Document:

<PAGE>

                                                                   EXHIBIT 10.13

                                 MISSION PARK

                         MULTI-TENANT SINGLE-BUILDING
                              MODIFIED-NET LEASE

                                by and between

                            KOLL/INTEREAL BAY AREA

                                 ("Landlord")
                                      and

                           INTEGRAPHICS SYSTEM, INC.

                                  ("Tenant")

                  For the approximately 16,495 SF Premises at
                   4001 Burton Drive, Santa Clara, CA 95054
<PAGE>

                                 LEASE SUMMARY

     Lease Date:                             October 27, 1995

     Landlord:                               Koll/Intereal Bay Area

     Address of Landlord:                    c/o Koll Management Services, Inc.
                                             2041 Mission College Blvd., Suite
                                             100 Santa Clara, CA 95054

     Tenant:                                 InteGraphics System, Inc.

     Address of Tenant:                      2150 Trade Zone Blvd., #101
                                             ----------------------------------
                                             San Jose, CA 95131
                                             ----------------------------------
     Contact: J. C. Kuo                      Telephone: (408) 263-9182
              ---------                      ------------------------

Premises:                                    Approximately 16,495 square feet

Building Address:                            4001 Burton Drive
                                             Santa Clara, CA 95054

Building Square Footage:                     Approximately 28,837 square feet

Commencement Date:                           February 1, 1996

Term:                                        Three (3) years

Monthly Rent:            Months of Term           Net Monthly Rent
                         --------------           ----------------
                          1 through 12            $14,020.75/month
                         13 through 24            $14,845.50/month
                         25 through 36            $15,670.25/month

Estimated Operating Expenses:                $3,134.05/month

Security Deposit:                            $15,670.25

Tenant's Percentage:                         57.20%

(This Lease Summary is for information only and is not part of the Lease. The
Lease will control in case of any conflicts or inconsistencies.)
<PAGE>

                                     LEASE
                                     -----

              (MULTI-TENANT BUILDING ON SINGLE-BUILDING PROJECT)

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

<TABLE>
<S>                                                                        <C>
 1.  PARTIES..............................................................   1
 2.  PREMISES.............................................................   1
 3.  DEFINITIONS..........................................................   1
 4.  LEASE TERM...........................................................   3
 5.  RENT.................................................................   3
 6.  LATE PAYMENT CHARGES.................................................   4
 7.  SECURITY DEPOSIT.....................................................   4
 8.  HOLDING OVER.........................................................   5
 9.  TENANT IMPROVEMENTS..................................................   5
10.  CONDITION OF PREMISES................................................   5
11.  USE OF THE PREMISES..................................................   5
12.  QUIET ENJOYMENT......................................................   8
13.  ALTERATIONS..........................................................   8
14.  SURRENDER OF THE PREMISES............................................   9
15.  PERSONAL PROPERTY TAXES..............................................   9
16.  UTILITIES AND SERVICES...............................................   9
17.  REPAIR AND MAINTENANCE...............................................  10
18.  LIENS................................................................  12
19.  LANDLORD'S RIGHT TO ENTER THE PREMISES...............................  12
</TABLE>

                                      (i)
<PAGE>

<TABLE>
<S>                                                                        <C>
20.  SIGNS................................................................  13
21.  INSURANCE............................................................  13
22.  DAMAGE OR DESTRUCTION................................................  15
23.  CONDEMNATION.........................................................  16
24.  ASSIGNMENT AND SUBLETTING............................................  17
25.  DEFAULT..............................................................  18
26.  SUBORDINATION........................................................  21
27.  NOTICES..............................................................  22
28.  ATTORNEYS' FEES......................................................  22
29.  ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS..........................  22
30.  TRANSFER OF THE BUILDING OR PROJECT BY LANDLORD......................  23
31.  LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.......................  23
32.  LIMITATION OF LIABILITY..............................................  23
33.  MORTGAGEE PROTECTION.................................................  24
34.  BROKERS..............................................................  24
35.  ACCEPTANCE...........................................................  24
36.  MODIFICATION FOR LENDER..............................................  24
37.  PARKING..............................................................  24
38.  GENERAL..............................................................  24
</TABLE>

                                     (ii)
<PAGE>

                               TABLE OF EXHIBITS
                               -----------------

EXHIBIT A   The Premises

EXHIBIT B   The Project

EXHIBIT C   Hazardous Materials Questionnaire

EXHIBIT D   Sign Criteria

                                     (iii)
<PAGE>

                                     LEASE
                                     -----

              (MULTI-TENANT BUILDING ON SINGLE-BUILDING PROJECT)
              --------------------------------------------------

     1.   PARTIES. This Lease ("Lease"), dated October 27, 1995, is entered into
by and between Koll/Intereal Bay Area, a California general partnership
("Landlord"), whose address is c/o Koll Management Services, Inc., 2041 Mission
College Blvd., Suite 100, Santa Clara, California 95054 and InteGraphics System
Inc., a California corporation ("Tenant"), whose address is 2150 Trade Zone
                                                            ---------------
Blvd., #101 San Jose CA 95131.
-----------------------------

     2.   PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises, consisting of approximately sixteen thousand four
hundred ninety-five (16,495) square feet, shown in EXHIBIT A ("Premises"), in
                                                   ---------
the building commonly known as 4001 Burton Drive ("Building"), as further
defined in Paragraph 3.B., in the City of Santa Clara ("City"), County of Santa
Clara ("County"), California, together with a right in common with other tenants
of the Project to use the Outside Area, as defined in Paragraph 3.1.

     3.   DEFINITIONS. The following terms shall have the following meanings in
this Lease:

          A.   Alterations. Any alterations, additions or improvements made in,
               -----------
on or about the Building or the Premises after the Commencement Date, including,
but not limited to, lighting, heating, ventilating, air conditioning,
electrical, partitioning, drapery and carpentry installations.

          B.   Building. The building described in Paragraph 2 consisting of
               --------
approximately twenty-eight thousand eight hundred thirty-seven (28,837) square
feet.
          C.   CC&Rs. Those certain covenants, conditions and restrictions
               -----
recorded in Book E67 1, Page 414, Official Records of Santa Clara County, on
July 26, 1979, as amended.

          D.   Commencement Date. The Commencement Date of this Lease shall be
               -----------------
the first day of the Term determined in accordance with Paragraph 4.A.

          E.   HVAC. Heating, ventilating and air conditioning.
               ----

          F.   Interest Rate. Twelve percent (12%) per annum, however, in no
               -------------
event to exceed the maximum rate of interest permitted by law.

          G.   Landlord's Agents. Landlord's authorized agents, partners,
               -----------------
subsidiaries, directors, officers, and employees.

          H.   Monthly Rent. The rent payable pursuant to Paragraph 5.A., as
               ------------
adjusted from time to time pursuant to the terms of this Lease.

                                       1
<PAGE>

          I.   Outside Area. All areas and facilities within the Project,
               ------------
exclusive of the interior of the Building, provided and designated by Landlord
for the general use and convenience of Tenant and other tenants and occupants of
the Project, including perimeter roads, sidewalks, landscaped areas, service
areas, and trash disposal facilities, subject to the reasonable rules and
regulations and changes therein from time to time promulgated by Landlord
governing the use of the Outside Area.

          J.   Project. The real property shown on EXHIBIT B consisting of
               -------                             ---------
approximately 2.1 acres, upon which is located the Building. Landlord reserves
the right to construct additional buildings within the Project, in which event
the area of such buildings shall be added to the area of the existing buildings
to determine the total building area of the Project. Landlord further reserves
the right to incorporate into the Project any real property adjacent to the
Project and on which one or more buildings have been constructed.

          K.   Real Property Taxes. Any form of assessment, license, fee, rent
               -------------------
tax, levy, penalty (if a result of Tenant's delinquency), or tax (other than net
income, estate, succession, inheritance, transfer or franchise taxes), imposed
by any authority having the direct or indirect power to tax, or by any city,
county, state or federal government or any improvement or other district or
division thereof, whether such tax is: (i) determined by the area of the Project
or any part thereof or the rent and other sums payable hereunder by Tenant or by
other tenants, including, but not limited to, any gross income or excise tax
levied by any of the foregoing authorities with respect to receipt of such rent
or other sums due under this Lease; (ii) imposed upon any legal or equitable
interest of Landlord in the Project or the Premises or any part thereof, (iii)
imposed upon this transaction or any document to which Tenant is a party
creating or transferring any interest in the Project; (iv) levied or assessed in
lieu of, in substitution for, or in addition to, existing or additional taxes
against the Project whether or not now customary or within the contemplation of
the parties; (v) imposed as a special assessment for such purposes as fire
protection, street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services; or (vi) imposed as a result of any
transfer of any interest in the Project by Landlord, or the construction of any
improvements thereon or thereto.

          L.   Rent. Monthly Rent plus the Additional Rent defined in Paragraph
               ----
5.B.
          M.   Security Deposit. That amount paid by Tenant pursuant to
               ----------------
Paragraph 7.

          N.   Sublet. Any transfer, sublet, assignment, license or concession
               ------
agreement, change of ownership, mortgage, or hypothecation of this Lease or the
Tenant's interest in the Lease or in and to all or a portion of the Premises.

          O.   Subrent. Any consideration of any kind received, or to be
               -------
received, by Tenant from a subtenant if such sums are related to Tenant's
interest in this Lease or in the Premises.

          P.   Subtenant. The person or entity with whom a Sublet agreement is
               ---------
proposed to be or is made.

                                       2
<PAGE>

          Q.   Tenant's Percentage. The percentage of the area of the Premises
               -------------------
to the area of the Building. Tenant's Percentage is agreed to be fifty-seven and
20/100ths percent (57.20%) for the purpose of this Lease, until such time as
additional buildings are made a part of the Project and such percentage is
adjusted.

          R.   Tenant's Personal Property. Tenant's trade fixtures, furniture,
               --------------------------
equipment and other personal property in the Premises.
          S.   Term. The term of this Lease set forth in Paragraph 4.A.
     4.   LEASE TERM.

          A.   Term.  Date.  The Term of this Lease shall be three (3) years
               ----   ----
commencing on February 1, 1996 (the "Commencement Date") and expiring three (3)
years thereafter, unless sooner terminated. Tenant agrees, however, that if for
any reason whatsoever Landlord is unable to deliver possession of the Premises
on the Commencement Date. Landlord shall not be liable to Tenant for any loss or
damage therefrom, nor shall this Lease be void or voidable. In such event, the
Commencement Date, termination date and all other dates of this Lease shall be
extended to conform to the time of Landlord's tender of possession of the
Premises to Tenant and Tenant shall not be obligated to pay Monthly Rent or
other sums due Landlord hereunder until possession of the Premises is tendered
to Tenant.

          B.   Early Entry. Tenant shall be permitted to occupy the Premises
               -----------
commencing January 10, 1996 for the purpose of fixturing or any other purpose
permitted by Landlord. Such early entry shall be subject to all the terms and
provisions hereof, except for the payment of Monthly Rent which shall commence
on the Commencement Date. Landlord shall have the right to impose such
additional conditions on Tenant's early entry as Landlord shall deem
appropriate, and shall further have the right to require that Tenant execute an
early entry agreement containing such conditions prior to Tenant's early entry.

     5.   RENT.

          A.   Monthly Rent. Tenant shall pay to Landlord, in lawful money of
               ------------
the United States, for each calendar month of the Term, net Monthly Rent as
shown below, in advance, on the first day of each calendar month, without
abatement, deduction, claim, offset, prior notice or demand:

               Months of Term           Net Monthly Rent
               --------------           ----------------
               1 through 12             $14,020.75/month
               13 through 24            $14,845.50/month
               25 through 36            $15,670.25/month

          B.   Additional Rent. Additionally, Tenant shall pay, as and with the
               ---------------
net Monthly Rent, Tenant's Percentage of the estimated monthly Operating
Expenses, as adjusted from time to

                                       3
<PAGE>

time, and as more specifically set forth in Paragraph 17.C. Tenant shall deposit
with Landlord upon execution of this Lease the following amounts to be applied
toward Rent due for the first month of the Term:

          Monthly Rent (net)                                  $14,020.75 /month

          Tenant's Percentage of Building Maintenance and
          Outside Area Expenses                               $  3,134.05/month
                                                              -----------------
                         TOTAL                                $ 17,154.80/month

All monies (except Monthly Rent) required to be paid by Tenant under this Lease,
including, without limitation, Operating Expenses, shall be deemed Additional
Rent.

          C.   Prorations. If the Commencement Date is not the first (1st) day
               ----------
of a month, or if the expiration date of this Lease is not the last day of a
month, a prorated installment of Rent based on a thirty (30) day month shall be
paid for the fractional month during which the Lease commences or expires.

     6.   LATE PAYMENT CHARGES. Tenant acknowledges that late payment by Tenant
to Landlord of Rent and other charges provided for under this Lease will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of such
costs being extremely difficult or impracticable to fix. Therefore, if any
installment of Rent or any other charge due from Tenant is not received by
Landlord when due. Tenant shall pay to Landlord an additional sum equal to five
percent (5%) of the amount overdue as a late charge for every month or portion
thereof that the Rent or other charges remain unpaid. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that
Landlord will incur by reason of the late payment by Tenant.

Initials:

/s/ William M. Harris                             /s/ Kenny Liu
______________________________                    ______________________________
Landlord                                          Tenant

     7.   SECURITY DEPOSIT. Tenant shall deposit with Landlord upon execution of
this Lease Fifteen Thousand Six Hundred Seventy and 25/100ths Dollars
($$15,670.25) as security for the full and faithful performance of every
provision of this Lease to be performed by Tenant (the "Security Deposit"). If
Tenant defaults with respect to any provision of this Lease, Landlord may apply
all or any part of the Security Deposit for the payment of any Rent or other sum
in default, the repair of such damage to the Premises or the payment of any
other amount which Landlord may spend or become obligated to spend by reason of
Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default to the full extent permitted
by law. If any portion of the Security Deposit is so applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the

                                       4
<PAGE>

Security Deposit to its original amount. If Tenant is not otherwise in default,
the Security Deposit or any balance thereof shall be returned to Tenant within
thirty (30) days after the expiration of the Term.

     8.   HOLDING OVER. If Tenant remains in possession of all or any part of
the Premises after the expiration of the Term, with the express or implied
consent of Landlord, such tenancy shall be month-to-month only and shall not
constitute a renewal or extension for any further term. If Tenant remains in
possession either with or without Landlord's consent, Monthly Rent shall be
increased to an amount equal to one hundred fifty percent (150%) of the Monthly
Rent payable during the last month of the Term, and any other sums due under
this Lease shall be payable in the amount and at the times specified in this
Lease. Such month-to-month tenancy shall be subject to every other term,
condition, and covenant contained herein. If Tenant remains in possession
without Landlord's consent, Tenant shall indemnify, defend and hold Landlord
harmless from all claims, costs and liabilities including attorneys' fees and
costs, arising from or in connection with Tenant remaining in possession.

     9.   TENANT IMPROVEMENTS. Intentionally deleted.

     10.  CONDITION OF PREMISES. The Premises and all electrical, plumbing,
mechanical, and HVAC systems serving the Premises shall be in good working order
as of the date that Landlord delivers possession of the Premises to Tenant.
Prior to delivery of possession, Landlord shall, at Landlord's expense (i)
professionally clean the Premises, including the carpet, (ii) replace any
stained ceiling tiles; and (iii) repair, patch and spot paint interior walls as
needed, Subject to Landlord's completion of the foregoing, by taking possession
of the Premises. Tenant shall be deemed to have accepted the Premises and all
improvements therein in their present condition, "as is," subject to all
applicable laws, codes and ordinances. Any damage to the Premises caused by
Tenant's move-in shall be repaired or corrected by Tenant, at its expense.
Tenant acknowledges that neither Landlord nor its Agents have made any
representations or warranties as to the suitability or fitness of the Premises
for the conduct of Tenant's business, nor has Landlord or its Agents agreed to
undertake any Alterations or construct any improvements to the Premises except
as expressly provided in this Lease.

     11.  USE OF THE PREMISES.

          A.   Tenant's Use. Tenant shall use the Premises solely for general
               ------------
office, engineering, sales, marketing and distribution of electronic components,
and shall not use the Premises for any other purpose without obtaining the prior
written consent of Landlord. Tenant agrees that the Project is subject and this
Lease is subordinate to the CC&Rs. Tenant acknowledges receipt of a copy of the
CC&Rs and further acknowledges that it has read the CC&Rs and knows the contents
thereof. Throughout the Term, Tenant shall faithfully and timely perform and
comply with the CC&Rs and any modification or amendments thereof.

          B.   Compliance with Laws. Tenant shall not use the Premises or suffer
               --------------------
or permit anything to be done in or about the Premises or the Project which will
in any way conflict with any law, statute, zoning restriction, ordinance or
governmental law, rule, regulation or requirement of

                                       5
<PAGE>

public authorities now in force or which may hereafter be in force, relating to
or affecting the condition, use or occupancy of the Premises or the Project.
Tenant shall not commit any public or private nuisance or any other act or thing
which might or would disturb the quiet enjoyment of any other tenant of the
Project or any occupant of nearby property. Tenant shall place no loads upon the
floors, walls or ceilings in excess of the maximum designed load determined by
Landlord or which endanger the structure; nor place any harmful liquids in the
drainage systems; nor dump or store waste materials or refuse or allow such to
remain outside the Building proper, except in the enclosed trash areas provided.
Tenant shall not store or permit to be stored or otherwise placed any other
material of any nature whatsoever outside the Building.

          C.   Emissions. Tenant shall not during the Term of this Lease:
               ---------

               (i)    Permit any vehicle on the Project to emit exhaust which is
in violation of any governmental law, rule, regulation or requirement;

               (ii)   Discharge, emit or permit to be discharged or emitted, any
liquid, solid or gaseous matter, or any combination thereof, into the
atmosphere, the ground or any body of water, which matter, as reasonably
determined by Landlord or any governmental entity with jurisdiction, does or may
pollute or contaminate the same, or is or may become radioactive, or may
adversely affect (1) the health or safety of persons, whether on the Premises,
the Project, or elsewhere, (2) the condition, use or enjoyment of the Premises
or the Project or any other real or personal property located on the Project or
elsewhere, or (3) the Project or any of the improvements constructed thereon,
including buildings, foundations, pipes, utility lines, landscaping or parking
areas;

               (iii)  Produce, or permit to be produced, any intense glare,
light or heat except within an enclosed or screened area, and then only in such
manner that the glare, light or heat shall not be discernible from outside the
Premises,

               (iv)   Create, or permit to be created, any sound pressure level
which will interfere with the quiet enjoyment of any real property outside the
Project, or which will create a nuisance or violate any governmental law, rule,
regulation or requirement;

               (v)    Create, or permit to be created, any ground vibration that
is discernible outside the Premises; or

               (vi)   Transmit, receive or permit to be transmitted or received,
any electromagnetic, microwave or other radiation which is harmful or hazardous
to any person or property in, on or about the Project or elsewhere.

          D.   Hazardous Materials.
               -------------------

               (i)    Tenant agrees to complete prior to Lease execution the
questionnaire attached to the Lease as EXHIBIT C (the "Hazardous Materials
                                       ---------
Questionnaire"). Tenant represents and warrants that the information completed
by Tenant in the Hazardous Materials Questionnaire is true and complete. Tenant
agrees to immediately inform Landlord in writing if any of the

                                       6
<PAGE>

information contained in the Hazardous Materials Questionnaire becomes untrue,
inaccurate or incomplete.

               (ii)   Any handling, transportation, storage, treatment, disposal
or use of Hazardous Materials by Tenant and Tenant's employees, contractors,
subcontractors, invitees and sublessees (collectively "Tenant's Agents") in or
about the Premises, shall strictly comply with all applicable Hazardous
Materials Laws. Tenant shall indemnify, defend upon demand with counsel
reasonably acceptable to Landlord, and hold harmless Landlord and Landlord's
partners, agents, employees, contractors, and invitees (collectively "Landlord's
Agents") from and against any and all liabilities, losses, claims, damages, lost
profits, consequential damages, interest, penalties, fines, monetary sanctions,
attorneys' fees, experts' fees, court costs, remediation costs, investigation
costs, and other expenses which result from or arise in any manner whatsoever
out of the use, storage, treatment, transportation, release, or disposal of
Hazardous Materials on or about the Premises or the Project by Tenant or
Tenant's Agents.

               (iii)  If the presence of Hazardous Materials in, on, or about
the Premises or the Project caused or permitted by Tenant or Tenant's Agents
results in contamination or deterioration of water or soil resulting in a level
of contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Tenant
shall promptly take any and all action necessary to investigate and remediate
such contamination if required by Law or as a condition to the issuance or
continuing effectiveness of any governmental approval which relates to the use
of the Premises or any part thereof. Tenant shall further be solely responsible
for, and shall defend, indemnify, and hold Landlord and Landlord's Agents
harmless from and against, all claims, costs and liabilities, including
attorney's fees and costs, arising out of or in connection with any
investigation and remediation required hereunder to return the Premises to its
condition existing prior to the appearance of such Hazardous Materials.

               (iv)   Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any Hazardous Materials which
relates to the Premises, and (ii) any contamination of the Premises or the
Project by Hazardous Materials which constitutes a violation of any Hazardous
Materials Law. Tenant and Tenant's Agents shall not bring Hazardous Materials of
types or quantities differing from those set forth in the Hazardous Materials
Questionnaire without first obtaining the written permission of the Landlord. At
any time during the Lease term, Tenant shall, within five (5) days after written
request therefor received from Landlord, disclose in writing all Hazardous
Materials that are being used by Tenant or Tenant's Agents on the Premises, the
nature of such use, and the manner of storage and disposal.

               (v)    Landlord may cause testing wells to be installed on or
about the Outside Area of the Project, and may cause the ground water to be
tested to detect the presence of Hazardous Materials by the use of such tests as
are then customarily used for such purposes, provided that Landlord shall use
diligent efforts to minimize any inconvenience or disruption to Tenant's
business in connection with such installation. If Tenant so requests, Landlord
shall supply Tenant with copies of such test results. The cost of such tests and
of the installation, maintenance, repair and replacement of such wells shall be
paid by Tenant if such tests disclose the existence of

                                       7
<PAGE>

facts which give rise to liability of Tenant pursuant to its indemnity given in
Paragraph 11.D(ii) or (iii).

               (vi)   As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
defined as hazardous or extremely hazardous pursuant to Section 66160 of Title
26 of the California Code of Regulations, Division 22, (ii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C., Section 6901 et seq. (42 U.S.C. Section 6903), or
(iii) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.,
Section 9601 et seq. (42 U.S.C. 6901). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.

               (vii)  The obligations of Landlord and Tenant under this
Paragraph 11.D shall survive the expiration or earlier termination of the Lease
term. The rights and obligations of Landlord and Tenant with respect to issues
relating to Hazardous Materials are exclusively established by this Paragraph
11.D. In the event of any inconsistency between any other part of the Lease and
this Paragraph 11.D, the terms of this Paragraph 11.D shall control.

     12.  QUIET ENJOYMENT. Landlord covenants that Tenant, upon performing the
terms, conditions and covenants of this Lease, shall have quiet and peaceful
possession of the Premises as against any person claiming the same by, through
or under Landlord.

     13.  ALTERATIONS. Tenant shall not make or permit any Alterations in, on or
about the Premises, except for nonstructural Alterations not exceeding Five
Thousand Dollars ($5,000.00) in cost per calendar year, without the prior
written consent of Landlord, and according to plans and specifications approved
in writing by Landlord, which consent shall not be unreasonably withheld. With
regard to Alterations not requiring Landlord's consent, Tenant shall provide
Landlord copies of all plans and specifications therefor prior to the
construction thereof. Notwithstanding the foregoing Tenant shall not, without
the prior written consent of Landlord, make any: (i) Alterations to the
structure or exterior of the Building; (ii) Alterations to and penetrations of
the roof of the Building; and (iii) Alterations visible from outside the
Premises, to which Landlord may withhold Landlord's consent on wholly aesthetic
grounds. All Alterations shall be installed at Tenant's sole expense, in
compliance with all applicable laws and the CC&Rs, by a licensed contractor,
shall be done in a good and workmanlike manner conforming in quality and design
with the Premises existing as of the Commencement Date, and shall not diminish
the value of either the Building or the Premises. All Alterations made by Tenant
shall be and become the property of Landlord upon installation and shall not be
deemed Tenant's Personal Property; provided, however, that Landlord shall at the
time consent for the Alterations is requested, notify Tenant, whether Tenant
must at the expiration or earlier termination of the Term, remove, at Tenant's
expense, any or all Alterations

                                       8
<PAGE>

installed by Tenant and return the Premises to their condition prior to the
installation of such Alterations, normal wear and tear excepted. Notwithstanding
any other provision of this Lease, Tenant shall be solely responsible for the
maintenance and repair of any and all Alterations made by it to the Premises.
Tenant shall give Landlord written notice of Tenant's intention to perform work
on the Premises, whether or not Landlord's consent is required, at least twenty
(20) days prior to the commencement of such work to enable Landlord to post and
record a Notice of Nonresponsibility or other notice deemed proper before the
commencement of any such work. Landlord, at Landlord's option at the expiration
or earlier termination of the Term, may require Tenant to remove some or all of
any Alterations installed without Landlord's consent.

     14.  SURRENDER OF THE PREMISES. Upon the expiration or earlier termination
of the Term, Tenant shall surrender the Premises to Landlord in its condition
existing as of the Commencement Date, normal wear and tear and fire or other
casualty and approved Alterations which Landlord has indicated shall remain upon
the Premises upon the expiration of the Term excepted, with all interior walls
repaired if damaged; all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed; the plumbing and electrical systems and
lighting in good order and repair, including replacement of any burned out or
broken light bulb or ballasts; and the HVAC equipment serviced and repaired by a
reputable and licensed service firm, all to the reasonable satisfaction of
Landlord. Tenant shall remove from the Premises all of Tenant's Alterations
required to be removed pursuant to Paragraph 13 and all Tenant's Personal
Property, and repair any damage and perform any restoration work caused by such
removal. If Tenant fails to remove such Alterations and Tenant's Personal
Property, and such failure continues after the termination of this Lease,
Landlord may retain such property and all rights of Tenant with respect to it
shall cease, or Landlord may place all or any portion of such property in public
storage for Tenant's account. Tenant shall be liable to Landlord for costs of
removal of any such Alterations and Tenant's Personal Property and storage and
transportation costs of same, and the cost of repairing and restoring the
Premises, together with interest at the Interest Rate from the date of
expenditure by Landlord. If the Premises are not so surrendered at the
expiration or earlier termination of this Lease, Tenant shall indemnify, defend
and hold Landlord and its Agents harmless against all claims, costs and
liabilities, including attorneys' fees and costs, resulting from Tenant's delay
in so surrendering the Premises.

     15.  PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed or levied against Tenant's Personal Property in, on or about the
Premises or elsewhere. When possible, Tenant shall cause its Personal Property
to be assessed and billed separately from the real or personal property of
Landlord.

     16.  UTILITIES AND SERVICES. Tenant shall be responsible for and shall pay
promptly all charges for water, gas, electricity, telephone, refuse pickup,
janitorial service and all other utilities, materials and services furnished
directly to or used by Tenant in, on or about the Premises during the Term,
together with any taxes thereon. If such utilities are not separately metered to
the Premises, Landlord shall bill Tenant for Tenant's pro rata share based on
Tenant's Percentage or other equitable basis as determined by Landlord. Landlord
shall not be liable in damages or otherwise for any failure or interruption of
any utility service or other service furnished to the Premises, except that
resulting from the willful misconduct of Landlord.

                                       9
<PAGE>

     17.  REPAIR AND MAINTENANCE.

          A.   Landlord's Obligations. Landlord shall maintain in good order,
               ----------------------
condition and repair the structural parts of the Building, including the
foundation and subflooring of the Building, the roof (including the roof
membrane), exterior walls and interior bearing or structural walls (excluding,
however, interior wall surfaces), except for any damage thereto caused by the
negligence or willful acts or omissions of Tenant or of Tenant's agents,
employees or invitees, or by reason of the failure of Tenant to perform or
comply with any terms of this Lease, or caused by Alterations made by Tenant or
by Tenant's agents, employees or contractors. Landlord also shall maintain the
Outside Area in good order, condition and repair. Landlord shall at all times
have exclusive control of the Outside Area, including the right to grant
easements or other rights of access to third parties, and may at any time
temporarily close any part thereof, exclude and restrain anyone from any part
thereof, except the bona fide customers, employees and invitees of Tenant who
use the Outside Area in accordance with the rules and regulations as Landlord
may from time to time promulgate, and may change the configuration of the
Outside Area. In exercising any such rights, Landlord shall make a reasonable
effort to minimize any disruption of Tenant's business. It is an express
condition precedent to all obligations of Landlord to repair that Tenant shall
have notified Landlord of the need for such repairs. Tenant waives the
provisions of Sections 1941 and 1942 of the California Civil Code and any
similar or successor law regarding Tenant's right to make repairs and deduct the
expenses of such repairs from the Rent due under this Lease.

          B.   Tenant's Obligations. Tenant shall at all times and at its own
               --------------------
expense clean, keep and maintain in good order, condition and repair every part
of the Premises which is not within Landlord's obligation pursuant to Paragraph
17.A. Tenant's repair and maintenance obligations shall include, all plumbing
and sewage facilities within the Premises, fixtures, interior walls and ceiling,
floors, windows, doors, entrances, plateglass, showcases, skylights, all
electrical facilities and equipment, including lighting fixtures, lamps, fans
and any exhaust equipment and systems, any automatic fire extinguisher equipment
within the Premises, electrical motors and all other appliances and equipment of
every kind and nature located in, upon or about the Premises. Tenant shall also
be responsible for all pest control within the Premises. Tenant shall obtain
HVAC systems preventive maintenance contracts with quarterly service (or such
other periodic service as Landlord shall designate) in accordance with
manufacturer recommendations, which shall be subject to the reasonable approval
of Landlord and paid for by Tenant, and which shall provide for and include
replacement of filters, oiling and lubricating of machinery, parts replacement,
adjustment of drive belts, oil changes and other preventive maintenance,
including annual maintenance of duct work, interior unit drains and caulking of
sheet metal, and recaulking of jacks and vents on an annual basis.  Tenant shall
have the benefit of all warranties available to Landlord regarding the equipment
in such HVAC systems. Tenant shall provide Landlord with copies of all HVAC
maintenance reports on a quarterly basis, including copies of contractor
recommendations for repairs and/or replacements. If any repairs and/or
replacements are recommended by the contractor, Tenant shall perform such
repairs and/or replacements and shall provide Landlord with evidence that such
repairs and/or replacements have been completed in accordance with the
contractor's recommendations. Landlord may, at Landlord's election, have the
HVAC systems inspected by Landlord's contractor on a semi-annual basis to
confirm whether Tenant has maintained the HVAC systems as required herein. The

                                      10
<PAGE>

cost of any such semi-annual inspections shall be included in Building
Maintenance Expenses and paid for by Tenant as provided in Paragraph 17.C.
Notwithstanding the foregoing to the contrary, Landlord shall have the right at
any time during the term of this Lease to assume the maintenance and repair of
the HVAC systems upon written notice to Tenant and, if Landlord elects to do so,
the cost of such maintenance and repair, including any service contracts
maintained by Landlord for such purpose, shall be included in Operating Expenses
and paid by Tenant as provided in Paragraph 17.C.

          C.   Reimbursement by Tenant.
               ------------------------

               (i)   Tenant to Pay Operating Expenses. Tenant shall pay Landlord
                     --------------------------------
monthly, as Additional Rent, Tenant's Percentage of Operating Expenses.

               (ii)  Operating Expenses. As used herein, the term "Operating
                     ------------------
Expenses" shall mean all expenses incurred by Landlord for the repair and
maintenance of the Outside Area and the Building, including, without limitation
the following: annual roof inspections; wages and salaries of all employees
engaged in the operation, maintenance and security of the Building, including
taxes, insurance and benefits relating thereto; the rental cost and overhead of
any office and storage space used to provide such services; cost of all
supplies, materials and labor used in the operation, repair, replacement and
maintenance of the Building and the Outside Area; cost of repairs and general
maintenance of the Building and the Outside Area (excluding repairs and general
maintenance paid for by proceeds of insurance or by Tenant or other third
parties); resurfacing and restriping of the parking area; painting, sweeping,
maintenance and repair of sidewalks, fountains, curbs and signs, landscape
sprinkler systems, planting and landscaping; lighting and other utilities;
directional signs and other markers and bumpers; maintenance and repair of any
fire protection systems, lighting systems, storm drainage systems, and any other
utility system; personnel to implement such services, including, if Landlord
deems necessary, the cost of security guards; garbage, trash, rubbish and waste
removal; all costs with respect to repairs and maintenance of utility facilities
(including pipes and conduits) serving more than one tenant; depreciation on
maintenance and operating machinery and equipment (if owned) and rental paid for
such machinery and equipment (if rented); premiums for commercial liability
insurance covering the Project; premiums for all risk or causes of loss -
special form insurance and, at Landlord's option, earthquake insurance on the
Building; premiums for insurance against loss of rents for a period of twelve
(12) months from the date of the loss; Real Property Taxes; a reasonable
management fee for the manager of the Building; and any capital improvements
made to the Building or the Outside Area to reduce operating costs, to comply
with governmental rules and regulations enacted after completion of the
Building, to replace the roof (including the roof membrane) or the HVAC system
for the Building, or to resurface the parking areas. The cost of any capital
improvements shall be amortized over the useful life of the improvement and only
the annual amortized cost of such item shall be included in Operating Expenses
annually.

               (iii) Exclusions from Operating Expenses. Notwithstanding
                     ----------------------------------
anything to the contrary contained in this Lease, Operating Expenses shall not
include the following: (a) costs expended in the original construction of the
Building and the Project; (b) costs of alterations or improvements made to the
Premises or the premises of other tenants of the Project; (c) depreciation,

                                      11
<PAGE>

interest and principal payments on mortgages, ground rents, and other debt
costs, if any; (d) expenses resulting from the sole negligence of Landlord or
its Agents; (e) legal fees, leasing commissions, advertising expenses and other
expenses incurred in connection with the leasing of the Project; (f) costs for
which Landlord is reimbursed by insurance; (g) services provided to other
tenants in the Building or the Project which are not provided to Tenant; (h)
fines, penalties, and interest; and (i) costs incurred by Landlord to correct
defects in the construction of the Building or the Project.

               (iv) Monthly Payments. From and after the Commencement Date,
                    ----------------
Tenant shall pay to Landlord on the first day of each calendar month of the Term
Tenant's Percentage of the estimated monthly Operating Expenses incurred by
Landlord. The foregoing estimated monthly charges may be adjusted by Landlord at
the end of any calendar quarter on the basis of Landlord's experience and
reasonably anticipated costs. Any such adjustment shall be effective as of the
calendar month next succeeding receipt by Tenant of written notice of such
adjustment. Within one hundred twenty (120) days following the end of each
calendar year Landlord shall furnish Tenant a statement of such actual expenses
("Actual Expenses") for the calendar year and the payments made by Tenant with
respect to such period. If Tenant's payments for the Operating Expenses do not
equal the amount of the Actual Expenses, Tenant shall pay Landlord the
deficiency within thirty (30) days after receipt of such statement. If Tenant's
payments exceed the Actual Expenses, Landlord shall offset the excess against
the Operating Expenses thereafter becoming due to Landlord. There shall be
appropriate adjustments of the Operating Expenses as of the Commencement Date
and expiration of the Term.

          D.   Compliance with Governmental Regulations. Tenant shall, at its
               ----------------------------------------
cost, comply with, including the making by Tenant of any Alteration to the
Premises, all present and future regulations, rules, laws, ordinances, and
requirements of all governmental authorities (including, without limitation
state, municipal, County and federal governments and their departments, bureaus,
boards and officials) arising from Tenant's use or occupancy of the Premises.

     18.  LIENS. Tenant shall keep the Building and the Project free from any
liens arising out of any work performed, materials furnished or obligations
incurred by or on behalf of Tenant and shall indemnify, defend and hold Landlord
and its Agents harmless from all claims, costs and liabilities, including
attorneys' fees and costs, in connection with or arising out of any such lien or
claim of lien. Tenant shall cause any such lien imposed to be released of record
by payment or posting of a proper bond acceptable to Landlord within ten (10)
days after written request by Landlord. Tenant shall give Landlord written
notice of Tenant's intention to perform work on the Premises which might result
in any claim of lien at least ten (10) days prior to the commencement of such
work to enable Landlord to post and record a Notice of Nonresponsibility. If
Tenant fails to so remove any such lien within the prescribed ten (10) day
period, then Landlord may do so at Tenant's expense and Tenant shall reimburse
Landlord for such amounts upon demand. Such reimbursement shall include all
costs incurred by Landlord including Landlord's reasonable attorneys' fees with
interest thereon at the Interest Rate.

     19.  LANDLORD'S RIGHT TO ENTER THE PREMISES. Tenant shall permit Landlord
and its Agents to enter the Premises at all reasonable times with reasonable
notice, except for emergencies in which case no notice shall be required, to
inspect the same, to post Notices of

                                      12
<PAGE>

Nonresponsibility and similar notices, to show the Premises to interested
parties such as prospective lenders, to make necessary repairs, to discharge
Tenant's obligations hereunder when Tenant has failed to do so within a
reasonable time after written notice from Landlord, and at any reasonable time
within one hundred and eighty (180) days prior to the expiration or earlier
termination of the Term, to place upon the Building and the Outside Area
ordinary "For Lease" signs and to show the Premises to prospective tenants. The
above rights are subject to reasonable security regulations of Tenant, and to
the requirement that Landlord shall at all times act in a manner to cause the
least possible physical interference with Tenant's business.

     20.  SIGNS. The location, size, design, color and other physical aspects of
Tenant's identification signage shall comply with the sign criteria for the
Project attached as EXHIBIT D and shall be subject to the Landlord's written
                    ---------
approval prior to installation (which shall not be unreasonably withheld), the
CC&Rs, and any appropriate municipal or other governmental approvals. The cost
of the sign, its installation, maintenance and removal expense shall be Tenant's
sole expense. If Tenant fails to maintain its sign, or, if Tenant fails to
remove its sign upon termination of this Lease, Landlord may do so at Tenant's
expense and Tenant's reimbursement to Landlord for such amounts shall be deemed
Additional Rent.

     21.  INSURANCE.

          A.   Indemnification. Tenant hereby agrees to defend, indemnify and
               ---------------
hold harmless Landlord and its Agents from and against any and all claims,
damage, loss, liability or expense including attorneys' fees and legal costs
suffered directly or by reason of any claim, suit or judgment brought by or in
favor of any person or persons for damage, loss or expense due to, but not
limited to, bodily injury and property damage sustained by such person or
persons which arises out of, is occasioned by or in any way attributable to the
use or occupancy of the Premises or the Project or any part thereof and adjacent
areas by Tenant, the acts or omissions of the Tenant, its agents, employees or
any contractors brought onto the Premises or the Project by Tenant, except to
the extent caused by the negligence or willful misconduct of Landlord or its
Agents. Tenant agrees that the obligations assumed herein shall survive the
termination or expiration of this Lease. The foregoing indemnity shall not
apply, however, to any claims, damage, loss, liability or expense arising out of
or in connection with the presence of any Hazardous Materials in, on or about
the Project, which indemnity shall be governed solely by the provisions of
Paragraph 11.D.

          B.   Tenant's Insurance. Tenant agrees to maintain in full force and
               ------------------
effect at all times during the Term, at its own expense, for the protection of
Tenant and Landlord, as their interests may appear, policies of insurance issued
by a responsible carrier or carriers acceptable to Landlord which afford the
following coverages:

               (i)  Commercial general liability insurance in an amount not less
than Three Million and no/100ths Dollars ($3,000,000.00) combined single limit
for both bodily injury and property damage which includes blanket contractual
liability broad form property damage, personal injury, completed operations and
products liability, naming Landlord and its Agents as additional insureds.

                                      13
<PAGE>

               (ii) "All Risk" property insurance (including, without
limitation, vandalism, malicious mischief, inflation endorsement, and sprinkler
leakage endorsement) on Tenant's Personal Property located on or in the
Premises. Such insurance shall be in the full amount of the replacement cost, as
the same may from time to time increase as a result of inflation or otherwise,
and shall be in a form providing coverage comparable to the coverage provided in
the standard ISO All-Risk form. As long as this Lease is in effect, the proceeds
of such policy shall be used for the repair and replacement of such items so
insured. Landlord shall have no interest in the insurance proceeds on Tenant's
Personal Property.

          C.   Premises Insurance. During the Term Landlord shall maintain "All
               ------------------
Risk" property insurance (including inflation endorsement, sprinkler leakage
endorsement and, at Landlord's option, boiler and machinery insurance,
earthquake and flood coverage) on the Building, excluding coverage of all
Tenant's Personal Property located on or in the Premises, but including the
Tenant Improvements, if any are provided for in Paragraph 9 of this Lease. Such
insurance shall also include insurance against loss of rents on an "All Risk"
basis, including, at Landlord's option, earthquake and flood, in an amount equal
to the Monthly Rent and Additional Rent, and any other sums payable under the
Lease, for a period of at least twelve (12) months commencing on the date of
loss. Such insurance shall name Landlord and its Agents as named insureds and
include a lender's loss payable endorsement in favor of Landlord's lender (Form
438 BFU Endorsement). If the Project insurance premiums are increased after the
Commencement Date, due to an increase in the value of the Building or its
replacement cost. Tenant shall pay Tenant's Percentage of such increase within
ten (10) days of notice of such increase. If such insurance premiums are
increased due to Tenant's use of the Premises, improvements installed by Tenant,
or any other cause solely attributable to Tenant, Tenant shall pay the full
amount of the increase.

          D.   Waiver of Subrogation. Landlord and Tenant each hereby waive all
               ---------------------
rights of recovery against the other on account of loss or damage occasioned to
such waiving party for its property or the property of others under its control
to the extent that such loss or damage is insured against under any insurance
policies which may be in force at the time of such loss or damage. Tenant and
Landlord shall, upon obtaining policies of insurance required hereunder, give
notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease and Tenant and Landlord shall cause each insurance
policy obtained by such party to provide that the insurance company waives all
right of recovery by way of subrogation against either Landlord or Tenant in
connection with any damage covered by such policy.

          E.   Increased Coverage. Upon demand, Tenant shall provide Landlord,
               ------------------
at Tenant's expense, with such increased amount of existing insurance, and such
other insurance as Landlord or Landlord's lender may reasonably require to
afford Landlord and Landlord's lender adequate protection.

          F.   Co-Insurer. If, on account of the failure of Tenant to comply
               ----------
with the foregoing provisions, Landlord is adjudged a co-insurer by its
insurance carrier, then, any loss or damage Landlord shall sustain by reason
thereof, including attorneys' fees and costs, shall be borne by Tenant and shall
be immediately paid by Tenant upon receipt of a bill therefor and evidence of
such loss.

                                      14
<PAGE>

          G.   Insurance Requirements. All insurance shall be in a form
               ----------------------
satisfactory to Landlord and shall be carried with companies that have a general
policy holder's rating of not less than "A" and a financial rating of not less
than Class "X' in the most current edition of Best's Insurance Reports; shall
                                              ------------------------
provide that such policies shall not be subject to material alteration or
cancellation except after at least thirty (30) days' prior written notice to
Landlord, and shall be primary as to Landlord. The policy or policies, or duly
executed certificates for them, together with satisfactory evidence of payment
of the premium thereon shall be deposited with Landlord prior to the
Commencement Date, and upon renewal of such policies, not less than thirty (30)
days prior to the expiration of the term of such coverage. If Tenant fails to
procure and maintain the insurance required hereunder, Landlord may, but shall
not be required to, order such insurance at Tenant's expense and Tenant shall
reimburse Landlord. Such reimbursement shall include all costs incurred by
Landlord including Landlord's reasonable attorneys' fees, with interest thereon
at the Interest Rate.

          H.   Landlord's Disclaimer. Landlord and its Agents shall not be
               ---------------------
liable for any loss or damage to persons or property resulting from fire,
explosion, falling plaster, glass, tile or sheetrock, steam, gas, electricity,
water or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface, or
any other cause whatsoever, unless caused by or due to the sole negligence or
willful acts of Landlord. Tenant shall give prompt written notice to Landlord in
case of a casualty, accident or repair needed in the Premises.

     22.  DAMAGE OR DESTRUCTION.

          A.   Landlord's Obligation to Rebuild. If the Premises or the Building
               --------------------------------
is damaged or destroyed, Landlord shall promptly and diligently repair the same
unless either Landlord or Tenant has the right to terminate this Lease as
provided herein and either party has elected to so terminate.

          B.   Right to Terminate. Landlord shall have the right to terminate
               ------------------
this Lease in the event any of the following events occurs:

               (i)    Insurance proceeds are not available to pay one hundred
percent (100%) of the cost of such repair, excluding the deductible for which
Tenant shall be responsible;

               (ii)   The Premises cannot, with reasonable diligence, be fully
repaired by Landlord within one hundred twenty (120) days after the date of the
damage or destruction; or

               (iii)  The Premises cannot be safely repaired because of the
presence of hazardous factors, including, but not limited to, earthquake faults,
radiation, chemical waste and other similar dangers.

          If Landlord elects to terminate this Lease, Landlord shall give Tenant
written notice of its election to terminate within thirty (30) days after such
damage or destruction, and this Lease

                                      15
<PAGE>

shall terminate fifteen (15) days after the date Tenant receives such notice. If
Landlord elects not to terminate the Lease, subject to Tenant's termination
right set forth below, Landlord shall promptly commence the process of obtaining
necessary permits and approvals and repair of the Premises or the Building as
soon as practicable, and this Lease will continue in full force and effect. All
insurance proceeds from insurance under Paragraph 21, excluding proceeds for
Tenant's Personal Property, shall be disbursed and paid to Landlord. Tenant
shall be required to pay to Landlord the amount of any deductibles payable in
connection with any insured casualties, unless the casualty was caused by the
sole negligence or willful misconduct of Landlord.

          Tenant shall have the right to terminate this Lease, if the Premises
cannot, with reasonable diligence and subject to Tenant delays, be fully
repaired within one hundred eighty (180) days from the date of damage or
destruction. The determination of the estimated repair period shall be made by
Landlord in its good faith business judgment within thirty (30) days after such
damage or destruction. Landlord shall deliver written notice of the repair
period to Tenant after such determination has been made and Tenant shall
exercise its right to terminate this Lease, if at all, within ten (10) days of
receipt of such notice from Landlord. If this Lease is terminated by either
party as permitted herein, Landlord shall refund to Tenant any prepaid Rent
allocable to the period following the date of the casualty.

          C.   Limited Obligation to Repair. Landlord's obligation, should it
               ----------------------------
elect or be obligated to repair or rebuild, shall be limited to the Premises,
the Tenant Improvements, or the Building, as the case may be, as any or all of
the same existed immediately prior to the casualty, excluding, however, any
additional alterations or improvements made by Tenant.

          D.   Abatement of Rent. Rent shall be temporarily abated
               -----------------
proportionately during any period when, by reason of such damage or destruction,
Landlord and Tenant reasonably determine that there is substantial interference
with Tenant's use of the Premises, having regard to the extent to which Tenant
may be required to discontinue Tenant's use of the Premises. Such abatement
shall commence upon such damage or destruction and end upon substantial
completion by Landlord of the repair or reconstruction which Landlord is
obligated or undertakes to do. Tenant shall not be entitled to any other
compensation or damages from Landlord for loss of the use of the Premises,
damage to Tenant's Personal Property or any inconvenience occasioned by such
damage, repair or restoration. Tenant hereby waives the provisions of Section
1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil
Code, and the provisions of any similar law hereinafter enacted.

          E.   Damage Near End of Term. Anything herein to the contrary
               -----------------------
notwithstanding, if the Premises or the Building is destroyed or damaged during
the last twelve (12) months of the Term, then Landlord or Tenant may, at its
option, cancel and terminate this Lease as of the date of the occurrence of such
damage. If neither Landlord nor Tenant elects to so terminate this Lease, the
repair of such damage shall be governed by Paragraphs 22.A. and 22.B.

     23.  CONDEMNATION. If title to all of the Premises or Building or so much
thereof is taken for any public or quasi-public use under any statute or by
right of eminent domain so that reconstruction of the Premises or Building will
not, in Landlord's and Tenant's mutual opinion, result

                                      16
<PAGE>

in the Premises being reasonably suitable for Tenant's continued occupancy for
the uses and purposes permitted by this Lease, this Lease shall terminate as of
the date that possession of the Premises or Building or part thereof be taken,
and Landlord shall refund to Tenant any prepaid Rent allocable to the period
following the date of the taking. A sale by Landlord to any authority having the
power of eminent domain, either under threat of condemnation or while
condemnation proceedings are pending, shall be deemed a taking under the power
of eminent domain for all purposes of this paragraph.

          If any part of the Premises or Building is taken and the remaining
part is reasonably suitable for Tenant's continued occupancy for the purposes
and uses permitted by this Lease, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part of the Premises or
Building is taken. The Rent and other sums payable hereunder shall be reduced in
the same proportion that Tenant's use and occupancy of the Premises is reduced.
If any portion of the Outside Area is taken, Tenant's Rent shall be reduced only
if such taking materially interferes with Tenant's use of the Outside Area and
then only to the extent that the fair market rental value of the Premises is
diminished by such partial taking. If the parties disagree as to the amount of
Rent reduction, the matter shall be resolved by arbitration and such arbitration
shall comply with and be governed by the California Arbitration Act, Sections
1280 through 1294.2 of the California Code of Civil Procedure. Each party hereby
waives the provisions of Section 1265.130 of the California Code of Civil
Procedure allowing either party to petition the Superior Court to terminate this
Lease in the event of a partial taking of the Project or Premises.

          No award for any partial or entire taking shall be apportioned. Tenant
assigns to Landlord its interest in any award which may be made in such taking
or condemnation, together with any and all rights of Tenant arising in or to the
same or any part thereof. Nothing contained herein shall be deemed to give
Landlord any interest in or require Tenant to assign to Landlord any separate
award made to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business, or its moving costs.

     24.  ASSIGNMENT AND SUBLETTING.

          A.   Landlord's Consent. Tenant shall not enter into a Sublet without
               ------------------
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Any attempted or purported Sublet without Landlord's prior written
consent shall be void and confer no rights upon any third person and, at
Landlord's election, shall terminate this Lease. Each Subtenant shall agree in
writing, for the benefit of Landlord, to assume, to be bound by, and to perform
the terms, conditions and covenants of this Lease to be performed by Tenant.
Notwithstanding anything contained herein, Tenant shall not be released from
personal liability for the performance of each term, condition and covenant of
this Lease by reason of Landlord's consent to a Sublet unless Landlord
specifically grants such release in writing.

          B.   Information to be Furnished. If Tenant desires at any time to
               ---------------------------
Sublet the Premises or any portion thereof, it shall first notify Landlord of
its desire to do so and shall submit in writing to Landlord: (i) the name and
identity of the proposed Subtenant; (ii) the nature of the proposed Subtenant's
business to be carried on in the Premises; (iii) the terms and provisions of the

                                       17
<PAGE>

proposed Sublet and a copy of the proposed Sublet form containing a description
of the subject premises; and (iv) such financial information, including
financial statements, as Landlord may reasonably request concerning the proposed
Subtenant.

          C.   Landlord's Alternatives. Within thirty (30) days after Landlord's
               -----------------------
receipt of the information specified in Paragraph 24.B., Landlord shall, by
written notice to Tenant, elect: (i) to lease for its own account the Premises
or the portion thereof so proposed to be Sublet by Tenant, upon the same terms
as those offered to the proposed Subtenant but on a form acceptable to Landlord;
(ii) to lease for its own account the Premises or the portion thereof so
proposed to be Sublet by Tenant to any person upon any terms desired by
Landlord; (iii) to consent to the Sublet by Tenant; or (iv) to refuse its
consent to the Sublet. If Landlord proceeds under Paragraph 24.C.(iii) and
consents to the Sublet, Tenant may thereafter enter into a valid Sublet of the
Premises or portion thereof, upon the terms and conditions and with the proposed
Subtenant set forth in the information furnished by Tenant to Landlord pursuant
to Paragraph 24.B., subject, however, at Landlord's election, to the condition
that any excess of the Subrent over the Rent required to be paid by Tenant under
this Lease less reasonable attorneys' fees and leasing commissions paid by
Tenant on the Sublease, shall be paid to Landlord.

          D.   Proration. For the purposes of determining the excess Subrent
               ---------
payable to Landlord pursuant to Paragraph 24.C, if a portion of the Premises is
Sublet, the pro rata share of the Rent attributable to such partial area of the
Premises shall be determined by Landlord by dividing the Rent payable by Tenant
hereunder by the total square footage of the Premises and multiplying the
resulting quotient (the per square foot rent) by the number of square feet of
the Premises which are Sublet.

          E.   Exempt Sublets. Notwithstanding the above, Landlord's prior
               --------------
written consent shall not be required for an assignment of this Lease to a
subsidiary, affiliate or parent corporation of Tenant, or a corporation into
which Tenant merges or consolidates, if Tenant gives Landlord prior written
notice of the name of any such assignee, and if the assignee assumes, in
writing, for the benefit of Landlord all of Tenant's obligations under the
Lease. An assignment or other transfer of this Lease to a purchaser of all or
substantially all of the assets of Tenant shall be deemed a Sublet requiring
Landlord's prior written consent.

     25.  DEFAULT.

          A.   Tenant's Default. A default under this Lease by Tenant shall
               ----------------
exist if any of the following occurs:

               (i)  If Tenant fails to pay Rent or any other sum required to be
paid hereunder when due; or

               (ii) If Tenant fails to perform any term, covenant or condition
of this Lease except those requiring the payment of money, and Tenant fails to
cure such breach within fifteen (15) days after written notice from Landlord
where such breach could reasonably be cured within such fifteen (15) day period;
provided, however, that where such failure could not reasonably be

                                       18
<PAGE>

cured within the fifteen (15) day period, that Tenant shall not be in default if
it commences such cure within the fifteen (15) day period and thereafter
diligently prosecutes same to completion, which completion shall occur not later
than sixty (60) days from the date of receipt of written notice from Landlord;
or

               (iii)  If Tenant assigns its assets for the benefit of its
creditors; or

               (iv)   If the sequestration or attachment of or execution on any
material part of Tenant's Personal Property essential to the conduct of Tenant's
business occurs, and Tenant fails to obtain a return or release of such Personal
Property within thirty (30) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier; or

               (v)    If Tenant fails to continuously or uninterruptedly conduct
its business in the Premises, or shall have abandoned or vacated the Premises;
or

               (vi)   If a court makes or enters any decree or order other than
under the bankruptcy laws of the United States adjudging Tenant to be insolvent;
or approving as properly filed a petition seeking reorganization of Tenant; or
directing the winding up or liquidation of Tenant and such decree or order shall
have continued for a period of thirty (30) days.

          B.   Remedies. Upon a default, Landlord shall have the following
               --------
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, to which Landlord may resort cumulatively or
in the alternative:

               (i)    Landlord may continue this Lease in full force and effect,
and this Lease shall continue in full force and effect as long as Landlord does
not terminate this Lease, and Landlord shall have the right to collect Rent when
due.

               (ii)   Landlord may terminate Tenant's right to possession of the
Premises at any time by giving written notice to that effect, and relet the
Premises or any part thereof. Tenant shall be liable immediately to Landlord for
all costs Landlord incurs in reletting the Premises or any part thereof,
including, without limitation, broker's commissions, expenses of cleaning and
redecorating the Premises required by the reletting and like costs. Reletting
may be for a period shorter or longer than the remaining term of this Lease. No
act by Landlord other than giving written notice to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises or the appointment of
a receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. On
termination, Landlord has the right to remove all Tenant's Personal Property and
store the same at Tenant's cost and to recover from Tenant as damages:

                      (a) The worth at the time of award of unpaid Rent and
other sums due and payable which had been earned at the time of termination;
plus

                      (b) The worth at the time of award of the amount by which
the unpaid Rent and other sums due and payable which would have been payable
after termination until

                                       19
<PAGE>

the time of award exceeds the amount of such Rent loss that Tenant prove could
have been reasonably avoided; plus

               (c) The worth at the time of award of the amount by which the
unpaid Rent and other sums due and payable for the balance of the Term after the
time of award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; plus

               (d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which, in the ordinary course of things, would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus

               (e) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by the laws of
the State of California.

          The "worth at the time of award" of the amounts referred to in
Paragraphs 25.B.(ii)(a) and 25.B.(ii)(b) is computed by allowing interest at the
Interest Rate on the unpaid rent and other sums due and payable from the
termination date through the date of award. The "worth at the time of award" of
the amount referred to in Paragraph 25.B.(ii)(c) is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%). Tenant waives redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of any default of Tenant
hereunder.

          (iii)    Landlord may, with or without terminating this Lease, re-
enter the Premises and remove all persons and property from the Premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant. No reentry or taking possession of the
Premises by Landlord pursuant to this paragraph shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant.

     C.   Bankruptcy.
          -----------

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

                                       20
<PAGE>

               (ii) Within thirty (30) days after court approval of the
assumption of this Lease, the trustee or receiver shall cure (or provide
adequate assurance to the reasonable satisfaction of Landlord that the trustee
or receiver shall cure) any and all previous defaults under the unexpired Lease
and shall compensate Landlord for all actual pecuniary loss resulting from
Tenant's breach of this Lease, including any attorneys' fees and costs incurred
by Landlord as a result of such breach and/or the bankruptcy proceedings
instituted by or against Tenant, and shall provide adequate assurance of future
performance under the Lease to the reasonable satisfaction of Landlord. Adequate
assurance of future performance, as used herein, includes, but shall not be
limited to: (i) assurance of source and payment of Rent, and other consideration
due under this Lease; (ii) assurance that the assumption or assignment of this
Lease will not breach any provision, such as radius, location, use, or
exclusivity provision, in any other lease of space within the Complex.

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

          D.   Landlord's Default. Landlord shall not be deemed to be in default
               ------------------
in the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within thirty (30)
days after receipt of written notice by Tenant to Landlord specifying the nature
of such default; provided, however, that if the nature of Landlord's obligation
is such that more than thirty (30) days are required for its performance, then
Landlord shall not be deemed to be in default if it shall commence such
performance within such thirty (30) day period and thereafter diligently
prosecute the same to completion.

     26.  SUBORDINATION. This Lease is subject and subordinate to mortgages and
deeds of trust (collectively "Encumbrances") which may now affect the Building
or the Project, to the CC&Rs and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, if the holder or holders
of any such Encumbrance ("Holder") shall require that this Lease be prior and
superior thereto, Tenant shall, within seven (7) days after written request from
Landlord, execute, have acknowledged and deliver any and all reasonable
documents or instruments, which Landlord or Holder deems necessary or desirable
for such purposes. Landlord shall have the right to cause this Lease to be and
become and remain subject and subordinate to any and all Encumbrances which are
now or may hereafter be executed covering the Building or the Project or any
renewals, modifications, consolidations, replacements or extensions thereof, for
the full amount of all advances made or to be made thereunder and without regard
to the time or character of such advances, together with interest thereon and
subject to all the terms and provisions thereof; provided only, that in the
event of termination of any such lease or upon the foreclosure of any such
mortgage or deed of trust, so long as Tenant is not in default, Holder agrees to
recognize Tenant's rights under this Lease as long as Tenant shall pay the Rent
and observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within ten (10) days after

                                       21
<PAGE>

Landlord's written request, Tenant shall execute any and all documents required
by Landlord or the Holder to make this Lease subordinate to any lien of the
Encumbrance. If Tenant fails to do so, it shall be deemed that this Lease is
subordinated. Notwithstanding anything to the contrary set forth in this
paragraph, Tenant hereby attorns and agrees to attorn to any entity purchasing
or otherwise acquiring the Building or the Project at any sale or other
proceeding or pursuant to the exercise of any other rights, powers or remedies
under such Encumbrance.

     27.  NOTICES. Any notice or demand required or desired to be given under
this Lease shall be in writing and shall be personally served or in lieu of
personal service may be given by mail. If given by mail, such notice shall be
deemed to have been given when seventy-two (72) hours have elapsed from the time
when such notice was deposited in the United States mail, registered or
certified, and postage prepaid, addressed to the party to be served. At the date
of execution of this Lease, the addresses of Landlord and Tenant are as set
forth in Paragraph 1. After the Commencement Date, the address of Tenant shall
be the address of the Premises. Either party may change its address by giving
notice of same in accordance with this paragraph.

     28.  ATTORNEYS' FEES. If either party brings any action or legal proceeding
for damages for an alleged breach of any provision of this Lease, to recover
rent, or other sums due, to terminate the tenancy of the Premises or to enforce,
protect or establish any term, condition or covenant of this Lease or right of
either party, the prevailing party shall be entitled to recover as a part of
such action or proceedings, or in a separate action brought for that purpose,
reasonable attorneys' fees and costs.

     29.  ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. Tenant shall within ten
(10) days following written request by Landlord:

          (i)  Execute and deliver to Landlord any documents, including estoppel
certificates, in the form prepared by Landlord (a) certifying that this Lease is
unmodified and in full force and effect or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect and the date to which the Rent and other charges are paid in
advance, if any, and (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord, or, if there are
uncured defaults on the part of the Landlord, stating the nature of such uncured
defaults, and (c) evidencing the status of the Lease as may be required either
by a lender making a loan to Landlord to be secured by deed of trust or mortgage
covering the Building or the Project or a purchaser of the Building or the
Project from Landlord. Tenant's failure to deliver an estoppel certificate
within seven (7) days after delivery of Landlord's written request therefor
shall be conclusive upon Tenant (a) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) that there
are now no uncured defaults in Landlord's performance and (c) that no Rent has
been paid in advance. If Tenant fails to so deliver a requested estoppel
certificate within the prescribed time it shall be conclusively presumed that
the Lease is unmodified and in full force and effect except as represented by
Landlord.

          (ii) Deliver to Landlord the current financial statements of Tenant,
and financial statements of the two (2) years prior to the current financial
statements year, with an opinion of a certified public accountant, including a
balance sheet and profit and loss statement for the most

                                       22
<PAGE>

recent prior year, all prepared in accordance with generally accepted accounting
principles consistently applied.

     30. TRANSFER OF THE BUILDING OR PROJECT BY LANDLORD. In the event of any
conveyance of the Building or the Project and assignment by Landlord of this
Lease, Landlord shall be and is hereby entirely released from all liability
under any and all of its covenants and obligations contained in or derived from
this Lease occurring after the date of such conveyance and assignment and Tenant
agrees to attorn to such transferee provided such transferee assumes Landlord's
obligations under this Lease.

     31. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. If Tenant shall at any
time fail to make any payment or perform any other act on its part to be made or
performed under this Lease, Landlord may, but shall not be obligated to and
without waiving or releasing Tenant from any obligation of Tenant under this
Lease, upon written notice to Tenant, make such payment or perform such other
act to the extent Landlord may deem desirable, and in connection therewith, pay
expenses and employ counsel. All sums so paid by Landlord and all penalties,
interest and costs in connection therewith shall be due and payable by Tenant on
the next day after any such payment by Landlord, together with interest thereon
at the Interest Rate from such date to the date of payment by Tenant to
Landlord, plus collection costs and attorneys' fees. Landlord shall have the
same rights and remedies for the nonpayment thereof as in the case of default in
the payment of Rent.

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

         (i)    The sole and exclusive remedy shall be against the Landlord's
interest in the Project;

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

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

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

         (v)    No judgment will be taken against any partner of Landlord;

         (vi)   Any judgment taken against any partner of Landlord may be
vacated and set aside at any time nunc pro tunc;

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

                                       23
<PAGE>

          (viii)  These covenants and agreements are enforceable both by
Landlord and also by any partner of Landlord.

     33.  MORTGAGEE PROTECTION. If Landlord' defaults under this Lease, Tenant
will notify any beneficiary of a deed of trust or mortgagee of a mortgage
covering the Building or the Project for which Landlord has provided Tenant with
a name and address, and offer such beneficiary or mortgagee a reasonable
opportunity to cure the default, including time to obtain possession of the
Building or the Project by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure.

     34.  BROKERS. Landlord and Tenant warrant and represent each to the other
that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, except for Cornish & Carey Commercial Real
Estate whose commission shall be payable by Landlord, and that it knows of no
other real estate broker or agent who is or might be entitled to a commission in
connection with this Lease. Landlord and Tenant agree to indemnify, defend and
hold each other and their respective agents harmless from and against any and
all liabilities or expenses, including attorneys' fees and costs, arising out of
or in connection with claims made by any broker or individual for commissions or
fees resulting from the execution of this Lease.

     35.  ACCEPTANCE. This Lease shall only become effective and binding upon
full execution hereof by Landlord and delivery of a signed copy to Tenant.
Neither party shall record this Lease nor a short form memorandum thereof.

     36.  MODIFICATION FOR LENDER. If, in connection with obtaining financing
for the Building or the Project or any portion thereof, Landlord's lender shall
request reasonable modification to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not materially adversely affect Tenant's rights
hereunder.

     37.  PARKING. Tenant shall have the right to use up to sixty-six (66)
unreserved parking spaces in the Project's parking facilities in common with
other tenants of the Project upon terms and conditions, as may from time to time
be established by Landlord. Tenant agrees not to overburden the parking
facilities and agrees to cooperate with Landlord and other tenants in the use of
the parking facilities. Landlord reserves the right in its discretion to
determine whether the parking facilities are becoming crowded and to allocate
and assign parking spaces among Tenant and the other tenants. Tenant shall not
park cars, trucks, trailers or other vehicles, or parts thereof, overnight on
the Project.

     38.  GENERAL.

          A.   Captions. The captions and headings used in this Lease are for
               --------
the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.

          B.   Executed Copy. Any fully executed copy of this Lease shall be
               -------------
deemed an original for all purposes.

                                       24
<PAGE>

          C.   Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.

          D.   Separability. If one or more of the provisions contained herein,
               ------------
except for the payment of Rent, is for any reason held invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had not been
contained herein.

          E.   Choice of Law. This Lease shall be construed and enforced in
               -------------
accordance with the substantive laws of the State of California. The language in
all parts of this Lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Landlord or Tenant.

          F.   Gender; Singular, Plural. When the context of this Lease
               ------------------------
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural.

          G.   Binding Effect. The covenants and agreement contained in this
               --------------
Lease shall be binding on the parties hereto and on their respective heirs,
successors and assigns to the extent this Lease is assignable.

          H.   Waiver. The waiver by Landlord or Tenant of any breach of any
               ------
term, condition or covenant, of this Lease by the other shall not be deemed to
be a waiver of such provision or any subsequent breach of the same or any other
term, condition or covenant of this Lease. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
at the time of acceptance of such payment. No covenant, term or condition of
this Lease shall be deemed to have been waived by Landlord or Tenant unless such
waiver is in writing signed by the waiving party.

          I.   Entire Agreement. This Lease is the entire agreement between the
               ----------------
parties, and there are no agreements or representations between the parties
except as expressed herein. Except as otherwise provided herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.

          J.   Authority. If Tenant is a corporation or a partnership, each
               ---------
individual executing this Lease on behalf of said corporation or partnership, as
the case may be, represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said entity in accordance with its corporate
bylaws, statement of partnership or certificate of limited partnership, as the
case may be, and that this Lease is binding upon said entity in accordance with
its terms. Landlord, at its option, may require a copy of such written
authorization to enter into this Lease.

          K.   Exhibits. All exhibits, amendments, riders and addendums attached
               --------
hereto are hereby incorporated herein and made a part hereof.

                                       25
<PAGE>

          L.   Rules and Regulations. Landlord shall have the right to establish
               ---------------------
from time to time such rules and regulations as Landlord shall deem appropriate
for the protection of the Project.

          M.   Days of Week. If the date upon which any act is to be performed
               ------------
or notice is to be delivered under this Lease shall fall upon a Saturday, Sunday
or legal holiday, such act or notice shall be timely if performed or delivered
on the next business day.

          N.   Force Majeure. The performance of any obligation to be performed
               -------------
by Landlord and Tenant under this Lease, excluding, however, the obligation to
pay Rent or any other sum payable to Landlord by Tenant, shall be excused for
any period during which either party is prevented from performing such
obligation due to causes beyond such parties control, including without
limitation, strikes, lockouts or other labor disturbance or labor dispute,
governmental regulation, moratorium or other governmental action, civil
disturbance, war, war-like operations, invasions, rebellion, hostilities,
sabotage, fires or other casualty, rain, flooding, hailstorms, lightning,
earthquake, or other acts of God (collectively, "force majeure"). Landlord and
Tenant each agree to (i) provide written notice to the other if Landlord or
Tenant is unable to perform any obligation imposed upon such party hereunder
within the time period required, if such inability to perform is due to force
majeure, and (ii) use reasonable efforts to mitigate the effects of force
majeure on the timely performance of such obligation.

     This Lease is effective as of the date the last signatory necessary to
execute the Lease shall have executed this Lease.

TENANT                           LANDLORD

InteGraphics System, Inc., a     Koll/Intereal Bay Area, a
California corporation           California general partnership

                                 By Koll Management Services,
By   /s/ Kenny Liu 10/27/95         Inc., a Delaware corporation,
   -------------------------
                                    its managing agent
Its  President
    -----------
                                    By /s/ William M. Harris
                                       ---------------------

                                    Its Regional President
                                        ------------------

                                       26<PAGE>

                                                                  EXHIBIT 10.14

                      FIRST AMENDMENT TO LEASE AGREEMENT

     This First Amendment to Lease Agreement ("Amendment") is entered into as of
January 15, 1999, by and between KOLL/INTEREAL BAY AREA, a California general
partnership, ("Landlord"), and IGS TECHNOLOGIES, INC., a California corporation
("Tenant"), formerly known as Integraphics Systems, Inc., with reference to the
following facts:

                                   Recitals
                                   --------

     A.   Landlord and Tenant entered into that certain lease agreement dated
October 27, 1995 ("Lease"), for premises located in the City of Santa Clara,
County of Santa Clara, State of California more particularly described in the
Lease and commonly known as 4001 Burton Drive ("Premises").

     B.   Landlord and Tenant now wish to amend the Lease to extend the three
(3) year term of the Lease for an additional six (6) months as more particularly
set forth hereinbelow.

     NOW, THEREFORE, in consideration of the covenants and agreements contained
in this Amendment and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

                           Amendments and Agreements
                           -------------------------

     1.   Recitals. All of the above recitals are true and correct.
          --------

     2.   Definitions. Unless otherwise defined in this Amendment, all
          -----------
capitalized terms used in this Amendment which are not defined in this Amendment
shall have the same meaning and definition given them in the Lease.

     3.   Extension of Term. The existing three (3) year term of the Lease is
          -----------------
hereby extended for an additional six (6) month period commencing on February 1,
1999 and expiring on July 31, 1999 ("Extension Period"). All references in the
Lease and in this Amendment to "Term" shall mean the existing three (3) year
term of the Lease as extended through the Extension Period.

     4.   Monthly Rent. Net Monthly Rent for each and every month of the
          ------------
Extension Period shall be Twenty-Five Thousand Five Hundred Sixty-Seven and
25/100ths Dollars ($25,567.25) per month.

     5.   As Is. Tenant shall lease the Premises for the Extension Period in its
          -----
"AS IS" condition on the date of the commencement of the Extension Period.
Landlord shall have no obligation to make any improvements, alterations,
modifications, repairs or refurbishments of any nature whatsoever to the
Premises as a condition to or in connection with Tenant's lease of the Premises
for the Extension Period.

     6.   Brokers. Each of Landlord and Tenant represent and warrant to the
          -------
other that neither it nor its officers, partners, agents, or anyone acting on
behalf of it, has dealt with any real estate broker in the negotiating or making
of this Amendment, except that Landlord has dealt with CB Richard Ellis, Inc., a
Delaware corporation ("CBRE"), in the negotiating and making of this Amendment.
Each of Landlord and Tenant agree to indemnify and hold the other harmless from
any claims, costs, or expenses, including reasonable attorneys' fees and costs,
incurred by the indemnified party in conjunction with any claim or claims of any
broker to a commission in connection with this Amendment as a result of the acts
or omissions of the indemnifying party.

                                      -1-
<PAGE>

Any commission or other compensation due CBRE in connection with this Amendment
shall be paid by Landlord.

     7.   Inconsistency. In the event of any inconsistency or conflict between
          -------------
the terms of this Amendment and the terms of the Lease with respect to the
matters which are a subject of this Amendment, the terms of this Amendment shall
control.

     8.   Ratification. Except as amended by this Amendment, the terms and
          ------------
provisions of the Lease are hereby ratified, confirmed, and shall remain in full
force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the day and year first hereinabove written.

                                   LANDLORD:
                                   --------

                                   KOLL/INTEREAL BAY AREA,
                                   a California general partnership

                                   By:  CB Richard Ellis, Inc.,
                                        a Delaware corporation
                                   Its: Managing Agent

                                        By:  /s/ Leland A. Waller
                                           ----------------------

                                        Its: as Director CBREI
                                            ---------------------

                                   TENANT:
                                   ------

                                   IGS TECHNOLOGIES, INC.,
                                   a California corporation

                                   By: /s/ Kenny Liu
                                      ---------------------------

                                   Its:      CEO
                                       --------------------------

                                   By:___________________________

                                   Its:__________________________

                                      -2-

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