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                                                                   EXHIBIT 10.15

                                 PREMISES LEASE

This Lease is made and entered into as of January 11, 1998, between Point 
Richmond R&D Associates II, LLC, a California Limited Liability Company 
("Landlord") and Pixar Animation Studios, a California Corporation ("Tenant").

     1.   DEFINITIONS. Words not defined in this Section or elsewhere in this 
Lease have their customary meanings. (1) "Term" is the total of the Initial 
Term and any validly exercised Option Terms allowed by this Lease; the "Initial 
Term" is three years; (2) "Commencement Date" is January 15, 1999, which is 
also the first day of the Initial Term; (3) "Base Monthly Rent" means, subject 
to adjustment as provided in the Lease, $2.00 per month per Rentable Square 
Foot, payable in advance, without deduction, offset, prior notice or demand, on 
the first day of each Month of the Term; (4) "Premises" means the part of the 
Building leased to Tenant for Tenant's exclusive use, consisting of the 
portions of the Building shown on Exhibit A to this Lease as Space A; (5) 
"Building" means the structure in which the Premises are located; (6) 
"Property" includes the Building and land on which it stands, commonly known as 
1003 West Cutting Boulevard, Richmond, California; (7) "Agents" includes 
employees, agents, guests, invitees and, when applied to tenant, subtenants and 
assignees; (8) "Day", "Month" and "Year" mean, respectively, calendar 
day/month/year; (9) "Lease Year" means consecutive 12-month periods starting on 
the Commencement Date; (10) "Common Area" means parts of the Building not for 
exclusive use by Tenants including halls, lobby, elevators, rest rooms, roof, 
exterior walls and structural components; (11) "Tax" means any form of 
assessment, license, fee, rent, tax, levy, penalty or tax imposed by any 
authority having direct or indirect taxing powers (including Improvement 
Districts) against Landlord's interest in the Property or personal property 
used in the operation of the Property and/or Landlord's business of renting the 
Property; (12) "Alteration" includes additions, deletions, modifications and 
changes to the Premises (including utility installations such as ducting, 
power panels, fluorescent fixtures, base heaters, conduit and wiring); (13) 
"Operating Expenses" are all expenses for maintenance, servicing, management 
and repair of the Property and the Premises inclusive of Taxes and insurance 
premiums; (14) "Base Year" means calendar year 1999; (15) Tenant's "Pro Rata 
Share" is the total cost of an item multiplied by 14% [Landlord may adjust 
Tenant's Pro Rata Share of specific Operating Expenses if Landlord reasonably 
determines that Tenant's usage warrants an adjustment]; (16) "Floor Area of the 
Premises" is measured from the exterior surface of exterior walls and from the 
center of walls separating the Premises from adjacent premises or common areas; 
(17) "Floor Area of the Building" is measured from the exterior surface of 
exterior walls including common and core areas; (18) "consent" and "approval" 
require reasonable conduct by the acting party; (19) "Regulation" includes all 
laws, ordinances statutes, regulations and requirements adopted by duly 
constituted public authorities now in force or hereafter adopted; (20) 
"Litigation" includes judicial actions, arbitrations and administrative 
proceedings; (21) "Condemnation" includes taking by exercise of governmental 
power or the transfer to any condemnor under threat of or 


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during the pendency of condemnation proceedings; (22) "Usable Square Foot" 
refers to space within the total Floor Area of the Building consisting of the 
square footage of the Premises less the amount of square footage of the Common 
Areas. The Premises contain about 5,470 Usable Square Feet; (23) "Load Factor" 
means that portion of the Common Area attributable to the Premises which shall 
be calculated as 12.5% of the usable square footage or about 684 square feet 
(24) "Rentable Square Foot" refers to each square foot of the Floor Area of the 
Premises adjusted to include a prorata portion of the Common Area (halls, 
entryways, lobbies, rest rooms, etc.). The Premises contain about 6154 Rentable 
Square Feet; (25) "Rent" means the total of the Base Monthly Rent plus all 
Additional Rent required to be paid under the provisions of this Lease; (26) 
"Normal Working Hours" means 7:00 am through 7:00 pm, Monday through Friday, 
excluding bank holidays (days on which consumer branches of the Bank of America 
(or any successor to the Bank of America) are not open).

     2.   PREMISES. Landlord hereby leases to Tenant and Tenant shall have 
exclusive use of the Premises for the Term, including any extension of the 
Term. Tenant shall also have a non-exclusive right to use the Common Area in 
conjunction with all other tenants of the Building.

     3.   DELAY IN POSSESSION. If Landlord cannot deliver possession of the 
Premises to Tenant on the scheduled Commencement Date, the failure shall not 
affect this Lease's validity, or render Landlord liable for resulting damages; 
but Tenant shall not be obligated to pay rent until Landlord tenders 
possession. If Landlord cannot deliver possession within 90 days of the 
scheduled Commencement Date, Tenant may terminate this Lease on written notice 
to Landlord. In such event, Tenant shall have no further recourse against 
Landlord respecting the Lease. If this lease is not terminated for delayed 
possession and possession is not delivered to Tenant on the scheduled 
Commencement Date, the Commencement Date shall be deemed the date on which 
Landlord tenders possession of the Premises to Tenant and the Term will run 
from the new Commencement Date.

     4.   RENT. Tenant shall pay all Rent due Landlord in United States dollars
at the address for notice set forth below, or such other place as Landlord
designates in writing. If Alterations increase the Rentable Square Feet of the
Premises, Base Monthly Rent will increase proportionately. If the obligation to
pay rent commences other than on the first day of a Month, the first payment
shall include rent from the date the obligation commences to the first day of
the following month calculated per diem on the basis of a 30 Day Month.

          4.1. BASE MONTHLY RENT. The Base Monthly Rent shall be $12,308 (6,154 
Rentable Square Feet at $2.00 per Rentable Square Foot per month).

          4.2. BASE MONTHLY RENT ADJUSTMENT. The Base Monthly Rent shall not be 
adjusted during the Term.

          4.3. ADDITIONAL RENT. For each year during the Term that Operating 
Expenses for the Property exceed the Base Year's Operating Expenses, Tenant 
shall pay to Landlord, in addition to the Base Monthly Rent and all other 
payments due under this Lease, an amount equal to Tenant's Pro Rata Share of 
the amount by which the actual Operating Expenses for that year exceed the Base 
Year Operating Expenses (the "Excess Operating Expenses"). It is the intent of 
the parties that Tenant shall pay to Landlord Tenant's Pro Rata Share of 
increases in Operating


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Expenses for the Property over the amount of the Base Year Operating Expenses. 
Payment obligations created by to this paragraph are elements of "Additional 
Rent". In the event that Tenant questions any amount demanded by Landlord as 
Additional Rent, Landlord shall provide Tenant with verification of the amounts 
required from Tenant and Tenant shall have the right to review such 
documentation. In the event of any error discovered in such review process, the 
amount will be appropriately adjusted.

          4.4. CALCULATION OF BASE YEAR OPERATING EXPENSES. Base Year Operating
Expenses shall be determined as the actual Operating Expenses incurred for the
Property during the Base Year. Within three months following the first
anniversary of the Commencement Date, or as soon thereafter as may be practical,
Landlord shall prepare and deliver to Tenant a schedule of Base Year Operating
Expenses. The said schedule will fix the amount of the Base Year Operating
Expenses for all purposes under the provisions of this Lease. Should Tenant
question the said schedule, Landlord shall provide Tenant with verification of
the amounts set forth in the schedule. In the event Landlord, for any reason,
neglects or fails to timely provide the required schedule of Base Year Operating
Expenses to Tenant, such failure shall not be deemed a default under or breach
of this Lease by Landlord for any purpose, neither shall it be deemed a waiver
of any rights of Landlord to collect Tenant's Pro Rata Share of excess Operating
Expenses, neither shall such failure by Landlord excuse Tenant from performance
of any of Tenant's obligations under the provisions of this Lease. Landlord
shall be required to deliver the required schedule of actual Base Year Operating
Expenses to Tenant no less than 60 days prior to the date on which Tenant's
payment is due to Landlord for Tenant's Pro Rata Share of Excess Operating
Expenses.

          4.5. SECURITY DEPOSIT. Tenant shall give Landlord as a security
deposit the sum of $12,308 (the "Deposit"). Landlord shall hold the Deposit as
security for Tenant's faithful performance of all its obligations under this
Lease and may, at its option, apply the Deposit to remedy defaults in the
payment of any charge hereunder, to repair damages to the Property caused by
Tenant, or to clean the Premises at the end of this Lease. If any portion of the
Deposit is so applied, Tenant shall, within 10 Days after written demand
therefor, deliver to Landlord funds sufficient to restore the Deposit to its
original amount. Landlord shall not be required to keep the Deposit separate
from its general funds. Tenant shall earn no interest on the Deposit.

          4.6. LATE CHARGES. Late payment of any sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, including, without
limit, accounting charges and late charges that may be imposed on Landlord by
the terms of loans secured by the Property. If Tenant fails to deliver to
Landlord any moneys due hereunder within 10 Days of the due date, Tenant shall
pay to Landlord a late charge of 10% of the overdue amount which is agreed to be
a reasonable estimate of the costs Landlord will incur by reason of the late
payment, the exact amount of which will be difficult to determine. Acceptance of
a late charge shall not constitute a waiver of the default or preclude
Landlord's exercise of other rights and remedies.

     5.   TAXES. Landlord shall pay (subject to Tenant's obligation to 
contribute to Excess Operating Expenses) all Taxes assessed against Landlord's 
interest in the Property and personal property used in its operation. Tenant 
shall pay all Taxes assessed on Tenant's fixtures, improvements, furnishings, 
merchandise, equipment and personal property in and on the Premises. If Tenant 
fails to timely pay Taxes, Landlord may (but is not obligated to) pay the same 
at any time thereafter. On demand, Tenant shall repay Landlord amounts so paid 
with


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interest at the highest rate allowable by law. If Tenant desires to contest the
validity or amount of any Tax applicable to the Premises, Tenant shall be
entitled to do so and to defer payment of such Tax until final determination of
such contest upon giving Landlord written notice thereof prior to commencing
such contest and protecting Landlord on demand by obtaining a surety bond in the
amount of 150% of the total amount of Taxes in dispute. The surety bond shall
hold Landlord harmless from any damages or costs incurred in connection with the
contest. Landlord shall, at Tenant's request, cooperate in all reasonable ways
requested by Tenant in connection with the contest of Taxes, provided that
Tenant pays all reasonable costs incurred by Landlord resulting from such
cooperation.

     6.   INSURANCE.

          6.1. LANDLORD'S INSURANCE. Landlord shall insure the Property for up 
to 100% of its replacement value against loss or damage by those risks normally
included by the insurance industry in the term "All Risk"; any recovery from
such insurance shall belong to Landlord. Landlord shall maintain comprehensive
general liability insurance insuring Landlord (and others named by Landlord, but
not Tenant) against liability for bodily injury, death and property damage on or
about the Property, with combined single limit coverage of at least $2 million.

          6.2. TENANT'S INSURANCE. Tenant, at its sole expense, shall maintain:
a) All Risk coverage insurance on all fixtures, improvements, furnishings,
merchandise, equipment and personal property in the Premises; and b) for the
benefit of Tenant and Landlord, commercial general liability and property damage
insurance against claims for bodily injury, death or property damage occurring
in or about, and/or arising from Tenant's use of, the Premises, with combined
single limit coverage of at least $2,000,000 (such insurance shall include,
without limitation, products liability, coverage for liability arising from
consumption of any food or beverages sold from the Premises (including coverage
for liability from consumption or sale of alcoholic beverages). Such insurance
coverage shall not limit Tenant's liability. Tenant shall furnish to Landlord
prior to the Commencement Date, and at least 30 Days prior to the expiration
date of any policy, certificates indicating that the insurance required of
Tenant is in full force and effect, that Landlord has been named as an
additional insured on the liability policy, and that no such policy will be
canceled unless 30 Days' prior written notice has been given to Landlord. Each
liability policy shall include a broad form liability endorsement and provide
that Landlord as an additional insured may recover for any loss it suffers by
reason of acts/omissions of Tenant and its Agents. Except as Landlord may
approve in writing before issuance of such policy, all policies which Tenant
shall obtain hereunder shall be issued by companies with "AAA" rating by either
Moody's Rating Service or Standard & Poor's Rating Service and general policy
rating of at least A in Best Insurance Guide's then most current issue. Policies
obtained by Tenant pursuant to this Lease shall be subject to Landlord's
reasonable approval.

          6.3. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary 
in this Lease, the parties release each other and their respective officers,
agents, employees and servants, from all claims for damages, loss, expense or
injury to the Premises, and/or to the furnishings and fixtures and equipment or
inventory or other property of either Landlord or Tenant in, about or upon the
Premises, which is caused by or results from perils, events or happenings which
are covered by insurance in force at the time of any such loss or by insurance
required to be carried hereunder; provided, however, that such waiver shall be
effective only to



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the extent permitted by the applicable insurance and only to the extent such 
insurance coverage is not prejudiced thereby. Each party shall cause every 
insurance policy obtained by it to provide that the insurance company waives 
all right of recovery by way of subrogation in connection with any damage 
covered by such policy.

     6.4.  LANDLORD INDEMNIFICATION. Tenant will indemnify and save Landlord 
harmless from and against any and all claims, actions, damages, liability and 
expense relating to loss of life, personal injury and/or property damage 
arising from or out of any occurrence in, upon or at the Premises, or the 
Tenant's occupancy and/or use of the Property, occasioned wholly or in part by 
any acts or omissions of Tenant and its Agents. If Landlord becomes a party to 
such Litigation commenced by or against Tenant, Tenant shall defend and hold 
Landlord harmless from all claims, liabilities, costs and expenses, and shall 
pay all costs, expenses and reasonable legal fees incurred by Landlord in 
connection with such Litigation. If Tenant is made a party to Litigation 
commenced by or against Landlord solely as a result of Landlord's acts or 
omissions, Landlord shall defend Tenant and indemnify Tenant against the costs 
of such Litigation. The provisions of this Paragraph shall be deemed to apply 
only to those circumstances where a portion of a loss or claim is not covered 
by existing insurance covering the indemnified party and then only to the 
extent that such loss or claim is not covered by insurance. This Paragraph 
shall not preclude application of comparative negligence if the parties or 
their agents are both at fault.

     6.5.  TENANT INDEMNIFICATION. Landlord will indemnify and save Tenant 
harmless from and against any and all claims, actions, damages, liability and 
expense relating to loss of life, personal injury and/or property damage 
arising from or out of any occurrence in, upon or at the Premises, or the 
occupancy or Landlord's use of the Property, occasioned wholly or in part by 
any acts or omissions of Landlord and its Agents or arising from or out of any 
occurrence in, upon, or at the Property (other than the Premises), except to 
the extent that such occurrence or event was caused by the acts or omissions of 
Tenant and its Agents. If Tenant becomes a party to such Litigation commenced 
by or against Landlord, Landlord shall defend and hold Tenant harmless from all 
claims, liabilities, costs and expenses, and shall pay all costs, expenses and 
reasonable legal fees incurred by Tenant in connection with such Litigation. 
The provisions of this Paragraph shall apply only to those circumstances where 
a portion of a loss or claim is not covered by existing insurance covering the 
indemnified party and then only to the extent that such loss or claim is not 
covered by insurance. This Paragraph shall not preclude application of 
comparative negligence if the parties or their agents are both at fault.

     6.6.  WORKER'S INSURANCE. Tenant shall keep in force for the Term and pay 
for worker's compensation and other insurance to comply with all applicable 
Regulations.

7.   MAINTENANCE.

     7.1.  PREMISES. During the Term, Landlord shall maintain the Premises
(including all interior walls, doors, doorways, lighting fixtures, plumbing
fixtures, and all windows) in good order, condition and repair, subject to
Tenant's obligation to pay for damages caused by the acts of Tenant and its
Agents. Tenant waives the provisions of any law permitting Tenant to make
repairs at Landlord's expense, including, without limitation, California Civil
Code Sections 1941-1946. Landlord will supply janitorial services for the
Premises as Landlord deems appropriate, but to a standard comparable to such
services provided to similar use buildings in the city where the 



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Property is located.
     
          7.2. COMMON AREAS. Landlord shall maintain the Common Area in
reasonably good order and condition; however, damage caused by the acts or
omissions of Tenant and/or its Agents shall be repaired at Tenant's expense.
Landlord shall maintain all improvements and appurtenances upon the Property in
good order, condition and repair. Tenant shall notify Landlord in writing of
required repairs to the Property. Landlord shall make necessary repairs in a
reasonable time. Maintenance and repairs shall be completed in a good and
workmanlike manner using such methods as Landlord deems appropriate in its sole
discretion. Landlord shall make commercially reasonable efforts to perform
maintenance and repairs with minimum interference with Tenant's business
operations.

          7.3.  ALTERATIONS. Tenant shall make no Alteration to the Property
costing in excess of $2,500 without Landlord's prior written consent, which
Landlord will not unreasonably withhold. Landlord may impose such conditions
upon approval of an Alteration as Landlord may deem appropriate. Every
Alteration shall be done under supervision of a licensed contractor and in
accordance with plans and specifications furnished to and approved by Landlord
prior to commencement of work. If an Alteration increases the Floor Area of the
Premises, the Base Monthly Rent and Tenant's Pro Rata Share shall be increased
in proportion to the resulting increase in the Floor Area of the Premises.
Tenant shall give Landlord 7 Days' advance written notice prior to starting
construction of each Alteration. Each Alteration shall remain in place and
become the property of Landlord, unless, at the time of consent, Landlord
required removal of the Alteration on Termination, in which case, Tenant shall
remove such Alteration(s) and restore the Premises to their pre-Alteration
condition at Termination.

          7.4.  SYSTEMS. The heating/air-conditioning ("HVAC"), plumbing and
electrical systems (collectively "Systems") shall not be used for any purpose
other than that for which they were constructed. Tenant shall pay for repairs
resulting from the willful misconduct of Tenant and its Agents and for any
violation of the provisions of this paragraph. 

          7.5.  LIENS. Tenant shall keep the Property free of liens arising out
of obligations incurred, work performed or materials furnished for or to Tenant.
Tenant shall indemnify Landlord against all costs, liens and encumbrances from
work performed or materials furnished by or at Tenant's direction. If Tenant
fails to obtain removal of such lien within 20 Days following its imposition,
Landlord shall have the right, but not the obligation, to obtain such release by
such means as it deems proper, including payment of the underlying claim. On
demand, Tenant shall reimburse Landlord for all such sums paid and expenses
incurred by Landlord in connection therewith (including attorneys' fees and
costs) together with interest at the highest rate allowable by law from the date
Landlord makes such payment until the date of reimbursement.

     8.   MANAGEMENT. The Wareham Property Group, Inc., an affiliate of 
Landlord, or another affiliated, or unaffiliated, third party, will manage the 
Property for a reasonable fee, which fee shall be set and, from time to time, 
adjusted by Landlord in line with fees for such services for similar use 
buildings in the San Francisco-Oakland Bay Area.

     9.   UTILITIES AND SERVICES.

          9.1.  PREMISES. Landlord will make HVAC and utilities for heating and 
lighting use

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available to the Premises during Normal Working Hours. The cost of such 
utilities and services, shall be considered a portion of the Operating 
Expenses, subject to a maximum utilities charge of $.13 per month per Usable 
Square Foot per month. Any utility and service costs in excess of $.13 per 
Usable Square Foot per month shall be paid by Tenant to Landlord upon demand. 
Should Tenant desire to use the Premises other than during Normal Working 
Hours, Tenant shall pay Landlord as Additional Rent, and within 21 days of 
receipt of Landlord's bill therefor, the cost of providing additional utilities 
and services for the extra time and use. Landlord shall estimate the actual 
cost of such services and expenses in the best exercise of its reasonable 
business judgment and bill in accordance with that estimate. Tenant shall 
provide its own janitorial services for the Premises at Tenant's own expense.

          9.2.  COMMON AREAS. Landlord shall provide Common Area utilities, 
landscaping, janitorial and, if Landlord deems it appropriate, security 
services, all of which shall be considered Operating Expenses, to a standard 
comparable to other similar use buildings in the general vicinity of the 
Property.

          9.3.  LIMITATION OF LIABILITY. Landlord shall not be in default under 
the provisions of this Lease or be liable for any damages directly or 
indirectly resulting from the following conditions: (1) the interruption of use 
of any equipment in connection with the furnishing of any of the services 
described in Paragraphs 9.1 and 9.2 of this lease; (2) failure to furnish or 
delay in furnishing any services referred to in Paragraphs 9.1 and 9.2 of this 
lease where failure or delay is caused by accident or any condition or event 
beyond Landlord's reasonable control; (3) the limitation, curtailment or 
rationing of, or restrictions on, use of water, electricity, gas or any other 
form of energy serving the Premises. Landlord shall not be liable under any 
circumstances for a loss of or injury to property or business, however 
occurring, through or in connection with or incidental to failure to furnish 
any such services. Notwithstanding the foregoing provisions of this Paragraph, 
in the event that utility service to the Premises is unavailable for a period 
exceeding 15 consecutive days, then from and after the 16th consecutive day 
without utility service and until utility service is restarted, Tenant shall be 
entitled to an abatement of rent unless the disruption of the utility service 
results in whole, or in part, from the acts and/or omissions of Tenant 
(inclusive of Tenant's agents, servants, employees, guests, invitees, 
operatives and/or contractors) in which case there shall be no abatement of 
rent.

     10.  USE OF PREMISES. This Lease is subject to all Regulations governing
use of the Property. Tenant has not entered into this Lease relying on any
representation by Landlord or its Agents as to suitability of the Premises for
the conduct of Tenant's Business. Tenant has made its own analysis of
suitability of the Premises for its intended use. Tenant shall: 1) use the
Premises for only general office, administrative and storage and other, legal,
related uses in connection with the development of computer software (including
testing of the software and training in its use); 2) pay Landlord the full
amount of any increased insurance premium resulting from Tenant's use of the
Premises; 3) at its sole expense, promptly comply with all Regulations and the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting Tenant's particular use of the
Premises. Tenant shall not: 1) sell or permit to be kept, used or sold in or
about the Premises any articles prohibited by a standard form policy of fire
insurance; 2) do or permit anything to be done in or about the Property which
will obstruct or interfere with rights of other occupants of the Property or
injure


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or annoy them; 3) maintain or permit any nuisance in or about the Property; 4) 
commit or suffer to be committed any waste in or upon the Property; 5) conduct 
or allow any auction or similar sale upon the Property; 6) do or permit 
anything to be done in or about the Property which will violate any Regulation 
[the judgment of any court of competent jurisdiction, a binding arbitration 
award, a decision after an administrative hearing or Tenant's admission in any 
Litigation (whether or not Landlord is a party) that Tenant has violated a 
Regulation shall be conclusive of that fact between Landlord and Tenant]; 7) 
place a sign upon the Property; 8) do or permit anything to be done which will 
increase existing insurance premiums for the Property or cause cancellation of 
any policy covering any of the Property. However, Tenant shall not be required 
to comply with or cause the Premises to comply with any Regulations requiring 
the construction of improvements in the Premises unless the compliance with any 
of the foregoing is necessitated by Tenant's particular use of the Premises.

     11.  DEFAULTS AND REMEDIES.
          11.1.     TENANT'S DEFAULT. The occurrence of any one or more of the 
following events shall constitute a default and breach of this Lease by Tenant:
(a) Tenant's failure to pay any Rent or charges required to be paid by Tenant 
under this Lease within 5 days of Landlord's delivery of written notice to 
Tenant that said amounts are past due; (b) Tenant's abandonment or vacation of 
the Premises; (c) Tenant's failure to promptly and fully perform any other 
covenant, condition or agreement contained in this Lease where such failure 
continues for 30 days after written notice from Landlord to Tenant of such 
default; (d) the levy of a writ of attachment or execution on this Lease or on 
any of the property of Tenant located in the Premises; (e) the making by Tenant 
of a general assignment for the benefit of its creditors or of an arrangement, 
composition, extension or adjustment with its creditors; (f) the filing by or 
against Tenant of a petition for relief or other proceeding under federal 
bankruptcy laws or state or other insolvency laws, which petition is not 
removed or which action is not dismissed within 90 days of its filing, or the 
assumption by any court or administrative agency, or by a receiver, trustee or 
custodian appointed by either, of jurisdiction, custody or control of the 
Premises or of Tenant or any substantial part of its assets or property; or (g) 
if the interest of Tenant under this Lease is held by a partnership or by more 
than one person or entity, the occurrence of any act or event described in 
parts (e) or (f) above in respect of any partner or principal in the Tenant 
entity. Except as otherwise specified by this Paragraph, in the event a 
nonmonetary default occurs which cannot reasonably be cured within the time 
period specified above and Tenant commences corrective action within said time 
period, Tenant shall not be subject to penalty under this Lease so long as 
Tenant prosecutes such corrective action diligently and continuously to 
completion.
          11.2.     LANDLORD'S REMEDIES. In the event of Tenant's default 
hereunder, then in addition to any other rights or remedies Landlord may have 
under this Lease or under law, Landlord may elect either of the remedies set 
forth in Paragraphs 11.2(a) or 11.2(b) Notwithstanding any other provision of 
this Lease, the Lessor has the remedy described in California Civil Code 
Section 1951.5 (Lessor (Landlord) may continue lease in effect after Lessee's 
(Tenant's) breach and abandonment and recover rent as it becomes due, if Lessee 
(Tenant) has the right to sublet or assign, subject only to reasonable 
limitations):

                    (a) To immediately terminate this Lease and Tenant's right
          to possession of the Premises by giving written notice to Tenant and
          to recover from Tenant an award of



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        damages equal to the sum of (i) the worth at the time of award of the
        unpaid rental which had been earned at the time of termination, (ii) the
        worth at the time of award of the amount by which the unpaid rental
        which would have been earned after termination until the time of award
        exceeds the amount of such rental loss that Tenant affirmatively proves
        could have been reasonably avoided, (iii) the worth at the time of award
        of the amount by which the unpaid rental for the balance of the term
        after the time of award exceeds the amount of such rental loss that
        Tenant affirmatively proves could be reasonable avoided, (iv) any other
        amount necessary to compensate Landlord for all the detriment either
        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, and (v) all such other amounts in addition
        to or in lieu of the foregoing as may be permitted from time to time
        under applicable law; or

           (b) To have this Lease continue in effect for so long as Landlord
        does not terminate this Lease and Tenant's right to possession of the
        Premises, in which event Landlord shall have the right to enforce all of
        the rights and remedies provided by this Lease and by law, including the
        right to recover the rental and other charges payable by Tenant under
        this Lease as they become due.

For purposes of this Section 11, the worth at the time of award of the amounts
referred to in Paragraph 11.2(a)(i) and 11.2(a)(ii) shall be computed by
allowing interest at the highest rate allowable by law, and the worth at time of
award of the amount referred to in part 11.2(a)(iii) shall be computed by
discounting such amount at the rate specified in California Civil Code Section
1951.2(b) or any successor statute. In such computations, the rent due shall
include Base Monthly Rent plus the aggregate amount of all Additional Rents and
other charges and amounts payable by Tenant pursuant to the provisions of this
Lease.

        11.3.  LANDLORD'S DEFAULT. Landlord will be in default if Landlord fails
to perform any obligation required of Landlord (other than a delay in delivery
of possession as provided for in Section 3 of this Lease) with 30 days after
written notice by Tenant, specifying wherein Landlord has failed to perform such
obligation; provided that if the nature of Landlord's obligation is such that
more than 30 days are required for performance, then Landlord shall not be in
default if Landlord commences performance within 30 days of Tenant's written
notice to Landlord of the problem and thereafter diligently prosecutes the same
to completion. Except as expressly set forth in this Lease, Tenant shall not
have any right whatsoever to terminate this Lease or to withhold, reduce or
offset any amount against any payments of rents or charges due and payable under
this Lease.

        12.  TERMINATION. Upon expiration of the Term or the early termination
of this Lease (collectively "Termination"), Tenant shall deliver up and
surrender to Landlord possession of the Premises in as good order and condition
as when Tenant took possession excepting only ordinary wear and tear. Tenant's
obligation with respect to the surrender of the Premises shall be fulfilled if
Tenant surrenders possession of the Premises in the condition existing at the
Commencement Date, except for ordinary wear and tear, casualties, condemnation,
Hazardous Materials (other than those released or emitted by Tenant in or about
the Premises) and 


                                       9
<PAGE>   10
alterations or other interior improvements which Landlord states in writing may 
be surrendered at the termination of the Lease. Upon Termination, Landlord may 
reenter the Premises and remove all persons and property therefrom. If Tenant 
fails to remove anything that Tenant is required or entitled to remove from the 
Premises on Termination, Landlord may remove the same and store or dispose of 
such item(s) in accordance with Civil Code Sections 1980-91. Tenant shall pay 
to Landlord on demand all expenses incurred in such removal and storage and in 
cleaning the Premises. If the Premises are not surrendered at the end of the 
Term, Tenant shall indemnify Landlord against all losses resulting from 
Tenant's delay in surrendering the Premises. If Tenant remains in possession of 
the Premises after expiration of the Term and if Landlord and Tenant have not 
executed an express written agreement as to such holding over, then such 
occupancy shall be a tenancy from month to month at a Base Monthly Rent fixed 
at 125% of the Base Monthly Rent in effect immediately prior to such 
expiration, such payments to be made as herein provided. In the event of such 
holding over, all terms of this Lease including the obligation for payment of 
all charges owing hereunder shall remain in force and effect on said month to 
month basis. The voluntary or other surrender of this Lease by Tenant, if 
accepted by Landlord, or a mutual cancellation thereof, shall not work a 
merger, but shall, at the Landlord's option, terminate or operate as an 
assignment to Landlord of any or all subleases or subtenancies.

     13.  CONDEMNATION OF PREMISES.

          13.1.  TOTAL CONDEMNATION. If the entire Premises are taken by 
Condemnation during the Term, this Lease shall terminate on the date of 
transfer of possession and Tenant shall have no claim against Landlord for the 
value of the unexpired Term.

          13.2.  PARTIAL CONDEMNATION. If any portion of the Premises is taken
by Condemnation during the Term, this Lease shall remain in full force and
effect; except that if a partial taking leaves the Premises unsuitable for
occupancy, Tenant may terminate this Lease effective on the date transfer of
possession is required unless Landlord makes other comparable arrangements for
Tenant's space. Landlord and Tenant shall each have the right to terminate this
Lease effective on the date transfer of possession is required in the event of
Condemnation of more than 25% of the Floor Area of the Premises. Either party
may exercise its right to terminate this Lease by serving 30 Days written notice
to the other within 30 Days of their receipt of notice of condemnation, except
that Tenant's notice shall be ineffective if Landlord serves written notice upon
Tenant of Landlord's election to provide alternate space equivalent to that
condemned within 10 Days of Tenant's deliver of notice to Landlord pursuant to
this Paragraph. Tenant shall have the right of reasonable approval of
replacement space. Landlord shall be required to deliver the alternate space to
Tenant within 60 Days of Landlord's notice to Tenant of its election to provide
alternate space. All rent and other obligations of Tenant under this Lease shall
be paid to the date of Termination; Tenant shall have no claim against Landlord
for any unexpired portion of the Term if the Lease is terminated under the
provisions of this Paragraph. If this Lease is not canceled after a partial
taking, Base Monthly Rent and Tenant's Pro Rata Share shall be adjusted to
reflect the net change in the Floor Area of the Premises. TENANT WAIVES
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1265.130.

          13.3.  AWARD TO TENANT. In the event of Condemnation, Tenant may 
claim from the condemnor such compensation as Tenant may separately recover for 
moving costs, loss of business, fixtures or equipment belonging to Tenant. 
Tenant shall have no other right to recover



                                       10
<PAGE>   11
from Landlord or the condemnor for any additional claims arising out of such 
taking.

     14.  LANDLORD'S ENTRY. Landlord and its Agents may enter the Premises at 
all reasonable times to: inspect; make repairs or Alterations; post "For Lease" 
signs during the last 120 Days of the Term; show the Premises during the last 
120 days of the Term; and/or to post notices of nonresponsibility. Landlord 
shall have such right of entry without any rebate of rent to Tenant for any 
loss of occupancy or quiet enjoyment of the Premises. Landlord shall provide 24 
hours' notice of intended entry except under circumstances Landlord deems an 
emergency. Landlord shall make commercially reasonable efforts to minimize any 
interference with Tenant's operations in connection with any entry by Landlord 
upon the Premises pursuant to this Paragraph.

     15.  LIMITATION OF LIABILITY AND INDEMNITY: This Section 15, inclusive of 
all paragraphs and subparagraphs, supersedes each and every other provision of 
this Lease.

          15.1. LIMITATION OF LANDLORD'S LIABILITY. LANDLORD SHALL NOT BE 
LIABLE FOR AMOUNTS EXCEEDING INSURANCE COVERAGE MAINTAINED BY LANDLORD UNDER 
THIS LEASE ("EXISTING COVERAGE") RESPECTING ANY INJURY OR DAMAGE, PROXIMATE OR 
REMOTE, OCCURRING THROUGH OR CAUSED BY REPAIRS OR ALTERATIONS TO THE PROPERTY, 
UNLESS THE INJURY OR DAMAGE ARISES FROM LANDLORD'S NEGLIGENCE, WILLFUL 
MISCONDUCT, OR BREACH OF THIS LEASE ("LANDLORD'S ACTS"). EXCEPT FOR LOSSES 
ARISING FROM LANDLORD'S ACTS, LANDLORD SHALL HAVE NO LIABILITY IN EXCESS OF 
EXISTING COVERAGE FOR ANY INJURY OR DAMAGE OCCASIONED BY DEFECTIVE ELECTRIC 
WIRING, OR THE BREAKING, BURSTING, STOPPAGE OR LEAKING OF THE PLUMBING, 
AIR-CONDITIONING, HEATING, FIRE CONTROL SPRINKLER SYSTEMS OR GAS, SEWER OR 
STEAM PIPES.

          15.2.  LIMITATION ON ENFORCEMENT OF REMEDIES. NOTWITHSTANDING ANY 
OTHER PROVISION OF THIS LEASE, TENANT AND ITS AGENTS SHALL, UNDER ALL 
CIRCUMSTANCES, BE ABSOLUTELY LIMITED TO LANDLORD'S INTEREST IN THE PROPERTY FOR 
SATISFACTION OF ANY AND ALL JUDGMENTS, AWARDS AND/OR ORDERS AGAINST LANDLORD 
RELATING TO OR ARISING OUT OF TENANT AND ITS AGENTS' OCCUPANCY AND USE OF THE 
PROPERTY AND/OR IN THE EVENT OF ANY DEFAULT BY LANDLORD UNDER THIS LEASE; AND 
NO OTHER PROPERTY OF LANDLORD OR ITS PARTNERS OR PRINCIPALS, DISCLOSED OR 
UNDISCLOSED, SHALL BE SUBJECT TO LEVY, EXECUTION OR OTHER ENFORCEMENT PROCEDURE 
FOR THE SATISFACTION OF TENANT AND ITS AGENTS' REMEDIES WITH RESPECT TO THIS 
LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, OR THE USE AND 
OCCUPANCY OF THE PROPERTY AND THE PREMISES BY TENANT AND ITS AGENTS. TENANT, ON 
BEHALF OF TENANT AND ITS AGENTS, WAIVES ALL RIGHTS TO COLLECT OR ENFORCE ANY 
AND ALL ORDERS, AWARDS AND/OR JUDGMENTS AGAINST LANDLORD IN EXCESS OF 
LIMITATIONS IMPOSED BY THIS SECTION 15. TENANT SHALL REQUIRE EVERY SUBTENANT 
AND ASSIGNEE OF TENANT AGREE TO BE BOUND BY THE WAIVER SET FORTH IN THIS 
SECTION. LANDLORD'S EXPOSURE AS SET FORTH IN THIS SECTION IS CUMULATIVE AND IN 
THE AGGREGATE (AS TO ALL JUDGMENTS, AWARDS AND ORDERS AGAINST LANDLORD ARISING 
IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, OR THE 
USE AND OCCUPANCY OF THE PROPERTY BY TENANT AND ITS AGENTS). LIMITS IMPOSED BY 
THIS SECTION INCLUDE DUTIES OF EXPRESS AND/OR IMPLIED INDEMNITY. "LANDLORD" 
INCLUDES ALL PERSONS AND ENTITIES WHO NOW OR HEREAFTER OWN AN INTEREST IN 
LANDLORD.


                    Initial                  Initial


                                       11
<PAGE>   12
     16.  ASSIGNMENT AND SUBLETTING. Tenant shall not directly or indirectly: 
(1) assign this Lease in whole or in part; (2) sublet any part or all of the 
Premises; (3) license the use of all or any part of the Premises or a business 
conducted thereon; or (4) encumber or hypothecate this Lease (collectively 
"Transfer"), without first obtaining Landlord's written consent, which consent 
shall not be unreasonably withheld or delayed. The transfer of shares of stock, 
partnership interests or other ownership interests in Tenant resulting in a 
change in the effective control of Tenant, or any merger, consolidation or 
other reorganization of Tenant is a Transfer of this Lease. Tenant's request 
for consent to any assignment, sublease or other transfer shall be in writing 
and shall include the following: (a) the name and legal composition of the 
proposed transferee; (b) the nature of the proposed transferee's business to be 
carried on in the Premises; (c) the terms and provisions of the proposed 
assignment or sublease; and (d) such financial and other information as 
Landlord may reasonably request concerning the proposed transferee or 
concerning the proposed assignment or sublease. Any Transfer of this Lease, in 
whole or in part, without Landlord's prior written consent shall constitute a 
default under this Lease. Landlord's consent to any Transfer shall not 
constitute a waiver of the need for such consent to any subsequent Transfer. 
Tenant may, without Landlord's prior written consent sublet the Premises or 
assign the Lease to (i) a subsidiary, affiliate, division or corporation, 
controlling, controlled by or under common control with Tenant. Landlord's 
failure to respond in writing to Tenant's request for consent to a Transfer 
within 30 Days of the delivery of the request to Landlord shall constitute 
Landlord's consent to the Transfer.

Notwithstanding the preceding Paragraph of this Section, provided that Tenant 
remains a publicly traded company and merges with or is purchased by another 
publicly traded company of equal or greater financial strength than Tenant, the 
transaction shall not be considered a Transfer of the Tenant's interest in this 
Lease.

Notwithstanding any Transfer with or without Landlord's consent, Tenant shall
remain fully liable on this Lease unless expressly released by Landlord in
writing. Without limiting other reasons or circumstances, Landlord and Tenant
agree that it is reasonable for Landlord to withhold consent if, in Landlord's
judgment: (i) in the case of an assignment of the Tenant's interest in this
Lease, the financial strength of the proposed assignee is not commensurate with
the obligations of the Lease; (ii) the proposed use would be incompatible with
the use of the rest of the Property; or (iii) the proposed use would generate
traffic and/or wear and tear materially in excess of Tenant's use. If Landlord
consents to a Transfer, Tenant shall pay Landlord's reasonable attorneys' fees
incurred in connection with such consent. Tenant shall pay to Landlord 50% of
all Excess Rent received by Tenant directly or indirectly in respect of Transfer
of all or any part of this Lease or of the Premises. "Excess Rent" means, in the
case of an assignment, all consideration attributable to this Lease and, in the
case of a sublease, all consideration in excess of the rents and charges
reserved under this Lease. Tenant, however, shall not be required to pay
Landlord any Excess Rent until Tenant has deducted therefrom the costs to Tenant
to effectuate the assignment or sublease, including attorneys' fees, leasing
commissions and remodeling costs.


                                       12
<PAGE>   13
     17. DAMAGE OR DESTRUCTION. Each party may terminate this Lease if the 
Premises or the Building are damaged to an extent exceeding 50% of the then 
replacement cost of the Premises (in the event of damage limited to the 
Premises) or 33% of the Building (in the event of damage not limited to the 
Premises). Landlord may also terminate this Lease if the Premises or the 
Building are damaged by an uninsured peril to an extent exceeding 33% of the 
then replacement cost of the Premises (in the event of damage limited to the 
Premises) or 25% of the Building (in the event of damages not limited to the 
Premises). If a party elects Termination under this section, the terminating 
party shall deliver written notice to the non-terminating party within 30 Days 
of the occurrence of the damage. Tenant shall have 30 Days to vacate the 
Premises unless they are unsafe for occupancy, in which case, Tenant shall 
immediately vacate. TENANT WAIVES SECTION 1932(2), AND SECTION 1933(4) OF THE 
CALIFORNIA CIVIL CODE. If this Lease is not terminated pursuant to this 
Section, Landlord shall, within 90 Days of the occurrence of the damage, 
proceed to repair the Building, on substantially the same plan as existed 
immediately before the occurrence of damage. Tenant shall be liable for repair 
and replacement of all fixtures, leasehold improvements, furnishings, 
merchandise, equipment and Tenant's personal property not covered by insurance. 
If Tenant is able to continue to conduct its business during the making of 
repairs, the Base Monthly Rent will be reduced during the repair period in the 
proportion that the unusable part of the Premises bears to the whole. 
Notwithstanding any other provision of this Lease, if the discounted present 
value of the Base Monthly Rent due for the remaining Term, using as the 
discount rate the prime commercial lending rate in effect at the Bank of 
America, NT&SA, as of the date of the damage is less than the cost of repairing 
the damage to the Premises, Landlord may terminate this Lease on 10 Days' 
written notice to Tenant.

     18. HAZARDOUS MATERIALS.

         18.1.  TENANT'S WARRANTIES. Tenant's obligations are:

               18.1.1.    RESTRICTIONS ON HAZARDOUS MATERIALS. Hazardous 
Material (as defined below) shall not be brought upon, manufactured, generated, 
disposed of, handled, used, kept or stored (collectively "Handled" or 
"Handling") in, on, about or under the Property by Tenant and its Agents 
without Landlord's prior written consent.

               18.1.2.    APPLICABLE REGULATIONS. If any Hazardous Material is 
Handled, in, on, about or under the Property by Tenant and its Agents, Tenant 
shall bear all responsibility for ensuring that such material shall be handled 
in compliance with all Environmental, Health and Safety Requirements regulating 
such Hazardous Material. Tenant shall procure, maintain in effect and comply 
with all conditions and requirements of any and all permits, licenses and other 
governmental and regulatory approvals or authorizations required by 
Environmental, Health or Safety Requirements relating to the Handling of 
Hazardous Material. Tenant shall give Landlord copies of all such permits, 
licenses, or other regulatory approvals within 5 Days of receipt.

               18.1.3.    RESTORATION. If, as a result of actions caused or 
permitted by Tenant and its Agents, Hazardous Material in, on, about or under 
the Property or any adjoining property results in contamination of the Property 
or other property, Tenant, at its sole expense, shall promptly take all actions 
as are necessary to return the Property and/or the other affected property to 
the condition existing prior to such contamination ("Restoration"). Tenant 
shall not, however, undertake Restoration without first providing Landlord with 
written notice and


                                       13
<PAGE>   14
obtaining Landlord's approval of the restoration procedures, work and
contractor. Tenant shall effect Restoration in compliance with all
Environmental, Health and Safety Requirements. Tenant shall not enter into any
settlement agreement, consent decree or compromise respecting any claims
relating to Hazardous Material connected with the Property without first
notifying Landlord of its intention to do so and affording Landlord ample
opportunity to appear, intervene or appropriately assert and protect Landlord's
interests.

        18.1.4.  REMOVAL. On Termination, Tenant shall remove from the Property
all Hazardous Materials in, on, about or under the Property Handled by Tenant
and its Agents and all receptacles and containers therefor, and shall cause such
Hazardous Materials, receptacles and containers to be Handled, transported and
disposed of pursuant to all applicable Environmental, Health and Safety
Requirements. Hazardous Materials, receptacles and containers shall be removed
by duly licensed haulers, transported to and disposed of at duly licensed
facilities for the disposal of such Hazardous Materials, receptacles or
containers. Tenant shall deliver to Landlord copies of all documentation
relating to Handling of Hazardous Materials, receptacles or containers therefor,
reflecting legal and proper Handling. Tenant shall, at its sole expense, repair
all damage to the Property resulting from its removal of Hazardous Materials,
receptacles and containers. Tenant shall continue to pay rent until completion
of such removal and repairs.

        18.1.5.  TENANT'S WRITTEN CONFIRMATION. Tenant shall execute such
documents as Landlord may request as to Tenant's knowledge of the presence of
Hazardous Materials in, on, about or under the Property. On each anniversary of
the Commencement Date, Tenant shall give Landlord a letter stating the during
the preceding year Tenant complied with this Section 18 or, if Tenant has not so
complied, stating the details of noncompliance.

        18.1.6.  TENANT'S DUTY TO NOTIFY LANDLORD. Tenant shall notify Landlord
in writing immediately upon learning of: (1) enforcement, cleanup, remediation
or other action threatened, instituted or completed by any governmental or
regulatory agency or private person with respect to the Property or any
adjoining property relating to Hazardous Materials; (2) any claim threatened or
made by any person against Tenant, Landlord, the Property or any adjoining
landowner, Tenant or property for personal injury, compensation or any other
matter relating to Hazardous Materials; and (3) any reports made by or to any
governmental or regulatory agency with respect to the Property or any adjoining
property relating to Hazardous Materials, including without limitation, any
complaints, notices or asserted violations in connection therewith. Tenant shall
supply to Landlord as promptly as possible, and in any event within 5 Days after
Tenant first receives or sends the same, copies of all claims, reports,
complaints, notices, warnings, asserted violations or other documents relating
in any way to the foregoing.

        18.2.  LANDLORD'S RIGHTS. Landlord and its Agents shall have the right
to communicate, verbally or in writing, with any regulatory agency or any
environmental consultant on any matter respecting the Property relating to
Hazardous Materials. Landlord shall be entitled to copies of all notices,
reports or other documents issued by or to any such regulatory agency or
consultant respecting the Property relating to Hazardous Materials.

        18.3.  TENANT'S DUTY TO INDEMNIFY. If the Handling by Tenant and its
Agents of Hazardous Materials results in contamination of the Property, or if
any lender or governmental agency requires an investigation to determine whether
there is contamination of the Property or any adjoining property as a result of
the Handling of Hazardous Materials by Tenant and its Agents, then Tenant shall
indemnify, defend and hold Landlord and its Agents and all of 


                                       14
<PAGE>   15

Landlord's partners or other affiliates, together with all their directors, 
officers, shareholders, employees, agents, contractors and attorneys, harmless 
from and defend them against any and all claims, damages, penalties, fines, 
costs, liabilities and losses (including, without limitation, diminution in 
value of the Property, damages for the loss or restriction on use of rental or 
usable space or of any other amenity of the Property, damages arising from any 
adverse impact on marketing of space in the Property, other consequential 
damages and sums paid in settlement of claims, attorneys' fees, consultants' 
fees and experts' fees) which arise during or after the Term as a result of 
such contamination. This indemnification includes, without limitation, costs 
incurred in connection with removal or restoration work required by any 
regulatory agency and/or private persons because of the presence of Hazardous 
Materials in the soil or groundwater in, on, about or under the Property or any
adjoining property as a result of the acts of Tenant and its Agents and legal 
fees and expenses incurred by Landlord relating to such claims, demands, 
investigations and responses.

     18.4. RIGHT OF ENTRY. If contamination of the Property by Hazardous 
Materials occurs or if any lender or regulatory agency requires an 
investigation to determine if there is contamination of the Property or any 
adjoining property, then Landlord and its Agents shall have the right, at any 
reasonable time and from time to time, to enter the Premises to perform 
monitoring, testing or other analyses, and to review applicable documents, 
notices, or other materials. If such contamination resulted from the conduct of 
Tenant and its Agents, Tenant shall pay, on delivery of Landlord's invoice, all 
costs and expenses reasonably incurred by Landlord in connection with such 
investigation, monitoring, and testing.

     18.5. DEFINITIONS. The following terms shall have the following meanings:

          18.5.1. "HAZARDOUS MATERIAL": means (a) any petroleum or chemical 
products, whether in liquid, solid, or gaseous form, or any fraction or 
by-product thereof, (b) asbestos or asbestos-containing materials, (c) 
polychlorinated biphenyls (PCBs), (d) radon gas, (e) underground storage 
tanks, (f) any explosive or radioactive substances, (g) lead or lead-based 
paint, or (h) any other substance, material, waste or mixture now or hereafter 
during the term of this lease listed, defined or otherwise determined by any 
governmental authority to be hazardous, toxic, dangerous or otherwise 
regulated, controlled or giving rise to liability under any Environmental 
Health and Safety Requirements.

          18.5.2. "ENVIRONMENTAL HEALTH AND SAFETY REQUIREMENTS" means any 
federal, state or local law or rule (whether imposed by statute, administrative 
or judicial order, or common law), now in force or hereafter enacted, governing 
health, safety, industrial hygiene, the environment, natural resources, or 
Hazardous Materials, including, without limitation, such laws governing or 
regulating the use, generation, storage, removal, recovery treatment, handling, 
transport, disposal, control, discharge of, or exposure to Hazardous Materials. 
All Environmental Health and Safety Requirements are Regulations under the 
terms of this Lease.

     18.6. ALLOCATION OF RESPONSIBILITIES. ALL LIABILITY ARISING FROM THE 
TRANSPORTATION OR HANDLING OF HAZARDOUS MATERIALS IN, ON, UNDER, AND/OR ABOUT 
THE PROPERTY OR ADJOINING PROPERTY BY TENANT AND ITS AGENTS SHALL, AT ALL 
TIMES, REMAIN TENANT'S SOLE RESPONSIBILITY, EVEN IF THE HAZARDOUS MATERIALS 
ORIGINATE FROM THE PROPERTY. NO ACT BY LANDLORD OR ITS AGENTS SHALL CONSTITUTE 
ASSUMPTION BY LANDLORD OF ANY OBLIGATIONS, DUTIES, LIABILITIES OR 


                                       15
<PAGE>   16
RESPONSIBILITIES PERTAINING TO TENANT'S COMPLIANCE WITH ANY ENVIRONMENTAL, 
HEALTH OR SAFETY REQUIREMENTS. NOTWITHSTANDING TERMINATION OF THIS LEASE, 
TENANT SHALL RETAIN ALL LIABILITY AND RESPONSIBILITY FOR COMPLIANCE WITH 
REGULATIONS AND ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS CONCERNING TENANT 
AND ITS AGENTS' HANDLING OF HAZARDOUS MATERIALS. TENANT SHALL INDEMNIFY AND 
HOLD LANDLORD AND ITS AGENTS HARMLESS FROM ALL COSTS AND EXPENSES ASSOCIATED 
WITH SUCH COMPLIANCE.

     18.7. INSPECTIONS. Tenant will cooperate with the completion of 
inspections of the Property as required by applicable law and regulation. 
Tenant shall provide to Landlord a copy of the reports for each such inspection 
within 15 days of Tenant's receipt of such reports.

     18.8. COOPERATION. Tenant will not interfere with Landlord's acts pursuant 
to the above-referenced Regulations. Tenant will comply with reasonable 
procedures promulgated by Landlord pursuant to such laws and regulations. 
Landlord shall have no duty to establish any procedures or to supervise in any 
way Tenant's activities on the Property.

     18.9. SURVIVAL. The covenants, agreements and indemnities set forth in 
this Section 18 shall survive Termination and shall not be affected by any 
investigation, or information obtained as a result of any investigation, by or 
on behalf of Landlord or any prospective Tenant.

     18.10. SPECIAL MATTERS.

            18.10.1. STORAGE TANKS: TENANT SHALL NOT INSTALL ANY STORAGE TANKS 
ON THE PROPERTY WITHOUT LANDLORD'S PRIOR WRITTEN CONSENT.

            18.10.2. FLAMMABLE CHEMICALS: Tenant shall store all flammable 
chemicals in a metal storage cabinet. Flammable Chemicals includes, without 
limitation, turpentine, thinner, brush cleaner, solvents and other combustible 
products.

            18.10.3. NFPA WARNINGS: If Tenant uses any chemicals on the 
Premises Tenant shall post an NFPA diamond on the exterior side of the door to 
the Premises.

     18.11. LANDLORD'S OBLIGATIONS. Landlord's obligations are:
            
            18.11.1. COMPLIANCE WITH REGULATIONS. If Landlord and its Agents 
Handle Hazardous Material in, on, about or under the Property, such material 
shall be Handled in compliance with all Environmental, Health and Safety 
Requirements.

            18.11.2. RESTORATION. If, as a result of Landlord's bringing 
Hazardous Material upon the Property, any contamination of the Property or the 
surrounding environment occurs, Landlord shall promptly take all necessary 
actions to return the Property and/or the surrounding environment to the 
condition existing prior to such contamination.

            18.11.3. DUTY TO NOTIFY TENANT. Landlord shall notify Tenant in 
writing upon learning of: (1) enforcement, cleanup, remediation or other action 
threatened, instituted or completed by any regulatory agency or private person 
with respect to the Property relating to Hazardous Materials; (2) any claim 
threatened or made against Landlord respecting the Tenant or the Property for 
personal injury, compensation or any other matter relating to Hazardous 
Materials; and (3) reports made by or to any regulatory agency respecting the 
Property, complaints, notices or asserted violations in connection therewith. 
Landlord shall supply to Tenant copies of claims, notices, warnings, or other 
documents relating to the foregoing.

           18.11.4. INDEMNITY OF TENANT. If Hazardous Materials, resulting from


                                       16
<PAGE>   17
Landlord's acts, contaminate the Property, or if the Property is contaminated 
on the Commencement Date, Landlord shall indemnify, defend, protect and hold 
Tenant and its Agents harmless from and against any and all claims, damages, 
penalties, costs, liabilities and losses resulting from such contamination.

     19.  MISCELLANEOUS PROVISIONS.

          19.1.  WAIVER. No waiver of any breach of this Lease shall be 
construed as a waiver of any other breach. Landlord's acceptance of rent after 
tenant's breach shall not be a waiver of any preceding breach of this Lease by 
Tenant, even if known by Landlord at the time.

          19.2.  NOTICES. Notices, requests, demands and other communications 
shall be in writing personally delivered or sent by certified mail, return 
receipt requested, postage prepaid, properly addressed to the other party at 
the address set forth by its signature below, or at such other address as may 
be designated in writing by one party to the other. Notice shall be effective 
on personal delivery or on the date indicated on the post office's certified 
mail receipt of delivery.

          19.3.  CONSTRUCTION. This Lease shall be construed pursuant to 
California law. The invalidity of any provision of this Lease shall not affect 
the remainder. All terms of this Lease shall be construed to mean either the 
singular or the plural, masculine, feminine or neuter, as the situation may 
demand. Headings are descriptive only and not determinative of meaning. Time is 
of the essence in performance of all obligations. This Lease constitutes the 
entire agreement between the parties respecting the subject matters that it 
addresses. This Lease supersedes all prior oral and written agreements 
respecting the hiring of the Premises. Provisions of this Lease may be waived, 
amended or repealed only by all parties' written consent. This Lease binds and 
inures to the benefit of the parties and their heirs, personal representatives, 
successors and assigns. Should any provision of this Lease require judicial 
interpretation, it is agreed that the court interpreting or construing the same 
shall not apply a presumption that the terms shall be more strictly construed 
against one party by reason of the rule that a document is to be construed more 
strictly against the party responsible for its preparation; the parties agree 
that all parties have participated in the preparation of this Lease.

          19.4.  MEMORANDUM. If Landlord requests a Memorandum of Lease, the 
parties shall execute, acknowledge and record a document identifying: the 
parties, Premises, Term and Commencement Date. No other memorandum of this 
Lease shall be recorded.

          19.5.  AUTHORITY. Each individual executing this Lease for a 
corporation warrants that he is duly authorized to execute and deliver the 
Lease for the corporation and that the Lease binds the corporation in 
accordance with its terms. Each individual executing this Lease on behalf of a 
partnership warrants that he is duly authorized to execute and deliver this 
Lease for the partnership and that this Lease binds the partnership in 
accordance with its terms.

          19.6.  LITIGATION. All Litigation arising out of or in connection with
this Lease shall be venued in Contra Costa County, California. The prevailing
party shall recover costs of suit and attorneys' fees, whether or not the matter
proceeds to judgment or award.

          19.7.  SUBORDINATION OF LEASEHOLD. This Lease shall, at all times, be
subordinate to the lien of any loan which Landlord may secure with the Property.
Tenant shall execute written instruments to effect such subordination
conditioned upon the lienholder executing a nondisturbance agreement providing
that absent Tenant's default, the lienholder will allow



                                       17
<PAGE>   18
Tenant to remain in possession of the Premises, subject to the provisions of 
this Lease, for the duration of the Term.

     19.8.  ESTOPPEL. Within 15 Days of Landlord's request, Tenant shall 
complete, execute and deliver to Landlord a certification: (a) 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); (b) of the date to which the rent and other charges are 
paid; (c) that Tenant knows of no uncured defaults on the part of Landlord 
hereunder, or specifying such defaults, if any are claimed; and (d) of the date 
of commencement and expiration of the Term. Tenant's failure to timely deliver 
the document constitutes a certification that Landlord is not in default under 
the Lease and the terms of the Lease are in force without modification. 
Prospective purchasers, lenders or lender's assignees may rely upon such 
certification.

     19.9.  ATTORNMENT. In the event of a sale of the Property or the completion
of foreclosure against the Property, Tenant shall attorn to the Landlord's
successor in interest.

     19.10. LENDER'S REQUESTS. Tenant shall consent to Lease amendments 
requested by any lender against the Property, provided that such amendments do 
not materially affect Tenant's obligations. Tenant shall timely supply 
financial information requested by such lender.

     19.11. REASONABLE EXPENDITURES. Any expenditure by a party permitted or 
required under the Lease, for which such party is entitled to demand and does 
demand reimbursement from the other party, shall be limited to the fair market 
value of the goods and services involved, shall be reasonably incurred, and 
shall be substantiated by documentary evidence available for inspection and 
review by the other party or its representative during normal business hours.

     19.12. TENANT IMPROVEMENTS. Landlord shall have no obligation to modify or 
improve the Premises or the Property in connection with this Lease. Landlord 
shall, however, reimburse Tenant in an amount not to exceed $13,675 for the 
cost of replacement of the flooring in the Premises; reimbursement shall be 
made within 15 Days of Tenant's delivery to Landlord of appropriate evidence of 
payment of the requested amount for the replacement flooring or a billing from 
a licensed contractor for the completion of the said work, without regard to 
whether it has been paid. Tenant shall comply with all provisions of this Lease 
regarding Alterations in performing the modifications and other improvements to 
the Premises contemplated by Tenant.

     19.13. SUBMISSION. Submission of this document to Tenant does not create a 
reservation for a lease or any rights respecting the Premises prior to 
Landlord's execution.

     19.14. ARBITRATION OF DISPUTES. NOTWITHSTANDING ANY OTHER PROVISION OF 
THIS LEASE, THE PROVISIONS OF THIS SECTION APPLY TO ALL DISPUTES ARISING OUT OF 
THE LEASE SAVE AND EXCEPT UNLAWFUL DETAINER PROCEEDINGS; NOTHING IN THIS 
AGREEMENT SHALL BE INTERPRETED TO REQUIRE LANDLORD TO SUBMIT UNLAWFUL DETAINER 
PROCEEDINGS TO ARBITRATION. IF A CONTROVERSY, CLAIM OR DISPUTE EXCLUDING 
UNLAWFUL DETAINER PROCEEDINGS AND ISSUES RAISED IN CONNECTION THEREWITH 
(COLLECTIVELY "DISPUTE"). THE TERM "DISPUTE" SHALL NOT BE CONSTRUED TO INCLUDE 
UNLAWFUL DETAINER PROCEEDINGS. IN THE EVENT THAT A




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<PAGE>   19

DISPUTE BETWEEN THE PARTIES ARISES OUT OF THIS LEASE, THE DISPUTE SHALL BE 
SUBMITTED TO BINDING ARBITRATION TO BE CONDUCTED UNDER THE COMMERCIAL 
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION, JUDGMENT ON THE 
ARBITRATOR'S AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. 
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1283.05 SHALL APPLY TO SUCH 
ARBITRATION.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE 
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISIONS 
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING 
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR 
JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL 
RIGHTS TO DISCOVERY AND APPEAL UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN 
THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION 
AFTER AGREEING TO THIS PROVISION YOU MAY BE COMPELLED TO ARBITRATE UNDER THE 
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS 
ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING 
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO 
NEUTRAL ARBITRATION.


         /s/  [SIG]                                 /s/  [SIG]
         ----------                                 ----------
          Initial                                    Initial


     19.15.    BROKERAGE. This transaction has been negotiated by the parties 
without the assistance or participation of real estate licensees. Tenant 
represents to Landlord that Tenant has been assisted by any real estate 
licensee in connection with this transaction.

     19.16.    COOPERATION. Tenant will not interfere with Landlord's actions 
pursuant to any Regulation affecting the Property. Tenant will comply with all 
reasonable procedures promulgated by Landlord relating to the matters covered 
by such Regulations. Landlord has no duty to establish procedures or 
regulations or to supervise Tenant's activities for any purpose including, 
without limitation, the Handling of Hazardous Materials.



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<PAGE>   20
     19.17.   PARKING. Tenant shall have the non-exclusive right to the use of
16 off-street parking places.

     19.18.   MEASUREMENTS. All measurements respecting Usable Square Feet,
Rentable Square Feet and Floor Areas are approximate. Landlord reserves the
right to re-measure the Premises and the Building at any time. In the event that
such re-measurement indicates sizes different than those used in this lease, the
lease will be appropriately amended to reflect any required corrections
prospectively.

     19.19.   PREPARATION. This Lease was prepared by the Law Offices of Graves
& Allen ("G&A") acting solely as counsel for Landlord. Tenant has had the
opportunity to review this Lease and have it reviewed by such legal counsel and
other advisors as Tenant deems necessary or appropriate. Tenant acknowledges
that G&A has not acted as counsel for Tenant or provided Tenant any advice in
connection with this transaction. Tenant understands that this document affects
significant legal rights.

Approved and executed:

            LANDLORD:                                    TENANT:
   POINT RICHMOND R&D ASSOCIATES,                PIXAR ANIMATION STUDIOS,  
 A California Limited Partnership                a California Corporation



By  /s/  [SIG]                                  By  /s/  [SIG]
  --------------------------------                ------------------------------
        Authorized Signature                         Authorized Signature


                                                --------------------------------
                                                   Please print name and title


Date: 1/13/99                                   Date:
                                                     ---------------

        ADDRESS FOR NOTICES:                                ADDRESS FOR NOTICES:
     1120 Nye Street, Suite 400 
        San Rafael, CA 94901    


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