustaining such loss; provided, however, that such waiver
shall be effective only to the extent permitted by the insurance covering such
loss and to the extent such insurance is not prejudiced thereby.



                                     - 20 -
<PAGE>   22

                                   ARTICLE 10

                            DAMAGE TO LEASED PREMISES

10.1 LANDLORD'S DUTY TO RESTORE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph, unless
this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant
pursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion the restoration of the Leased Premises, the
Building or the Outside Area, as the case may be, to the extent then allowed by
law, to substantially the same condition in which it existed as of the Lease
Commencement Date. Landlord's obligation to restore shall be limited to actual
receipt of insurance proceeds and to the improvements constructed by Landlord.
Landlord shall have no obligation to restore any Improvements made by Tenant to
the Leased Premises or any of Tenant's personal property, inventory or trade
fixtures. Upon completion of the restoration by Landlord, Tenant shall forthwith
replace or fully repair all of Tenant's personal property, inventory, trade
fixtures and other improvements constructed by Tenant to like or similar
conditions as existed at the time immediately prior to such damage or
destruction.

10.2 INSURANCE PROCEEDS. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either Paragraph
10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant
which cover loss of property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become the
property of Landlord, and the remainder of such proceeds shall be paid to and
become the property of Tenant. If this Lease is not terminated pursuant to
either Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
carried by Tenant which cover loss to property that is Landlord's property shall
be paid to and become the property of Landlord, and all proceeds available from
such insurance which cover loss to property which would only become the property
of Landlord upon the termination of this Lease shall be paid to and remain the
property of Tenant. The determination of Landlord's property and Tenant's
property shall be made pursuant to Paragraph 6.2.

10.3 LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:

        (a) The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord, plus the
deductible amount specified in such insurance policy, or (ii) fifty percent of
the then actual replacement cost thereof;

        (b) The Building is damaged by an uninsured peril, which peril Landlord
was not required to insure against pursuant to the provisions of Article 9 of
this Lease.

        (c) The Building is damaged by any peril and, because of the laws then
in force, the Building (i) cannot be restored at reasonable cost or (ii) if
restored, cannot be used for the same use being made thereof before such damage.

10.4 TENANT'S RIGHT TO TERMINATE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril and Landlord does not elect to terminate
this Lease or is not entitled to terminate this Lease pursuant to this Article,
then as soon as reasonably practicable, Landlord shall furnish Tenant with the
written opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be complete. Tenant shall have the
option to terminate this Lease in the event any of the following occurs, which
option may be exercised only by delivery to Landlord of a written notice of
election to terminate within seven days after Tenant receives from Landlord the
estimate of the time needed to complete such restoration:



                                     - 21 -
<PAGE>   23

        (a) If the time estimated to substantially complete the restoration
exceeds six (6) months from and after the date the architect's or construction
consultant's written opinion is delivered; or

        (b) If the damage occurred within twelve months of the last day of the
Lease Term and the time estimated to substantially complete the restoration
exceeds one hundred eighty days from and after the date such restoration is
commenced.

10.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
10.4 above, captioned "Tenant's Right To Terminate", are intended to supersede
and replace the provisions contained in California Civil Code, Section 1932,
Subdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant
hereby waives the provisions of such Civil Code Sections and the provisions of
any successor Civil Code Sections or similar laws hereinafter enacted.

10.6 ABATEMENT OF RENT. In the event of damage to the Leased Premises which does
not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired by such damage.

                                   ARTICLE 11

                                  CONDEMNATION

11.1 TENANT'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph 11.4
below regarding temporary takings, Tenant shall have the option to terminate
this Lease if, as a result of any taking, (i) all of the Leased Premises is
taken, or (ii) twenty-five percent (25%) or more of the rentable area Leased
Premises is taken and the part of the Leased Premises that remains cannot,
within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant's business. Tenant must exercise such option
within a reasonable period of time, to be effective on the later to occur of (i)
the date that possession of that portion of the Leased Premises that is
condemned is taken by the condemnor or (ii) the date Tenant vacated the Leased
Premises.

11.2 LANDLORD'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises
is taken and the part of the Leased Premises that remains cannot, within a
reasonable period of time, be made reasonably suitable for the continued
operation of Tenant's business, or (iii) because of the laws then in force, the
Leased Premises may not be used for the same use being made before such taking,
whether or not restored as required by Paragraph 11.3 below. Any such option to
terminate by Landlord must be exercised within a reasonable period of time, to
be effective as of the date possession is taken by the condemnor.

11.3 RESTORATION. If any part of the Leased Premises or the Building is taken
and this Lease is not terminated, then Landlord shall, to the extent not
prohibited by laws then in force, repair any damage occasioned thereby to the
remainder thereof to a condition reasonably suitable for Tenant's continued
operations and otherwise, to the extent practicable, in the manner and to the
extent provided in Paragraph 10.1.

11.4 TEMPORARY TAKING. If a portion of the Leased Premises is temporarily taken
for a period of one year or less and such period does not extend beyond the
Lease Expiration Date, this Lease shall remain in effect. If any portion of the
Leased Premises is temporarily taken for a period which exceeds one year or
which extends beyond the Lease Expiration Date, then the rights of Landlord and
Tenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.

11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of the
Property, the Building, or the Leased Premises, or any portion thereof, shall
belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of
its right, title and interest in any such award; provided, however, that Tenant
shall be entitled to receive any portion of the award that is made specifically
(i) for the taking of personal property, inventory or trade



                                     - 22 -
<PAGE>   24

fixtures belonging to Tenant, (ii) for the interruption of Tenant's business or
its moving costs, or (iii) for the value of any leasehold improvements installed
and paid for by Tenant. The rights of Landlord and Tenant regarding any
condemnation shall be determined as provided in this Article, and each party
hereby waives the provisions of Section 1265.130 of the California Code of Civil
Procedure, and the provisions of any similar law hereinafter enacted, allowing
either party to petition the Supreme Court to terminate this Lease and/or
otherwise allocate condemnation awards between Landlord and Tenant in the event
of a taking of the Leased Premises.

11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises which
does not result in a termination of this Lease (other than a temporary taking),
then, as of the date possession is taken by the condemning authority, (a) the
Base Monthly Rent shall be reduced in the same proportion that the area of that
part of the Leased Premises so taken (less any addition to the area of the
Leased Premises by reason of any reconstruction) bears to the area of the Leased
Premises immediately prior to such taking and (b) Tenant's Project Proportionate
Share shall be reduced to reflect the ratio that the area of the Leased Premises
after such taking bears to the area of the Property.

11.7 TAKING DEFINED. The term "taking" or "taken" as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant to or as a result of the exercise of such power by such an agency,
including any inverse condemnation and/or any sale or transfer by Landlord of
all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.

                                   ARTICLE 12

                              DEFAULT AND REMEDIES

12.1 EVENTS OF TENANT'S DEFAULT. Tenant shall be in default of its obligations
under this Lease if any of the following events ("Events of Default") occur:

        (a) Tenant shall have failed to pay Base Monthly Rent or any regularly
scheduled Additional Rent when due and such failure continues for more than five
(5) days after Landlord gives written notice thereof to Tenant; provided,
however, that after the second such failure in a calendar year, only the passage
of time, but no further notice, shall be required to establish an Event of
Default in the same calendar year; or


        (b) Tenant shall have failed to pay any other Additional Rent or other
amount of money or charge payable by Tenant hereunder as and when such
additional rent or amount or charge becomes due and payable and such failure
continues for more than twenty (20) days after Landlord gives written notice
thereof to Tenant; provided, however, that after the second such failure in a
calendar year, only the passage of time, but no further notice, shall be
required to establish an Event of Default in the same calendar year; or

        (c) Tenant shall have failed to perform any term, covenant or condition
of this Lease (except those requiring the payment of Base Monthly Rent or
Additional Rent, which failures shall be governed by subparagraphs (a) and (b)
above) within twenty (20) days after written notice from Landlord to Tenant
specifying the nature of such failure and requesting Tenant to perform same;
provided, however, that if, by the nature of such term, covenant or condition,
such failure cannot reasonably be cured within such period of twenty (20) days,
an Event of Default shall not exist as long as Tenant commences with due
diligence and dispatch the curing of such failure within such period of twenty
(20) days and, having so commenced, thereafter prosecutes with diligence and
dispatch and completes the curing of such failure within a reasonable time; or

        (d) Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions contained
in Article 7, whether voluntarily or by operation of law; or

        (e) Tenant shall have abandoned the Leased Premises; or



                                     - 23 -
<PAGE>   25

        (f) Tenant or any guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such guarantor) or any property or asset
essential to the conduct of Tenant's (or such guarantor's) business, and Tenant
(or such guarantor) shall have failed to obtain a return or release of the same
within thirty days thereafter, or prior to sale pursuant to such sequestration,
attachment or levy, whichever is earlier; or

        (g) Tenant or any guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or

        (h) Tenant or any guarantor of this Lease shall have allowed (or sought)
to have entered against it a decree or order which: (i) grants or constitutes an
order for relief, appointment of a trustee, or condemnation or a reorganization
plan under the bankruptcy laws of the United States; (ii) approves as properly
filed a petition seeking liquidation or reorganization under said bankruptcy
laws or any other debtor's relief law or similar statute of the United States or
any state thereof; or (iii) otherwise directs the winding up or liquidation of
Tenant; provided, however, if any decree or order was entered without Tenant's
consent or over Tenant's objection, Landlord may not terminate this Lease
pursuant to this Subparagraph if such decree or order is rescinded or reversed
within thirty days after its original entry; or

        (i) Tenant or any guarantor of this Lease shall have availed itself of
the protection of any debtor's relief law, moratorium law or other similar law
which does not require the prior entry of a decree or order.

12.2 LANDLORD'S REMEDIES. In the event of any default by Tenant, and without
limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by law or otherwise provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:

        (a) Landlord may, at Landlord's election, keep this Lease in effect and
enforce, by an action at law or in equity, all of its rights and remedies under
this Lease including, without limitation, (i) the right to recover the rent and
other sums as they become due by appropriate legal action, (ii) the right to
make payments required by Tenant, or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate
of interest not prohibited by law from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
relief and specific performance to prevent Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations under this Lease,
as the case may be.

        (b) Landlord may, at Landlord's election, terminate this Lease by giving
Tenant written notice of termination, in which event this Lease shall terminate
on the date set forth for termination in such notice. Any termination under this
subparagraph shall not relieve Tenant from its obligation to pay to Landlord all
Base Monthly Rent and Additional Rent then or thereafter due, or any other sums
due or thereafter accruing to Landlord, or from any claim against Tenant for
damages previously accrued or then or thereafter accruing. In no event shall any
one or more of the following actions by Landlord, in the absence of a written
election by Landlord to terminate this Lease constitute a termination of this
Lease:

                (i) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;

                (ii) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or

                (iii) Any action taken by Landlord or its partners, principals,
members, officers, agents, employees, or servants, which is intended to mitigate
the adverse effects of any breach of this Lease by Tenant, including, without
limitation, any action taken to maintain and preserve the Leased Premises on any
action taken to relet the Leased Premises or any portion thereof for the account
at Tenant and in the name of Tenant.

        (c) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. If Landlord



                                     - 24 -
<PAGE>   26

does not terminate this Lease by giving written notice of termination, Landlord
may enforce all its rights and remedies under this Lease, including the right
and remedies provided by California Civil Code Section 1951.4 ("lessor may
continue lease in effect after lessee's breach and abandonment and recover rent
as it becomes due, if lessee has right to sublet or assign, subject only to
reasonable limitations"), as in effect on the Effective Date of this Lease.

        (d) In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provided in
California Civil Code Section 1951.2, as in effect on the Effective Date of this
Lease. For purposes of computing damages pursuant to Section 1951.2, an interest
rate equal to the maximum rate of interest then not prohibited by law shall be
used where permitted. Such damages shall include, without limitation:

                (i) 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 such rental loss that Tenant proves could be reasonably avoided,
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; and

                (ii) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom, including without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Leased Premises, (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of how the same is
funded, including reduction of rent, a direct payment or allowance to a new
tenant, or otherwise), (iii) broker's fees allocable to the remainder of the
term of this Lease, advertising costs and other expenses of reletting the Leased
Premises; (iv) costs of carrying and maintaining the Leased Premises, such as
taxes, insurance premiums, utility charges and security precautions, (v)
expenses incurred in removing, disposing of and/or storing any of Tenant's
personal property, inventory or trade fixtures remaining therein; (vi)
reasonable attorney's fees, expert witness fees, court costs and other
reasonable expenses incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Leased Premises, establishing damages hereunder, and
releasing the Leased Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant's default.

12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES. In the event Landlord fails to
perform its obligations under this Lease, Landlord shall nevertheless not be in
default under the terms of this Lease until such time as Tenant shall have first
given Landlord written notice specifying the nature of such failure to perform
its obligations, and then only after Landlord shall have had thirty (30) days
following its receipt of such notice within which to perform such obligations;
provided that, if longer than thirty (30) days is reasonably required in order
to perform such obligations, Landlord shall have such longer period. In the
event of Landlord's default as above set forth, then, and only then, Tenant may
then proceed in equity or at law to compel Landlord to perform its obligations
and/or to recover damages proximately caused by such failure to perform (except
as and to the extent Tenant has waived its right to damages as provided in this
Lease).

12.4 LIMITATION OF TENANT'S RECOURSE. Tenant's recourse shall be limited to
Landlord's interest in the Property. In addition, if Landlord is a corporation,
trust, partnership, joint venture, limited liability company, unincorporated
association, or other form of business entity, Tenant agrees that (i) the
obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals of such business entity, and
(ii) Tenant shall have no recourse to the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders or
principals. Additionally, if Landlord is a partnership or limited liability
company, then Tenant covenants and agrees:

        (a) No partner or member of Landlord shall be sued or named as a party
in any suit or action brought by Tenant with respect to any alleged breach of
this Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);

        (b) No service of process shall be made against any partner or member of
Landlord except for the sole purpose of securing jurisdiction over the
partnership; and



                                     - 25 -
<PAGE>   27

        (c) No writ of execution will ever be levied against the assets of any
partner or member of Landlord other than to the extent of his or her interest in
the assets of the partnership or limited liability company constituting
Landlord.

Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner or member of Landlord and shall be
applicable to any actual or alleged misrepresentation or nondisclosure made
regarding this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.

12.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
12.3 above are intended to supersede and replace the provisions of California
Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant hereby
waives the provisions of California Civil Code Sections 1932(1), 1941 and 1942
and/or any similar or successor law regarding Tenant's right to terminate this
Lease or to make repairs and deduct the expenses of such repairs from the rent
due under this Lease.

                                   ARTICLE 13

                               GENERAL PROVISIONS

13.1 TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency any and all
taxes, assessments, license fees, use fees, permit fees and public charges of
whatever nature or description levied, assessed or imposed against Tenant or
Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant's estate in this Lease, Tenant's ownership of property, improvements
made by Tenant to the Leased Premises or the Outside Areas, improvements made by
Landlord for Tenant's use within the Leased Premises or the Outside Areas,
Tenant's use (or estimated use) of public facilities or services or Tenant's
consumption (or estimated consumption) of public utilities, energy, water or
other resources (collectively, "Tenant's Interest"). Upon demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments. If
any such taxes, assessments, fees or public charges are levied against Landlord,
Landlord's property, the Building or the Property, or if the assessed value of
the Building or the Property is increased by the inclusion therein of a value
placed upon Tenant's Interest, regardless of the validity thereof, Landlord
shall have the right to require Tenant to pay such taxes, and if not paid and
satisfactory evidence of payment delivered to Landlord at least ten days prior
to delinquency, then Landlord shall have the right to pay such taxes on Tenant's
behalf and to invoice Tenant for the same. Tenant shall, within the earlier to
occur of (a) thirty (30) days of the date it receives an invoice from Landlord
setting forth the amount of such taxes, assessments, fees, or public charge so
levied, or (b) the due date of such invoice, pay to Landlord, as Additional
Rent, the amount set forth in such invoice. Failure by Tenant to pay the amount
so invoiced within such time period shall be conclusively deemed a default by
Tenant under this Lease. Tenant shall have the right to bring suit in any court
of competent jurisdiction to recover from the taxing authority the amount of any
such taxes, assessments, fees or public charges so paid.

13.2 HOLDING OVER. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this Paragraph. Any such holding over to which
Landlord has consented 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 Base Monthly Rent shall be increased to an amount equal to one hundred
fifty percent (150%) of the Base Monthly Rent payable during the last full month
immediately preceding such holding over.

13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and subordinate to all
ground leases, mortgages and deeds of trust which affect the Building or the
Property and which are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such ground lease or any lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all customary or reasonable documents or instruments which
Landlord and such lessor or lender deems necessary or desirable to make this
Lease



                                     - 26 -
<PAGE>   28

prior thereto. Tenant hereby consents to Landlord's ground leasing the land
underlying the Building or the Property and/or encumbering the Building or the
Property as security for future loans on such terms as Landlord shall desire,
all of which future ground leases, mortgages or deeds of trust shall be subject
to and subordinate to this Lease. However, if any lessor under any such future
ground lease or any lender holding such future mortgage or deed of trust shall
desire or require that this Lease be made subject to and subordinate to such
future ground lease, mortgage or deed of trust, then Tenant agrees, within ten
days after Landlord's written request therefor, to execute, acknowledge and
deliver to Landlord any and all documents or instruments requested by Landlord
or by such lessor or lender as may be necessary or proper to assure the
subordination of this Lease to such future ground lease, mortgage or deed of
trust, but only if such lessor or lender agrees to recognize Tenant's rights
under this Lease and agrees not to disturb Tenant's quiet possession of the
Leased Premises so long as Tenant is not in default under this Lease. If
Landlord assigns the Lease as security for a loan, Tenant agrees to execute such
documents as are reasonably requested by the lender and to provide reasonable
provisions in the Lease protecting such lender's security interest which are
customarily required by institutional lenders making loans secured by a deed of
trust. Notwithstanding the foregoing, Landlord shall use best efforts to provide
Tenant with non-disturbance agreements reasonably acceptable to Tenant from any
ground lessors, mortgage holders or lien holders, present or future, having an
interest in the Leased Premises.

13.4 TENANT'S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request, attorn
(i) to any purchaser of the Building or the Property at any foreclosure sale or
private sale conducted pursuant to any security instruments encumbering the
Building or the Property, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under an underlying ground
lease of the land underlying the Building or the Property, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease, except that such purchaser, grantee or lessor
shall not: (a) be liable for any act or omission of iStar Sunnyvale Partners,
L.P. under this Lease; (b) be subject to any offsets or defenses which Tenant
might have against iStar Sunnyvale Partners, L.P. (prior to such purchaser,
grantee or lessor becoming landlord under this Lease); (c) be bound by any Rent
or Additional Rent which Tenant might have paid to iStar Sunnyvale Partners,
L.P. for more than the current month or more than one (1) month prior to the due
date for the then current installment; (d) be liable for any deposits made or
prepaid Rent paid by Tenant hereunder unless such deposits or payments have been
transferred to such purchaser, grantee or lessor; or (e) be bound by any
amendment or modification of this Lease made without any required lessor's or
lender's consent.

13.5 MORTGAGEE PROTECTION. In the event of any default on the part of Landlord,
Tenant will give notice by registered mail to any Lender or lessor under any
underlying ground lease who shall have requested, in writing, to Tenant that it
be provided with such notice, and Tenant shall offer such Lender or lessor a
reasonable opportunity to cure the default, including time to obtain possession
of the Leased Premises by power of sale or judicial foreclosure or other
appropriate legal proceedings if reasonably necessary to effect a cure.

13.6 ESTOPPEL CERTIFICATE. Tenant will, within ten (10) business days following
any request by Landlord, execute and deliver to Landlord an estoppel certificate
in the form attached as Exhibit D (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, (ii) stating the date to which the rent and other charges are paid
in advance, if any, (iii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iv) certifying such other information
about this Lease as may be reasonably requested by Landlord, its Lender or
prospective lenders, investors or purchasers of the Building or the Property.
Tenant's failure to execute and deliver such estoppel certificate within ten
(10) days after Landlord's request therefor shall be a material default by
Tenant under this Lease, and Landlord shall have all of the rights and remedies
available to Landlord as Landlord would otherwise have in the case of any other
material default by Tenant, including the right to terminate this Lease and sue
for damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to this
paragraph may be relied upon by any Lender or purchaser or prospective Lender or
purchaser of the Building, the Property, or any interest in them.



                                     - 27 -
<PAGE>   29

13.7 FINANCIAL STATEMENTS AND INFORMATION. Tenant shall deliver to Landlord and
to any lender or purchaser designated by Landlord the following information
certified to be true, complete and correct by an officer of Tenant: upon
Landlord's reasonable request after the end of each fiscal year of Tenant, a
balance sheet of Tenant and its consolidated subsidiaries as of the end of such
year, a statements of profits and losses of Tenant and its subsidiaries for such
year, and an audited statement of cash flows of Tenant and its consolidated
subsidiaries for such year, setting forth in each case, in comparative form, the
corresponding figures for the preceding fiscal year in reasonable detail and
scope and certified by independent certified public accountants of recognized
national standing selected by Tenant; and upon Landlord's reasonable request
after the end of each fiscal quarter of Tenant a balance sheet of Tenant and its
consolidated subsidiaries as at the end of such quarter, statements of profits
and losses of Tenant and its consolidated subsidiaries for such quarter and a
statement of cash flows of Tenant and its consolidated subsidiaries for such
quarter, setting forth in each case, in comparative form, the corresponding
figures for the similar quarter of the preceding year, in reasonable detail and
scope, and certified to be true and complete by a financial officer of Tenant
having knowledge thereof; the foregoing financial statements all being prepared
in accordance with generally accepted accounting principles, consistently
applied. If Tenant is a reporting company under the Securities and Exchange Act
of 1934, as amended, the foregoing annual reports of this Section 13.14 will be
satisfied by the delivery of Tenant's forms 10-K, 10-Q and annual reports
promptly upon Landlord's reasonable request after their filing with the
Securities and Exchange Commission. Together with the annual financial
statements described above, Tenant shall deliver to Landlord an annual operating
statement of the Leased Premises in detail reasonably satisfactory to Landlord
and certified to be true, complete and correct by an officer of Tenant.

13.8 TRANSFER BY LANDLORD. Landlord and its successors in interest shall have
the right to transfer their interest in the Building, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer if its transferee agrees to
assume and perform all such obligations of the Landlord hereunder on the same
terms and conditions and (ii) shall be relieved of all liability for the
performance of the obligations of the Landlord hereunder which have accrued
before the date of transfer if its transferee agrees to assume and perform all
such prior obligations of the Landlord hereunder. Tenant shall attorn to any
such transferee. After the date of any such transfer, the term "Landlord" as
used herein shall mean the transferee of such interest in the Building or the
Property.

13.9 FORCE MAJEURE. The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligations by reason of any
strikes, lockouts or labor disputes; government restrictions, regulations,
controls, action or inaction; civil commotion; or extraordinary weather, fire or
other acts of God.

13.10 NOTICES. Any notice required or desired to be given by a party regarding
this Lease shall be in writing and shall be personally served, or in lieu of
personal service may be given by reputable overnight courier service, postage
prepaid, addressed to the other party as follows:


        IF TO LANDLORD:           c/o iStar Financial, Inc.
                                  One Embarcadero Center
                                  Suite 3300
                                  San Francisco, CA 94111
                                  Attention:  Asset Management

        with a copy to:           Pillsbury Winthrop LLP
                                  50 Fremont Street
                                  San Francisco, CA 94105
                                  Attention: Glenn Q. Snyder, Esq.

        IF TO TENANT:             Prior to Lease Commencement Date:
                                  Trident Microsystems, Inc.
                                  2450 Walsh Ave.
                                  Santa Clara, CA  95051
                                  Attention:  Carmen Chang



                                     - 28 -
<PAGE>   30

                                  From and after Lease Commencement Date:
                                  Trident Microsystems, Inc.
                                  1090 East Arques Avenue
                                  Sunnyvale, California  94086
                                  Attention:  Carmen Chang


Any notice given in accordance with the foregoing shall be deemed received upon
actual receipt or refusal to accept delivery.

13.11 ATTORNEYS' FEES. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.

13.12 DEFINITIONS. Any term that is given a special meaning by any provision in
this Lease shall, unless otherwise specifically stated, have such meaning
wherever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:

        (a) REAL PROPERTY TAXES. The term "Real Property Tax" or "Real Property
Taxes" shall each mean Tenant's Project Percentage Share of (i) all taxes,
assessments, levies and other charges of any kind or nature whatsoever, general
and special, foreseen and unforeseen (including all instruments 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 or new construction), 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 for
whatever reason against the Property or any portion thereof, or Landlord's
interest herein, or the fixtures, equipment and other property of Landlord that
is an integral part of the Property and located thereon, or Landlord's business
of owning, leasing or managing the Property or the gross receipts, income or
rentals from the Property, (ii) all charges, levies or fees imposed by any
governmental authority against Landlord by reason of or based upon the use of or
number of parking spaces within the Property, the amount of public services or
public utilities used or consumed (e.g. water, gas, electricity, sewage or waste
water disposal) at the Property, the number of person employed by tenants of the
Property, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Property, or the type of use or uses conducted
within the Property, and all costs and fees (including attorneys' fees)
reasonably incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax, and (iii) all
tax increases due to improvements made to the Leased Premises by Tenant or by
Landlord on behalf of Tenant. If, at any time during the Lease Term, the
taxation or assessment of the Property prevailing as of the Effective Date of
this Lease shall be altered so that in lieu of or in addition to any the Real
Property Tax described above there shall be levied, awarded 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, substitute, or additional use
or charge (i) on the value, size, use or occupancy of the Property or Landlord's
interest therein or (ii) on or measured by the gross receipts, income or rentals
from the Property, or on Landlord's business of owning, leasing or managing the
Property or (iii) computed in any manner with respect to the operation of the
Property, then any such tax or charge, however designated, shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is partly based upon property
or rents unrelated to the Property, then only that part of such Real Property
Tax that is fairly allocable to the Property shall be included within the
meaning of the terms "Real Property Tax" or "Real Property Taxes."
Notwithstanding the foregoing, the terms "Real Property Tax" or "Real Property
Taxes" shall not include estate, inheritance, transfer, gift or franchise taxes
of Landlord or the federal or state income tax imposed on Landlord's income from
all sources.

        (b) LANDLORD'S INSURANCE COSTS. The term "Landlord's Insurance Costs"
shall mean Tenant's Project Proportionate Share of the costs to Landlord to
carry and maintain the policies of fire and property damage insurance for the
Building and the Property and general liability and any other insurance required
or permitted to be



                                     - 29 -
<PAGE>   31

carried by Landlord pursuant to Article 9, together with any deductible amounts
paid by Landlord upon the occurrence of any insured casualty or loss.

        (c) PROPERTY MAINTENANCE COSTS. The term "Property Maintenance Costs"
shall mean Tenant's Project Proportionate Share of all costs and expenses
(except Landlord's Insurance Costs, Real Property Taxes and Building Maintenance
Costs) paid or incurred by Landlord in protecting, operating, maintaining,
repairing and preserving the Property and all parts thereof, including without
limitation, (i) market rate professional management fees (not to exceed three
percent (3%) of Base Monthly Rent), (ii) the amortizing portion of any costs
incurred by Landlord in the making of any modifications, alterations or
improvements required by any governmental authority as set forth in Article 6,
which are so amortized during the Lease Term, and (iii) such other costs, and
the amortizing portion of all capital expenditures, as may be paid or incurred
with respect to operating, maintaining, and preserving the Property, such as
repairing and resurfacing paved areas, repairing and replacing structural parts
of the Property, and repairing and replacing, when necessary, electrical,
plumbing, heating, ventilating and air conditioning systems serving the
Property, but excluding the items specifically designated as Landlord's
obligations in Section 5.1(b).

        (d) BUILDING MAINTENANCE COSTS. The term "Building Maintenance Costs"
shall mean Tenant's Building Proportionate Share of the amortizing portion of
all capital expenditures allocable to the Building and all other costs as may be
incurred with respect to operating, maintaining and preserving the Building,
including, without limitation, repair and resurfacing the exterior surfaces of
the Building (including costs), and repairing and replacing, when necessary,
electrical, plumbing, heating, ventilating and air conditioning systems serving
the Building, but excluding the items specifically designated as Landlord's
obligations in Section 5.1(b).

        (e) PROPERTY OPERATING EXPENSES. The term "Property Operating Expenses"
shall mean and include all Real Property Taxes, plus all Landlord's Insurance
Costs, plus all Property Maintenance Costs and Building Maintenance Costs.

        (f) LAW. The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirements of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Property, or any of them, in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).

        (g) LENDER. The term "Lender" shall mean the holder of any promissory
note or other evidence of indebtedness secured by the Property or any portion
thereof.

        (h) PRIVATE RESTRICTIONS. The term "Private Restrictions" shall mean (as
they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements, easements, and any other recorded documents or
instruments affecting the use of the Property, the Building, the Leased
Premises, or the Outside Areas.

        (i) RENT. The term "Rent" shall mean collectively Base Monthly Rent and
all Additional Rent.

13.13 GENERAL WAIVERS. One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof, or
any waiver of any breach of any provision hereof, shall be effective unless in
writing and signed by the waiving party. The receipt by Landlord of any rent or
payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach. No waiver of any provision of
this Lease shall be deemed a continuing waiver unless such waiver specifically
states so in writing and is signed by both Landlord and Tenant. No delay or
omission in the exercise of any right or remedy accruing to either party upon
any breach by the other party under this Lease shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by either party of any breach of any provision of this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.



                                     - 30 -
<PAGE>   32

13.14 MISCELLANEOUS. Should any provisions of this Lease prove to be invalid or
illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State in which the Leased Premises are located.
The captions in this Lease are for convenience only and shall not be construed
in the construction or interpretation of any provision hereof. When the context
of this Lease requires, the neuter gender includes the masculine, the feminine,
a partnership, corporation, limited liability company, joint venture, or other
form of business entity, and the singular includes the plural. The terms "must,"
"shall," "will," and "agree" are mandatory. The term "may" is permissive. When a
party is required to do something by this Lease, it shall do so at its sole cost
and expense without right of reimbursement from the other party unless specific
provision is made therefor. Where Landlord's consent is required hereunder, the
consent of any Lender shall also be required. Landlord and Tenant shall both be
deemed to have drafted this Lease, and the rule of construction that a document
is to be construed against the drafting party shall not be employed in the
construction or interpretation of this Lease. Where Tenant is obligated not to
perform any act or is not permitted to perform any act, Tenant is also obligated
to restrain any others reasonably within its control, including agents,
invitees, contractors, subcontractors and employees, from performing such act.
Landlord shall not become or be deemed a partner or a joint venturer with Tenant
by reason of any of the provisions of this Lease.

                                   ARTICLE 14

                               CORPORATE AUTHORITY

                          BROKERS AND ENTIRE AGREEMENT

14.1 CORPORATE AUTHORITY. (a) If Tenant is a corporation, each individual
executing this Lease on behalf of such corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State in which the Leased Premises are located,
that Tenant has the full right and legal authority to enter into this Lease, and
that he or she is duly authorized to execute and deliver this Lease on behalf of
Tenant in accordance with its terms. Tenant shall, within thirty days after
execution of this Lease, deliver to Landlord a certified copy of the resolution
of its board of directors authorizing or ratifying the execution of this Lease
and if Tenant fails to do so, Landlord at its sole election may elect to
terminate this Lease.

                (b) Landlord is a limited partnership, and each individual
executing this Lease on behalf of Landlord represents and warrants that Landlord
is validly formed and duly authorized and existing, that Landlord is qualified
to do business in the State in which the Leased Premises are located, that
Landlord has the full right and legal authority to enter into this Lease, and
that he or she is duly authorized to execute and deliver this Lease on behalf of
Landlord in accordance with its terms.

14.2 BROKERAGE COMMISSIONS. Landlord and Tenant each represents, warrants and
agrees that it has not had any dealings with any real estate broker(s), leasing
agent(s), finder(s) or salesmen, other than the Brokers (as named in Article 1)
with respect to the lease by it of the Leased Premises pursuant to this Lease,
and that it will indemnify, defend with competent counsel, and hold the other
party harmless from any liability for the payment of any real estate brokerage
commissions, leasing commissions or finder's fees claimed by any other real
estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or due
and payable by reason of such indemnifying party's agreement or promise (implied
or otherwise) to pay (or to have the other party pay) such a commission or
finder's fee by reason of its leasing the Leased Premises pursuant to this
Lease. Landlord shall be obligated to pay the Brokers pursuant to a separate
brokerage commission agreement.

14.3 ENTIRE AGREEMENT. This Lease and the Exhibits (as described in Article 1),
which Exhibits are by this reference incorporated herein, constitute the entire
agreement between the parties, and there are no other agreements, understandings
or representations between the parties relating to the lease by Landlord of the
Leased



                                     - 31 -
<PAGE>   33

Premises to Tenant, except as expressed herein. No subsequent changes,
modifications or additions to this Lease shall be binding upon the parties
unless in writing and signed by both Landlord and Tenant.

14.4 LANDLORD'S REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
any of its agents made any representations or warranties respecting the
Property, the Building or the Leased Premises, upon which Tenant relied in
entering into the Lease, which are not expressly set forth in this Lease. Tenant
further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing Law, or (ii) the suitability of the Leased Premises
for the conduct of Tenant's business, or (iii) the exact square footage of the
Leased Premises, and that Tenant relies solely upon its own investigations with
respect to such matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord's agent(s), if any, not contained in this Lease or in
any Exhibit attached hereto.

                                   ARTICLE 15

                                OPTIONS TO EXTEND

15.1 So long as Trident Microsystems, Inc. is the Tenant hereunder and occupies
a material portion of the Leased Premises, and subject to the condition set
forth in clause (b) below, Tenant shall have one option to extend the term of
this Lease with respect to the entirety of the Premises for a period of five (5)
years from the expiration of the Lease Term (the "Extension Period"), subject to
the following conditions:

        (a) The option to extend shall be exercised, if at all, by notice of
exercise given to Landlord by Tenant not less than one hundred eighty (180) days
prior to the expiration of the Lease Term;

        (b) Anything herein to the contrary notwithstanding, if Tenant is in
default beyond all applicable notice and cure periods under any of the terms,
covenants or conditions of this Lease, either at the time Tenant exercises the
extension option or on the commencement date of the Extension Period, Landlord
shall have, in addition to all of Landlord's other rights and remedies provided
in this Lease, the right to terminate such option to extend upon notice to
Tenant.

15.2 In the event the option is exercised in a timely fashion, the Lease shall
be extended for the term of the Extension Period upon all of the terms and
conditions of this Lease, provided that the Base Monthly Rent for the Extension
Period shall be the "Fair Market Rent" for the Leased Premises, increased after
12 months in accordance with Article 1. For purposes hereof, "Fair Market Rent"
shall mean the base rent for the Premises, based upon the rental rate per square
foot that an unaffiliated landlord and tenant would agree to for a lease on the
terms of this Lease for the Extension Period for comparable premises in the
vicinity of the Property, determined pursuant to the process described below. In
no event, however, shall any adjustment of Base Monthly Rent pursuant to this
paragraph result in a decrease of the Base Monthly Rent for the Premises below
the amount due from Tenant for the preceding portion of the initial Lease Term
for which Base Monthly Rent had been fixed.

15.3 Within 30 days after receipt of Tenant's notice of exercise, Landlord shall
notify Tenant in writing of Landlord's estimate of the Base Monthly Rent for the
Extension Period, based on the provisions of Paragraph 15.2 above. Within 30
days after receipt of such notice from Landlord, Tenant shall have the right
either to (i) accept Landlord's statement of Base Monthly Rent as the Base
Monthly Rent for the Extension Period; or (ii) elect to arbitrate Landlord's
estimate of Fair Market Rent, such arbitration to be conducted pursuant to the
provisions hereof. Failure on the part of Tenant to require arbitration of Fair
Market Rent within such 30-day period shall constitute acceptance of the Base
Monthly Rent for the Extension Period as calculated by Landlord. If Tenant
elects arbitration, the arbitration shall be concluded within 90 days after the
date of Tenant's election, subject to extension for an additional 30-day period
if a third arbitrator is required and does not act in a timely manner. To the
extent that arbitration has not been completed prior to the expiration of any
preceding period for which Base Monthly Rent has been determined, Tenant shall
pay Base Monthly Rent at the rate calculated by Landlord, with the potential for
an adjustment to be made once Fair Market Rent is ultimately determined by
arbitration.



                                     - 32 -
<PAGE>   34

15.4 In the event of arbitration, the judgment or the award rendered in any such
arbitration may be entered in any court having jurisdiction and shall be final
and binding between the parties. The arbitration shall be conducted and
determined in the County of Santa Clara in accordance with the then prevailing
rules of the American Arbitration Association or its successor for arbitration
of commercial disputes except to the extent that the procedures mandated by such
rules shall be modified as follows:

        (a) Tenant shall make demand for arbitration in writing within 30 days
after service of Landlord's determination of Fair Market Rent given under
Paragraph 15.3 above, specifying therein the name and address of the person to
act as the arbitrator on its behalf. The arbitrator shall be qualified as a real
estate appraiser familiar with the Fair Market Rent of similar industrial,
research and development, or office space in the Silicon Valley area who would
qualify as an expert witness over objection to give opinion testimony addressed
to the issue in a court of competent jurisdiction. Failure on the part of Tenant
to make a proper demand in a timely manner for such arbitration shall constitute
a waiver of the right thereto. Within 15 days after the service of the demand
for arbitration, Landlord shall give notice to Tenant, specifying the name and
address of the person designated by Landlord to act as arbitrator on its behalf
who shall be similarly qualified. If Landlord fails to notify Tenant of the
appointment of its arbitrator, within or by the time above specified, then the
arbitrator appointed by Tenant shall be the arbitrator to determine the issue.

        (b) In the event that two arbitrators are chosen pursuant to Paragraph
15.4(a) above, the arbitrators so chosen shall, within 15 days after the second
arbitrator is appointed determine the Fair Market Rent. If the two arbitrators
shall be unable to agree upon a determination of Fair Market Rent within such
15-day period, they, themselves, shall appoint a third arbitrator, who shall be
a competent and impartial person with qualifications similar to those required
of the first two arbitrators pursuant to Paragraph 15.4(a). In the event they
are unable to agree upon such appointment within seven days after expiration of
such 15-day period, the third arbitrator shall be selected by the parties
themselves, if they can agree thereon, within a further period of 15 days. If
the parties do not so agree, then either party, on behalf of both, may request
appointment of such a qualified person by the then Chief Judge of the United
States District Court having jurisdiction over the County of Santa Clara, acting
in his private and not in his official capacity, and the other party shall not
raise any question as to such Judge's full power and jurisdiction to entertain
the application for and make the appointment. The three arbitrators shall decide
the dispute if it has not previously been resolved by following the procedure
set forth below.

        (c) Where an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the parties
during the course of arbitration, the issue shall be resolved by the three
arbitrators within 15 days of the appointment of the third arbitrator in
accordance with the following procedure. The arbitrator selected by each of the
parties shall state in writing his determination of the Fair Market Rent
supported by the reasons therefor with counterpart copies to each party. The
arbitrators shall arrange for a simultaneous exchange of such proposed
resolutions. The role of the third arbitrator shall be to select which of the
two proposed resolutions most closely approximates his determination of Fair
Market Rent. The third arbitrator shall have no right to propose a middle ground
or any modification of either of the two proposed resolutions. The resolution he
chooses as most closely approximating his determination shall constitute the
decision of the arbitrators and be final and binding upon the parties.

        (d) In the event of a failure, refusal or inability of any arbitrator to
act, his successor shall be appointed by him, but in the case of the third
arbitrator, his successor shall be appointed in the same manner as provided for
appointment of the third arbitrator. The arbitrators shall decide the issue
within 15 days after the appointment of the third arbitrator. Any decision in
which the arbitrator appointed by Landlord and the arbitrator appointed by
Tenant concur shall be binding and conclusive upon the parties. Each party shall
pay the fee and expenses of its respective arbitrator and both shall share the
fee and expenses of the third arbitrator, if any, and the attorneys' fees and
expenses of counsel for the respective parties and of witnesses shall be paid by
the respective party engaging such counsel or calling such witnesses.

        (e) The arbitrators shall have the right to consult experts and
competent authorities to obtain factual information or evidence pertaining to a
determination of Fair Market Rent, but any such consultation shall be made in
the presence of both parties with full right on their part to cross-examine. The
arbitrators shall render their decision and award in writing with counterpart
copies to each party. The arbitrators shall have no power to modify the
provisions of this Lease.



                                     - 33 -
<PAGE>   35

                                   ARTICLE 16

                                TELEPHONE SERVICE

        Notwithstanding any other provision of this Lease to the contrary:

        (a) So long as the entirety of the Leased Premises is leased to Tenant:

                (i) Landlord shall have no responsibility for providing to
Tenant any telephone equipment, including wiring, within the Leased Premises or
for providing telephone service or connections from the utility to the Leased
Premises; and

                (ii) Landlord makes no warranty as to the quality, continuity or
availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees. Tenant accepts the telephone
equipment (including, without limitation, the INC, as defined below) in its
"AS-IS" condition, and Tenant shall be solely responsible for contracting with a
reliable third party vendor to assume responsibility for the maintenance and
repair thereof (which contract shall contain provisions requiring such vendor to
inspect the INC periodically (the frequency of such inspections to be determined
by such vendor based on its experience and professional judgment), and requiring
such vendor to meet local and federal requirements for telecommunications
material and workmanship). Landlord shall not be liable to Tenant and Tenant
waives all claims against Landlord whatsoever, whether for personal injury,
property damage, loss of use of the Leased Premises, or otherwise, due to the
interruption or failure of telephone services to the Leased Premises. Tenant
hereby holds Landlord harmless and agrees to indemnify, protect and defend
Landlord from and against any liability for any damage, loss or expense due to
any failure or interruption of telephone service to the Leased Premises for any
reason. Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.

        (b) At such time as the entirety of the Leased Premises is no longer
leased to Tenant, Landlord shall in its sole discretion have the right, by
written notice to Tenant, to elect to assume limited responsibility for INC, as
provided below, and upon such assumption of responsibility by Landlord, this
subparagraph (b) shall apply prospectively.

                (i) Landlord shall provide Tenant access to such quantity of
pairs in the Building intra-building network cable ("INC") as is determined to
be available by Landlord in its reasonable discretion. Tenant's access to the
INC shall be solely by arrangements made by Tenant, as Tenant may elect,
directly with Pacific Bell or Landlord (or such vendor as Landlord may
designate), and Tenant shall pay all reasonable charges as may be imposed in
connection therewith. Pacific Bell's charges shall be deemed to be reasonable.
Subject to the foregoing, Landlord shall have no responsibility for providing to
Tenant any telephone equipment, including wiring, within the Leased Premises or
for providing telephone service or connections from the utility to the Leased
Premises, except as required by law.

                (ii) Tenant shall not alter, modify, add to or disturb any
telephone wiring in the Leased Premises or elsewhere in the Building without the
Landlord's prior written consent. Tenant shall be liable to Landlord for any
damage to the telephone wiring in the Building due to the act, negligent or
otherwise, of Tenant or any employee, contractor or other agent of Tenant.
Tenant shall have no access to the telephone closets within the Building, except
in the manner and under procedures established by Landlord. Tenant shall
promptly notify Landlord of any actual or suspected failure of telephone service
to the Leased Premises.

                (iii) All costs incurred by Landlord for the installation,
maintenance, repair and replacement of telephone wiring in the Building shall be
a Property Maintenance Cost.

                (iv) Landlord makes no warranty as to the quality, continuity or
availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or



                                     - 34 -
<PAGE>   36

consequential damages (including damages for loss of business) in the event
Tenant's telecommunications services in any way are interrupted, damaged or
rendered less effective, except to the extent caused by the grossly negligent or
willful act or omission by Landlord, its agents or employees. Tenant
acknowledges that Landlord meets its duty of care to Tenant with respect to the
Building INC by contracting with a reliable third party vendor to assume
responsibility for the maintenance and repair thereof (which contract shall
contain provisions requiring such vendor to inspect the INC periodically (the
frequency of such inspections to be determined by such vendor based on its
experience and professional judgment), and requiring such vendor to meet local
and federal requirements for telecommunications material and workmanship).
Subject to the foregoing, Landlord shall not be liable to Tenant and Tenant
waives all claims against Landlord whatsoever, whether for personal injury,
property damage, loss of use of the Leased Premises, or otherwise, due to the
interruption or failure of telephone services to the Leased Premises. Tenant
hereby holds Landlord harmless and agrees to indemnify, protect and defend
Landlord from and against any liability for any damage, loss or expense due to
any failure or interruption of telephone service to the Leased Premises for any
reason. Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.



                                     - 35 -
<PAGE>   37

        IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound thereby
as of the Effective Date of this Lease first above set forth.

                                       LANDLORD:

                                       iSTAR SUNNYVALE PARTNERS, L.P.,
                                       a Delaware limited partnership




Dated: May 16, 2001                    By: /s/  ERICH STIGER
                                          --------------------------------------
                                       Title: VICE PRESIDENT
                                              ----------------------------------


                                       TENANT:

                                       TRIDENT MICROSYSTEMS, INC.,
                                       a Delaware corporation


Dated: May 16, 2001                    By: /s/  PETER JEN
                                          --------------------------------------
                                       Title: CHIEF ACCOUNTING OFFICER
                                              ----------------------------------

Dated: May 16, 2001                    By: /s/  FRANK LIN
                                          --------------------------------------
                                       Title: CHIEF EXECUTIVE OFFICER
                                              ----------------------------------






                                     - 36 -
<PAGE>   38

                                    EXHIBIT A

                                    SITE PLAN









                                     - 1 -
<PAGE>   39

                                    EXHIBIT B

                             [INTENTIONALLY OMITTED]









                                     - 1 -
<PAGE>   40

                                    EXHIBIT C

                             CONSTRUCTION DRAWINGS









                                     - 1 -
<PAGE>   41

                                    EXHIBIT D

                       FORM OF TENANT ESTOPPEL CERTIFICATE

                           TENANT ESTOPPEL CERTIFICATE

To:     iStar Sunnyvale Partners, L.P.
        c/o iStar Financial, Inc.
        One Embarcadero Center, Suite 3300
        San Francisco, CA 94111
        ATTN: Asset Management

        ______________________________
        ______________________________
        ______________________________
        ATTN:_________________________


                Re: Lease, dated as of _____________, 2001 between
                ________________, a ________________, as tenant (the original
                named tenant under the Lease, together with such tenant's
                successors and assigns, being hereinafter referred to
                collectively as the "Tenant"), and iStar Sunnyvale Partners,
                L.P., a Delaware limited partnership ("Landlord"), covering
                certain premises known by the street address ________________ in
                the City of Sunnyvale, County of Santa Clara, State of
                California (the "Leased Premises"), as amended as noted on
                attached Schedule A (collectively, the "Lease")

Gentlemen:

        The undersigned Tenant hereby represents, warrants and certifies to
________________ ("________") and Landlord, that:

        1. The Lease has not been modified, changed, altered or amended in any
respect, either orally or in writing, except as may be indicated on Schedule A
attached hereto, and constitutes the entire agreement between Tenant and
Landlord affecting Tenant's leasing of the Leased Premises. A true and correct
copy of the Lease is attached as Schedule B. The Lease is in full force and
effect and is not subject to any contingencies or conditions not set forth in
the Lease.

        2. The term of the Lease commenced on ____________ ____, ____ and will
expire on ____________ ____, ____; the Tenant has no option to renew the Lease
Term.

        3. The monthly base rent payable under the Lease as of the current month
is $________________. Tenant has paid all fixed and additional rent and other
sums which are due and payable under the Lease through the date hereof, and
Tenant has not made and will not make any prepayments of fixed rent (except
first month's rent) for more than one month in advance. To Tenant's best
knowledge, there are no presently unexpired rental concessions or abatements due
under the Lease except as set forth on Schedule A attached hereto. To Tenant's
best knowledge, Tenant has no credits, offsets, abatements, defenses,
counterclaims or deductions against any rental or other payments due under the
Lease or with respect to its performance of the other terms and conditions of
the Lease, and has asserted no claims against Landlord.

        4. Tenant has paid to Landlord a security deposit in the amount of
$__________. Landlord is the beneficiary under a letter of Credit in the amount
of $__________ required by the Lease as additional security. Tenant has not made
any other payments to Landlord as a security deposit, advance or prepaid rent
(except first month's rent).

        5. Landlord has completed, and, if required under the Lease, paid for,
any and all tenant work



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required under the Lease and Tenant has accepted the Leased Premises. Tenant is
not entitled to any further payment or credit for tenant work.

        6. To Tenant's current actual knowledge, Landlord is not in default in
the performance of any of the terms of the Lease, nor is there now any fact or
condition which, with notice or lapse of time or both, will become such a
default. Tenant has not delivered to Landlord any notice of default with respect
to the Landlord's obligations under the Lease.

        7. Tenant is in actual possession of the entire Leased Premises and, to
Tenant's current actual knowledge, is not in any respect in default under any of
the terms and conditions of the Lease, nor is there now any fact or condition
which, with notice or lapse of time or both, will become such a default. Tenant
has not received from Landlord any notice of default with respect to the
Tenant's obligations under the Lease.

        8. Tenant has not assigned, transferred, mortgaged or otherwise
encumbered its interest under the Lease, nor subleased any of the Leased
Premises, nor permitted any person or entity to use the Leased Premises, except
as otherwise indicated on Schedule A annexed hereto.

        9. Except as expressly provided in the Lease, Tenant:

                (i)     does not have any right to renew or extend the term of
                        the lease,

                (ii)    does not have any right to cancel or surrender the Lease
                        prior to the expiration of the term of the Lease,

                (iii)   does not have any option or rights of first refusal or
                        first offer to purchase or lease all or any part of the
                        Leased Premises or the real property of which the Leased
                        Premises are a part,

                (iv)    does not have any right, title or interest with respect
                        to the Leased Premises other than as lessee under the
                        lease, and

                (v)     does not have any right to relocate into other property
                        owned by Landlord or any of landlord's affiliates.

        10. There has not been filed by or, to Tenant's current actual
knowledge, against Tenant a petition in bankruptcy, voluntary or otherwise, any
assignment for the benefit of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States, or any state
thereof, or any other action brought under said bankruptcy laws with respect to
Tenant.

        11. If Tenant is required to provide insurance coverage under the Lease,
Tenant has not given or received written notice that Tenant's insurance coverage
will be canceled or will not be renewed.

        12. Tenant is not aware of any material defects or deficiencies in the
systems, elements or components of the Leased Premises. Tenant has not received
any written notice, citation or other claim alleging any material violation of
any applicable building, zoning, land use, environmental, anti-pollution,
health, fire, safety, access accommodations for the physically handicapped,
subdivision, energy and resource conservation or similar laws, statutes, rules,
regulations or ordinances, or any covenants, conditions and restrictions
applicable to the Leased Premises.

        13. To the current actual knowledge of Tenant, any and all brokerage and
leasing commissions relating to and/or resulting from Tenant's execution and
delivery of the Lease and occupancy of the Leased Premises have been paid in
full.

        14. The individual executing this Tenant Estoppel Certificate on behalf
of Tenant represents and warrants that he has the power and the authority to
execute this Tenant Estoppel Certificate on behalf of Tenant.



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        15. This Tenant Estoppel Certificate shall inure to the benefit of
__________ and Landlord and their respective nominees, successors, assigns,
participants and designees and shall be binding upon Tenant and its successors
and assigns.

Dated this ____ day of ____________, _______.

Tenant: __________________, a _______________


By:
   --------------------------------------
Its:
    -------------------------------------








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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
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<S>     <C>                                                                  <C>
ARTICLE 1 REFERENCE ......................................................     1

        1.1      REFERENCES ..............................................     1

ARTICLE 2 LEASED PREMISES, TERM AND POSSESSION ...........................     3

        2.1      DEMISE OF LEASED PREMISES ...............................     3
        2.2      RIGHT TO USE OUTSIDE AREAS ..............................     3
        2.3      LEASE COMMENCEMENT DATE AND LEASE TERM ..................     3
        2.4      DELIVERY OF POSSESSION; EARLY ACCESS ....................     3
        2.5      PERFORMANCE OF IMPROVEMENT WORK; ACCEPTANCE OF POSSESSION     4
        2.6      SURRENDER OF POSSESSION .................................     4

ARTICLE 3 RENT, LATE CHARGES AND SECURITY DEPOSITS .......................     5

        3.1      BASE MONTHLY RENT .......................................     5
        3.2      ADDITIONAL RENT .........................................     5
        3.3      YEAR-END ADJUSTMENTS; AUDITS ............................     5
        3.4      LATE CHARGE, AND INTEREST ON RENT IN DEFAULT ............     6
        3.5      PAYMENT OF RENT .........................................     7
        3.6      PREPAID RENT ............................................     7
        3.7      SECURITY DEPOSIT ........................................     7

ARTICLE 4 USE OF LEASED PREMISES AND OUTSIDE AREA ........................     7

        4.1      PERMITTED USE ...........................................     7
        4.2      GENERAL LIMITATIONS ON USE ..............................     7
        4.3      NOISE AND EMISSIONS .....................................     8
        4.4      TRASH DISPOSAL ..........................................     8
        4.5      PARKING .................................................     8
        4.6      SIGNS ...................................................     8
        4.7      COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS ...........     9
        4.8      COMPLIANCE WITH INSURANCE REQUIREMENTS ..................     9
        4.9      LANDLORD'S RIGHT TO ENTER ...............................     9
        4.10     USE OF OUTSIDE AREAS ....................................     9
        4.11     ENVIRONMENTAL PROTECTION ................................     9
        4.12     RULES AND REGULATIONS ...................................    11

ARTICLE 5 REPAIRS, MAINTENANCE, SERVICES AND UTILITIES ...................    11

        5.1      REPAIR AND MAINTENANCE ..................................    11
        5.2      UTILITIES ...............................................    12
        5.3      SECURITY ................................................    12
        5.4      ENERGY AND RESOURCE CONSUMPTION .........................    12
        5.5      LIMITATION OF LANDLORD'S LIABILITY ......................    13

ARTICLE 6 ALTERATIONS AND IMPROVEMENTS ...................................    13

        6.1      BY TENANT ...............................................    13
        6.2      OWNERSHIP OF IMPROVEMENTS ...............................    14
        6.3      ALTERATIONS REQUIRED BY LAW .............................    14
        6.4      LIENS ...................................................    14

ARTICLE 7 ASSIGNMENT AND SUBLETTING BY TENANT ............................    14
</TABLE>



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<TABLE>
<CAPTION>
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<S>     <C>                                                                  <C>
        7.1      BY TENANT ...............................................    14
        7.2      MERGER, REORGANIZATION, OR SALE OF ASSETS ...............    15
        7.3      LANDLORD'S ELECTION .....................................    16
        7.4      CONDITIONS TO LANDLORD'S CONSENT ........................    16
        7.5      ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED .....    17
        7.6      PAYMENTS ................................................    17
        7.7      GOOD FAITH ..............................................    17
        7.8      EFFECT OF LANDLORD'S CONSENT ............................    17
        7.9      OPTIONS PERSONAL ........................................    18
        7.10     TENANT'S REMEDIES .......................................    18

ARTICLE 8 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY ...............    18

        8.1      LIMITATION ON LANDLORD'S LIABILITY AND RELEASE ..........    18
        8.2      TENANT'S INDEMNIFICATION OF LANDLORD ....................    18

ARTICLE 9 INSURANCE ......................................................    19

        9.1      TENANT'S INSURANCE ......................................    19
        9.2      LANDLORD'S INSURANCE ....................................    20
        9.3      MUTUAL WAIVER OF SUBROGATION ............................    20

ARTICLE 10 DAMAGE TO LEASED PREMISES .....................................    21

        10.1     LANDLORD'S DUTY TO RESTORE ..............................    21
        10.2     INSURANCE PROCEEDS ......................................    21
        10.3     LANDLORD'S RIGHT TO TERMINATE ...........................    21
        10.4     TENANT'S RIGHT TO TERMINATE .............................    21
        10.5     TENANT'S WAIVER .........................................    22
        10.6     ABATEMENT OF RENT .......................................    22

ARTICLE 11 CONDEMNATION ..................................................    22

        11.1     TENANT'S RIGHT TO TERMINATE .............................    22
        11.2     LANDLORD'S RIGHT TO TERMINATE ...........................    22
        11.3     RESTORATION .............................................    22
        11.4     TEMPORARY TAKING ........................................    22
        11.5     DIVISION OF CONDEMNATION AWARD ..........................    22
        11.6     ABATEMENT OF RENT .......................................    23
        11.7     TAKING DEFINED ..........................................    23

ARTICLE 12 DEFAULT AND REMEDIES ..........................................    23

        12.1     EVENTS OF TENANT'S DEFAULT ..............................    23
        12.2     LANDLORD'S REMEDIES .....................................    24
        12.3     LANDLORD'S DEFAULT AND TENANT'S REMEDIES ................    25
        12.4     LIMITATION OF TENANT'S RECOURSE .........................    25
        12.5     TENANT'S WAIVER .........................................    26

ARTICLE 13 GENERAL PROVISIONS ............................................    26

        13.1     TAXES ON TENANT'S PROPERTY ..............................    26
        13.2     HOLDING OVER ............................................    26
        13.3     SUBORDINATION TO MORTGAGES ..............................    26
        13.4     TENANT'S ATTORNMENT UPON FORECLOSURE ....................    27
        13.5     MORTGAGEE PROTECTION ....................................    27
        13.6     ESTOPPEL CERTIFICATE ....................................    27
        13.7     FINANCIAL STATEMENTS AND INFORMATION ....................    28
</TABLE>



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<TABLE>
<CAPTION>
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<S>     <C>                                                                  <C>
        13.8     TRANSFER BY LANDLORD ....................................    28
        13.9     FORCE MAJEURE ...........................................    28
        13.10    NOTICES .................................................    28
        13.11    ATTORNEYS' FEES .........................................    29
        13.12    DEFINITIONS .............................................    29
        13.13    GENERAL WAIVERS .........................................    30
        13.14    MISCELLANEOUS ...........................................    31

ARTICLE 14 CORPORATE AUTHORITY BROKERS AND ENTIRE AGREEMENT ..............    31

        14.1     CORPORATE AUTHORITY .....................................    31
        14.2     BROKERAGE COMMISSIONS ...................................    31
        14.3     ENTIRE AGREEMENT ........................................    31
        14.4     LANDLORD'S REPRESENTATIONS ..............................    32

ARTICLE 15 OPTIONS TO EXTEND .............................................    32

ARTICLE 16 TELEPHONE SERVICE .............................................    34
</TABLE>













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