Document:

<PAGE>   1
                                                                     EXHIBIT 4.3

                                 AMENDMENT NO. 1

          TO SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     This Amendment No. 1 to the Second Amended and Restated Registration Rights
Agreement (the "Amendment") is made as of March 24, 2000, by and among Virage,
Inc., a Delaware corporation ("Company"), the purchasers listed on Exhibit A
attached hereto (the "New Purchasers"), and the holders of shares of at least
67% of the Underlying Common Stock as such term is defined in the Second Amended
and Restated Registration Rights Agreement (the "Investors").

     WHEREAS, the Company and the Investors previously entered into the Second
Amended and Restated Registration Rights Agreement dated September 21, 1999 (the
"Rights Agreement").

     WHEREAS, in order to induce the New Purchasers to enter into the Common
Stock Purchase Agreement by and among the Company and the New Purchasers of even
date herewith (the "Purchase Agreement"), the Company and Investors desire to
amend the Rights Agreement in order to grant the New Purchasers the registration
rights that have been granted to the Investors under the Rights Agreement.
Capitalized terms as used herein have the meanings defined for them in the
Rights Agreement, unless otherwise defined herein.

     NOW, THEREFORE, for the consideration and mutual covenants set forth
herein, the parties hereby agree as follows:

     1.   DEFINITION OF UNDERLYING COMMON STOCK. Section 1(b) of the Rights
Agreement entitled, "Underlying Common Stock," is hereby amended in its entirety
to read as follows:

     "Underlying Common Stock" shall mean (i) the shares of Common Stock issued
     upon conversion of the Series A, Series B, Series C, Series D and Series E
     Preferred, (ii) the shares of Common Stock remaining issuable upon
     conversion of the outstanding Series A Preferred, Series B Preferred,
     Series C Preferred, Series D Preferred and Series E Preferred, and (iii)
     the shares of Common Stock issued pursuant to the Common Stock Purchase
     Agreement dated as of March 24, 2000 (the "Purchase Agreement") by and
     among the Company and the purchasers listed on Exhibit A hereto (the "New
     Purchasers), together with all shares of Common Stock and other securities
     issued or issuable in respect of the Common Stock referred to in clauses
     (i), (ii) and (iii) by reason of stock splits, stock dividends,
     combinations, mergers, exchanges or other reclassifications or
     recapitalizations, provided that the term "Underlying Common Stock" shall
     exclude all shares of Common Stock sold by an Investor in an offering
     registered under the Securities Act or Rule 144 thereunder."

<PAGE>   2

     2.   DEFINITION OF PURCHASER. Section 1(g) of the Rights Agreement
entitled, "Purchaser," is hereby amended in its entirety to read as follows:

     "Purchaser" shall mean a purchaser of the Series E Preferred and the New
     Purchasers and each of their permitted transferees.

     3.   By its signature hereto, the New Purchasers become a party to the
Rights Agreement, as amended by this Amendment.

     This Amendment may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument.

VIRAGE, INC.

By:
   -----------------------------
         Paul Lego, President

--------------------------------
(Name of Entity)

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

                                       2

<PAGE>   3

                                    EXHIBIT A

                                 New Purchasers

Akamai Technologies, Inc.

CNET Investments, Inc.

RealNetworks, Inc.

Thomson Consumer Electronics, Inc.

                                       3<PAGE>   1
                                                                    EXHIBIT 10.9

================================================================================

                                  OFFICE LEASE

                                     BETWEEN

                                   JIM JOSEPH
          Trustee, Jim Joseph Revocable Trust, dated January 19, 1990,

                                       AND

                                  Virage, Inc.

================================================================================

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                       Page     Paragraph
<S>                                                    <C>      <C>
ALTERATIONS ...................................          7         13
ARBITRATION ...................................         15         30
ASSIGNMENT AND SUBLETTING .....................          8         20
ATTORNEY FEES .................................         15         29
BUILDING PLANNING .............................          7         14
COMPLIANCE WITH REGULATIONS ...................          8         17
CONDEMNATION ..................................         13         24
DAMAGE TO THE PREMISES ........................         12         23
DEFAULT .......................................         14         28
DIRECT OPERATING EXPENSES .....................         10         21
ENTRY BY LANDLORD .............................          6         10
ESTOPPEL CERTIFICATE ..........................         13         26
HAZARDOUS SUBSTANCES ..........................         16         33
HOLDING OVER ..................................         14         27
IMPROVEMENT OF THE PREMISES ...................          3          4
INSURANCE .....................................          6         11
LETTER OF CREDIT ..............................         17         35
LIENS .........................................          7         16
NON-LIABILITY OF LANDLORD .....................          7         12
NOTICES .......................................         16         34
OPTION TO RENEW ...............................         17         36
PARKING .......................................          5          6
PERSONAL PROPERTY TAXES .......................          8         18
REAL ESTATE TAXES AND ASSESSMENTS .............         11         22
RENT ..........................................          2          2
REPAIRS AND MAINTENANCE BY TENANT .............          5          7
REPAIRS BY LANDLORD ...........................          6          9
RULES AND REGULATIONS .........................          8         19
SECURITY DEPOSIT ..............................          2          3
SIGNS/SIGNAGE .................................          7         15
SUBORDINATION AND ATTORNMENT ..................         13         25
SUCCESSORS AND ASSIGNS ........................         15         32
TERM ..........................................          1          1
USE OF THE PREMISES ...........................          4          5
UTILITIES AND SERVICES ........................          5          8
WAIVER ........................................         15         31
</TABLE>

                                  OFFICE LEASE

<PAGE>   2

THIS LEASE, executed this _________ day of ____________________, _____, by and
between Jim Joseph, trustee, Jim Joseph Revocable Trust, dated January 19, 1990,
(hereinafter referred to as "Landlord"), and Virage, Inc. , a Delaware
Corporation, (hereinafter referred to as "Tenant");

                                   WITNESSETH

WHEREAS, Landlord is owner of a leasehold interest in that certain real property
on which an office building designated as Interland's Borel Place on the site
plan attached hereto as Exhibit A hereto (hereinafter referred to as the
"Building") and certain appurtenant improvements (including, without limitation,
the parking area and landscaping) have been constructed, the address of which is
411 Borel Avenue, City and County of San Mateo, California, 94402;

WHEREAS, all office space as shown on Exhibit A hereto shall be deemed to be the
"Office Park"; and

WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from
Landlord, that portion of the First and Third ( 1st and 3rd ) Floors of the
Building delineated on the floor plan attached as Exhibit B hereto (hereinafter
referred to as the "Premises"),also known as Suites 100 and 300 , consisting of
approximately 48,000 rentable square feet. Premise shall be remeasured and
recalculated by a qualified architect using current BOMA standards and rentable
square feet will be agreed upon by Landlord and Tenant prior to effective date.

NOW, THEREAFTER, Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord, for the term, at the rent, and upon
and subject to the terms and conditions hereinafter set forth.

 1. TERM (a) The term of this Lease shall be the period of Six ( 6 ) years,
commencing on the 1st day of October, 2000 , and ending on the 30th day of
September of 2006 , unless sooner terminated as hereinafter provided.

      (b) Landlord may permit Tenant and Tenant's agents or contractors to enter
      the Premises prior to the Commencement Date specified in the Lease in
      order that Tenant may do other approved work or alterations as may be
      required by Tenant to make the Premises ready for Tenant's use and
      occupancy. The request and permission must be in writing. If Landlord
      permits such prior entry, then such license shall be subject to the
      condition that Tenant and Tenant's agents, contractors, workman,
      mechanics, suppliers, and invitees shall work in harmony and not interfere
      with Landlord and its agents and contractors in doing their work in the
      Premises or with other tenants and occupants of the above building. If at
      any time such entry shall cause or threaten to cause such disharmony or
      interference, Landlord, in its sole discretion, shall have the right to
      withdraw and cancel such license upon twenty-four (24) hours written
      notice to Tenant and any further prior entry shall be prohibited. Tenant
      agrees that any entry into and any occupation of the Premises shall be
      deemed to be under all of the terms, covenants, conditions and provisions
      of the Lease, except as to the covenant to pay rent, and further agrees
      that to the extent permitted by law, Landlord and its principals,
      employees and agents shall not be liable in any way for any injury or
      death to any person or persons, loss or damage to any of Tenant's work and
      installations made in the Premises, or loss or damage to property placed
      therein, the same being at Tenant's sole risk. Tenant agrees to protect,
      defend, indemnify, and save harmless Landlord and its principals,
      employees and agents from all liabilities, costs, damages, fees and
      expenses (including reasonable attorneys' fees and expenses) arising out
      of or connected with the activities of Tenant or its agents, contractors,
      workmen, mechanics, suppliers and invitees in or about the Premises or the
      above building.

                                       -1-
<PAGE>   3

      In addition to any other conditions or limitations on such license to
      enter the Premises prior to the said occupancy date, Tenant expressly
      agrees that none of its agents, contractors, workmen, mechanics,
      suppliers, or invitees shall enter the Premises prior to such occupancy
      date unless and until each of them shall furnish such assurances to
      Landlord, including but not limited to, insurance coverage, waivers of
      lien, surety company performance bonds and personal guaranties of
      individuals of substance, as Landlord shall require to protect Landlord
      against any loss, casualty, liability, liens or claims. Nothing contained
      in this Paragraph 1(b) shall be deemed to extend the date for the
      commencement of the payment of rent by Tenant beyond October 1, 2000, as
      hereinafter set forth in Paragraph 2 below.

2. RENT (a) Tenant shall pay to Landlord, as rent for the Premises during the
term of this lease, the sums hereinafter set forth per month, payable in advance
on or before the first day of each month during the term hereof. Said rent shall
be subject to adjustment and shall be in addition to all other amounts
(including, without limitation, tax and cost increases) required to be paid by
Tenant pursuant to the provisions of this Lease. The rent will be paid per the
following schedule:

<TABLE>
<CAPTION>
      MONTH                       LEASE RATE/ MONTH                  BASE RENT/ MONTH *
      -----                       -----------------                  ------------------
<S>                          <C>                                     <C>
      1-12                   $ 4.20 psf, full service                   $ 201,600.00
      13-24                  $ 4.35 psf, full service                   $ 208,800.00
      25-36                  $ 4.50 psf, full service                   $ 216,000.00
      37-48                  $ 4.66 psf, full service                   $ 223,680.00
      49-60                  $ 4.82 psf, full service                   $ 231,360.00
      61-72                  $ 4.99 psf, full service                   $ 239,520.00
</TABLE>

      * based on 48,000 rsf and subject to adjustment after calculation of the
      size of the Premises

      (b) If the term of this Lease commences on a date other than the first day
      of a calendar month, rent for the period from the date of commencement of
      the term hereof through the last day of the calendar month in which such
      term commences shall be prorated on the basis of a thirty-day month, and
      rent for the first full and fractional month of fifteen days or less of
      the term of this Lease shall be payable on the date Tenant submits signed
      Lease; if the first month is fractional and is more than fifteen days,
      only the prorated rent for this portion of the first month shall be
      payable on the date Tenant submits signed Lease. In the event the term of
      this Lease ends on a day other than the last day of the calendar month,
      rent for the period from the first day of the last calendar month of such
      term to the end of such term shall be prorated on the basis of a
      thirty-day month.

      (c) The installments of rent specified herein shall be paid, without
      deduction or offset, and without prior notice or demand, to Landlord at
      411 Borel Avenue, San Mateo, California 94402, or at such other address as
      Landlord may from time to time specify by written notice to Tenant. All
      amounts of money payable by Tenant to Landlord hereunder, if not paid when
      due, shall bear interest from the due date until paid at the rate of ten
      percent (10%) per annum.

 3. SECURITY DEPOSIT. Concurrently with the execution hereof, Tenant has paid to
Landlord the sum of TWO HUNDRED THIRTY NINE THOUSAND FIVE HUNDRED TWENTY AND
NO/100 DOLLARS ($ 239,520.00), (the "Security Deposit"), which sum shall be held
by Landlord as security for the performance by Tenant of the obligations to be
performed by Tenant hereunder. In the event Tenant fully performs all
obligations to be performed by Tenant hereunder, Landlord shall, upon expiration
of the term of this Lease or the earlier termination hereof pursuant to the
provisions of Paragraph 23 or Paragraph 24 hereof, remit to Tenant the amount of
the Security Deposit. If, at any time during the term of this Lease, Tenant
shall default in the performances

                                       -2-
<PAGE>   4

of any obligation to be performed by Tenant hereunder, Landlord may, at its
option, apply the Security Deposit or so much thereof as may be necessary to
compensate Landlord for any expense, loss or damage sustained by Landlord as a
result of said default. In the event of any such application by Landlord, Tenant
shall, upon written demand of Landlord, forthwith deposit with Landlord a
sufficient amount of cash to restore the Security Deposit to the original amount
thereof, and Tenant's failure to do so within ten (10) days after receipt of
such demand from Landlord shall carry with it the same consequences as failure
to pay any installment of rent due under this Lease. In the event that this
Lease should be terminated for any reason other than default on the part of
Landlord or damage or destruction to the demised Premises as provided for in
Paragraph 23 hereof, or a taking of the demised Premises for public use by right
of eminent domain as provided for in Paragraph 24 hereof (in any of which events
the Security Deposit, less any portion thereof which may have been utilized by
Landlord to cure any default or applied to any damages suffered by Landlord as a
result of Tenant's default, shall be refunded to Tenant), Landlord shall have
the right to retain the Security Deposit until the expiration of the term of
this Lease by lapse of time (whether or not this Lease has been earlier
terminated) so that the full damages of Landlord may be ascertained. At the
expiration of the term of this Lease by lapse of time, provided Tenant has paid
all of the rental herein called for and fully performed all of the covenants and
conditions on its part agreed to be performed, Landlord shall return to Tenant
the Security Deposit less any portion thereof which may have been utilized by
Landlord to cure any default or applied to any damages suffered by Landlord. It
is understood and agreed by Landlord and Tenant that the provisions of this
Paragraph 3 shall not operate as a limitation upon the amount of damages to
which Landlord may be entitled by virtue of any default hereunder by Tenant.

Tenant shall provide Landlord with a Letter of Credit as an additional security
deposit per the provisions of Paragraph 35.

4. IMPROVEMENT OF THE PREMISES. As promptly as practicable after the date of
execution of this Lease, Landlord shall undertake to prepare the Premises for
occupancy by Tenant in accordance with the provisions of the Work Letter and/or
Space Plan executed between Landlord and Tenant concurrently herewith. If the
improvements and alterations specified in said Work Letter and/or Space Plan are
not substantially completed prior to the commencement date of the terms of this
Lease set forth in Paragraph l hereof, and the failure or inability of Landlord
to complete the Premises was caused otherwise than by reason of delays
occasioned by Tenant, this Lease shall remain in full force and effect, however,
the term of this Lease and the obligation of Tenant to pay the installments of
rent specified in Paragraph 2 hereof, and all other charges in the nature of
additional rent, shall not commence until said improvements and alterations are
substantially completed and the Premises suitable for occupancy by Tenant and
the term of the Lease shall run for the full period of SIX (6 ) years ; and in
no event whatsoever shall Landlord be liable for any damages caused by any delay
in completion for whatever reason nor shall this Lease be void or voidable
except, in case of Tenant's delay, at Landlord's election. If Tenant fails to
deliver fully executed working drawings and standards to Landlord on or before
June 1, 2000, Landlord shall not be liable in damages to Tenant for any delay in
delivery of possession of the Premises regardless of the cause of such delay and
rent for the premises shall commence in accordance with Paragraph 1. If Tenant
makes any selections that vary from the building standards or require
improvements in excess of the standard allowances, and if the cost of such
different or additional materials of Tenant's selection exceeds Landlord's cost
of building standard work, Tenant shall pay to Landlord, as hereafter provided,
the difference between the cost of such different and/or additional materials
and the cost established by Landlord for standard building allowances. No
changes shall be made in any building standard work materials until Landlord has
submitted an estimate to Tenant in writing of the increased cost thereof, and
Landlord and Tenant have agreed in writing on the increased cost of such
different new materials and installation in excess of the cost of building
standard work. All amounts payable by Tenant to Landlord pursuant to this
Paragraph 4 shall be paid by Tenant to Landlord within thirty (30) days after
the rendering of bills therefore by Landlord or its contractor to Tenant, it
being understood that such bills may be rendered during the progress of the
performance of the work and/or the furnishing and installation of the materials
to which such bills relate. All improvements shall be surrendered by Tenant to
Landlord at the end of the initial or other expiration of the term of the Lease.
No credit shall be granted for the omission of materials where no replacement in
kind is made.

                                       -3-
<PAGE>   5

Landlord will provide a Tenant Improvement Allowance of up to $ 504,000.00 *
(including architectural/ space planning fees) for improvements to the premises,
subject to improvements being building standard work materials (or better) and
improvements not being removable, decorator or convenience items. Landlord and
Tenant will jointly control the scope of work and allocation of the allowance.
Costs exceeding $ 504,000.00 * will be paid by Tenant or Tenant will have the
option to modify the scope of work prior to work commencement. Tenant's written
approval will be required on engineering drawings and construction expenses
prior to construction commencement; drawings and expenses shall not be alterable
without written approval of Landlord and Tenant. In the event Tenant does not
use the entire Tenant Improvement Allowance for its initial improvement of the
Premises, Landlord shall reserve any unused portion and permit the same to be
used by Tenant for later improvements to the Premises, subject to and upon the
same terms of this Paragraph 4.

During the term, Tenant shall, subject to Landlord's approval of the location
thereof, have the right to install and maintain up to four (4) satellite dish
antennas, related receiving equipment and related cable and communication
equipment (collectively, the "Satellite Dish Equipment"), as Tenant may
reasonably require in connection with Tenant's communications and data
transmission network, on the roof of the Building. All such Satellite Dish
Equipment shall be installed in the equipment well of the Building in locations
mutually acceptable to Landlord and Tenant. Landlord shall have the right, at
Tenant's expense, to have the proposed location and installation method for all
such equipment reviewed by Landlord's structural engineer. Tenant, prior to the
execution of this Lease, shall provide Landlord with a detailed listing of all
of the Satellite Dish Equipment, including, without limitation, all size and
weight specifications Tenant proposes to put on the roof.

All of Tenant's Satellite Dish Equipment to be installed on the roof shall be
installed by Tenant, at Tenant's sole cost and expense, in accordance with plans
approved in writing by Landlord and in accordance with all applicable
governmental approvals and permits. Tenant shall repair any damage to the roof
in connection with the installation of such Satellite Dish Equipment. Tenant's
antenna shall not interfere with any other antennas currently on the roof. All
such repairs of the roof shall be made by a contractor approved by Landlord and
in accordance with Landlord's specifications.

Tenant shall pay to Landlord an administrative fee for each installation in the
amount of $500.00 per installation. After the initial installation, Tenant, at
Tenant's sole cost and expense, shall maintain all of Tenant's Satellite Dish
Equipment placed on the roof. Roof access shall be permitted for antenna
installation and regularly scheduled maintenance only. Tenant shall be
responsible for any repairs and maintenance necessary to the roof on account of
Tenant's Satellite Dish Equipment or Tenant's maintenance thereof.

* Based on an allowance of $15.00 per RSF for 24,000 RSF on the 1st floor; and
an allowance of $6.00 per RSF for 24,000 RSF on the 3rd floor, subject to
adjustment after calculation of the size of the Premises.

 5. USE OF THE PREMISES. Tenant shall use the Premises for general office use,
sales or administrative purposes, and for no other use or purpose without the
prior written consent of Landlord. No use shall be made of the Premises which
will increase the existing rate of insurance on the Building or cause the
cancellation of any insurance policy covering the Building. Tenant shall not
commit or suffer to be committed any waste upon the Premises or any public or
private nuisance or any other act or thing which may disturb the quiet enjoyment
of any other tenant in the Building, and shall not use the Premises for any
purpose or use that is in violation of any of the laws, ordinances, regulations
or rules of any public authority.

Tenant's personnel occupancy of the Premises shall be limited to 260 people.
Personnel occupancy beyond 260 people is subject to Landlord's prior approval,
and such approval shall not be unreasonably withheld subject to Tenant's
agreement to pay for reasonable building operating costs associated with
personnel loading in excess of 260 people.

                                       -4-

<PAGE>   6

6. PARKING. In accordance with the City of San Mateo Code, Landlord will provide
Tenant with a maximum of (160) non-exclusive parking spaces, as shown on the
site plan attached as Exhibit A hereto, during normal business hours. Landlord
has no actual knowledge, without independent investigation or inquiry, of any
laws, statutes, ordinances, regulations or rules of any Governmental agency that
requires or may require in the future a fee be charged for parking by Tenant or
other tenants of the building. Should, however, there be any such charges
required in the future by any Governmental agency, these charges will be shared
by the Tenant and all other tenants of the building in proportion to the space
of the building occupied by each. Tenant and its employees shall comply with all
reasonable rules and regulations promulgated from time to time by Landlord
relating to the use of the parking area. Landlord agrees to use good faith
efforts to reasonably accommodate Tenant's request for additional parking spaces
as needed.

7. REPAIRS AND MAINTENANCE BY TENANT -- NO OBLIGATION OF LANDLORD. Tenant agrees
at its expense to maintain the Premises in good condition and repair throughout
the term of this Lease, reasonable wear and tear excepted, and except for
matters which are the responsibility of Landlord hereunder, and damage by fire
or other casualty.

Landlord has no obligation and has made no promise to alter, remodel, improve,
repair, decorate or paint the Premises or any part thereof, except as specified
in Paragraph 4 above; no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant, except as
specifically herein set forth.

8. UTILITIES AND SERVICES. Provided Tenant is not in default under any provision
of this Lease, Landlord shall furnish to the Premises, between the hours of 8:00
a.m. and 6:00 p.m. on Monday through Friday of each calendar week during the
term of this Lease, legal holidays excepted, the following services and
utilities:

      (a)    Heat and air conditioning for the Premises;

      (b)    110 volt/60 cycle electric current in the amounts sufficient for
             lighting the Premises and powering customary business machines used
             thereon. In the event Tenant utilizes the services and utilities
             described in Paragraph (8)(a) & (b) at times and for purposes other
             than designated above, then Tenant shall pay the cost of said
             services and utilities.

      (c)    Janitorial and maintenance service, including sweeping, washing or
             vacuuming of floors and floor coverings, window cleaning and
             replacement of light bulbs and fluorescent tubes in all light
             fixtures installed in the Premises by Landlord. Generally,
             janitorial services are provided during hours other than 8:00 a.m.
             to 6:00 p.m. Monday through Friday.

Landlord shall also maintain the common entrances/exits, stairways and lavatory
facilities in the Building, and the parking area adjacent to the Building and
the access ways thereto, in a clean and orderly condition. Landlord shall not be
liable, however, for either the failure, or delay, to furnish any of the
services or utilities specified in this Paragraph 8, or the curtailment of such
services or utilities, where such failure or curtailment is caused by conditions
beyond the reasonable control of Landlord or by accidents, strikes, repairs, or
improvements to Premises, or the Building, nor shall any such failure constitute
a constructive eviction of Tenant, entitle Tenant to the abatement of rent,
relieve Tenant from observing and performing any of the provisions of this
Lease, or any other claims against Landlord.

Whenever heat generating equipment or lighting other than building standard
lights are used in the Premises by Tenant which affect the temperature otherwise
maintained by the air conditioning system, Landlord shall have the right, after
notice to Tenant, to install supplementary air conditioning facilities in the
Premises or otherwise modify the ventilating and air conditioning system serving
the Premises, and the cost of such facilities and modifications shall be borne
by Tenant. Tenant shall pay concurrently with the rent the cost of providing all
cooling energy to the Premises in excess of that furnished for normal office use
or during hours requested by Tenant when air conditioning is not otherwise to be
furnished by Landlord. If Tenant requires power in excess of that provided for
normal office use in the Building or if

                                       -5-
<PAGE>   7
Tenant installs equipment requiring power in excess of that provided for normal
desk-top office equipment or normal copying equipment, Tenant shall pay for the
cost of such excess power, together with the cost of installing any additional
risers or other facilities that may be necessary to furnish such excess power to
the Premises. Nothing contained in the prior sentence shall limit the obligation
of Tenant to pay for power and other utilities under normal use as set forth in
Paragraph 21(b) below, as opposed to power and other utilities of Tenant's
particular use of the Premises. Failure to make timely payment shall carry the
same consequences as the failure to make timely payment of rent.

Landlord may impose a reasonable charge for any utilities and services,
including, without limitation, air conditioning, electricity, and water,
provided by Landlord by reason of: (i) any use of the Premises at any time other
than the hours set forth above; (ii) any use beyond what Landlord agrees herein
to furnish; (iii) special electrical, cooling and ventilating needs created by
Tenant's telephone equipment, computers, electronic data processing equipment
and other similar equipment or uses; or (iv) additional electrical consumption
resulting from the use by Tenant of high voltage desk or floor lamps. Landlord,
at its option, may require installation of metering devices, at Tenant's
expense, for the purpose of metering Tenant's utility consumption. After hours
utilities will be available for Tenant at Tenant's sole cost and expense.

 9. REPAIRS BY LANDLORD. Except as otherwise provided in Paragraph 23 hereof,
Landlord agrees at its expense to maintain in good condition and repair
throughout the term of this Lease the roof, exterior walls and common areas of
the Building (including the parking lot and landscaping), and to repair or
replace all or any part of the plumbing, gas lines, electric wiring, and heating
and ventilating ducts located in the Building when such repair or replacement is
necessitated otherwise than through the fault of Tenant. Landlord shall not be
responsible for damage to, or destruction of, property located on the Premises
by reason of defects in those portions of the Premises which Landlord is
obligated to maintain or replace. To the best of Landlord's knowledge, without
duty of investigation or inquiry, the building is in good condition and repair.
The Building, to the best of Landlord's knowledge, is in conformance with all
applicable codes. Any expenses to meet future code requirements will be
allocated to the operating expenses of the building with all capital
improvements amortized over their useful life.

10. ENTRY BY LANDLORD. Tenant agrees to permit Landlord to enter the Premises at
reasonable times and upon giving reasonable notice, (except in the case of
emergency), for the purpose of inspecting the same, showing the Premises to
prospective purchasers, mortgagees, or tenants, making any necessary repairs or
additions to the Premises, the Premises of another tenant or to the Building and
performing any work therein that may be necessary to comply with any laws,
ordinances, rules, regulations or requirements of any public authority or of the
Board of Fire Underwriters or any similar body, or that Landlord may deem
necessary to prevent waste or deterioration in connection with the Premises,
including without limitation any repairs or other work which Tenant is obligated
to make or perform under the terms of this Lease and which Tenant has failed or
neglected to make or perform after receipt of written demand by Landlord that
the same be made or performed. In the event Landlord performs any work which
Tenant is obligated to perform under the terms of this Lease, Tenant shall pay
to Landlord, within five (5) business days from the date of receipt by Tenant of
a statement therefor, the cost incurred by Landlord in performing the same.
Nothing herein shall imply any duty on the part of Landlord to do any such work
which, under any provision of this Lease, Tenant may be required to perform and
the performance thereof by Landlord shall not constitute a waiver of any default
by Tenant in failing to perform the same. Landlord may, during the progress of
any work in the Premises, keep and store in a reasonable manner upon the
Premises all necessary materials, tools, and equipment. Landlord shall not in
any event be liable for inconvenience, annoyance, disturbance, loss of business
or other damage to Tenant by reason of making repairs or the performance of any
work in the Premises, or on account of bringing materials, supplies and
equipment to or through the Premises during the course thereof, and the
obligation of Tenant under this Lease shall not thereby be affected in any
manner whatsoever.

11. INSURANCE. At all times during the term of this Lease, Tenant shall maintain
in force, at its sole cost and expense, public liability insurance with coverage
in the amount of Two Million Dollars ($2,000,000) for property damage, Two
Million Dollars ($2,000,000) for bodily injury to or death of any one person,
and Two Million Dollars ($2,000,000) for bodily injury or death as a result of
any single accident or occurrence, occurring on or about the Premises. Such
policy or policies of insurance shall be with insurers and in such form as
Landlord may

                                       -6-

<PAGE>   8

reasonably approve and each such policy shall name Landlord as an additional
insured, thereunder. Each such policy shall contain a waiver by the insurer
thereunder of its right of subrogation against Landlord, and shall provide that
it may not be cancelled or the limits of coverage materially changed, without at
least ten (10) days prior written notice to Landlord. Tenant shall promptly
deliver a copy of each such policy or certificates of insurance manifesting the
required coverage to Landlord.

12. NON-LIABILITY OF LANDLORD. Tenant shall defend, indemnify, hold and save
Landlord free and harmless from any and all liability or damage of every kind or
character caused to property or to persons in or about the Premises for any
reason whatsoever except for liability or damage caused by negligence of
Landlord or Landlord's authorized agents or contractors, or liability for a
breach of this Lease by Landlord. Landlord shall not be liable for any damage,
loss or injury to the property of Tenant, or any other person, suffered on, in
or about the Premises by reason of the condition of the Premises, by reason of
fire, earthquake, action of the elements, or any other casualty, or by reason of
the act of Tenant, its agents or employees, or third persons.

13. ALTERATIONS. Tenant shall not make or permit to be made any alterations,
changes or additions in or to the Premises without the prior written consent of
Landlord and such consent will not be unreasonably withheld. Any such approved
changes or additions shall be done either by or under the direction of Landlord
at the cost of Tenant, shall become immediately the property of Landlord, and
shall remain upon and be surrendered with the Premises upon expiration or
earlier termination of the term of this Lease. Any movable furniture remaining
on the Premises at the end of the term hereof shall be removed by Tenant or if
not so removed shall, at the option of Landlord, become the property of
Landlord. The Landlord will work with Tenant in accordance with this Paragraph
to ensure any and all approved alterations are accomplished in a timely manner.

14. BUILDING PLANNING. In the event Landlord requires the Premises for use in
conjunction with another suite or for other reasons connected with the building
planning program, Landlord, upon notifying Tenant in writing, shall have the
right to move Tenant to space in the Building of which the Premises form a part,
at Landlord's sole cost and expense, and the terms and conditions of the
original lease shall remain in full force and effect, save and excepting that
the Premises shall be in a new location with equal or greater square footage and
similar office configuration. However, if the new space does not meet with
Tenant's approval, Tenant shall have the right to cancel said Lease upon giving
Landlord ninety (90) days written notice within ten (10) days of receipt of
Landlord's notification.

15. SIGNS/SIGNAGE Tenant shall not place or affix any sign in, on or about the
Premises or the Building which is visible from the exterior of the Premises,
without the prior written consent of Landlord. Building standard signage (suite
door, floor lobby and main building directory) will be provided by Landlord.

16. LIENS. Tenant shall keep the Premises and the Building free from any and all
liens and claims arising out of any work performed, materials furnished or
obligations incurred by Tenant, and shall indemnify, defend and hold Landlord
harmless from and against any liens and encumbrances arising out of any work
performed or materials furnished by or at the request of Tenant. In the event
that Tenant shall not, within twenty (20) days following the imposition of any
such lien, cause such lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to the lien. All such sums paid by Landlord and all expenses
incurred by Landlord in connection therewith, including, without limitation,
attorney's fees and court costs, shall be payable by Tenant to Landlord on
demand with interest at the rate of ten percent (10%) per annum from the date of
payment by Landlord. Landlord shall have the right at all times to post and keep
posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord and the Premises, and
any other party having an interest therein, from mechanics' and materialmen's
liens, and Tenant

                                       -7-

<PAGE>   9

shall give to Landlord at least ten (10) business days prior written notice of
the expected date of commencement of any work relating to additions or
alterations of the Premises to the extent same may be approved by Landlord in
accordance with Paragraph 13 above.

17. COMPLIANCE WITH REGULATIONS. At all times during the term of this Lease,
Tenant shall comply with and conform to all laws, ordinances, regulations,
requirements and orders of all municipal and governmental bodies which relate in
any manner to the use or occupancy of the Premises. The judgment of any court of
competent jurisdiction or the admission by Tenant in any action or proceeding
against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any such law, ordinance, requirement or order in the use of the
Premises, shall be conclusive of that fact as between Landlord and Tenant.

18. PERSONAL PROPERTY TAXES. Tenant agrees to pay, before delinquency, any and
all taxes levied or assessed against the equipment, furniture, trade fixtures
and other personal property of Tenant located on or about the Premises at any
time during the term of this Lease.

19. RULES AND REGULATIONS. At all times during the term of this Lease, Tenant
shall comply with the rules and regulations for the Building which are attached
as Exhibit C and incorporated herein by reference. Tenant agrees that Landlord
shall have the right to amend said rules and regulations and to promulgate new
rules and regulations applicable to all tenants in the Building which relate to
their use and occupancy thereof. Landlord will provide said Amendments to Tenant
in writing and any amended rule or regulation shall be reasonable. Landlord
shall not be responsible to Tenant for the nonperformance by any other tenant or
occupant of any of said rules and regulations.

20. ASSIGNMENT AND SUBLETTING. Tenant for itself, its successors and assigns,
expressly covenants that it shall not by operation of law or otherwise assign,
sublet, hypothecate, encumber or mortgage this Lease, or any part thereof, or
permit the Premises to be used by others without the prior written consent of
Landlord in each instance but which, in the case of a proposed sublet by Tenant
shall not be unreasonably withheld. Any attempt by Tenant to assign, sublet,
encumber or mortgage this Lease shall be null and void. The consent by Landlord
to any assignment, mortgage, hypothecation, encumbrance, subletting or use of
the Premises by others, shall not constitute a waiver of Landlord's right to
withhold its consent to any other or further assignment, subletting, mortgage,
encumbrance or use of the Premises by others. Without the prior written consent
of Landlord, this Lease and the interest therein of any assignee of Tenant
herein, shall not pass by operation of law or otherwise, and shall not be
subject to garnishment or sale under execution in any suit or proceeding which
may be brought against or by Tenant or any assignee of Tenant. The absolute and
unconditional prohibitions contained in this Paragraph 20 and Tenant's agreement
thereto are material inducements to Landlord to enter into this Lease with
Tenant and any breach thereof shall constitute a material default hereunder
permitting Landlord to exercise all remedies provided for herein or by law or in
equity on a default of Tenant. If Tenant requests Landlord's consent to an
assignment of this Lease or subletting of all or any part of the Premises,
Tenant shall submit to Landlord: (1) the name of the proposed assignee or
subtenant; (2) the terms of the proposed assignment or subletting together with
a conformed or photostatic copy of the proposed assignment or sublease; (3) the
nature of business of the proposed assignee or subtenant's business and its
proposed use of the Premises; (4) such information as to its financial
responsibility and general reputation as Landlord may require; and (5) a summary
of plans and specifications for revising the floor layout of the Premises.
Tenant will reimburse Landlord for any reasonable legal fees or for any other
expenses incurred as a consequence of each assignment and subletting.

Upon the receipt of such information from Tenant, Landlord shall have the
option, to be exercised in writing within thirty (30) days after such receipt,
to cancel and terminate this Lease if the request is to assign this Lease or to
sublet all of the Premises or, if the request is to sublet a portion of the
Premises only, to cancel and terminate this Lease with respect to such portion,
in each case as of the date set forth in Landlord's notice of exercise of such
option. Landlord will not have the option to cancel and terminate this Lease
within the first eighteen (18) months of the Lease Term for reasons specified in
this paragraph.

                                       -8-
<PAGE>   10
If Landlord shall cancel this Lease, Tenant shall surrender possession of the
Premises, or the portion of the Premises which is the subject of the request, as
the case may be, on the date set forth in such notice. If this Lease shall be
canceled as to a portion of the Premises only, the Monthly Base Rent and all
additional rent payable by Tenant hereunder shall be abated proportionately
according to the ratio that the number of square feet in the portion of space
surrendered (as computed by Landlord) bears to the rentable area of the
Premises.

If Landlord shall fail to exercise its option to cancel and terminate this Lease
with respect to all or part of the Premises as above provided, Landlord shall
not thereby be deemed to have consented to the proposed assignment or
subletting.

If Landlord shall consent to a sublease or an assignment pursuant to the request
from Tenant, Tenant shall cause to be executed by its assignee or subtenant an
agreement to perform faithfully and to assume and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease for the period
covered by the assignment or sublease and to the extent of the space sublet or
assigned. An executed counterpart of each sublease or assignment and assumption
of performance by the sublessee or assignee, in form and substance approved by
Landlord, shall be delivered to Landlord within five (5) days prior to the
commencement of occupancy set forth no such assignment or sublease; shall be
binding on Landlord until Landlord has received such counterpart as required
herein.

If Landlord shall give its consent to any assignment of this Lease or to any
sublease, Tenant shall in consideration therefore pay to Landlord as additional
rent fifty percent (50%) of the following amounts with reasonable deductions for
brokerage fees and legal costs only for expenses incurred by Tenant in
connection with such assignment or subletting including but not limited to legal
fees, brokerage commissions and costs of making alterations, as the case may be:

      (i)    In the case of a sublease, any rents, additional charge or other
             consideration payable under the sublease to Tenant by the subtenant
             which is in excess of the Monthly Base Rent and all additional rent
             accruing during the term of the sublease in respect of the
             subleased space (at the rate per square foot payable by Tenant
             hereunder) pursuant to the terms hereof (including, but not limited
             to, sums paid for the sale or rental of Tenant's fixtures,
             leasehold improvements, equipment, furniture, furnishings or other
             personal property, less the then net unamortized or undepreciated
             cost thereof determined on the basis of Tenant's federal income tax
             returns); and

      (ii)   In the case of an assignment, an amount equal to all sums and other
             considerations paid to Tenant by the assignee for or by reason of
             such assignment (including, but not limited to, sums paid for the
             sale of Tenant's fixtures, leasehold improvements, equipment,
             furniture, furnishings or other personal property less the then net
             unamortized or undepreciated cost thereof determined on the basis
             of Tenant's federal income tax returns).

The sums payable as set forth above shall be paid to Landlord as additional rent
as and when paid by the assignee or subtenant to Tenant.

In no event shall any assignment or subletting to which Landlord may consent,
release or relieve Tenant from its obligations to fully observe or perform all
of the terms, covenants and conditions of this Lease on its part to be observed
or performed.

The provisions of Paragraph 20 shall not apply to transactions with a
corporation into or with which Tenant is merged or consolidated or to which
substantially all of Tenant's assets are transferred so long as (i) such
transfer was made for a legitimate independent business purpose and not for the
purpose of transferring this Lease, (ii) the successor to Tenant has a net worth
computed in accordance with generally accepted accounting principles at least
equal to the greater of (1) the net worth of Tenant immediately prior to such
merger, consolidation or transfer, and (2) the net worth of the original Tenant
on the date of this Lease, and (iii) proof satisfactory to Landlord of such net
worth is delivered to Landlord at least 10 days prior to the effective date of
any such transaction. Tenant may also, upon prior notice to and with the consent
of Landlord, which consent shall not be unreasonably withheld, permit any
corporation or other business entity which controls, is controlled by, or is
under common control with the original Tenant (a "Related Corporation") to
sublet all or part of the Premises for any Permitted Use, provided the Related
Corporation is in Landlord's reasonable judgment of a character and engaged in a
business which is in keeping with the standards for the Building and the
occupancy thereof.

                                       -9-

<PAGE>   11

Such sublease shall not be deemed to vest in any such Related Corporation any
right or interest in this Lease or the Premises nor shall it relieve, release,
impair or discharge any of Tenant's obligations hereunder. For the purposes
hereof, "control" shall be deemed to mean ownership of not less than 50 percent
of all of the voting stock of such corporation or not less than 50 percent of
all of the legal and equitable interest in any other business entity if Tenant
is not a corporation. Notwithstanding the foregoing, Tenant shall have no right
to assign this Lease or sublease all or any portion of the Premises without
Landlord's consent pursuant to this Section if Tenant is not the initial Tenant
herein named or a person or entity who acquired Tenant's interest in this Lease
in a transaction approved by Landlord."

21. DIRECT OPERATING EXPENSES. In addition to the rent specified in Paragraph 2
hereof, Tenant and Landlord agree that an annual adjustment in the rent shall be
made as hereinafter provided:

      (a) Landlord and Tenant covenant and agree that the rent provided for
      herein is subject to annual review and adjustment in order that the Tenant
      shall pay for its individual share of any increase of the Direct Operating
      Expenses (as hereinafter defined) of the Office Park. Such review and
      adjustment shall be made as of the first day of the first full calendar
      month of each Lease Year (as hereinafter defined) during the term of this
      Lease. For the purpose of this Lease, the term "Lease Year" shall mean
      each consecutive twelve (12) calendar month period during the term of this
      Lease commencing on the first day of the first full calendar month during
      or after the calendar month Tenant commences to pay rent pursuant to
      Paragraph 2 above. The Base Year with which all future year comparisons
      shall be made is 2000. Any future year increase over the Base Year shall
      be paid on a prorata basis by Tenant, in the following manner:

      Prior to the commencement of the second and each subsequent Lease Year (or
      as soon thereafter as is reasonably practicable), Landlord shall estimate
      the Direct Operating Expenses for the Office Park for such Lease Year. In
      the event that for any Lease Year, Landlord's estimated Direct Operating
      Expenses for the Office Park shall exceed the Direct Operating Expenses
      for the Base Year, Tenant shall pay monthly as additional rent,
      concurrently with Tenant's monthly rental payment during said Lease Year,
      an amount equal to one-twelfth (1/12) of such excess, divided by the
      amount of square feet contained in the Office Park, times the amount of
      square footage in the demised Premises. For the purposes of this Paragraph
      21, the amount of square footage in the demised Premises shall be deemed
      to be FORTY-TWO THOUSAND SIX HUNDRED SIXTY-SEVEN (42,667) useable square
      feet (useable square footage in the demised Premise to be adjusted as per
      the new BOMA calculation following BOMA re-measurement identified on Page
      1 of this Lease) and the amount of square footage in the Office Park shall
      be deemed to be One Hundred Twenty Six Thousand (126,000) square feet.

      (b) "Direct Operating Expenses" as used herein shall include all costs of
      administration, operation and maintenance of the Office Park and the real
      property on which said Office Park is situated, together with the
      landscaping and parking areas for the Office Park as determined in
      accordance with generally accepted accounting practices consistently
      applied, including, without limitation, the following:

      Property and public liability insurance premiums; the cost of labor,
      materials and services for the operation and maintenance of the Office
      Park, including, without limitation, water and sewer use charges, garbage
      and waste disposal, license, permit and inspection fees (except for any
      new construction or alterations attributable to a specific Tenant or
      Office Park expansion), heat, light, power and other utilities under
      normal use, air conditioning and ventilation, elevator service, plumbing
      service, janitorial and cleaning service, costs of maintenance contracts,
      watchmen, guards and personnel to the extent engaged in administration,
      operation and maintenance of the Office Park and its surrounding real
      property, together with payroll taxes and employee benefits applicable
      thereto; supplies, materials, salaries of foremen and supervisory
      employees whose duties directly concern the management and operation of
      the Office Park; the cost of maintaining and repairing the roadways,
      sidewalks, curbs, gutters and parking surfaces located upon the real
      property on which the Office Park is situated; and in providing cleaning
      and gardening services to said real property; the cost of repairs and
      general maintenance, exclusive of expenses such as the alteration of
      Premises for the accommodation of a specific tenant or tenants, and
      exclusive also of expenditures made for capital investments or
      improvements, except that

                                      -10-

<PAGE>   12

      in the event Landlord eliminates or reduces Direct Operating Expenses as a
      result of a capital investment of labor-saving devices, then the cost of
      the capital investment or labor-saving devices will be amortized over the
      useful life of such improvements, but in such a manner so as not to exceed
      the cost that would otherwise have been billed to Tenant prior to the
      installation of such equipment or labor-saving devices.

      (c) As soon as reasonably practicable after the first day of the first
      full calendar month of each Lease Year during the term hereunder, Landlord
      shall prepare and deliver to Tenant a statement of the actual Office Park
      Direct Operating Expenses incurred during the Lease Year. The statement
      shall further compare the Direct Operating Expenses to those of the Base
      Year, and shall indicate Tenant's prorata share of the excess, if any.

      If such statement shows an amount that is more than the previously
      estimated share of Tenant of Direct Operating Expenses for the Office Park
      for said Lease Year, Tenant shall pay the deficiency to Landlord within
      thirty (30) days after delivery of the statement. Failure to make timely
      payment shall carry the same consequences as the failure to make timely
      payment of rent.

      If such statement shows that Tenant has overpaid Tenant's share of Direct
      Operating Expenses, then the difference shall be satisfied by a deduction
      from Tenant's next monthly rental payment(s) or, if at the end of the
      Lease, with a cash payment from Landlord to Tenant.

      During a period of thirty (30) days after receipt of such statement,
      Tenant shall have the right to inspect the books and any other pertinent
      records of Landlord, during normal business hours, for the purpose of
      verifying such statement. Tenant may contest the Landlord's computation of
      the amount of increase or decrease, either in whole or in part, by paying
      any undisputed portion when giving Landlord written notice stating its
      objections and provided that such notice is received by Landlord not later
      than five (5) days after the expiration of said thirty (30) day period.

      (d) If for any reason, other than the default of Tenant, this Lease shall
      terminate on a day other than the last day of the Lease Year, the amount
      of adjustment, if any, in rent payable by Tenant applicable to the Lease
      Year in which such termination shall occur, shall be prorated on the basis
      which the number of days from the commencement of such Lease Year to and
      including such termination date bears to Three Hundred Sixty Five (365).

22. REAL ESTATE TAXES AND ASSESSMENTS. In addition to the rent specified in
Paragraph 2 hereof, Tenant and Landlord agree that an annual adjustment in the
rent shall be made as hereinafter provided:

      (a) Landlord and Tenant covenant and agree that the rent provided for
      herein is subject to annual review and adjustment in order that Tenant
      shall pay for his individual share of any increase in the amount of real
      estate taxes and assessments levied or assessed against the Office Park or
      the income derived from the Office Park, exclusive of Federal and State
      Income Taxes. "Office Park" as used in this Lease shall include the real
      property on which the Building is situated, together with all of the real
      property described in Exhibit A hereto.

      Such review and adjustment shall be made as of the first full calendar
      month of each Lease Year during the term of this Lease. The Base Year with
      which all future year comparisons shall be made is 2000.

      Any future year increase over the Base Year shall be paid on a prorata
      basis by Tenant, in the following manner:

      Prior to the commencement of the second and each subsequent Lease Year (or
      as soon thereafter as is reasonably practicable), Landlord shall estimate
      the amount of taxes and assessments for the Office Park for such Lease
      Year. In the event that for any Lease Year Landlord's estimate for the
      amount of taxes and assessments for the Office Park shall exceed the taxes
      and assessments for the Base Year, Tenant shall pay monthly as additional
      rent, concurrently with Tenant's monthly rental payment during said Lease
      Year, an amount equal to one-twelfth (1/12) of the excess, divided by the
      amount of square feet contained in the Office Park, times the amount of
      square footage in the demised Premises. For the purposes of this Paragraph
      22, the amount of square footage in the demised

                                      -11-
<PAGE>   13

      Premises shall be deemed to be Forty-Two Thousand Six Hundred Sixty-Seven
      (42,667) useable square feet, (useable square footage in the demised
      Premise to be adjusted as per the new BOMA calculation following BOMA
      re-measurement identified on Page 1 of this Lease) and the amount of
      square footage in the Office Park shall be deemed to be One Hundred Twenty
      Six Thousand (126,000) square feet.

      (b) As soon as reasonably practicable after the first day of the first
      full calendar month of each Lease Year during the term hereunder, Landlord
      shall prepare and deliver to Tenant a statement of the actual taxes and
      assessments levied or assessed during said Lease Year. The statement shall
      further compare the actual taxes and assessments to those of the Base Year
      and shall indicate Tenant's prorata share of the excess, if any.

      If such statement shows an amount that is more than the previously
      estimated share of Tenant taxes and assessments for the Office Park for
      said Lease Year, Tenant shall pay the deficiency to Landlord within thirty
      (30) days after delivery of the statement. Failure to make timely payment
      shall carry the same consequences as the failure to make payment of rent.

      If such statement shows that Tenant has overpaid Tenant's share of taxes
      and assessments, then the difference shall be satisfied by a deduction
      from Tenant's next monthly rental payment(s) or, if at the end of the
      Lease, with a cash payment to the Tenant from Landlord.

      During a period of thirty (30) days after receipt of such statement,
      Tenant shall have the right to inspect the books and any other pertinent
      records of Landlord, during normal business hours, for the purpose of
      verifying such statement. Tenant may contest the Landlord's computation of
      the amount of increase or decrease, either in whole or in part, by paying
      any undisputed portion when giving Landlord written notice stating its
      objections and provided that such notice is received by Landlord not later
      than five (5) business days after the expiration of said thirty (30) day
      period.

      (c) If for any reason, other than the default of Tenant, this Lease shall
      terminate on a day other than the last day of the Lease Year, the amount
      of adjustment, if any, in rent payable by Tenant applicable to the Lease
      Year in which such termination shall occur, shall be prorated on the basis
      which the number of days from the commencement of such Lease Year to and
      including such termination date bears to three hundred and sixty-five
      (365).

23.   DAMAGE TO THE PREMISES.

      (a) In the event any portion of the Premises is damaged by fire,
      earthquake, action of the elements or any other casualty, and such damage
      can be repaired and the Premises restored to their former condition within
      ninety (90) days from the date of such damage, then, unless otherwise
      provided in Paragraph 23(b) hereof, Landlord shall, at its expense proceed
      immediately to make such repairs, provided that any mortgagee or lender of
      Landlord shall have made available to Landlord for such repairs any and
      all insurance proceeds otherwise payable to Landlord. If such insurance
      proceeds are not made available to Landlord, Landlord shall have the
      option either (i) to pay any shortfall from his own funds and complete
      such repairs as aforesaid, or (ii) terminate this Lease. However,
      Landlord's obligation to repair shall be limited to those items that
      Landlord was obliged to build at its own expense. Notwithstanding the
      foregoing, in the event that there are insufficient insurance proceeds to
      cover the cost of repairs, Tenant may avoid a termination of this Lease by
      depositing sufficient funds to cover any shortfall in an escrow account
      with a depository mutually satisfactory to Landlord and Tenant, such funds
      to be held and disbursed by such depository pursuant to written escrow
      instructions executed by both Landlord and Tenant. Such partial
      destruction shall not serve to terminate this Lease, but Tenant shall be
      entitled to a proportionate abatement of the installments of rent and all
      other charges in the nature of additional rent payable during the period
      commencing on the date of such partial destruction and ending upon
      completion of all such repairs, which abatement shall be based upon the
      portion of the Premises rendered unsuitable for use by Tenant during such
      period.

      (b) In the event (i) any portion of the Premises is damaged by fire,
      earthquake, action of the elements or any other casualty, and such damage
      cannot be repaired and the Premises restored to their former condition
      within ninety (90) days from the date of such damage, or

                                      -12-

<PAGE>   14

      (ii) the Building is damaged by any such casualty and the cost of
      repairing such damage will exceed thirty percent (30%) of the replacement
      cost (exclusive of foundations) of the Building, Landlord may, at its
      option, elect to terminate this Lease as of the date of the occurrence of
      such damage. In the event Landlord fails to exercise said option to
      terminate by written notice to Tenant within thirty (30) days from the
      date of occurrence of such damage, Landlord shall promptly undertake to
      restore the Premises and the Building to their former condition. Tenant
      shall be entitled to a proportionate abatement of the installments of rent
      and all charges in the nature of additional rent payable during the period
      commencing on the date of such damage and ending upon completion of all
      such repairs, which abatement shall be based upon the portion of the
      Premises rendered unsuitable for use by Tenant during such period.

      (c) Notwithstanding the provisions of Subparagraph (a) of this Paragraph
      23, in the event any portion of the Premises is damaged by fire,
      earthquake, action of the elements or any other casualty, and such damage
      cannot be repaired and the Premises restored to their former condition
      within one hundred eighty (180) days from the date of such damage, this
      Lease shall terminate as of the date of occurrence of such damage.

24. CONDEMNATION. In the event all or a substantial portion of the Premises
shall be taken or condemned under power of eminent domain, or by purchase in
lieu thereof, this Lease shall terminate as of the date possession of that
portion of the Premises so taken, condemned or purchased is surrendered to the
condemning or purchasing authority or body. All compensation awarded or paid
upon such condemnation or purchase shall belong to and be the sole property of
Landlord; provided, however, that any portion of the compensation awarded or
paid for or on account of any loss of business by Tenant or for damage to, or
the cost of removal or relocation of, the furniture, trade fixtures and
equipment of Tenant, shall be paid to and retained by Tenant.

25. SUBORDINATION AND ATTORNMENT. Tenant agrees that it shall, promptly upon the
request of Landlord at any time or times during the term of this Lease, execute
and deliver such documents and other instruments as Landlord may reasonably
require to cause this Lease to be and become subject and subordinate to any
mortgage or deed of trust, and any renewal, extension, replacement or
modification thereof, covering the real property on which the Building is
located, provided that such mortgage or deed of trust shall contain provisions
to the effect that so long as Tenant shall not be in default in the performance
of any obligations to be performed by Tenant hereunder, the mortgagee, trustee
or beneficiary, as the case may be, shall not terminate this Lease or the
interest of Tenant in the Premises through foreclosure of such mortgage or deed
of trust, and shall not disturb the possession and use of the Premises by
Tenant. Tenant agrees that in the event of the enforcement, by judicial
foreclosure, exercise of the power of sale, or otherwise, of any mortgage or
deed of trust covering the real property on which the Building is located by the
mortgagee, trustee or beneficiary thereunder or thereof, as the case may be,
Tenant shall automatically become the lessee of any successor in interest in
title to said real property as a result of such enforcement, without change in
the terms of this Lease. Tenant further agrees that upon request of any such
successor in interest, Tenant will execute and deliver to such successor in
interest an instrument or instruments confirming such attornment.

26. ESTOPPEL CERTIFICATE. Tenant agrees that it shall, from time to time at the
request of Landlord, and within ten (10) days after such request, execute,
acknowledge and deliver to Landlord a statement in writing certifying, if such
be the case, that this Lease is unmodified and in full force and effect or, if
this Lease has been modified, that it is in full force and effect as so
modified, the date of commencement of the term of this Lease, the due date of
the last installment of rent paid by Tenant to Landlord, and such other
information as Landlord may reasonably request. Tenant understands that any such
statement may be delivered by the Landlord to, and relied upon by, prospective
purchasers of the Building and by existing or prospective mortgagees or
beneficiaries under mortgages or deeds of trust covering the Building in which
the Premises are located.

                                      -13-
<PAGE>   15

27. HOLDING OVER. If Tenant remains in possession of all or any part of the
Premises after the expiration of the term hereof, with or without the express
consent of Landlord, such tenancy shall be from month-to-month only, and not a
renewal hereof or an extension for any further term, and in such case, rent and
other monetary sums due hereunder shall be payable at a rate equal to one
hundred twenty five percent (125%) of the rent in effect just prior to such
holdover thereafter for the first 30 days and one hundred fifty percent (150%)
of the rent in effect just prior to such holdover for every month thereafter,
and if such holding over is without the express consent of Landlord, Tenant
shall be liable to Landlord for all reasonable costs and damages caused to
Landlord by such holding over. Such month-to-month tenancy shall be subject to
every other term, covenant and agreement contained herein. In the event Landlord
fails to deliver the Premises on the Commencement Date because the previous
occupant of the Premises is holding over, or for any other cause beyond
Landlord's control, Landlord shall not be liable to Tenant for any damages as a
result of Landlord's delay in delivering the Premises, nor shall any delay
affect the validity of this Lease, and the Commencement Date of this Lease shall
be postponed until the Premises can be delivered by Landlord. Notwithstanding
the foregoing, if Landlord fails to deliver the Premises within one hundred
twenty (120) days after the Commencement Date, this Lease shall be voidable
without further obligation or liability of either party, at the option of
Tenant, upon written notice to Landlord within five (5) days after the
expiration of said one hundred twenty (120) day period. In the event of any
postponement of the Commencement Date as provided in this Paragraph 27, the
Lease Term shall remain the same, but the Expiration Date shall be extended for
the same number of days the Commencement date was postponed.

28.   DEFAULT.  In the event that:

      (a) Tenant shall default in the payment of rent or any other amounts
      required hereby to be paid by Tenant to Landlord hereunder, when the same
      shall become due, and such default shall continue for a period of ten (10)
      consecutive days; or

      (b) Tenant shall abandon or vacate the Premises for a period of thirty
      (30) consecutive days; or

      (c) Tenant shall default in the performance of any obligation required to
      be performed by Tenant under this Lease (other than abandonment or the
      payment of rent or any other amounts required hereby to be paid by Tenant
      hereunder) and shall fail, for a period of twenty (20) days after written
      notice from Landlord specifying such default, to cure said default (unless
      such default cannot be cured within twenty (20) days, in which case Tenant
      shall commence to cure said default within said twenty (20) days and shall
      cure the same with all reasonable dispatch); or

      (d) Tenant shall be adjudicated bankrupt, or a petition by or against
      Tenant for reorganization or adjustment of its obligations under the
      Bankruptcy Act or any other existing or future insolvency or bankruptcy
      statute shall be approved, or Tenant shall make a general assignment of
      its property for the benefit of creditors, or a receiver or trustee shall
      be appointed to take control of the business or assets of Tenant;

then and in each such case Landlord may, at its option, terminate this Lease, or
without terminating this Lease re-enter the Premises and for the account of
Tenant relet the same or any portion or portions thereof for all or any part of
the unexpired term of this Lease upon such terms and conditions as Landlord may
elect. In the event of any such termination of this Lease by Landlord, Landlord
shall be entitled to recover from Tenant (i) the worth at the time of award of
the unpaid rent which had been earned at the time of termination; (ii) the worth
at the time of award of the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; (iii) 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; and (iv) 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.

                                      -14-
<PAGE>   16
Efforts by Landlord to mitigate the damages caused by Tenant's breach of this
Lease shall not constitute a waiver by Landlord of its right to recover damages
hereunder. In the event of such reletting without terminating this Lease,
Landlord shall be entitled to recover from Tenant monthly the difference between
the monthly installments of rent and such other amounts as may be payable by
Tenant to Landlord pursuant to the provisions hereof over the total monthly
rental received by Landlord upon such reletting, after first deducting therefrom
all expenses reasonably incurred by Landlord in such reletting and in repairing,
renovating, remodeling and altering the Premises for the purpose of such
reletting. Landlord shall not be deemed to have elected to terminate this Lease
or the liability of Tenant to pay rent thereafter to accrue or its liability for
damages under any of the provisions hereof by any such re-entry or by any action
in unlawful detainer or otherwise to obtain possession of the Premises, unless
Landlord shall have notified Tenant in writing that it has so elected to
terminate this Lease. For purposes of this Paragraph 28, the following shall not
constitute termination of Tenant's right to possession: (A) acts of maintenance
or preservation or efforts to relet the Premises; or (B) the appointment of a
receiver upon initiative of Landlord to protect the Landlord's interest under
this Lease. Nothing herein contained shall be construed as obligating Landlord
to relet the whole or any part of the Premises. In the event of any entry or
taking possession of the Premises, Landlord shall have the right, but not the
obligation, to remove therefrom all or any part of the personal property located
therein and may place the same in storage at a public warehouse selected by
Landlord at the expense and risk of the owner or owners thereof. The remedies
provided Landlord hereunder shall be cumulative and shall be in addition and
supplemental to all other rights or remedies which Landlord may lawfully pursue
in the event of any breach or threatened breach by Tenant of any of the
provisions of this Lease.

29. ATTORNEYS FEES. In the event any action or proceeding is instituted at any
time by either party hereto against the other for the purpose of determining or
enforcing the rights of either party, the party prevailing in such action shall
be entitled to recover from the other party all costs reasonably incurred by the
prevailing party in connection with such action or proceeding, including the
reasonable fees of its attorneys as determined by the court.

30. ARBITRATION. At the option of Landlord, any controversy or dispute arising
under the terms or provisions of this Lease shall be determined by arbitration.
Such arbitration shall be conducted pursuant to the provisions of the laws of
the State of California then in force applicable to such proceedings and, to the
extent not inconsistent therewith, the rules of the American Arbitration
Association.

31. WAIVER. No waiver of any default of Tenant or Landlord, as the case may be,
hereunder shall be implied from any omission by Landlord or Tenant,
respectively, to take any action on account of such default, and no express
waiver shall affect any default other than the default specified in the express
waiver. Any waiver of any covenant, term or condition of this Lease by Landlord
or Tenant shall not be construed as a waiver of any subsequent breach by Tenant
or Landlord, respectively, of the same covenant, term or condition. The consent
or approval by Landlord or Tenant to any act by Tenant or Landlord,
respectively, requiring the consent or approval of Landlord or Tenant shall not
be deemed to waive or render unnecessary the consent or approval of Landlord or
Tenant to any subsequent similar acts of Tenant or Landlord. The acceptance of
rent hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant or Landlord of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.

32. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 20 hereof,
this Lease and all of the provisions hereof shall bind and inure to the benefit
of the successors and assigns of each of Landlord and Tenant.

                                      -15-

<PAGE>   17

33.   HAZARDOUS SUBSTANCES.

      (a) The term "Hazardous Substances", as used in this Lease shall include,
      without limitation, flammables, explosives, radioactive materials,
      asbestos, polychlorinated biphenyls (PCBs), chemicals known to cause
      cancer or reproductive toxicity, pollutants, contaminants, hazardous
      wastes, toxic substances or related materials, petroleum and petroleum
      products, and substances declared to be hazardous or toxic under any law
      or regulation now or hereafter enacted or promulgated by any governmental
      authority.

      (b) Tenant shall not cause or permit to occur any violation of any
      federal, state or local law, ordinance, or regulation now or hereafter
      enacted, related to environmental conditions on, under, or about the
      Premises, arising from Tenant's use or occupancy of the Premises,
      included, but not limited to, soil and ground water conditions.

      (c) Tenant shall not cause or permit to occur the use, generation,
      release, manufacture, refining, production, processing, storage, or
      disposal of any Hazardous Substance on, under, or about the Premises, or
      the transportation to or from the Premises of any Hazardous Substance.

      (d) Tenant shall indemnify, defend, and hold Landlord harmless from all
      fines, suits, procedures, claims, and actions of every kind, and all costs
      associated herewith (including attorneys' and consultants' fees) arising
      out of or in any way connected with any deposit, spill, discharge, or
      other release of Hazardous Substances that occurs during the term of this
      Lease, at or from the Premises, or which arises at any time from Tenant's
      use or occupancy of the Premises, from Tenant's failure to provide all
      information, make all submissions, and take all steps required by all
      Authorities under the Laws and all other environmental laws.

      (e) Tenant's obligations and liabilities under this Paragraph 33 shall
      survive the expiration of this Lease.

      (f) Tenant shall not be liable for any damage due to hazardous materials
      that occurred prior to the commencement of Tenant's lease or after its
      termination, unless damage is caused by Tenant during Tenant's occupancy.

34. NOTICES. Any notice or other written instrument relating to this Lease may
be delivered personally to the party to whom such notice is addressed (delivery
to the president, a vice president, or the secretary of such party to constitute
personal delivery to such party), or may be mailed by registered or certified
mail to such party at the following address or at such other address as such
party from time to time may designate by written notice:

                 TO LANDLORD:
                              JIM JOSEPH
                              ------------------------------
                              411 BOREL AVENUE, SUITE 600
                              ------------------------------
                              SAN MATEO, CA  94402
                              ------------------------------

                 TO TENANT:
                              VIRAGE, INC.
                              ------------------------------
                              411 BOREL AVENUE, SUITE 100
                              ------------------------------
                              SAN MATEO, CA 94402
                              ------------------------------

Any notice or other written instrument mailed as above provided shall be
effective at the expiration of seventy-two (72) hours after deposit of the same,
postage prepaid, in the United States mail at any place within the State of
California.

                                      -16-
<PAGE>   18
35. LETTER OF CREDIT. Tenant shall deliver to Landlord, upon execution of this
Lease, a clean, irrevocable, non-documentary and unconditional letter of credit
(the "Letter of Credit") issued by and drawable upon any commercial bank, trust
company, national banking association or savings and loan association with
offices for banking purposes in the State of California (the "Issuing Bank"),
which has outstanding unsecured, uninsured and unguaranteed indebtedness, or
shall have issued a letter of credit or other credit facility that constitutes
the primary security for any outstanding indebtedness (which is otherwise
uninsured and unguaranteed), that is then rated, without regard to qualification
of such rating by symbols such as "+" or "-" or numerical notation, "Aa" or
better by Moody's Investors Service and "AA" or better by Standard & Poor's
Rating Service, and has combined capital, surplus and undivided profits of not
less than $ 500,000,000. Such Letter of Credit shall (a) name Landlord as
beneficiary, (b) be in the amount of $ 2,000,000.00 for the entire term of the
Lease (c) permit multiple drawings, (d) be fully transferable by Landlord
without the payment of any fees or charges by Landlord, and (e) otherwise be in
form and content satisfactory to Landlord. If upon any transfer of the Letter of
Credit, any fees or charges shall be so imposed, then such fees or charges shall
be payable solely by Tenant and the Letter of Credit shall so specify. The
Letter of Credit shall provide that it shall be deemed automatically renewed,
without amendment, for consecutive periods of one year each thereafter during
the Term unless the Issuing Bank sends a notice (the "Non-Renewal Notice") to
Landlord by certified mail, return receipt requested, not less than 45 days next
preceding the then expiration date of the Letter of Credit stating that the
Issuing Bank has elected not to renew the Letter of Credit. Landlord shall have
the right, upon receipt of the Non-Renewal Notice, to draw the full amount of
the Letter of Credit, by sight draft on the Issuing Bank, and shall thereafter
hold or apply the cash proceeds of the Letter of Credit pursuant to the terms of
this Article. The issuing Bank shall agree with all drawers, endorsers and bona
fide holders that drafts drawn under and in compliance with the terms of the
Letter of Credit will be duly honored upon presentation to the Issuing Bank at
an office location in San Francisco, California. The Letter of Credit shall be
subject in all respects to the Uniform Customs and Practice for Documentary
Credits (1993 revision), International Chamber of Commerce Publication No. 500.

36. OPTION TO RENEW: Tenant, providing Tenant is not otherwise in default, shall
have one option to renew the Office Lease for a period of five (5) years, upon
giving Landlord written notice no later than January 1, 2006 of Tenant's intent
to renew. This option is subject to all terms, conditions and covenants herein
contained wherein Base Rent for the renewal term shall be based on the greater
of: (a) 100% of fair market value for comparable office buildings in the San
Mateo office market, or (b) September 1, 2006 monthly rent.

        A. "Fair Market Rental" shall mean the rate being charged to tenants for
        comparable space in similar buildings in San Mateo, California, with
        similar amenities, taking into consideration size, location, "free
        rent", allowance, floor level, proposed term of the lease, extent of
        services to be provided and the time that the particular rate under
        consideration became or is to become effective and any other relevant
        consideration. Fair Market Rental as of October 1, 2006 (the "Adjustment
        Date") shall be determined by Landlord with written notice (the
        "Notice") given to Tenant not later than thirty (30) days after receipt
        of the Option Notice, subject to Tenant's right to arbitration as
        hereinafter provided. Failure on the part of Tenant to demand
        arbitration within forty-five (45) days after receipt of the Notice from
        Landlord shall bind Tenant to the Fair Market Rental as determined by
        Landlord. Should Tenant elect to arbitrate and should the arbitration
        not have been concluded prior to the Adjustment Date, Tenant shall pay
        the prior year's Rent to Landlord after the Adjustment Date. If the
        amount of the Fair Market Rental as determined by arbitration is greater
        or less than Landlord's determination, then any adjustment required to
        adjust the amount previously paid shall be made by payment by the
        appropriate party within ten (10) days after such determination of Fair
        Market Rental.

                                      -17-
<PAGE>   19
        B. If Tenant disputes the amount claimed by Landlord as Fair Market
        Rental, Tenant may require that Landlord submit the dispute to
        arbitration. The arbitration shall be conducted and determined in the
        City of San Francisco, California in accordance with the then prevailing
        rules of the American Arbitration Association or its successor for
        arbitration of commercial disputes, except that the procedures mandated
        by such rules shall be modified as follows:

        (1)    Tenant shall make demand for arbitration in writing within thirty
               (30) days after service of the Notice, specifying therein the
               name and address of the person to act as the arbitrator on
               Tenant's behalf. The arbitrator shall be a real estate appraiser
               with at least five (5) years' full-time commercial appraisal
               experience who is familiar with the Fair Market Rental of
               first-class commercial office space in San Mateo, California.
               Failure on the part of Tenant to make the timely and proper
               demand for such arbitration shall constitute a waiver of the
               right thereto. Within ten (10) business 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, which arbitrator
               shall be similarly qualified. If Landlord fails to notify Tenant
               of the appointment of its arbitrator, within or by the time
               specified, then the arbitrator appointed by Tenant shall be the
               arbitrator to determine the Fair Market Rental for the Premises.

         (2)   If two arbitrators are chosen pursuant to Paragraph (B)(1) above,
               the arbitrators so chosen shall meet within ten (10) business
               days after the second arbitrator is appointed and 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 (B)(1) above. If they are
               unable to agree upon such appointment within five (5) business
               days after expiration of such ten (10) day period, the third
               arbitrator shall be selected by the parties themselves. If the
               parties do not agree on the third arbitrator within five (5)
               business days after expiration of the foregoing five (5) business
               day period, then either party, on behalf of both, may request
               appointment of such a qualified person by the then president of
               the San Francisco Real Estate Board. The three arbitrators shall
               decide the dispute, if it has not been previously resolved, by
               following the procedures set forth in Paragraph (B)(3) below.
               Each party shall pay the fees and expenses of its respective
               arbitrator and both shall share the fees and expenses of the
               third arbitrator. Attorneys' fees and expenses of counsel and of
               witnesses for the respective parties shall be paid by the
               respective party engaging such counsel or calling such witnesses.

        (3)    The Fair Market Rental shall be fixed by the three arbitrators in
               accordance with the following procedures. Each of the arbitrators
               selected by the parties shall state, in writing, his or her
               determination of the Fair Market Rental supported by the reasons
               therefor and shall make counterpart copies for each of the other
               arbitrators. The arbitrators shall arrange for a simultaneous
               exchange of such proposed resolutions within ten (10) business
               days after appointment of the third arbitrator. If either
               arbitrator fails to deliver to the other arbitrators his or her
               determination within such ten (10) business day period, then the
               determination of the other arbitrator shall be final and binding
               upon the parties. The role of the third arbitrator shall be to
               select which of the two proposed resolutions most closely
               approximates his or her determination of Fair Market Rental. 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 or she chooses as that most closely
               approximating his or her determination of the Fair Market Rental
               shall constitute the decision of the arbitrators and shall be
               final and binding upon the parties. If either party fails to pay
               its share of the fees of the third arbitrator with five (5)
               business days after receipt of an invoice, or fails to execute
               and deliver any documents reasonably required by the third
               arbitrator within five (5) business days after receipt thereof,
               then the Fair Market Rental shall be determined solely by the
               arbitrator selected by the other party.

                                      -18-

<PAGE>   20

        (4)    In the event of a failure, refusal or inability of any arbitrator
               to act, his or her successor shall be appointed by him or her,
               but in the case of the third arbitrator, his or her successor
               shall be appointed in the same manner as that set forth herein
               with respect to the appointment of the original third arbitrator.
               The arbitrators shall attempt to decide the issue within ten (10)
               business 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, except that such arbitrators shall
               not attempt by themselves to mutually ascertain the Fair Market
               Rental and any such determination, in a manner other than that
               provided for in Paragraph (B)(3) hereof, shall not be binding on
               the parties.

        (5)    The arbitrators shall have the right to consult experts and
               competent authorities for factual information or evidence
               pertaining to a determination of Fair Market Rental, 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 the decision and award in writing with counterpart copies
               to each party. The arbitrators shall have no power to modify the
               provisions of this Lease.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the date
first above written.

                                       LANDLORD:

                                       -----------------------------------------
                                       JIM JOSEPH
                                       Trustee, Jim Joseph Revocable Trust,
                                       dated January 19, 1990,

                                       TENANT:

                                       VIRAGE, INC.
                                       -----------------------------------------
                                       By:
                                          --------------------------------------

                                       Its:
                                           -------------------------------------

                                    EXHIBITS

                             EXHIBIT "A" - Site Plan
                            EXHIBIT "B" - Floor Plans
                       EXHIBIT "C" - Rules and Regulations

                                      -19-

<PAGE>   21
                              RULES AND REGULATIONS

1.    Tenant movements into and out of the building, wherein the extent of the
      move exceeds a small amount of hand carried goods, shall be coordinated in
      advance with Landlord and shall be conducted generally during the periods
      7:00pm and 7:00am, Monday through Friday, and Saturday through Sunday (all
      day). Landlord will provide Tenant specific written guidelines for moves
      upon being informed by Tenant of desired movement dates. In no event will
      Landlord be responsible for any loss or damage to such freight, furniture
      and fixtures or personal property from any cause.

2.    The sidewalks, entrances, lobby, elevators, stairways, and public
      corridors shall be used only as a means of ingress and egress and shall
      remain unobstructed at all times. The entrance and exit doors of all
      suites are to be kept closed at all times except as required for orderly
      passage to and from a suite. Loitering in any part of the Building or
      obstruction of any means of ingress or egress shall not be permitted.
      Doors and windows shall not be covered or obstructed. Overnight parking,
      including legal holidays and weekends, shall not be permitted without
      prior written consent of the Landlord.

3.    Plumbing fixtures shall not be used for any purposes other than those for
      which they were constructed and no rubbish, newspapers, trash or other
      substances of any kind shall be deposited therein. The use of electrical
      current shall not exceed safety standards established in the applicable
      building code. Walls, floors and ceilings shall not be defaced in any way
      and no tenant shall be permitted to mark, nail, screw or drill into paint
      or in any way mar any building surface, except that pictures,
      certificates, licenses and similar items normally used in Tenant's
      business may be carefully attached to the walls by Tenant in a manner to
      be prescribed by Landlord. Upon removal of such items by Tenant, any
      damage to the walls or other surfaces shall be repaired by Tenant.

4.    No awning, shade, sign, advertisement or notice shall be inscribed,
      painted or affixed on or to any part of the outside or inside of the
      Building. All tenant identification on public corridor doors or walls will
      be installed by Landlord for Tenant. No lettering or signs other than the
      name of the Tenant will be permitted on public corridor doors or walls
      with the size and type of the letters to be prescribed by Landlord. The
      bulletin board or directory of the Building will be provided exclusively
      for the display of the name and location of tenants thereof, and Landlord
      reserves the right to exclude all other names therefrom. Landlord reserves
      the right to approve all listing requests.

5.    The weight, size, position and installation of all safes and other
      unusually heavy objects used or placed in the Building shall be prescribed
      by Landlord. All mechanical equipment and office machines which are placed
      in the Building shall be installed in sittings which, in the judgment of
      the Landlord, shall be sufficient to prevent noise, vibration and
      annoyance. The repair of any damage done to the Building or property
      therein by installing or removing or maintaining such safes or other
      unusually heavy objects shall be paid for by Tenant.

6.    The storage of goods, wares or merchandise on the premises will not be
      permitted except in areas specifically designated by Landlord for storage.
      No sale or auction, public or private, will be permitted on the premises.

7.    All keys to the premises and the Building shall be obtained from Landlord
      and all keys shall be returned to Landlord upon the termination of this
      Lease. Tenant shall not change the locks or install other locks on the
      doors.

                                    EXHIBIT C
                                     PAGE 1

<PAGE>   22
8.    Tenant or any employee or invitee of Tenant using the premises after
      regular business hours or on non-business days shall lock any entrance
      doors to the Building used by him immediately after entering of leaving
      the Building. Tenant, its employees and invitees and other persons
      entering or leaving the Building when it is so locked, may be required to
      sign the Building register when so doing, and any security personnel of
      Landlord may refuse to admit Tenant or any of Tenant's employees, invitees
      or any other person to the Building while it is so locked, without a pass
      previously arranged or other satisfactory identification showing such
      person's right to access to the Building. At such time, Landlord assumes
      no responsibility whatsoever in connection therewith and shall not be
      liable for any damage resulting from any error in regard to any such pass
      or identification or from the admission of any unauthorized person to the
      Building.

9.    Tenant shall not permit any cooking to take place in the premises, nor
      shall Tenant install therein any vending machines without Landlord's
      written consent.

10.   Landlord reserves the right at any time to change or rescind any one or
      more of these Rules or Regulations or to make such other and further
      reasonable rules and regulations as in Landlord's judgment may from time
      to time be necessary for the management, safety, care and cleanliness of
      the Building, for the preservation of good order therein, and for the
      convenience of other occupants and tenants therein. Landlord shall not be
      responsible to Tenant or to any other person for the nonobservance or
      violation of the Rules or Regulations by any other tenant or other person.

11.   Except for animals aiding a disabled person, Tenant agrees not to keep or
      permit to be kept on said premises or in said Office Park, any pet,
      including but not limited to dogs, cats, birds, rodents or reptiles of any
      nature without the express written consent of Landlord.

12.   In accordance with City Ordinance # 1993-03, smoking is not permitted in
      the building.

                                    EXHIBIT C
                                     PAGE 2

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