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California-San Jose-2077 Gateway Place Lease - Spieker Properties LP and VLSI Libraries Inc.

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  • Commercial Lease. Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • Commercial Sublease. When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Sublease Agreement. Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple Net Lease. Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
  • Office Space Lease. When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.

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                              GATEWAY OFFICE PARK
                             San Jose, California


                                [IMAGE OMITTED]



                                     LEASE
<PAGE>
 
                            BASIC LEASE INFORMATION

                                 OFFICE LEASE

               Lease Date December 13, 1995

               Landlord SPIEKER PROPERTIES, L.P., a California Limited
               Partnership

               Address of Landlord: 2077 Gateway Place, Suite 100, San Jose, CA
               95110

               Tenant VLSI LIBRARIES INCORPORATED, a California Corporation


               Address of Tenant: 3135 Kifer Road.  Santa Clara, CA 95051



Contact                         Mark Templeton                                  Telephone: 408-986-9300
                                  President
                                                             
PARAGRAPH 1    Premises: Approximately 16,797 square feet of rentable area (which includes a portion of the
               building's common area) located on the third floor of the building known as 2077 Gateway Place.  The
               demised premises are approximately as shown in red on the attached floor plan (Exhibit B - Suite 300).
 
PARAGRAPH 2    Permitted Use:                                      General and Administrative Use
 
PARAGRAPH 2    Occupancy Density                                   67 people.
 
PARAGRAPH 3    Scheduled Arm Commencement Date:                    March 1, 1996
 
PARAGRAPH 3    Scheduled Length of Term:                           Five (5) years
 
PARAGRAPH 3    Scheduled Term Expiration Date:                     February 28, 2001
 
PARAGRAPH 4    Rent:  See Addendum 1 attached hereto

PARAGRAPH 15   Security Deposit:                                   $38,297.00

PARAGRAPH 29   Tenant's Proportionate Share:                       22.25%
 

               The foregoing Basic Lease Information is incorporated into and
               made a part of this Lease.  Each reference in this Lease to any
               of the Basic Lease Information shall mean the respective
               information above set forth and shall be construed to incorporate
               all of the terms provided under the Particular Lease paragraph
               pertaining to such information.  In the event of any conflict
               between the Basic Lease Information and the Lease. the latter
               shall control.


               LANDLORD:                         TENANT:                      
               SPIEKER PROPERTIES, L.P.          VLSI LIBRARIES INCORPORATED, a
               a California Limited Partnership  California Corporation       
                                                     

               By Spieker Properties, Inc.,      By /s/ Mark Templeton    
                  a Maryland, Corporation           Mark Templeton      
                  Its General Manager            Its President             
                  By:/s/ John A. Foster                                      
<PAGE>
 
                    John A. Foster                   
               Senior Vice President

                                     - 1 -
<PAGE>
 
                                     LEASE


                               TABLE OF CONTENTS



                                                    Page
                                                    
          Basic Lease Information                      1
      1.  Premises                                     3
      2.  Occupancy                                    3
      3.  Term And Possession                          3
      4.  Rent                                         3
      5.  Restrictions On Use                          3
      6.  Compliance With Laws                         3
      7.  Alterations                                  3
      8.  Repairs                                      3
      9.  Liens                                        4
     10.  Assignment And Subletting                    4
     11.  Insurance And Indemnification                4
     12.  Waiver Of Subrogation                        5
     13.  Service And Utilities                        5
     14.  Estoppel Certificate                         5
     15.  Security Deposit                             6
     16.  Substitution                                 6
     17.  Holding Over                                 6
     18.  Subordination                                6
     19.  Rules And Regulations                        6
     20.  Re-Entry By Landlord                         6
     21.  Default By Tenant                            6
     22.  Damage By Fire, Etc.                         7
     23.  Eminent Domain                               8
     24.  Sale By Landlord And Tenant's Remedies       8
     25.  Right Of Landlord To Perform                 8
     26.  Surrender Of Premises                        8
     27.  Waiver                                       8
     28.  Notices                                      8
     29.  Rental Adjustments                           9
     30.  Taxes Payable By Tenant                     10
     31.  Successors And Assigns                      10
     32.  Attorneys' Fees                             10
     33.  Light And Air                               10
     34.  Public Transportation Information           10
     35.  Miscellaneous                               10
     36.  Lease Effective Date                        10
 
          Signatures                                  10


     EXHIBIT "A"                   Rules and Regulations          
     EXHIBIT "B"                     Outline of Premises            
     EXHIBIT "C"                   Improvement Agreement           
     EXHIBIT "D"              Form of Tenant Certificate           
     EXHIBIT "E"                    Property Description             
<PAGE>
 
                                     LEASE

               THIS LEASE is made as of this 13th day of December 1995, between
               SPIEKER PROPERTIES, L.P., a California Limited (hereinafter
               called "Landlord")
                         Partnership
               and VLSI LIBRARIES   INCORPORATED, a California Corporation
               (hereinafter called "Tenant").

PREMISES       1.        Landlord leases to Tenant and Tenant leases from
                    Landlord those premises (hereinafter called "Premises)
                    outlined in red on Exhibit B attached hereto and made a part
                    hereof, specified in the Basic Lease Information attached
                    hereto (the "Building").

OCCUPANCY      2.        Tenant shall use the Premises for the Permitted Use and
                    for no other use or purpose without the prior written
                    consent of Landlord, which shall not be unreasonably
                    withheld or delayed. No increase in occupant density of the
                    Leased Premises shall be made which shall add to the burden
                    of such use of the Building as determined by Landlord
                    without the prior written consent of Landlord.

POSSESSION     3.   (a)  The parties project that the term shall commence on the
                    Scheduled Term Commencement Date and, except as otherwise
                    provided herein or in any exhibit or addendum hereto, shall
                    continue in full force until the Term Expiration Date. If
                    the Premises are not delivered by Landlord by the Scheduled
                    Term Commencement Date for any reason, Landlord shall not be
                    liable to Tenant for any loss or damage resulting from such
                    delay. The Term Commencement Date shall be the first day of
                    the calendar month next following the earlier of (i) the day
                    when the Premises are substantially complete, or (ii) the
                    date on which Tenant takes possession of, or commences the
                    operation of its business in some or all of the Premises. If
                    substantial completion occurs prior to the Scheduled Term
                    Commencement Dates, Tenant shall take occupancy. Landlord
                    shall provide Tenant as much notice as circumstances allow
                    of the date when Landlord expects to achieve substantial
                    completion based upon the progress of work. Should the Term
                    Commencement Date be a date other than the Scheduled Term
                    Commencement Date, either Landlord or Tenant, at the request
                    of the other shall execute a declaration specifying the Term
                    Commencement Date and the rent commencement date which shall
                    be binding upon the parties as to the matters therein
                    stated. Tenant's obligation to pay Rent and its other
                    obligations for payment under this Lease shall commence upon
                    the earlier of (i) the day when the Premises are
                    substantially complete, or (ii) the date on which Tenant
                    takes possession of or commences the operation of its
                    business in some or all of the Premises.

                    Tenant agrees to accept the premises in "as is" condition
                    except for the improvements per Exhibit C.

          RENT 4.        Tenant shall pay to Landlord throughout the Term Rent
                    as specified in the Basic Lease Information, payable in
                    monthly installments in advance on the first day of each
                    calendar month

See Addendum 1.     during every year of the Term in lawful money of the United
                    States, without deduction or offset whatsoever, to Landlord
                    at the address specified in the Basic Lease Information or
                    to such other firm or to such other place as Landlord may
                    from time to time designate in writing by notice given as
                    herein provided.  Rent for the first month of the Term shall
                    be paid by Tenant upon execution
<PAGE>
 
                    of this Lease. If the obligation for payment of Rent
                    commences on other than the first day of a month as provided
                    in paragraph 3(a), then Rent provided for such partial month
                    shall be prorated and the prorated installment shall be paid
                    on the first day of the calendar month next succeeding the
                    Term Commencement Date. If the Term terminates on other than
                    the last day of a calendar month, then the Rent provided for
                    such partial month shall be prorated and the prorated
                    installment shall be paid on the first day of the calendar
                    month next preceding the date of termination.

 RESTRICTIONS  5.        Tenant shall not do or permit anything to be done in or
       ON USE       about the Premises which will in any way obstruct or
                    interfere with the rights of other tenants or occupants of
                    the Building or injure or annoy them, nor use or allow the
                    Premises to be used for any improper, immoral, unlawful or
                    objectionable purpose, nor shall Tenant cause or maintain or
                    permit any nuisance in, on or about the Premises. Tenant
                    shall not commit or suffer the commission of any waste in,
                    on or about the Premises.

   COMPLIANCE  6.        Tenant shall not use the Premises or permit anything
    WITH LAWS       to be done in or about the Premises which will in any way
                    conflict with any law, statute, ordinance or governmental
                    rule or regulation now in force or which may hereafter be
See Addendum 2.     enacted or promulgated. Tenant shall not do or permit
                    anything to be done on or about the Premises or bring or
                    keep anything therein which will in any way increase the
                    rate of any insurance upon the Building or any of its
                    contents or cause a cancellation of said insurance or
                    otherwise affect said insurance in any manner, and Tenant
                    shall at its sole cost and expense promptly comply with all
                    laws, statutes, ordinances and governmental rules,
                    regulations or requirements now in force or which may
                    hereafter be in force and with the requirements of any board
                    of fire underwriters or other similar body now or hereafter
                    constituted relating to or affecting the condition, use or
                    occupancy of the Premises, excluding structural changes not
                    related to or affected by alterations or improvements made
                    by or for Tenant or Tenant's acts. The judgment of any court
                    of competent jurisdiction or the admission of Tenant in any
                    actions against Tenant, whether Landlord be a party thereto
                    or not, that Tenant has so violated any such law, statute,
                    ordinance, rule, regulation or requirement, shall be
                    conclusive of such violation as between Landlord and Tenant.

  ALTERATIONS  7.        Tenant shall not make or suffer to be made any
                    alterations, additions, or improvements in, on or to the
                    Premises or any part thereof without the prior written
                    consent of Landlord, which shall not be unreasonably
                    withheld or delayed; and any such alterations, additions or
                    improvements in, on or to said Premises, except for Tenant's
                    movable furniture and equipment, shall immediately become
                    Landlord's property and, at the end of the Term, shall
                    remain on the Premises without compensation to Tenant. In
                    the event Landlord consents to the making of any such
                    alterations, addition or improvement by Tenant, the same
                    shall be made by Tenant, at Tenant's sole cost and expense,
                    in accordance with plans and specifications approved by
                    Landlord, and any contractor or person selected by Tenant to
                    make the same must first be approved in writing by Landlord.

                    Notwithstanding the foregoing, at Landlord's option, all or
                    any portion of the alterations, addition or improvement work
                    shall be performed by Landlord for Tenant's account and
                    Tenant shall pay
<PAGE>
 
                    Landlord's estimate of the cost thereof (including a
                    reasonable charge for Landlord's overhead and profit) prior
                    to commencement of the work. Overhead and profit allowances
                    shall total fifteen percent (15%). Upon the expiration or
                    sooner termination of the Term, Tenant shall upon demand by
                    Landlord, at Tenant's sole cost and expense, with all due
                    diligence remove all those alterations, additions or
                    improvements made by or for the account of Tenant,
                    designated by Landlord to be removed, and Tenant shall with
                    all due diligence, at its sole cost and expense, repair and
                    restore the Premises to their original condition, normal
                    wear and tear excepted. At Landlord's election and
                    notwithstanding the foregoing, however, Tenant shall pay to
                    Landlord the cost of removing any such alterations,
                    additions or improvements and restoring the Premises to
                    their original condition, normal wear and tear excepted,
                    such cost to include a reasonable charge for Landlord's
                    overhead and profit as provided above, and such amount may
                    be deducted from the Security Deposit or any other sums or
                    amounts held by Landlord under this Lease.

      REPAIRS  8.        By taking possession of the Premises, Tenant accepts
                    the Premises as being in the condition in which Landlord is
                    obligated to deliver them and otherwise in good order,
                    condition and repair. At all times during the

                                     - 3 -
<PAGE>
 
                    Term Tenant shall, at Tenant's sole cost and expense, keep
                    the Premises and every part thereof in good order, condition
                    and repair, excepting damage thereto by fire, earthquake,
                    act of God or the elements.  Tenant waives all rights it may
                    have under Section 1942 of the Civil Code of the State of
                    California and any similar law, statute or ordinance now or
                    hereafter in effect (to the full extent that such waiver may
                    lawfully be given) authorizing or purporting to authorize
                    Tenant to make repairs to or for the account of Landlord.
                    Tenant shall upon the expiration or sooner termination of
                    the Term hereof, unless Landlord demands otherwise pursuant
                    to paragraph 7 hereof, surrender to Landlord the Premises
                    and all repairs, changes, alterations, additions and
                    improvements thereto in the same condition as when received
                    or when first installed, damage by fire, earthquake, act of
                    God or the elements excepted.  Landlord has no obligation to
                    alter, remodel, improve, repair, decorate or paint the
                    Premises or any part thereof, except as specified in the
                    Office Lease Improvement Agreement and no representations
                    respecting the condition of the Premises or the Building
                    have been made by Landlord to Tenant, except as specifically
                    set forth herein or in the Office Lease improvement
                    Agreement.

        LIENS  9.        Tenant shall keep the Premises free from liens arising
                    out of or related to work performed, materials or supplies
                    furnished or obligations incurred by Tenant or in connection
                    with work made, suffered or done by Tenant in Premises or
                    Building.  In the event that Tenant shall not, within ten
                    (10) days following the imposition of any such lien, cause
                    the same to be released of record by payment or posing of a
                    proper bond, Landlord shall have, in addition to all
                    remedies provided herein and by law, the right, but no
                    obligation to cause the same to be released by such means as
                    it shall deem proper, including payment of the claim giving
                    rise to such lien Landlord shall have the right at all times
                    to post and keep posted on the Premises any notices
                    permitted or required by law, or which Landlord shall deem
                    proper, for the protection of Landlord, the Premises, the
                    Building and any other party having an interest therein,
                    from mechanics and materialmen's liens, and Tenant shall
                    give Landlord not less than ten (10) business days prior
                    written notice of the commencement of any work in the
                    Building or Premises which could lawfully give rise to a
                    claim for mechanics or materialmen's lien.

   ASSIGNMENT  10.       Tenant shall not sell, assign, encumber or otherwise
          AND       transfer this Lease or any interest therein (by operation of
   SUBLETTING       law or otherwise), sublet the Premises or any part thereof
                    or suffer any other person to occupy or use the Premises or
                    any portion thereof, nor shall Tenant permit any lien to be
                    placed on Tenant's interest under this Lease by operation of
                    law except in accordance with the provisions of this
                    paragraph 10. For purposes hereof, sales, transfers or
                    assignments of (i) a controlling interest in the stock of
                    Tenant, if Tenant is a corporation, or of (ii) the general
                    partnership interests sufficient to control management
                    decisions if Tenant is a partnership or of (iii) the
                    majority or controlling underlying beneficial interest, if
                    Tenant is any other form of business entity, shall
                    constitute an assignment subject to the terms of this
                    paragraph 10.

                    (a)  In the event that Tenant should desire to sublet the
                    Premises or any part thereof, Tenant shall provide Landlord
                    with written notice of such desire at least ninety (90) days
                    in advance of the
<PAGE>
 
                    date on which Tenant desires to make such sublease. Landlord
                    shall then have a period of thirty (30) days following
                    receipt of such notice within which to notify Tenant in
                    writing that Landlord elects either (i) to terminate this
                    Lease as to the space so affected as of the date so
                    specified by Tenant, in which event, Tenant shall be
                    relieved of all further obligations hereunder as to such
                    space from and after that date, or (ii) to permit Tenant to
                    sublet such space, subject however, to the prior written
                    approval of the proposed sublessee by Landlord which said
                    consent shall not be unreasonably withheld. If Landlord
                    should fail to notify Tenant in writing of its election
                    within said thirty (30) day period, Landlord shall be deemed
                    to have waived option (i) above, but written approval of the
                    proposed sublessee shall still be required. Refusal by
                    Landlord to approve a proposed sublessee shall not
                    constitute a termination of this Lease. In exercising its
                    right of consent to a sublessee it shall be reasonable for
                    Landlord to withhold consent to any sublessee who (aa) does
                    not agree to assume the obligations of the Lease with
                    respect to the space to be so sublet, (bb) does not agree to
                    utilize the space to sublet for the Permitted Use, (cc) is
                    of unsound financial condition as determined by Landlord or
                    (dd) will, in Landlord's opinion, increase the occupant
                    density in the Leased Premises. If Tenant proposes to
                    sublease less than all of the Premises, election by Landlord
                    of termination of this Lease with respect to space to be so
                    sublet shall leave this Lease in full force and effect with
                    respect to the remainder of the space, the Rent and Tenant's
                    Proportionate Share of Operating Expenses and taxes shall be
                    adjusted on a pro rata basis to reflect the reduction in Net
                    Rentable Area of the Premises as retained by Tenant. This
                    Lease as so amended shall continue thereafter in full force
                    and effect and references herein to the Premises shall mean
                    that portion thereof as to which the Lease has not been
                    terminated.

                    (b)  Tenant shall not enter into any other transaction
                    subject to this paragraph 10 without Landlord's prior
                    written consent which said consent shall not be unreasonably
                    withheld.  It shall be reasonable for Landlord to withhold
                    consent to any proposed transaction described in this
                    paragraph 10 on any of the grounds specified in paragraph 10
                    (a) with respect to sublessees or any other reasonable
                    grounds.

                    (c)  Any rent or other consideration realized by Tenant
                    under any such sublease or assignment to which Landlord has
                    consented hereunder, in excess of the Rent payable
                    hereunder, after amortization of the reasonable cost of the
                    improvements over the remainder of the Term for which Tenant
                    has paid and reasonable subletting and assignment costs,
                    shall be divided and paid ninety percent (90%) to Landlord
                    and ten percent (10%) to Tenant.

                    (d)  Any subletting hereunder by Tenant shall not result in
                    Tenant being released or discharged from any liability under
                    this lease.  Any purported assignment, subletting or other
                    transaction to which paragraph 10 applies, which occurs
                    contrary to the provisions hereof, shall be void.
                    Landlord's consent to any assignment, subletting or other
                    transaction to which this paragraph 10 applies shall not
                    release Tenant from any of Tenant's obligations hereunder or
                    constitute a consent with respect to any subsequent
                    transaction to which this paragraph applies.

INSURANCE AND  11.  (a)  Landlord shall not be liable to Tenant and Tenant
                    hereby
<PAGE>
 
INDEMNIFICATION     waives all claims against Landlord for any injury or damage
                    to any person or properly in or about the Premises by or
                    from any cause whatsoever, (other than Landlord's gross
                    negligence or willful misconduct) and, without limiting the
                    generality of the foregoing, whether caused by water leakage
                    or any character from the roof, walls, basement or other
                    portion of the Premises or the Building, or caused by gas,
                    fire, oil or electricity in, on or about the Premises or the
                    Building.

                    (b)  Tenant shall hold Landlord harmless from and defend
                    Landlord against any and all claims or liability for any
                    injury or damage to any person or property whatsoever: (i)
                    occurring in, on or about the Premises or any part thereof,
                    or (ii) occurring in, on or about any facilities (including,
                    without prejudice to the generality of the term
                    "facilities", elevators, stairways, lobbies, health clubs,
                    passageways or hallways), the use of which Tenant may have
                    in conjunction with other tenants of the Building, when such
                    injury or damage shall be caused in part or whole by the
                    act, neglect, fault of or omission of any duty with respect
                    to the same by Tenant, its agents, servants, employees or
                    invitees.  Tenant shall further indemnify and save Landlord
                    harmless against and from  any and all claims by or on
                    behalf of any person, firm or corporation arising from the
                    conduct or management of any work or thing whatsoever done
                    by Tenant in or about or from transactions of Tenant
                    concerning the Premises, and will further indemnify and save
                    Landlord harmless against and from any and all claims
                    arising from any breach or default on the part of Tenant in
                    the performance of any covenant or agreement on the part of
                    Tenant to be performed pursuant to the terms of this Lease
                    or arising from any act or negligence of Tenant, or any of
                    its agents, contractors, servants, employees or licensees,
                    and from and against all costs, counsel fees, expenses and
                    liabilities incurred in connection with any such claim or
                    action or proceeding brought thereon.  In case any action or
                    proceeding is brought against Landlord by reason of any
                    claims or liability within the limits of the foregoing
                    indemnity, Tenant shall defend such action or proceeding at
                    Tenant's sole expense by counsel reasonably satisfactory to
                    Landlord.

                    (c)  Landlord shall hold Tenant harmless from and defend
                    Tenant against any and all claims or liability for any
                    injury or damage to any person or property occurring in or
                    about any facilities (including, without prejudice to the
                    generality of the term "facilities", elevators, stairways,
                    passageways or hallways), the use of which Tenant may have
                    in conjunction with other tenants of the building, when such
                    injury or damage shall be caused in whole or in part by the
                    act, neglect, fault of or omission of any duty with respect
                    to the same by Landlord, its

                                     - 4 -
<PAGE>
 
                    agents, servants, employees or invitees.  Landlord shall
                    further indemnify and safe Tenant harmless against and from
                    any and all claims by or on behalf of any person, firm or
                    corporation arising from the conduct or management of any
                    work or thing whatsoever done by Landlord in or about, or
                    from transactions of Landlord concerning the Premises where
                    such work is not being done for the account of Tenant, and
                    Landlord will further indemnify and safe Tenant harmless
                    against and from any and all claims arising from any breach
                    or default on the part of Landlord in the performance of any
                    covenant or agreement on the part of Landlord to be
                    performed pursuant to the terms of this Lease or arising
                    from any act or negligence of Landlord, or any of its
                    agents, contractors, servants, employees or licensees, and
                    from and against all costs, counsel fees, expenses and
                    liability incurred in connection with any such claim or
                    action or proceeding brought thereon.  In case any action or
                    proceeding is brought against Tenant by reason of any claims
                    or liability within the limits of the foregoing indemnity,
                    Landlord shall defend such action or proceeding at
                    Landlord's sole expense by counsel reasonable satisfactory
                    to Tenant.

                    (d)  The provisions of paragraph 11(b) and 11(c) shall
                    survive the expiration or termination of this Lease with
                    respect to any claims or liability occurring prior to such
                    expiration or termination.

                    (e)  Tenant shall purchase at its own expense and keep in
                    force during the Term of this Lease a policy or policies of
                    workers' compensation and comprehensive liability insurance,
                    including personal injury and property damage, in the amount
                    of Five Hundred Thousand Dollars ($500,000.00) for property
                    damage and Two Million Dollars ($2,000,000.00) per
                    occurrence for personal injuries or deaths of persons
                    occurring in or about the Premises.  The foregoing limits
                    shall be increased in proportion to increases during the
                    Term in the United States Department of Labor, Bureau of
                    Labor Statistics, Cost of Living Index.  All Urban Consumers
                    (1967 = 100) for the region in which the Leased Premises are
                    located.  Said policies shall; (i) name Landlord and any
                    party holding any interest to which this Lease may be
                    subordinated under paragraph 18 hereof, as additional
                    insureds, and insure Landlord's contingent liability under
                    this Lease; (ii) be issued by an insurance company
                    acceptable to Landlord and licensed to do business in the
                    State of California; and (iii) provide that said insurance
                    shall not be cancelled unless then (10) days prior written
                    notice shall have been given to Landlord.  Said policy or
                    policies or certificates thereof shall be delivered to
                    Landlord by Tenant upon commencement of the term of this
                    Lease and upon each renewable of said insurance.

    WAIVER OF  12.       To the extent permitted by law and without affecting
  SUBROGATION       the coverage provided by insurance required to be maintained
                    hereunder, Landlord and Tenant each waive any right to
                    recover against the other (i) damages for injury to or death
                    of persons, (ii) damages to property, (iii) damage to the
                    Premises or any part thereof, (iv) damage to the Building or
                    any part thereof, or (v) claims arising by reason of the
                    foregoing, but only to the extent that any of the foregoing
                    damages and/or claims referred to above are covered (and
                    only to the extent of such coverage) by insurance actually
                    carried by either Landlord or Tenant. This provision is
                    intended to waive fully, and for the benefit of each party,
                    any rights and/or claims which might give rise to a right of
<PAGE>
 
                    subrogation on any insurance carrier. The coverage obtained
                    by each party pursuant to this Lease shall include, but
                    without limitation, a waiver of subrogation by the carrier
                    which conforms to the provisions of this paragraph.

 SERVICES AND  13.  (a)  Landlord shall maintain the public and common
    UTILITIES       areas of the Building, including lobbies, stairs, elevators,
                    corridors and restrooms, and windows in the Building, the
                    mechanical, plumbing and electrical equipment serving the
                    Building, and the structure itself, in reasonably good order
                    and condition except for damage occasioned by the act of
                    Tenant, which damage shall be repaired by Landlord at
                    Tenant's expense.

                    (b)  Provided Tenant shall not be in default hereunder, and
                    subject to the provisions elsewhere herein contained and to
                    the rules and regulations of the Building, Landlord shall
                    furnish to the Premises during ordinary business hours of
                    generally recognized business days, to be determined by
                    Landlord (but exclusive, in any event, of Saturdays, Sundays
                    and legal holidays), water and electricity suitable for the
                    Permitted Uses of the Premises, heat and air conditioning
                    required in Landlord's judgment for the comfortable use and
                    occupation of the Premises for the Permitted Uses,
                    janitorial services during the time and in the manner that
                    such services are, in Landlord's judgment, customarily
                    furnished in comparable office buildings in the immediate
                    market area, and elevator service which shall mean service
                    either by nonattended automatic elevators or elevators with
                    attendants, or both, at the option of Landlord.  Landlord
                    shall have no obligation to provide additional or after-
                    hours heating or air conditioning, but if Landlord elects to
                    provide such services at Tenant's request, Tenant shall pay
                    to Landlord a reasonable charge for such services as
                    determined by Landlord.  Tenant agrees to keep and cause to
                    be kept closed all window covering when necessary because of
                    the sun's position, and Tenant also agrees at all times to
                    cooperate fully with Landlord and to abide by all the
                    regulations and requirements which Landlord may prescribe
                    for the proper functioning and protection of heating,
                    ventilating and air conditioning systems.  Wherever heat-
                    generating machines, excess lighting or equipment are used
                    in the Premises which affect the temperature otherwise
                    maintained by the air conditioning system, Landlord reserves
                    the right to install supplementary air conditioning units in
                    the Premises, and the cost thereof, including the cost of
                    installation and the cost of operation and maintenance
                    thereof, shall be paid by Tenant to Landlord upon demand by
                    Landlord.

                    (c)  Tenant shall not without the written consent of
                    Landlord use any apparatus or device in the Premises,
                    including without limitation, electronic data processing
                    machines, punch card machines and machines using excess
                    lighting or using current in excess of that which is
                    determined by Landlord as reasonable and normal for the
                    Permitted Use or which will in any way increase the amount
                    of electricity or water usually furnished or supplied for
                    the Permitted Uses of the Premises; nor connect with
                    electric current, except through existing electrical outlets
                    in the Premises or what pipes, any apparatus or device for
                    the purposes of using electrical current or water.  If
                    Tenant shall require water or electric current or any other
                    resource in excess of that usually furnished or supplied for
                    the Permitted Uses of the Premises, Tenant shall first
                    procure the consent of Landlord which
<PAGE>
 
                    Landlord may refuse, to the use thereof, and Landlord may
                    cause a special meter to be installed in the Premises so as
                    to measure the amount of water, electric current or other
                    resource consumed for any such other use. Tenant shall pay
                    directly to Landlord as an addition to and separate from
                    payment of Basic Operating Cost the cost of all such energy,
                    utility service and meters (and of installation maintenance
                    and repair thereof). Landlord may add to the metered charge
                    a recovery of additional expense incurred in keeping account
                    of the water, electric current or other resource so
                    consumed. Landlord shall not be liable for any damages
                    directly or indirectly resulting from, nor shall the Rent
                    herein reserved be abated by reason of (i) the installation,
                    use or interruption of use of any equipment in connection
                    with the furnishing of any of the foregoing utilities and
                    services, (ii) failure to furnish or delay in furnishing any
                    such utilities or services when such failure or delay is
                    caused by acts of God or the elements, labor disturbances of
                    any character, any other accidents or other conditions
                    beyond the reasonable control of Landlord, or by the making
                    of repairs or improvements to the Premises or to the
                    Building, or (iii) the limitation, curtailment, rationing or
                    restriction on use of water, electricity, gas or any other
                    form of energy or any other service or utility whatsoever
                    serving the Premises or the Building. Landlord shall be
                    entitled to cooperate voluntarily and in a reasonable manner
                    with the efforts of national, state or local governmental
                    agencies or utility supplies in reducing energy or other
                    resources consumption. The obligation to make services
                    available hereunder shall be subject to the limitations of
                    any such voluntary, reasonable program.

                    (d)  Any sums payable under this paragraph 13 shall
                    constitute Additional Rent hereunder.

     ESTOPPEL  14.       Within ten (10) days following any written request
  CERTIFICATE       which Landlord may make from time to time, Tenant shall
                    execute and deliver to Landlord a certificate substantially
                    in the form attached hereto as Exhibit D and made a part
                    hereof, indicating thereon any exceptions thereto which may
                    exist at that time. Failure by Tenant to execute and deliver
                    such certificate shall constitute an acceptance of the
                    Premises and acknowledgment by Tenant that the statements
                    included in Exhibit D are true and correct without
                    exception. Landlord and Tenant intend that any statement
                    delivered pursuant to this paragraph may be relied upon by
                    any mortgagee, beneficiary, purchaser or prospective
                    purchaser of the Building or any interest therein, Landlord
                    shall have the right to substitute for the attached Exhibit
                    D a certificate in form required by Landlord's mortgagee or
                    provider financing.

                                     - 5 -
<PAGE>
 
     SECURITY  15.       Concurrently with execution hereof. Tenant has paid to
      DEPOSIT       Landlord the Security Deposit in the amount stated on the
                    Basic Lease Information Sheet as security for the full and
                    faithful performance of Tenant's obligations under this
                    Lease Upon expiration of the Term or earlier termination
                    hereof, the Security Deposit shall be returned to Tenant.
                    reduced by such amounts as maybe required by Landlord to
                    remedy defaults on the part of Tenant in the payment of
                    Rent. to repair damages to the Premises caused by Tenant and
                    to clean the Premises. Landlord shall hold the Security
                    Deposit for the foregoing Purposes in accordance with the
                    provisions of all applicable law.

 SUBSTITUTION  16.       At any time after execution of this Lease, Landlord may
                    substitute for the Premises other Premises in the Building
                    (the "New Premises") upon not less than ninety (90) days
                    Prior written notice, in which event the new Premises shall
                    be deemed to be the Premises for all purposes hereunder:
                    Provided, however, that: 
                    (a) The Net Rentable Area in the Premises is less than five
                    thousand (5,000) square feet;

                    (b) The New Premises shall be similar in area and in
                    appropriateness for Tenant's purposes;

                    (c) Any such substitution is effected for the purpose of
                    accommodating a tenant who will occupy all or a substantial
                    Portion of the Net Rentable Area of the floor on which the
                    Premises are located; and

                    (d) If Tenant is occupying the Premises at the time of such
                    substitution, Landlord shall pay the expense of moving
                    Tenant, its property and equipment to the New Premises and
                    shall, at its sole cost, improve the New Premises with
                    improvements substantially similar to those Landlord has
                    committed to provide or has provided in the Premises.

 HOLDING OVER  17.       If Tenant shall retain possession of the Premises or 
                    any part thereof without Landlord's consent following the
                    expiration of the Term or sooner termination of this Lease
                    for any reason, then Tenant shall pay to Landlord for each
                    day of such retention 150% the amount of the daily rental
                    for the last period prior to the date of such expiration or
                    termination. Tenant shall also indemnity and hold Landlord
                    harmless from any loss or liability resulting from delay by
                    Tenant in surrendering the Premises, including, without
                    limitation, any claims made by any succeeding tenant founded
                    on such delay. Alternatively, if Landlord gives notice to
                    Tenant of Landlord's election thereof, such holding over
                    shall constitute renewal of this Lease for a Period from
                    month to month or for one year. whichever shall be specified
                    in such notice. Acceptance of Rent by Landlord following
                    expiration or termination shall not constitute a renewal of
                    this Lease. and nothing contained in this paragraph shall
                    waive Landlord's right of reentry or any other right. Unless
                    Landlord exercises the option hereby given to it. Tenant
                    shall be only a Tenant at sufferance, whether or not
                    Landlord accepts any Rent from Tenant while Tenant is
                    holding over without Landlord's written consent.

SUBORDINATION  18.       Without the necessity of any additional document being
                    executed by Tenant for the purpose of effecting a
                    subordination. this Lease shall be subject and subordinate
                    at all times to: (a) all ground leases or underlying leases
                    which may now exist or hereafter be executed affecting the
                    Building or the land upon which the Building is situated or
                    both, and (b) the lien of any mortgage or deed of trust
                    which may now exist or hereafter be executed in any amount
                    for which said Building, land, ground leases or underlying
                    leases, or Landlord's interest or estate in any of said
                    items, is specified as security. Notwithstanding the
<PAGE>
 
                    foregoing, Landlord shall have the right to subordinate or
                    cause to be subordinated any such ground leases or
                    underlying leases or any such liens to this Lease. In the
                    event that any ground lease or underlying lease terminates
                    for any reason, or any mortgage or deed of trust is
                    foreclosed or a conveyance in lieu of foreclosure is made
                    for any reason, Tenant shall, notwithstanding any
                    subordination, attorn to and become the Tenant of the
                    successor in interest to Landlord at the option of such
                    successor in interest. Tenant shall execute and deliver,
                    upon demand by Landlord and in the form requested by
                    Landlord, any additional documents evidencing the priority
                    or subordination of this Lease with respect to any such
                    ground leases or underlying leases or the lien of any such
                    mortgage or deed of trust. Tenant hereby irrevocably
                    appoints Landlord as attorney-in-fact of Tenant to execute,
                    deliver and record any such documents in the name and on
                    behalf of Tenant. At the request of Landlord. Tenant shall
                    provide to Landlord its current financial statement or other
                    information disclosing financial worth which Landlord shall
                    use solely for purposes of this Lease and in connection with
                    the ownership. management and disposition of the property
                    subject hereto.

 RULES AND     19.       Tenant shall faithfully observe and comply with the
REGULATION          rules and regulations printed on or annexed to this Lease
                    and all reasonable modifications thereof and additions
                    thereto from time to time put into effect by Landlord.
                    Landlord shall not be responsible to Tenant for the non-
                    compliance by any other tenant or occupant of the Building
                    with any of the rules and regulations.

     RE-ENTRY  20.       Landlord reserves and shall at all limes have
  BY LANDLORD       the right to reenter the Premises to inspect the same to
                    supply janitor service and any other service to be provided
                    by Landlord to Tenant hereunder, to show the Premises to
                    prospective purchasers, mortgagees or tenants. to post
                    notices of nonresponsibility and to alter improve or repair
                    the Premises and any portion of the Building, without
                    abatement of Rent. and may for that purpose erect, use and
                    maintain scaffolding, pipes, conduits and other necessary
                    structures in and through the Premises where reasonably
                    required by the character of the work to be performed;
                    provided that entrance to the Premises shall not be blocked
                    thereby, and further provided that the business of Tenant
                    shall not be interfered with unreasonably. Tenant waives any
                    claim for damages for any injury or inconveniences to or
                    interference with Tenant's business, any loss of occupancy
                    or quiet enjoyment of the Premises, and any other loss
                    occasioned thereby. Landlord shall at all times have and
                    retain a key with which to unlock all of the doors in, upon
                    and about the Premises, excluding Tenant's vaults and safes
                    or special security areas (designated in advance), and
                    Landlord shall have the right to use any and all means which
                    Landlord may deem necessary or proper to open said doors in
                    an emergency, in order to obtain entry to any portion of the
                    Premises, and any entry to the Premises or portions thereof
                    obtained by Landlord by any of said means, or otherwise,
                    shall not be construed to be a forcible or unlawful entry
                    into, or a detainer of, the Premises, or an eviction, actual
                    or constructive, of Tenant from the Premises or any portions
                    thereof. Landlord shall also have the right at any time,
                    without the same constituting an actual or constructive
                    eviction and without incurring any liability to Tenant
                    therefore, to change the arrangement and/or location of
                    entrances or passageways, doors and doorways, and corridors,
                    elevators, stairs, toilets or other 
<PAGE>
 
                    public parts of the Building and to change the name, number
                    or designation by which the Building is commonly known.

      DEFAULT  21.  (a)  EVENTS OF DEFAULT: The occurrence of any of the
    BY TENANT            following shall constitute an event to default on the
                         part of Tenant:

                    (1)  ABANDONMENT.  Vacation or abandonment of the Premises
                         for a continuous period in excess of five (5) business
                         days.  Tenant waives any right to notice Tenant may
                         have under Section 1951.3 of the Civil Code of the
                         State of California. the terms of this subsection (a)
                         being deemed such notice to Tenant as required by said
                         Section 1951.3;

                    (2)  NONPAYMENT OF RENT.  Failure to pay any installment of
                         Rent due and payable hereunder (or failure to pay any
                         other amount required to be paid hereunder, all such
                         obligations to be construed as the equivalent of
                         obligations for payment of Rent) upon the date when
                         said payment is due, such failure continuing without
                         cure by payment of the delinquent Rent and late charge
                         for a period of five (5) business days after written
                         notice and demand; provided, however, that except as
                         expressly otherwise Provided herein, Landlord shall
                         not be required to provide such notice more than twice
                         during the Term, the third such non-payment
                         constituting default for all purposes hereof without
                         requirement of notice.  For purposes of subparagraph
                         21(e), such failure shall constitute a default without
                         requirement of notice. The due dates for payment of
                         installments of rent provided for herein shall be
                         absolute and the existence of a cure period or notice
                         period shall not be deemed to extend said date for
                         purposes of determining Tenant's compliance with its
                         obligations hereunder.

                    (3)  OTHER OBLIGATIONS.  Failure to perform any obligations.
                         agreement or covenant under this Lease other than those
                         matters specified in subparagraphs (1) and (2) of this
                         subparagraph (a), such failure continuing for fifteen
                         (15) business days after written notice of such failure
                         (or such longer period as Landlord determines to be
                         necessary to remedy such default, provided that Tenant
                         shall continuously and diligently pursue such remedy at
                         all times until such default is cured);

                    (4)  GENERAL ASSIGNMENT.  A general assignment by Tenant for
                         the Benefit of creditors:

                                     - 6 -
<PAGE>
 
                    (5)  BANKRUPTCY.  The filing of any voluntary petition in
                         bankruptcy by Tenant or the filing of an involuntary
                         petition by Tenant's creditors, which involuntary
                         petition remains undischarged for a period of thirty
                         (30) days.  In the event that under applicable law the
                         trustee in bankruptcy or Tenant has the right to affirm
                         this Lease and continue to perform the obligations of
                         Tenant hereunder, such trustee or Tenant shall, in such
                         time periods as may be permitted by the bankruptcy
                         court having jurisdiction, cure all defaults of Tenant
                         hereunder outstanding as of the date of the affirmance
                         of this Lease and provide to Landlord such adequate
                         assurances as may be necessary to ensure Landlord of
                         the continued performance of Tenant's obligations under
                         this Lease.

                    (6)  RECEIVERSHIP.  The employment of a receiver to take
                         possession of substantially all of Tenant's assets or
                         the Premises, if such receivership remains undissolved
                         for a period of ten (10) business days after creation
                         thereof.

                    (7)  ATTACHMENT.  The attachment, execution or other
                         judicial seizure of all or substantially all of
                         Tenant's assets or the Premises, if such attachment or
                         other seizure remains undismissed or undischarged for a
                         period of ten (10) business days after the levy
                         thereof.

                    (8)  INSOLVENCY.  The admission by Tenant in writing of its
                         inability to pay its debts as they become due, the
                         filing by Tenant of a petition seeking any
                         reorganization, arrangement, composition, readjustment,
                         liquidation, dissolution or similar relief under any
                         present or future statute, law or regulation, the
                         filing by Tenant of an answer admitting or failing
                         timely to contest a material allegation of a petition
                         filed against Tenant in any such proceeding or, if
                         within thirty (30) days after the commencement of any
                         proceeding against Tenant seeking any reorganization or
                         arrangement, composition, readjustment, liquidation,
                         dissolution or similar relief under any present or
                         future statute, law or regulation, such proceeding
                         shall not have been dismissed.

                    (b)  REMEDIES UPON DEFAULT.

                    (1)  RENT.  All failures to pay any monetary obligation to
                         be paid by Tenant under this Lease shall be construed
                         as obligations for payment of Rent.

                    (2)  TERMINATION.  In the event of the occurrence of any
                         event of default, Landlord shall have the right, with
                         or without notice or demand, immediately to terminate
                         this Lease, and at any time thereafter recover
                         possession of the Premises or any part thereof and
                         expel and remove therefrom Tenant and any other person
                         occupying the same, by any lawful means, and again
                         repossess and enjoy the Premises without prejudice to
                         any of the remedies that Landlord may have under this
                         Lease, or at law or equity by reason of Tenant's
                         default or of such termination.

                    (3)  CONTINUATION AFTER DEFAULT.  Even though Tenant has
                         breached this Lease and/or abandoned the Premises this
                         Lease shall
<PAGE>
 
                         continued in effect for so long as Landlord does not
                         terminate Tenant's right to possession under paragraph
                         21 (b)(2) hereof, and Landlord may enforce all its
                         rights and remedies under this Lease, including (but
                         without limitation) the right to recover Rent as it
                         becomes due and Landlord, without terminating this
                         Lease, may exercise all of the rights and remedies of a
                         landlord under Section 1951.4 of the Civil Code of the
                         State of California or any successor code section. Acts
                         of maintenance preservation or efforts to lease the
                         Premises or the appointment of receiver upon
                         application of Landlord to protect Landlord's interests
                         under this Lease shall not constitute an election to
                         terminate Tenant's right to possession.

                    (c)  DAMAGES UPON TERMINATION.  Should Landlord terminate
                    this Lease pursuant to the provisions of paragraph 21(b)(2)
                    hereof, Landlord shall have all the rights and remedies of a
                    landlord provided by Section 1951.2 of the Civil Code of the
                    State of California, or successor code section.  Upon such
                    termination, in addition to any other rights and remedies to
                    which Landlord may be entitled under applicable law,
                    Landlord shall be entitled to recover from Tenant; (i) the
                    worth at the time of award of the unpaid Rent and other
                    amounts which had been earned at the time of termination;
                    (ii) the worth at the time of award of the amount by which
                    the unpaid Rent which would have been earned after
                    termination under the time of award exceeds the amount of
                    such Rent loss that the Tenant proves could have been
                    reasonable avoided; (iii) the worth at the time of award of
                    the amount by which the unpaid Rent for the Balance of the
                    Term after the time of award exceeds the amount of such Rent
                    loss that the Tenant proves could be reasonably avoided; and
                    (iv) any other amount necessary to compensate Landlord for
                    all the detriment proximately caused by Tenant's failure to
                    perform its obligations under this Lease or which, in the
                    ordinary course of things, would be likely to result
                    therefrom.  The "worth at the time of award" of the amounts
                    referred to in (i) and (ii) shall be computed with interest
                    at the lesser of eighteen percent (18%) per annum or the
                    maximum rate allowed by law.  The "worth at the time of
                    award" of the amount referred to in (iii) shall be computed
                    by reference to competent appraisal evidence or the formula
                    prescribed by and using the lowest discount rate permitted
                    under applicable law.

                    (d)  COMPUTATION OF RENT FOR PURPOSES OF DEFAULT.

                         For purposes of computing unpaid Rent which would have
                    accrued and become payable under this Lease pursuant to the
                    provisions of paragraph 21(c) unpaid Rent shall consist of
                    the sum of:

                    (1) the total Basic Rent for the balance of the Term then
                    remaining (with the amount of Basic Rent to be determined by
                    reference to fair rental value being the subject of proof by
                    competent evidence), plus

                    (2) a computation of the excess of Gross Rent (the term 
                    "Gross Rent" meaning the sum of (i) rental adjustments
                    payable pursuant to paragraph 29 and (ii) Basic Rent) over
                    Basic Rent for the balance of the Term then remaining
                    ("Excess Gross Rental"), the assumed excess Gross Rental for
                    the calendar year of the default and each future calendar
                    year in the Term to be equal to the Excess Gross Rental for
                    the calendar year prior to the year in which default occurs
                    compounded at a per annum rate equal to the mean average
                    rate of inflation for the preceding five (5) calendar
<PAGE>
 
                    years as determined by the United States Department of
                    Labor, Bureau of Labor Statistics Consumer Price Index (All
                    Urban Consumers) for the Metropolitan Area or Region which
                    San Francisco, California is a part.

                    (e)  LATE CHARGE.  In addition to its other remedies,
                    Landlord shall have the right without notice or demand to
                    add to the amount of any payment required to be made by
                    Tenant hereunder, and which is not paid on or before the
                    date the same is due, an amount equal to five percent (5%)
                    of the delinquency for each month or portion thereof that
                    the delinquency remains outstanding to compensate Landlord
                    for the loss of the use of the amount not paid and the
                    administrative costs caused by the delinquency, the parties
                    agreeing that the amount not paid and the administrative
                    costs caused by the delinquency, the parties agreeing that
                    Landlord's damage by virtue of such delinquencies would be
                    difficult to compute and the amount stated herein represents
                    a reasonable estimate thereof.

                    (f)  REMEDIES CUMULATIVE.  All rights, privileges and
                    elections or remedies of the parties are cumulative not
                    alternative to the extent permitted by law and except as
                    otherwise provided herein.

    DAMAGE BY  22.       If the Premises or the Building are damaged by fire or
   FIRE, ETC.       other casualty, Landlord shall forthwith repair the same,
                    provided such repairs can be made within one hundred eighty
                    (180) days from the date of such damage under the laws and
                    regulations of the federal, state and local governmental
                    authorities having jurisdiction thereof. In such event, this
                    Lease shall remain in full force and effect except that
                    Tenant shall be entitled to a proportionate reduction of
                    Rent while such repairs to be made hereunder by Landlord are
                    being made. Said proportionate reduction shall be based upon
                    the extent to which the making of such repairs to be made
                    hereunder by Landlord shall interfere with the business
                    carried on by Tenant in the Premises. Within twenty (20)
                    days from the date of such damage, Landlord shall notify
                    Tenant whether or not such repairs can be made within one
                    hundred eighty (180) days from the date of such damage and
                    Landlord's determination thereof shall be binding on Tenant.
                    If such repairs cannot be made within one hundred eighty
                    (180) days from the date of such damage, Landlord shall have
                    the option within thirty (30) days of the date of such
                    damage either to: (a) notify Tenant of Landlord's intention
                    to repair such damage and diligently prosecute such repairs,
                    in which event this Lease shall continue in full force and
                    effect and the Rent shall be reduced as provided herein; or
                    (b) notify Tenant of Landlord's election to terminate this
                    Lease as of a date specified in such notice, which date
                    shall be not less than thirty (30) nor more than sixty (60)
                    days after notice is given. In the event such notice to
                    terminate is given by Landlord, this Lease shall terminate
                    on the date specified in
<PAGE>
 
                    such notice.  In either event, the Rent shall be reduced by
                    a proportionate amount based upon the extent to which said
                    damage interfered with the business carried on by Tenant in
                    the Premises, and the Tenant shall pay such reduced Rent up
                    to the date of termination.  Landlord agrees to refund to
                    Tenant any Rent previously paid for any period of time
                    subsequent to such date of termination.  The repairs to be
                    made hereunder by Landlord shall not include, and Landlord
                    shall not be required to repair, any damage by fire or other
                    cause to the property of Tenant or any repairs or
                    replacements of any paneling, decorations, railings, floor
                    coverings or any alterations, additions, fixtures or
                    improvements installed on the premises by or at the expense
                    of Tenant.  The provisions of Section 1942, subdivision 2,
                    and Section 1933, subdivision 4, of the Civil Code of
                    California are superseded by the foregoing.

     EMINENT   23.       If any part of the Premises shall be taken or
      DOMAIN        appropriated under the power of eminent domain or conveyed
                    in lieu thereof, which materially effects Tenant's occupancy
                    of the Premises, either party shall have the right to
                    terminate this Lease at its option. If any part of the
                    Building shall be taken or appropriated under power of
                    eminent domain or conveyed in lieu thereof, Landlord may
                    terminate this Lease at its option. In either of such
                    events, Landlord shall receive subject to the rights of
                    Landlord's first mortgagee (and Tenant shall assign to
                    Landlord upon demand from Landlord) any income, rent, award
                    or any interest therein which may be paid in connection with
                    the exercise of such power of eminent domain, and Tenant
                    shall have no claim against Landlord for any part of the
                    sums paid by virtue of such proceedings, whether or not
                    attributable to the value of the unexpired Term. If a part
                    of the Premises shall be so taken or appropriated or
                    conveyed and neither party hereto shall elect to terminate
                    this Lease and the Premises have been damaged as a
                    consequence of such partial taking or appropriation or
                    conveyance. Landlord shall restore and Premises continuing
                    under this Lease at Landlord's cost and expense, provided,
                    however, that Landlord shall not be required to repair or
                    restore any injury or damage to the property of Tenant or to
                    make any repairs or restoration of any alterations,
                    additions, fixtures or improvements installed on the
                    Premises by or at the expense of Tenant. Thereafter, the
                    Rent for the remainder of the Term shall be proportionately
                    reduced, such reduction to be based upon the extent to which
                    the partial taking or appropriation or conveyance shall
                    interfere with the business carried on by Tenant in the
                    Premises. Notwithstanding anything to the contrary contained
                    in this paragraph, if the temporary use or occupancy of any
                    part of the Premises shall be taken or appropriated under
                    power of eminent domain during the Term, this Lease shall be
                    and remain unaffected by such taking or appropriation and
                    Tenant shall continue to pay in full all Rent payable
                    hereunder by Tenant during the Term, in the event of any
                    such temporary appropriation or taking. Tenant shall be
                    entitled to receive that portion of any award which
                    represents compensation for the use of or occupancy of the
                    Premises during the Term, and Landlord shall be entitled to
                    receive that portion of any award which represents the cost
                    of restoration of the Premises and the use and occupancy of
                    the Premises.
 
      SALE BY  24.       In the event of a sale or conveyance by Landlord of the
     LANDLORD       Building, the same shall operate to release Landlord from
 AND TENANT'S       any future liability upon any of the convenants or
                    conditions, express
<PAGE>
 
REMEDIES            or implied, herein contained in favor of Tenant, and in such
                    event Tenant agrees to look solely to the responsibility of
                    the successor in interest of Landlord in and to this Lease.
                    This Lease shall not be affected by any such sale and Tenant
                    agrees to attorn to the purchaser or assignee.  Tenant shall
                    look solely to Landlord's interest in the Building for
                    recovery of any judgment from Landlord.  Landlord, or if
                    Landlord is a partnership, its partners whether general or
                    limited, or if Landlord is a corporation, its directors,
                    officers or shareholders, shall never be personally liable
                    for any such judgment.

     RIGHT OF  25.       All convenants and agreements to be performed by
     LANDLORD       Tenant under any of the terms of this Lease shall be
   TO PERFORM       performed by Tenant at Tenant's sole cost and expense and
                    without any abatement of Rent. If Tenant shall fail to pay
                    any sum of money, other than Rent, required to be paid by it
                    hereunder or shall fail to perform any other act on its part
                    to be performed hereunder, and such failure shall continue
                    for ten (10) days after notice thereof by Landlord, Landlord
                    may, but shall not be obligated to do so, and without
                    waiving or releasing Tenant from any obligations of the
                    Tenant, make any such payment or perform any such act on the
                    Tenant's part to be made or performed. All sums so paid by
                    Landlord and all necessary incidental costs together with
                    interest thereon at the rate of eighteen percent (18%) per
                    annum or the maximum rate permitted by law, whichever is
                    less per annum from the date of such payment by the Landlord
                    shall be payable as Additional Rent to Landlord on demand,
                    and Tenant covenants to pay such sums, and Landlord shall
                    have, in addition to any other right or remedy of Landlord,
                    the same right and remedies in the event of the nonpayment
                    thereof by Tenant as in the case of default by Tenant in the
                    payment of the Rent.

    SURRENDER  26.  (a)  Tenant shall at least ninety (90) days before the
  OF PREMISES       last day of the Term, give to Landlord a written notice
                    intention to surrender the Premises on that date, but
                    nothing contained herein shall be construed as an extension
                    of the Term or as consent of Landlord to any holding over by
                    Tenant.

                    (b)  At the end of the term or any renewal thereof or other
                    sooner termination of this Lease, Tenant shall peaceably
                    deliver up to Landlord possession of the Premises, together
                    with all improvements, fixtures or additions thereto by
                    whomsoever made, in the same condition as received, or first
                    installed, damage by fire, earthquake, act of God, normal
                    wear and tear or the elements alone excepted. Tenant may,
                    upon the termination of this Lease, remove all movable
                    furniture and equipment belonging to Tenant, at Tenant's
                    sole cost, title to which shall be in Tenant until such
                    termination, repairing any damage caused by such removal.
                    Property not so removed shall be deemed abandoned by the
                    Tenant, and title to the same shall thereupon pass to
                    Landlord.

                    (c)  The voluntary or other surrender of this Lease by
                    Tenant, or a mutual cancellation thereof, shall not work a
                    merger and shall, at the option of Landlord, terminate all
                    or any existing subleases or subtenancies or may, at the
                    option of Landlord, operate as an assignment to it of any or
                    all such subleases or subtenancies.

       WAIVER  27.       If either Landlord or Tenant waives the performance of
                    any term, convenant or condition contained in this Lease,
                    such waiver shall not be deemed to be a waiver of any
                    subsequent breach of the
<PAGE>
 
                    same or any other term covenant or condition contained
                    herein. The acceptance of Rent by Landlord shall not
                    constitute a waiver of any preceding breach by Tenant of any
                    term, covenant or condition of this Lease, regardless of
                    Landlord's knowledge of such preceding breach at the time
                    Landlord accepted such rent. Failure by Landlord to enforce
                    any of the terms, covenants or conditions of this Lease for
                    any length of time shall not be deemed to waive or to
                    decrease the right of Landlord to insist thereafter upon
                    strict performance by Tenant. Waiver by Landlord of any
                    term, covenant or condition contained in this lease may only
                    be made by a written document signed by Landlord.

    NOTICES  28.         All notices and demands which may or are required to be
                    given by either party to the other hereunder shall be in
                    writing.  All notices and demands by Landlord to Tenant
                    shall be sent by United States certified or registered mail,
                    postage prepaid, addressed to Tenant at the Premises, or to
                    such other place as Tenant may from time to time designate
                    in the notice to Landlord.  All notices and demands by
                    Tenant to Landlord shall be sent by United States certified
                    or registered mail, postage prepaid, addressed to Landlord
                    at the address specified in the Basic Lease Information, or
                    to such other firm or to such other place as Landlord may
                    from time to time designate in a notice to Tenant.


     RENTAL  29.         In addition to Basic Rent provided to be paid
 ADJUSTMENT         hereunder, Tenant shall pay as Rent Tenant's Proportionate
                    Share of Basic Operating Cost in the manner set forth below.

                    (a)  DEFINITION:  For purposes hereof, the terms used in
                    this paragraph 29 shall have the following meanings:

                    (1)    "Basic Operating Cost" shall mean all expenses and
                    costs of every kind and nature which Landlord shall pay to
                    become obligated to pay because of or in connection with the
                    ownership and operation of the Building and supporting
                    facilities of the Building, and such additional facilities
                    now and in subsequent years as may be determined by Landlord
                    to be necessary to the Building, including, but not limited
                    to the following:

                    (i)    Wages, salaries and related expenses and benefits of
                    all on-site and off-site employees engaged directly in the
                    operation, management, maintenance, engineering and security
                    of the Building, and the costs of an office in the Building,
                    provided, however, that Basic Operating Cost shall not
                    include leasing commissions paid to any real estate broker,
                    salesperson or agent.

                    (ii)   Supplies, materials and rental of equipment used in
                    the operation, management and maintenance of the Building.

                                     - 8 -
<PAGE>
 
                    (iii)  Utilities. including water and power, heating,
                    lighting, air conditioning and ventilating of the Building.

                    (iv)   All maintenance, janitorial and service agreements
                    for the Building and the equipment therein. including,
                    without limitation, alarm services. window cleaning and
                    elevator maintenance.

                    (v)    A management cost recovery determined by Landlord
                    equal to three percent (3%) of Gross Rent derived from the
                    Building.

                    (vi)   Legal expenses and the cost of audits by certified
                    public accountants; Provided, however, that legal expenses
                    chargeable as Basic Operating Cost shall not include the
                    cost of negotiating leases, collecting rents, evicting
                    tenants nor shall it include costs incurred in legal
                    proceedings with or against any tenant or to enforce the
                    provisions of any lease.

                    (vii)  All insurance premiums and costs, including but not
                    limited to, the premiums and cost of fire, casualty and
                    liability coverage and rental abatement and earthquake
                    insurance (if Landlord elects to provide such coverage)
                    applicable to the Building and Landlord's personal properly
                    used in connection therewith.

                    (viii) Repairs, replacements and general maintenance
                    (excluding repairs and general maintenance Paid by proceeds
                    of insurance or by Tenant or other third parties, and
                    alterations attributable solely to tenants of the Building
                    other than Tenant).

                    (ix)  All maintenance costs relating to public and service
                    areas of the Building. including (but without limitation,
                    sidewalks, landscaping, service areas, mechanical rooms and
                    Building exteriors.

                    (x)    All taxes, service payments in lieu of taxes, annual
                    or periodic license or use fees, fees, real estate taxes,
                    impositions or charges imposed upon or levied in connection
                    with use of the Building to raise funds for public transit,
                    housing or other environmental, sociological or fiscal
                    effects of the Building or land use, assessments whether
                    general or special, ordinary and extraordinary, unforeseen
                    as well as foreseen, of any kind which are assessed, levied,
                    charged, confirmed or imposed by any public authority upon
                    the Building, the land upon which it is located, Building
                    operations or Rent payable under this Lease (or any portion
                    or component thereof), excepting only inheritance or estate
                    taxes imposed upon or assessed against the interest of any
                    person in the Building or any part thereof or interest
                    therein, and taxes computed upon the basis of the net income
                    of the owners of the Building or any part thereof or
                    interest therein.

                    (xi)   Amortization (together with reasonable financing
                    charges) of capital improvement made to the Building
                    subsequent to the Term Commencement Date which will improve
                    the operating efficiency of the Building or which may be
                    required to comply with laws. ordinances, rules or
                    regulations promulgated. adopted or enforces after
                    completion of the initial construction of the Building and
                    improvements of the Premises pursuant to the Office Lease
                    Improvement Agreement.

                           Notwithstanding anything to the contrary herein
                    contained, Basic Operating Cost shall not include (aa) the
                    initial
<PAGE>
 
                    construction cost of the Building; (bb) depreciation on the
                    initial construction of the Building: (cc) the cost of
                    providing Tenant Improvements to tenant or any other tenant:
                    (dd) debt service (including, but without limitation,
                    interest, principal and any impound payments) required to be
                    made on any mortgage or deed of trust recorded with respect
                    to the Building and/or the real properly on which the
                    Building is located other than debt service and financing
                    Charges imposed pursuant to Paragraph 29(a)(l)(xi) above;
                    and (ee) the cost of special services, goods or materials
                    provided to any tenant. In the event that the Building is
                    not fully occupied during any fiscal year of the Term as
                    determined by Landlord, an adjustment Shall be made in
                    computing the Basic Operating Cost for such year so that
                    Basic Operating Cost Shall be computed as though the
                    Building had been one hundred Percent (100%) occupied;
                    provided, however, that in no event shall Landlord be
                    entitled to collect in excess of one hundred percent (100%)
                    of the total Basic Operating Cost from all of the tenants in
                    the Building including Tenant. All costs and expenses shall
                    be determined in accordance with generally accepted
                    accounting principles which shall be consistently applied
                    (with accruals appropriate to Landlord's business). Basic
                    Operating Cost shall not include specific costs incurred for
                    the account of, separately billed to and Paid by specific
                    tenants.

                    (2) "Estimated Basic Operating Cost" for any particular year
                    shall mean Landlord's estimate of the Basic Operating Cost
                    for such fiscal year made prior to commencement of such
                    fiscal year as hereinafter provided. Landlord shall have
                    the right from time to time to revise its fiscal year and
                    interim accounting periods so long as the periods as so
                    revised are reconciled with prior periods in accordance with
                    generally accepted accounting principles applied in a
                    consistent manner.

                    (3) "Basic Operating Cost Adjustment" shall mean the
                    difference between Basic Operating Cost and Estimated Basic
                    Operating Cost for any fiscal year determined as hereinafter
                    provided.

                    (b) PAYMENT OF ESTIMATED BASIC OPERATING COST.

                        During Dec. of each fiscal year during the Term, or as
                    soon thereafter as practicable, Landlord shall give Tenant
                    written notice of the Estimated Basic Operating Cost for the
                    ensuing fiscal year. The Estimated Basic Operating Cost for
                    the fiscal year in which the Scheduled Term Commencement
                    Date falls is set forth in the Basic Lease Information
                    Sheet. Tenant shall pay Tenant's Proportionate Share of the
                    Estimated Basic Operating Costs with installments of Basic
                    Rent required to be paid pursuant to paragraph 3 above for
                    the fiscal year to which the estimate applies in monthly
                    installments on the first day of each calendar month during
                    such year, in advance. Such payment shall be construed to be
                    Rent for all purposes hereof. If at any time during the
                    course of a fiscal year, Landlord determines that Basic
                    Operating Cost will apparently vary from the then Estimated
                    Basic Operating Cost by more than five percent (5%),
                    Landlord may, by written notice to Tenant, revise the
                    Estimated Basic Operating Cost for the balance of such
                    fiscal year and Tenant shall pay Tenant's Proportionate
                    Share of the Estimated Basic Operating Cost as so revised
                    for the balance of the then current fiscal year on the first
                    day of each calendar month thereafter,
<PAGE>
 
                    such revised installment amounts to be Rent for all purposes
                    hereof.

                    (c) COMPUTATION OF BASIC OPERATING COST ADJUSTMENT.

                        Within one hundred twenty (120) days after the end of
                    each fiscal year as determined by Landlord or as soon
                    thereafter as practicable, Landlord shall deliver to Tenant
                    a statement of Basic Operating Cost for the fiscal year just
                    ended, accompanied by a computation of Basic Operating Cost
                    Adjustment. If such statement shows that Tenant's Payment
                    based upon Estimated Basic Operating Cost is less than
                    Tenant's Proportionate Share of Basic Operating Cost, then
                    Tenant shall pay the difference within twenty (20) days
                    after receipt of such statement. such payment to constitute
                    additional rent hereunder. If such statement shows that
                    Tenant's payments of Estimated Basic Operating Cost exceed
                    Tenant's Proportionate Share of Basic Operating Costs, then
                    (provided that Tenant is not in default under this Lease),
                    Tenant shall receive a credit for the amount of such payment
                    against Tenant's obligation for payment of Tenant's
                    Proportionate Share of Estimated Basic Operating Cost next
                    becoming due hereunder. If this Lease has been terminated or
                    the Term hereof has expired prior to the date of such
                    statement, then the Basic Operating Cost Adjustment shall be
                    paid by the appropriate party within twenty (20) days after
                    the date of delivery of the statement.

                    (d) NET LEASE.  This shall be a net lease and Base Rent
                    shall be paid to Landlord absolutely net of all costs and
                    expenses. The provisions for payment of Basic Operating Cost
                    by means of periodic payments of Tenant's Proportionate
                    Share of Estimated Basic Operating Cost and the Basic
                    Operating Cost Adjustment are intended to Pass on to Tenant
                    and reimburse Landlord for all cost and expenses of the
                    nature described in paragraph 29(a)(1) above incurred in
                    connection with ownership and operation of the Building and
                    such additional facilities now and in subsequent years as
                    may be determined by Landlord to be necessary to the
                    Building.

                    (e) TENANT AUDIT.  Tenant shall have the right at Tenant's
                    expense and upon not less than forty-eight (48)hours prior
                    written notice to Landlord, to review at reasonable times
                    Landlord's books and records for any fiscal year a portion
                    of which falls within the Term for purposes of verifying
                    Landlord's calculation of Basic Operating Cost and Basic
                    Operating Cost Adjustment.  In the event that Tenant shall
                    dispute the amount set

                                     - 9 -
<PAGE>
 
                    forth in any statement provided by Landlord under paragraph
                    29(c) above. Tenant shall have the right not later than
                    twenty (20) days following the receipt of such statement,
                    and upon condition that Tenant shall first deposit with
                    Landlord the full amount in dispute, to cause Landlord's
                    books and records with respect to such fiscal year to be
                    audited by certified public accountants selected by Tenant
                    subject to Landlord's reasonable right of approval. The
                    Basic Operating Cost Adjustment shall be appropriately
                    adjusted on the basis of such audit. If such audit discloses
                    a liability for a refund or credit by Landlord to Tenant in
                    excess of ten percent (10%) of Tenants Proportionate Share
                    of the Basic Operating Cost Adjustment previously reported.
                    the cost of such audit shall be borne by Landlord. Otherwise
                    the cost of such audit shall be paid by Tenant. If Tenant
                    shall not request an audit in accordance with the provisions
                    of this paragraph 29(e) within twenty (20) days of receipt
                    of Landlord's statement provided pursuant to paragraph
                    29(d). such statement shall be final and binding for all
                    purposes hereof.

      TAXES  30.    (a) Tenant shall pay before delinquency any and all taxes
    PAYABLE         levied or assessed and which become payable by Landlord (or
  BY TENANT         Tenant) during the Term of this Lease, whether or not now 
                    customary or within the contemplation of the parties hereto,
                    which are based upon, measured by or otherwise calculated
                    with respect to: (a) the value of Tenant's equipment,
                    furniture, fixtures or other personal property located in
                    the Premises; (b) the value of any leasehold improvements,
                    alterations, or additions made in or to the Premises,
                    regardless of whether title to such improvements.
                    alterations or additions shall be in Tenant of Landlord: or
                    (c) this transaction or any document to which Tenant is a
                    party creating or transferring an interest or an estate in
                    the Premises.

                    (b) In the event that it shall not be lawful for Tenant so
                    to reimburse Landlord, the Rent shall be revised to net
                    Landlord the same net rent after imposition of any such tax
                    upon Landlord as would have been payable to  Landlord prior
                    to the imposition of any such tax. All taxes payable by
                    Tenant under this Paragraph 30 shall be additional rental.

 SUCCESSORS
AND ASSIGNS  31.         Subject to the provisions of paragraph 10 hereof, the
                    terms, covenants and conditions contained herein shall be
                    binding upon and inure to the benefit of the heirs,
                    successors, executors, administrators and assigns of the
                    parties hereto.

 ATTORNEYS'
       FEES  32.         In the event that any action or proceeding is brought
                    to enforce any term, covenant or condition of this Lease on
                    the part of Landlord or Tenant, the prevailing party in such
                    litigation shall be entitled to reasonable attorneys' fees
                    to be fixed by the court in such action or proceeding.

      LIGHT
    AND AIR  33.         No diminution of light, air or view by any structure
                    which may hereafter be erected (whether or not by Landlord
                    shall entitle Tenant to any reduction of Rent, result in any
                    liability of Landlord to Tenant, or in any other way affect
                    this Lease or Tenant's obligations hereunder.

     PUBLIC 
     TRANS-
  PORTATION  34.         Tenant shall establish and maintain during the Term 
INFORMATION         hereof a  program to encourage maximum use of public 
                    transaporation by personnel or Tenant employed on the
                    Premises, including without limitation the
<PAGE>
 
                    distribution to such employees of written materials
                    explaining the convenience and availability of public
                    transportation facilities adjacent or proximate to the
                    Building, staggering working hours of employees, and
                    encouraging use of such facilities, all at Tenant's sole
                    reasonable cost and expense.

MISCELLANE-
        OUS  35.    (a)  The term "Premises" shall be deemed to include (except
                    where such meaning would be clearly repugnant to the
                    context) the offices space demised and improvements now or
                    at any time hereinafter comprising or built in the space
                    hereby demised.

                    (b)  The paragraph headings herein are for convenience of
                    reference and shall in no way define, increase, limit or
                    describe the scope or intent of any provision of this Lease.

                    (c)  The term "Landlord" in these presents shall include the
                    Landlord, its successors and assigns. In any case where this
                    Lease is signed by more than one person the obligations
                    hereunder shall be joint and several.

                    (d)  The term "Tenant" or any pronoun used in place thereof
                    shall indicate and include the masculine or feminine, the
                    singular or plural number, individuals, firms or
                    corporations, and their and each of their respective
                    successors, executors, administrators and permitted assigns,
                    according to the context hereof.

                    (e)  Time is of the essence of this Lease and all of its
                    provisions.

                    (f)  This Lease Shall in all respects be governed by the
                    laws of the State of California.

                    (g)  This Lease, together with its exhibits, contains all
                    the agreements of the parties hereto and supersedes any
                    previous negotiations.

                    (h)  There have been no representations made by the Landlord
                    or understandings made between the parties other than those
                    set forth in this Lease and its exhibits.

                    (i)  This Lease may not be modified except by a written
                    instrument by the parties hereto.

                    (j)  If for any reason whatsoever any of the provisions
                    hereof shall be unenforceable or ineffective all of the
                    other provisions Shall be and remain in full force and
                    effect.

                    (k)  See Addenda 1 & 2 and Additional Paragraphs 37-41
                    attached hereto and made a part hereof

      LEASE  36.         Submission of this instrument for examination or
  EFFECTIVE         signature by Tenant does not constitute a reservation or
       DATE         option for lease, and it is not effective as a lease or
                    otherwise until execution and delivery by both Land-lord and
                    Tenant.

                         IN WITNESS WHEREOF, the parties hereto have executed
                    this Lease the day and year first above written.
                              "LANDLORD"
                              Spieker Properties, L.P.
                              a California Limited Partnership
<PAGE>
 
                              By:   Spieker Properties, Inc., a Maryland
                                    Corporation
                              Its:  General Partner

Date 12/18/95                 By     /s/ John A. Foster
                                         John A. Foster

                                    Its        Senior Vice President

                              "TENANT"
                              VLSI LIBRARIES INCORPORATED, a California
                              Corporation

Date 12-15-95                 By     /s/ Mark Templeton
                                         Mark Templeton

                                    Its        President

                                     - 10 -
<PAGE>
 
ADDENDA ATTACHED TO AND MADE A PART OF THAT LEASE AGREEMENT BETWEEN SPIEKER
PROPERTIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP, AS LANDLORD, AND VLSI
LIBRARIES INCORPORATED, A CALIFORNIA CORPORATION, AS TENANT, DATED DECEMBER 13,
1995 FOR PREMISES LOCATED AT 2077 GATEWAY PLACE, SAN JOSE, CALIFORNIA.

ADDENDUM 1 - PARAGRAPH 4 - RENT.  Rent for the premises shall be as follows
-------------------------------

Year 1:        $24,020.00 per month plus operating expenses per Paragraph 29 of
               this Lease Agreement. Operating expenses through December 1996
               are estimated to be $8,734.00 per month. Direct operating
               expenses are estimated a year in advance and collected on a
               monthly basis. Any increases or decreases necessary will be made
               at the end of the operating year.

Year 2:        $25,363.00 per month plus operating expenses per Paragraph 29 of
               this Lease Agreement.

Year 3:        $26,707.00 per month plus operating expenses per Paragraph 29 of
               this Lease Agreement.

Year 4:        $28,051.00 per month plus operating expenses per Paragraph 29 of
               this Lease Agreement.

Year 5:        $29,563.00 per month plus operating expenses per Paragraph 29 of
               this Lease Agreement.

ADDENDUM 2 - PARAGRAPH 6 - COMPLIANCE WITH LAWS.  Tenant shall have the sole
-----------------------------------------------
responsibility for complying, at Tenant's cost, with provisions of the Americans
with Disabilities Act of 1990 (ADA), as it may later be amended, with respect to
the Premises and to the common areas of the Project, where such compliance has
been brought about: (I) by any alterations to the Premises or to the common
areas by the Tenant or on behalf of the Tenant at Tenant's written request (by
Landlord or otherwise) performed after the Term Commencement Date, (ii) by any
changes to Tenant's use of the Premises; or (iii) by any architectural barriers
caused by Tenant's installation of any equipment, furniture, or other personal
property on the Premises (items (I), (ii), (iii) collectively, "Tenant's ADA
Responsibilities").  Tenant shall indemnify, defend and hold Landlord, its
agents and employees harmless from and against any and all claims, damages and
liabilities arising directly or indirectly from Tenant's failure to satisfy any
of Tenant's ADA Responsibilities.  Landlord shall indemnify, defend and hold
Tenant, its agents and employees harmless from and against any and all claims,
damages or liabilities arising directly or indirectly from Landlord's failure to
comply with any obligations of a Landlord under the ADA, other than such claims,
damages or liabilities arising from Tenant's failure to satisfy any of Tenant's
ADA Responsibilities.
<PAGE>
 
ADDITIONAL PARAGRAPHS ATTACHED TO AND MADE A PART OF THAT LEASE AGREEMENT
BETWEEN SPIEKER PROPERTIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP AS LANDLORD,
AND VLSI LIBRARIES INCORPORATED, A CALIFORNIA CORPORATION, AS TENANT, DATED
DECEMBER 13, 1995 FOR PREMISES LOCATED AT 2077 GATEWAY PLACE, SAN JOSE,
CALIFORNIA.

PARAGRAPH 37 - OPTION TO RE-LEASE PREMISES.  Provided Tenant is not, and has not
------------------------------------------
been, in default of its obligations under this Lease, Tenant shall have one (1)
option to release the Premises in "as-is" condition for a term of five (5) years
at the then current market rent for comparable space in Gateway Office Park. In
no event will the monthly rental be less than the rental for the last month of
the previous term.

Tenant shall give Landlord written notice of its intent to exercise its option
at least one-hundred-eight (180) days prior to the expiration of the current
lease term.  Within fifteen (15) days after Tenant exercises its option to
release, Landlord will provide Tenant with the fair market rental for comparable
buildings in the San Jose Airport market, as well as terms and conditions for
the extended term.  Tenant shall have forty-five (45) days from notification by
Landlord of current rent and terms and conditions.  If Tenant does not accept
Landlord's rental figure and terms and conditions within the forty-five (45) day
period, this option shall be null and void and Landlord shall have no further
obligation to Tenant and Landlord may enter into a lease for the Premises with a
third party.

Notwithstanding anything to the contrary herein contained, Tenant's right to
extend the term by exercise of the foregoing option shall be conditioned upon
the following: (i) at the time of the exercise of the option, and at the time of
the commencement of the extended term, Tenant shall be in possession of and
occupying the Premises for the conduct of its business therein and the same
shall not be occupied by any assignee, subtenant or licensee, the option to
extend being applicable hereunder only with respect to so much of the Premises
as is actually occupied by Tenant; and (ii) the notice of exercise shall
constitute a representation by Tenant to Landlord effective as of the date of
the lease term, that Tenant does not intend to seek to assign the Lease in whole
or in part, or sublet all or any portion of the Premises, the election to extend
the term being for purposes of utilizing the Premises for Tenant's purposes in
the conduct of Tenant's business therein.

PARAGRAPH 38 - TENANT PARKING.  Tenant shall have the nonexclusive use of on-
-----------------------------
site parking at a ratio of not more than 4 cars per 1,000 square feet of
rentable area. Landlord shall also provide parking spaces in close proximity to
the building for visitors and handicapped persons.

PARAGRAPH 39 - EXTERIOR SIGNAGE.  Landlord agrees, at Landlord's expense, to
-------------------------------
provide Tenant with building standard exterior monument signage at Building
2077, to be shared with others. Exact location/placement of said monument shall
be determined by Landlord. The cost of appropriate lettering for the monument,
to be approved by Landlord, shall be paid for by Tenant.

PARAGRAPH 40 - LANDLORD INDEMNITY REGARDING HAZARDOUS SUBSTANCES.  Landlord
----------------------------------------------------------------
shall indemnify, defend and hold harmless Tenant, its officers, employees,
shareholders, parent, subsidiary and affiliate organizations and agents to the
extent of Landlord's interest in the Project, against any and all claims, suits,
loss, costs (including costs of investigation, clean up, monitoring, restoration
and reasonable attorney fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage, personal injury or death directly
arising from or related to: the presence of Hazardous Substances (as defined
below) in, on or about the Premises immediately prior to Tenant's first
occupancy unless caused by Tenant, its employees, invitees, subtenants, agents,
assigns, licensees or servants, or; the subsequent release, disposal, use or
storage of Hazardous
<PAGE>
 
Substances in, on or about the Premises by Landlord, its employees, invitees,
agents, assigns, licensees or servants.

For the purposes of this Indemnity, Hazardous Substances are defined,
collectively, as oil, flammable explosives, asbestos, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are "hazardous substances,"
"hazardous wastes," "hazardous materials" or toxic substances" under applicable
environmental laws, ordinances or regulation.

The provisions of this Landlord Indemnity regarding Hazardous Substances shall
survive the termination of this Lease.

PARAGRAPH 41 - TENANT INDEMNITY REGARDING HAZARDOUS SUBSTANCES.  Tenant shall
--------------------------------------------------------------
indemnify, defend and hold harmless Landlord, its employees, partners,
subtenants, agents, assigns, licensees, servants, subsidiaries and affiliate
organizations against any and all claims, suits, loss, costs (including costs of
investigation, clean up, monitoring, restoration and reasonable attorney fees),
damage or liability, whether foreseeable or unforeseeable, by reason of property
damage (including diminution in the value of the property of Landlord), personal
injury or death directly arising from or related to Hazardous Substance (as
defined below) released, manufactured, discharged, disposed, used or stored by
Tenant, its employees, invitees, subtenants, agents, assignees, licensees or
servants.

For the purpose of this Indemnity, Hazardous Substances are defined,
collectively, as oil, flammable explosives, asbestos, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are "hazardous substances,"
"hazardous wastes," "hazardous materials" or "toxic substances" under applicable
environmental laws, ordinances or regulation.

The provisions of this Tenant Indemnity regarding Hazardous Substances shall
survive the termination of the Lease.
<PAGE>
 
                             Rules and Regulations
EXHIBIT A.

               1.   Sidewalks, halls, passages, exits, entrances, elevators,
                    escalators and stairways shall not be obstructed by Tenants
                    or used by them for any purpose other than for ingress to
                    and egress from their respective premises.  The halls,
                    passages, exits, entrances, elevators and stairways are not
                    for the use of the general public and Landlord shall in all
                    cases retain the right to control and prevent access thereto
                    by all persons whose presence, in the judgment of Landlord,
                    shall be prejudicial to the safety, character, reputation
                    and interests of the Building and its Tenants, provided that
                    nothing herein contained shall be construed to prevent such
                    access to persons with whom any Tenant normally deals in the
                    ordinary course of such Tenant's business unless such
                    persons are engaged in illegal activities.  No Tenant, and
                    no employees or invitees of any Tenant, shall go upon the
                    roof of the Building, except as authorized by Landlord.

               2.   No sign, placard, picture, name, advertisement or notice,
                    visible from the exterior of leased premises shall be
                    inscribed, painted, affixed, installed or otherwise
                    displayed by any Tenant either on its premises or any part
                    of the Building without the prior written consent of
                    Landlord, and Landlord shall have the right to remove any
                    such sign, placard, picture, name, advertisement, or notice
                    without notice to and at the expense of the Tenant.

                    If Landlord shall have given such consent to any Tenant at
                    any time, whether before or after the execution of the
                    lease, such consent shall in no way operate as a waiver or
                    release of any of the provisions hereof or of such lease,
                    and shall be deemed to relate only to the particular sign,
                    placard, picture, name, advertisement or notice so consented
                    to by Landlord and shall not be construed as dispensing with
                    the necessity of obtaining the specific written consent of
                    Landlord with respect to any other such sign, placard,
                    picture, name, advertisement or notice.

                    All approved signs or lettering on doors and walls shall be
                    printed, painted, affixed or inscribed at the expense of the
                    Tenant by a person approved by Landlord.

               3.   The bulletin board or directory of the Building will be
                    provided exclusively for the display of the name and
                    location of Tenants only the Landlord reserves the right to
                    exclude any other names therefrom.

               4.   No curtains, draperies, blinds, shutters, shades, screens or
                    other coverings, awnings, hangings or decorations shall be
                    attached to, hung or placed in, or used in connection with,
                    any window or door or any premises without the prior written
                    consent of Landlord.  In any event with the prior written
                    consent of Landlord, all such items shall be installed
                    inboard of Landlord's standard window covering and shall in
                    no way be visible from the exterior of the Building.  No
                    articles shall be placed or kept on the window sills so as
                    to be visible from the exterior of the Building.  No
                    articles shall be placed against glass partitions or doors
                    which might appear unsightly from outside Tenant's Premises.

               5.   Landlord reserves the right to exclude from the Building
                    between the hours of 6 pm and 8 am and at all hours on
                    Saturdays, Sundays
<PAGE>
 
                    and holidays all persons who are not Tenants or their
                    accompanied guests in the Building. Each Tenant shall be
                    responsible for all persons for whom it allows to enter the
                    building and shall be liable to Landlord for all acts of
                    such persons.

                    Landlord shall in no case be liable for damages for error
                    with regard to the admission to or exclusion from the
                    Building of any person.

                    During the continuance of any invasion, mob, riot, public
                    excitement or other circumstance rendering such action
                    advisable in Landlord's opinion, Landlord's reserves the
                    right to prevent access to the Building by closing the
                    doors, or otherwise, for the safety of Tenants and
                    protection of the Building and Property in the Building.

               6.   No Tenant shall employ any person or persons other than the
                    janitor of Landlord for the purpose of cleaning premises
                    unless otherwise agreed to by Landlord in writing.  Except
                    with the written consent of Landlord no person or persons
                    other than those approved by Landlord shall be permitted to
                    enter the Building for the purpose of cleaning the same.  No
                    Tenant shall cause any unnecessary labor by reason of such
                    Tenant's carelessness or indifference in the preservation of
                    good order and cleanliness of the premises.  Landlord shall
                    in no way be responsible to any Tenant for any loss of
                    property on the premises, however occurring, or for any
                    damage done to the effects of any Tenant by the janitor or
                    any other employee or any other person.

               7.   No Tenant shall obtain for use upon its premises ice, 
                    drinking water, food, beverage, towel or other similar
                    services except through facilities provided by Landlord (and
                    maintained by tenant) and under regulations fixed by
                    Landlord, or accept barbering or boot blacking services on
                    premises except from persons authorized by Landlord.

               8.   Each Tenant shall see that all doors of its premises are
                    closed and securely locked and must observe strict care and
                    caution that all water, faucets or water apparatus are
                    entirely shut off before the Tenant or its employees leave
                    such premises, and that all utilities shall likewise be
                    carefully shut off, so as to prevent waste or damage, and
                    for any default or carelessness the Tenant shall make good
                    all injuries sustained by other Tenants or occupants of the
                    Building or Landlord.  On multiple-tenancy floors, all
                    Tenants shall keep the door or doors to the Building
                    corridors closed at all times except for ingress or egress.

               9.   As more specifically provided in the Tenant's Lease of the
                    Premises, Tenant shall not waste electricity, water or air-
                    conditioning and agrees to cooperate fully with Landlord to
                    assure the most effective operation of the Building's
                    heating and air-conditioning, and shall refrain from
                    attempting to adjust any controls other than room
                    thermostats installed for Tenant's use.

               10.  No Tenant shall alter any lock or access device or install a
                    new additional lock or access device or any bolt on any door
                    of its
<PAGE>
 
                    premises without the prior written consent of Landlord. If
                    Landlord shall give its consent the Tenant shall in each
                    case furnish Landlord with a key for any such lock.

               11.  No Tenant shall make or have made additional copies of any
                    keys or access devices provided by Landlord.  Each Tenant,
                    upon the termination of the Tenancy, shall deliver to
                    Landlord all the keys or access devices for the Building,
                    offices, rooms and toilet rooms which shall have been
                    furnished the Tenant or which the Tenant shall have had
                    made. In the event of the loss of any keys or access
                    devices so furnished by Landlord, Tenant shall pay Landlord
                    therefor.

               12.  The toilet rooms, urinals, wash bowls and other apparatus
                    shall not be used for any purpose other than that for which
                    they were constructed and no foreign substance of any kind
                    whatsoever shall be thrown therein, and the expense of any
                    breakage, stoppage or damage resulting from the violation of
                    this rule shall be borne  by the Tenant who, or whose
                    employees or invitees, shall have caused it.

               13.  No Tenant shall use or keep in its premises or the Building
                    any kerosene, gasoline or inflammable or combustible fluid
                    or material other than limited quantities necessary for the
                    operation or maintenance of office or office equipment.  No
                    Tenant shall use any method of heating or air-conditioning
                    other than that supplied by Landlord.

               14.  No Tenant shall use, keep or permit to be used or kept in
                    its premises any foul or noxious gas or substances or permit
                    or suffer such premises to be occupied or used in a manner
                    offensive or objectionable to Landlord or other occupants of
                    the Building by reason of noise, odors and/or vibrations or
                    interfere in any way with other Tenants or those having
                    business therein, nor shall any animals or birds be brought
                    or kept in or about any premises of the Building.

               15.  No cooking shall be done or permitted by any Tenant on its
                    premises (except that use by the Tenant of Underwriters'
                    Laboratory approved equipment for the preparation of coffee,
                    tea, hot chocolate and similar beverages for Tenants and
                    their employees shall be permitted, provided that such
                    equipment and use is in accordance with all applicable
                    federal, state and city laws, codes, ordinances, rules and
                    regulations), nor shall premises be used for lodging.

                                     EXHIBIT "A"                          Page 1
<PAGE>
 
               16.  Except with the prior written consent of Landlord, no Tenant
                    shall sell, or permit the sale, at retail, of newspapers.
                    magazines. periodicals. theatre tickets or any other goods
                    or merchandise in or on any premises, nor shall Tenant carry
                    on, or permit or allow any employee or other Person to carry
                    on, the Business of stenography, typewriting or any similar
                    business in or from any premises for the service or
                    accommodation of occupants of any other portion of the
                    Building. nor shall the Premises of any Tenant be used for
                    the storage of merchandise or for manufacturing of any kind,
                    or the business of a public barber shop, beauty parlor. nor
                    shall the premises of any Tenant be used for any improper,
                    immoral or objectionable purpose, or any business or
                    activity other than that specifically provided for in such
                    Tenant's lease.

               17.  If Tenant requires telegraphic, telephonic, burglar alarm or
                    similar services, it shall first obtain, and comply with,
                    Landlord's instructions in their installation.

               18.  Landlord will direct electricians as to where and how
                    telephone, telegraph and electrical wires are to be
                    introduced or installed.  No boring or cutting for wires
                    will be allowed without the prior written consent of
                    Landlord.  The location of burglar alarms, telephones, call
                    boxes and other office equipment affixed to all premises
                    shall be subject to the written approval of Landlord.

               19.  No Tenant shall install any radio or television antenna,
                    loudspeaker or any other device on the exterior wails or the
                    roof of the Building.  Tenant shall not interfere with radio
                    or television broadcasting or reception from or in [he
                    Building or elsewhere.

               20.  No Tenant shall lay linoleum, tile, carpet or any other
                    floor covering so that the same shall be affixed to the
                    floor of its premises in any manner except as approved in
                    writing by Landlord The expense of repairing any damage
                    resulting from a violation of this rule or the removal of
                    any floor covering shall be borne by the Tenant by whom, or
                    by whose contractors, employees or invitees, the damage
                    shall have been caused.

               21.  No furniture, freight, equipment, materials, supplies,
                    packages, merchandise or other property will be received in
                    the Building or carried up or down the elevators except
                    between such hours and in such elevators as shall be
                    designated by Landlord.

                    Landlord shall have the right to prescribe the weight, size
                    and position of all safes, furniture or other heavy
                    equipment brought into the Building.  Safes or other heavy
                    objects shall, if considered necessary by Landlord, stand on
                    wood strips of such thickness as determined by Landlord to
                    be necessary to properly distribute the weight thereof
                    Landlord will not be responsible for loss of or damage to
                    any such safe, equipment or property from any cause, and all
                    damage done to the Building by moving or maintaining any
                    such safe, equipment or other property shall be repaired at
                    the expense of Tenant

                    Business machines and mechanical equipment belonging to
                    Tenant which cause noise or vibration that may be
                    transmitted to the structure of the Building or to any space
                    therein to such a degree as to be objectionable to Landlord
                    or to any tenants in the
<PAGE>
 
                    Building shall be placed and maintained by Tenant, at
                    Tenant's expense, on vibration eliminators or other devices
                    sufficient to eliminate noise or vibration. The persons
                    employed to move such equipment in or out of the Building
                    must be acceptable to Landlord.

               22.  No Tenant shall place a load upon any floor of the premises
                    which exceeds the load per square foot which such floor was
                    designed to carry and which is allowed by law.  No Tenant
                    shall mark or drive nails, screw or drill into the
                    partitions, woodwork or plaster or in any way deface such
                    Premises or any part thereof.

               23.  No Tenant shall install, maintain or operate upon the
                    Premises any vending Machine without the written consent of
                    Landlord.

               24.  There shall not be used in any space, or in the public areas
                    of the Building, either by any Tenant or others, any hand
                    trucks except those equipped with rubber tires and side
                    guards or such other material-handling equipment as Landlord
                    may approve.  No other vehicles of any kind shall be brought
                    by any Tenant into or kept in or about the premises.

               25.  Each Tenant shall store all of its trash and garbage within
                    the interior of its premises.  No material shall be placed
                    in the trash boxes or receptacles if such material is of
                    such nature that it may not be disposed of in the ordinary
                    and customary manner of removing and disposing of trash and
                    garbage in the city without violation of any law or
                    ordinance governing such disposal.  All trash, garbage and
                    refuse disposal shall be made only through entryways and
                    elevators provided for such purposes and at such times as
                    Landlord shall designate.

               26.  Canvassing, soliciting, distribution of handbills or any
                    other written material, and peddling in the Building are
                    Prohibited and each Tenant shall cooperate to Prevent the
                    same.  No Tenant shall make room-to-room solicitation of
                    business from other tenants in the building.

               27.  Landlord shall have the right, exercisable without notice
                    and without liability to any Tenant, to change the name and
                    address of the Building.

               28.  Landlord reserves the right to exclude or expel from the
                    Building any person who, in Landlord's judgment is
                    intoxicated or under the influence of liquor or drugs or who
                    is in violation of any of the rules and regulations of the
                    Building.

               29.  Without the prior written consent of Landlord, Tenant shall
                    not use the name of the Building in connection with or in
                    Promoting or advertising the business of Tenant except as
                    Tenant's address.

               30.  Tenant shall comply with all safety, fire protection and
                    evacuation procedures and regulations established by
                    Landlord or any governmental agency.

               31.  Tenant assumes any and all responsibility for protecting its
                    Premises from theft, robbery and pilferage, which includes
                    keeping doors locked and other means of entry to the
                    Premises closed.
<PAGE>
 
               32.  The requirements of Tenants will be attended to only upon
                    application at the office of the Building by an authorized
                    individual.  Employees of Landlord shall not perform any
                    work or do anything outside of their regular duties unless
                    under special instructions from Landlord. and no employees
                    will admit any person (Tenant or otherwise) to any office
                    without specific instructions from Landlord.

               33.  Landlord may waive any one or more of these Rules and
                    Regulations for the benefit of any particular Tenant or
                    Tenants, but no such waiver by Landlord shall be construed
                    as a waiver of such Rules and Regulations in favor of any
                    other Tenant or Tenants, nor prevent Landlord from
                    thereafter enforcing any such Rules and Regulations against
                    any or all Tenants of the Building.

               34.  Landlord reserves the right to make such other and
                    reasonable rules and regulations as in its judgment may from
                    time to time be needed for safety and security, for care and
                    cleanliness of the Building and for the Preservation of good
                    order therein.  Tenant agrees to abide by all such Rules and
                    Regulations hereinabove stated and any additional rules and
                    regulations which are adopted,

               35.  Landlord reserves the right to designate the use of the
                    Parking spaces on the Premises.

               36.  Tenant shall use carpet protectors under all desk chairs.

               37.  Tenant agrees to keep balcony doors closed at all times,
                    except during ingress and egress.

               38.  Tenant or Tenant's guests shall park between designated
                    parking lines only, and shall not occupy two parking spaces
                    with one car.  Vehicles in violation of the above shall be
                    subject to tow-away. at vehicle owners expense.

               39.  Vehicles parked on premises overnight without prior written
                    consent of the Landlord shall be deemed abandoned and shall
                    be subject to tow-away at vehicle owner's expense.

               40.  Tenant shall be responsible for the observance of all of the
                    foregoing Rules and Regulations by Tenant's employees,
                    agents, clients, customers, invitees and guests.

               41.  The Rules and Regulations are in addition to. and shall not
                    be construed to in any way modify. alter or amend, in whole
                    or in part, the terms, covenants, agreements and conditions
                    of any Lease of Premises in the Building.  The word
                    "Building" as used herein means the building of which the
                    premises are part.

                                                                          Page 2
<PAGE>
 
                           [EXHIBIT B IMAGE OMITTED]
<PAGE>
 
                             INTERIOR IMPROVEMENTS
                             ---------------------


Landlord shall furnish and install at its own expense the interior improvements
in accordance with Malesardi Design Group's Space Plan dated 12/13/95 and
further described per this Exhibit C. Any alterations or modifications to the
improvements must be approved in writing by Landlord. Any increase in cost
(including the cost of design) as a result of such alterations or modifications
shall be acknowledged by Tenant in writing and paid to Landlord prior to
occupancy of the Premises. Any delays in construction caused by Tenant's changes
which extend the completion of the improvements shall be acknowledged by Tenant
and, notwithstanding the provisions of paragraph 3, shall accelerate the payment
of rent by the number of days delay.

The tenant improvements installed by Landlord shall include the following:

*    Install building standard carpet over pad throughout, exact colors to be
     determined and agreed upon by Landlord and Tenant.

*    Building standard latex paint throughout, exact colors to be determined and
     agreed upon by Landlord and Tenant.

*    Remodel HVAC zones, fire sprinklers and flourescent light mixtures at all
     new construction areas as determined by Landlord.

*    One each electrical duplex, phone and data outlet in each of the new
     offices.

*    Electrical, phone and data outlets adequate for operation of Tenant's
     cubicles.

*    Tenant to provide and install, at Tenant's expense, the following:

*    All teflon-coated computer cable to computer outlets and telephone outlets
     and other areas required by Tenant.


                                   EXHIBIT C
                                   ---------
<PAGE>
 
                           [EXHIBIT C IMAGE OMITTED]
<PAGE>
 
                                                      Form of Tenant Certificate

EXHIBIT D.


                     ____________________________________
                     ____________________________________
                     ____________________________________
                     ____________________________________


                     RE:



                     Gentlemen:

                     The undersigned, as Tenant under that certain lease (the
                     "Lease") dated ____________________ 19 ______, made with
                     _________________ as Landlord (the "Landlord"), does hereby
                     certify:

                1.   That the copy of the Lease attached hereto as Exhibit A is
                     a true and complete copy of the Lease, and there are no
                     amendments, modifications or extensions of or to the Lease
                     and the Lease is now in full force and effect.

                2.   That its leased premises at the above location have been
                     completed in accordance with the terms of the Lease, that
                     it has accepted possession of said premises, and that it
                     now occupies the same.

                3.   That it began paying rent on ___________________ 19 ______,
                     and that, save only as may be required by the terms of the
                     Lease, no rental has been paid in advance, nor has the
                     undersigned deposited any sums with the Landlord as
                     security.

                4.   That there exist no defenses or offsets to enforcement of
                     the Lease by the Landlord and, so far as is known to the
                     undersigned, the Landlord is not, as of the date hereof, in
                     default in the performance of the Lease, nor has the
                     Landlord committed any breach thereof, nor has any event
                     occurred which, with the passage of time or the giving of
                     notice, or both, would constitute a default or breach by
                     the Landlord.

                     The undersigned acknowledges that you are relying on the
                     above representation of the undersigned in (advancing funds
                     to purchase the existing first mortgage loan covering the
                     building in which the leased premises are located) (in
                     purchasing the building in which the leased premises are
                     located) and does hereby warrant and affirm to and for your
                     benefit, and that of your successors and assigns, that each
                     of the foregoing representations is true, correct and
                     complete as of the date hereof.

                Dated:________________________

                By______________________
<PAGE>
 
                Its___________________________



                                  EXHIBIT "D"
<PAGE>
 
                             PROPERTY DESCRIPTION
                             --------------------


               All that certain real property situate in the City of San Jose,
               County of Santa Clara, State of California, described as follows:

               ALL OF PARCELS A and B, as shown upon that certain Parcel Map
               entitled " Being all of Parcel 3 as shown on the Parcel Map
               recorded in Book 451 of Maps at Pages 17 and 18 and lying within
               the City of San Jose, California", which Map was filed for record
               in the Office of the Recorder of the County of Santa Clara, State
               of California on December 2, 1982 in Map Book 506 at Pages 45 and
               46, Santa Clara County Records.


                                   EXHIBIT E