LEASE AGREEMENT

                                 by and between

                           SHORELINE INVESTMENTS VII,

                       a California general partnership,

                                  as LANDLORD

                               and VeriSign, Inc.

                            a Delaware corporation,

                                   as TENANT

                            for Premises located at

                               1380 Shorebird Way

                           Mountain View, California
<PAGE>
 
                               TABLE OF CONTENTS


                                                                    
1.    Parties.......................................................   1
2.    Demise of Premises............................................   1
3.    Term..........................................................   1
4.    Rent..........................................................   1
      A.    Time of Payment.........................................   1
      B.    Monthly Installment.....................................   1
      C.    Late Charge.............................................   2
      D.    Additional Rent.........................................   2
      E.    Place of Payment........................................   2
      F.    Advance Payment.........................................   2
5.    Security Deposit..............................................   2
6.    Use of Premises...............................................   3
7.    Taxes and Assessments.........................................   3
      A.    Tenant's Property.......................................   3
      B.    Property Taxes..........................................   3
      C.    Other Taxes.............................................   4
8.    Insurance.....................................................   5
      A.    Indemnity...............................................   5
      B.    Liability Insurance.....................................   5
      C.    Property Insurance......................................   5
      D.    Tenant's Insurance; Release of Landlord.................   6
      E.    Mutual Waiver of Subrogation............................   6
9.    Utilities.....................................................   6
10.   Repairs and Maintenance.......................................   6
 

                                       2
<PAGE>
 
 
                                                                    
      A.    Landlord's Repairs......................................   6
      B.    Tenant's Repairs........................................   7
11.   Outside Area..................................................   8
12.   Outside Area Charges..........................................   8
13.   Alterations...................................................   8
14.   Acceptance of the Premises....................................   9
15.   Default.......................................................   9
      A.    Events of Default.......................................   9
      B.    Remedies................................................  10
16.   Destruction...................................................  12
17.   Condemnation..................................................  13
      A.    Definition of Terms.....................................  13
      B.    Rights..................................................  13
      C.    Total Taking............................................  13
      D.    Partial Taking..........................................  13
18.   Mechanics' Lien...............................................  14
19.   Inspection of the Premises....................................  14
20.   Compliance with Laws..........................................  14
21.   Subordination.................................................  14
      A.    Priority................................................  14
      B.    Subsequent Security Instruments.........................  14
      C.    Documents...............................................  15
      D.    Tenant's Attornment.....................................  15
      E.    Lender..................................................  15
22.   Holding Over..................................................  15
 

                                       3
<PAGE>
 
 
                                                                    
23.   Notices.......................................................  15
24.   Attorneys' Fees...............................................  16
25.   Nonassignment.................................................  16
      A.    Landlord's Consent Required.............................  16
      B.    Transferee Information Required.........................  16
26.   Successors....................................................  17
27.   Mortgagee Protection..........................................  17
28.   Landlord Loan or Sale.........................................  18
29.   Surrender of Lease Not Merger.................................  18
30.   Waiver........................................................  18
31.   General.......................................................  18
      A.    Captions................................................  18
      B.    Definition of Landlord..................................  18
      C.    Time of Essence.........................................  19
      D.    Severability............................................  19
      E.    Joint and Several Liability.............................  19
      F.    Law.....................................................  19
      G.    Agent...................................................  19
      H.    WAIVER OF JURY TRIAL....................................  19
32.   Sign..........................................................  20
33.   Interest on Past Due Obligations..............................  20
34.   Surrender of the Premises.....................................  20
35.   Authority.....................................................  21
36.   C. C. & R.'s..................................................  21
37.   Brokers.......................................................  21
 

                                       4
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38.   Limitation on Landlord's Liability............................  21
39.   Hazardous Material............................................  22
      A.    Definitions.............................................  22
      B.    Permitted Use...........................................  22
      C.    Hazardous Materials Management Plan.....................  22
      D.    Use Restriction.........................................  23
      E.    Tenant Indemnity........................................  23
      F.    Compliance..............................................  24
      G.    Assignment and Subletting...............................  24
      H.    Surrender...............................................  24
      I.    Right to Appoint Consultant.............................  24
      J.    Holding Over............................................  25
      K.    Landlord's Indemnity....................................  25
      L.    Provisions Survive Termination..........................  25
      M.    Controlling Provisions..................................  25
40.   Separately Stated Reimbursement...............................  25
41.   Condition of Premises.........................................  25


                                       5
<PAGE>
 
                                LEASE AGREEMENT
                                ---------------

     1.   Parties.  This Lease, dated for reference purposes as of August 15,
          -------                                                            
1996, is made by and between SHORELINE INVESTMENTS VII, a California general
partnership, ("Landlord"), and VeriSign, Inc., a Delaware corporation
("Tenant").

     2.   Demise of Premises.  Landlord hereby leases to Tenant and Tenant
          ------------------                                              
hereby leases from Landlord, upon the terms and conditions hereinafter set
forth, those certain premises (the "Premises") situated in the City of Mountain
View, County of Santa Clara, State of California, described as follows:
approximately Twenty-one Thousand Seven Hundred-eighty-eight (21,788) square
feet of floor space commonly known as 1380 Shorebird Way, Mountain View, located
in the building (the "Building"), as shown cross-hatched on the site plan (the
"Site Plan") attached hereto as EXHIBIT "A".  The Building is located on a
parcel of land (the "Parcel") as shown on the Site Plan, which Parcel is
described in EXHIBIT "B" attached hereto.  Landlord shall not be required to
make any alterations, additions or improvements to the Premises and the Premises
shall be leased to Tenant in an "as-is" condition.

     3.   Term.  The term of this Lease ("Lease Term") shall be for five (5)
          ----                                                              
years, commencing on September 1, 1996 (the "Commencement Date") and ending on
August 31, 2001 unless sooner terminated pursuant to any provision hereof.
Notwithstanding said scheduled Commencement Date, if for any reason Landlord
cannot deliver possession of the Premises to Tenant on said date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder, but in such case
Tenant shall not be obligated to pay rent until possession of the Premises is
tendered to Tenant and the commencement and termination dates of this Lease
shall be revised to conform to the date of Landlord's delivery of possession.
In the event Landlord shall permit Tenant to occupy the Premises prior to the
Commencement Date, such occupancy shall be subject to all the provisions of this
Lease, excluding the obligation to pay the Monthly Installment of rent and
Outside Area Charges.

     4.   Rent.
          ---- 

          A.  Time of Payment.  Tenant shall pay to Landlord as rent for the
              ---------------                                               
Premises the sum specified in Subparagraph 4.B below (the "Monthly Installment")
each month in advance on the first day of each calendar month, without deduction
or offset, prior notice or demand, commencing on the Commencement Date and
continuing through the term of this Lease, together with such additional rents
as are payable by Tenant to Landlord under the terms of this Lease.  The Monthly
Installment for any period during the Lease Term which period is less than one
(1) full month shall be a prorata portion of the Monthly Installment based upon
a thirty (30) day month.

          B.  Monthly Installment.  No Monthly Installment of rent shall be
              -------------------                                          
payable during the period from September 1, 1996 through and including September
30, 1996, or if 

                                       6
<PAGE>
 
possession of the Premises is delivered after September 1, 1996, for the first
thirty (30) calendar days following delivery of possession.

     The Monthly Installment of rent payable each month during the period from
October 1, 1996 through and including February 28, 1999, or for the first five
(5) months following delivery of the Premises, whichever occurs later, shall be
the sum of Thirty-four Thousand Eight Hundred Sixty Dollars ($34,860.00) per
month.

     Subject to the foregoing, the Monthly Installment of rent payable each
month during the period from March 1, 1999 through and including August 31, 2001
shall be the sum of Thirty-seven Thousand Forty Dollars ($37,040.00) per month.

          C.  Late Charge.  Tenant acknowledges that late payment by Tenant to
              -----------                                                     
Landlord of rent and other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain.  Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or deed of trust covering the Premises.  Accordingly, if
any installment of rent or any other sum due from Tenant shall not be received
by Landlord within ten (10) days after such amount shall be due, Tenant shall
pay to Landlord, as additional rent, a late charge equal to six percent (6%) of
such overdue amount.  The parties hereby agree that such late charge represents
a fair and reasonable estimate of the costs Landlord will incur by reason of
late payment by Tenant.  Acceptance of such late charge by Landlord shall in no
event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of its other rights and
remedies granted hereunder.

          D.  Additional Rent.  All taxes, insurance premiums, Outside Area
              ---------------                                              
Charges, late charges, costs and expenses which Tenant is required to pay
hereunder, together with all interest and penalties that may accrue thereon in
the event of Tenant's failure to pay such amounts, and all reasonable damages,
costs, and attorneys' fees and expenses which Landlord may incur by reason of
any default of Tenant or failure on Tenant's part to comply with the terms of
this Lease, shall be deemed to be additional rent ("Additional Rent") and shall
be paid in addition to the Monthly Installment of rent, and, in the event of
nonpayment by Tenant, Landlord shall have all of the rights and remedies with
respect thereto as Landlord has for the nonpayment of the Monthly Installment of
rent.

          E.  Place of Payment. Rent shall be payable in lawful money of the
              ----------------                                              
United States of America to Landlord at SHORELINE INVESTMENTS VII, c/o REALPROP
DEVELOPMENT COMPANY, 1710 Zanker Road, Suite 100, San Jose, California, 95112 or
to such other person(s) or at such other place(s) as Landlord may designate in
writing.

          F.  Advance Payment. Concurrently with the execution of this Lease,
              ---------------                                                
Tenant shall pay to Landlord the sum of Thirty-four Thousand Eight Hundred Sixty
Dollars ($34,860.00) to be applied to the Monthly Installment of rent first
accruing under this Lease.

     5.   Security Deposit. Tenant shall deposit the sum of Thirty-five Thousand
          ----------------                                                      

                                       7
<PAGE>
 
($35,000.00) (the "Security Deposit") upon execution of this Lease, to secure
the faithful performance by Tenant of each term, covenant and condition of this
Lease. If Tenant shall at any time fail to make any payment or fail to keep or
perform any term, covenant or condition on its part to be made or performed or
kept under this Lease, Landlord may, but shall not be obligated to and without
waiving or releasing Tenant from any obligation under this Lease, use, apply or
retain the whole or any part of the Security Deposit (A) to the extent of any
sum due to Landlord; (B) to make any required payment on Tenant's behalf; or (C)
to compensate Landlord for any loss, damages, attorneys' fees or expense
sustained by Landlord due to Tenant's default. In such event, Tenant shall,
within five (5) days of written demand by Landlord, remit to Landlord sufficient
funds to restore the Security Deposit to its original sum. No interest shall
accrue on the Security Deposit. Landlord shall not be required to keep the
Security Deposit separate from its general funds. Should Tenant comply with all
the terms, covenants, and conditions of this Lease and at the end of the term of
this Lease leave the Premises in the condition required by this Lease, then said
Security Deposit, less any sums owing to Landlord or which Landlord is otherwise
entitled to retain, shall be returned to Tenant within thirty (30) days after
the termination of this Lease and vacancy of the Premises by Tenant.

     6.   Use of Premises. Tenant shall use the Premises only in conformance
          ---------------                                                   
with applicable governmental laws, regulations, rules and ordinances for the
purpose of administrative offices, computer labs, product development, storage
and distribution and for no other purpose. Tenant shall indemnify, protect,
defend, and hold Landlord harmless against any loss, expense, damage, attorneys'
fees or liability arising out of the failure of Tenant to comply with any
applicable law. Tenant shall not commit or suffer to be committed, any waste
upon the Premises, or any nuisance, or other acts or things which may disturb
the quiet enjoyment of any other tenant in the buildings adjacent to the
Premises, or allow any sale by auction upon the Premises, or allow the Premises
to be used for any unlawful purpose, or place any loads upon the floor, walls or
ceiling which endanger the structure, or place any harmful liquids in the
drainage system of the Building. No waste materials or refuse shall be dumped
upon or permitted to remain upon any part of the Parcel outside of the Building,
except in trash containers placed inside exterior enclosures designated for that
purpose by Landlord. No materials, supplies, equipment, finished products or
semifinished products, raw materials or articles of any nature shall be stored
upon or permitted to remain on any portion of the Parcel outside of the
Building. Tenant shall strictly comply with the provisions of Paragraph 39
below.

     7.   Taxes and Assessments.
          --------------------- 

          A.  Tenant's Property. Tenant shall pay before delinquency any and all
              -----------------                                                 
taxes and assessments, license fees and public charges levied, assessed or
imposed upon or against Tenant's fixtures, equipment, furnishings, furniture,
appliances and personal property installed or located on or within the Premises.
Tenant shall take all reasonable steps necessary to cause said fixtures,
equipment, furnishings, furniture, appliances and personal property to be
assessed and billed separately from the real property of Landlord. If any of
Tenant's said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten (10) days
after receipt of a written statement from Landlord setting forth the taxes
applicable to Tenant's property.

                                       8
<PAGE>
 
          B.  Property Taxes. Tenant shall pay, as Additional Rent all Property
              --------------                                                   
Taxes levied or assessed with respect to the land comprising the Parcel and with
respect to the Building and all improvements located on the Parcel which become
due or accrue during the term of this Lease. Tenant shall pay such Property
Taxes to Landlord on or before the later of the following dates: (1) at least
ten (10) days prior to the delinquency date; or (2) twenty (20) days after
receipt of billing. If Tenant fails to do so, Tenant shall reimburse Landlord,
on demand, for all interest, late fees and penalties that the taxing authority
charges Landlord. In the event Landlord's mortgagee requires an impound for
Property Taxes, then on the first day of each month during the Lease Term,
Tenant shall pay Landlord one twelfth (1/12) of its annual share of such
Property Taxes. Tenant's liability hereunder shall be prorated to reflect the
Commencement and termination dates of this Lease.

     For the purpose of this Lease, "Property Taxes" means and includes all
taxes, assessments (including, but not limited to, assessments for public
improvements or benefits), taxes based on vehicles utilizing parking areas,
taxes based or measured by the rent paid, payable or received under this Lease,
taxes on the value, use, or occupancy of the Premises, the Building and/or the
Parcel, Environmental Surcharges directly attributable to Tenant's use or
occupancy of the Premises, and all other governmental impositions and charges of
every kind and nature whatsoever, whether or not customary or within the
contemplation of the parties hereto and regardless of whether the same shall be
extraordinary or ordinary, general or special, unforeseen or foreseen, or
similar or dissimilar to any of the foregoing which, at any time during the
Lease Term, shall be applicable to the Premises, the Building and/or the Parcel
or assessed, levied or imposed upon the Premises, the Building and/or the
Parcel, or become due and payable and a lien or charge upon the Premises, the
Building and/or the Parcel, or any part thereof, under or by virtue of any
present or future laws, statutes, ordinances, regulations or other requirements
of any governmental authority whatsoever. The term "Environmental Surcharges"
shall mean and include any and all expenses, taxes, charges or penalties imposed
by the Federal Department of Energy, the Federal Environmental Protection
Agency, the Federal Clean Air Act, or any regulations promulgated thereunder or
any other local, state or federal governmental agency or entity now or hereafter
vested with the power to impose taxes, assessments, or other types of surcharges
as a means of controlling or abating environmental pollution or the use of
energy. The term "Property Taxes" shall not include any federal, state or local
net income, estate, or inheritance tax imposed on Landlord.

          C.  Other Taxes. Tenant shall, as Additional Rent, pay or reimburse
              -----------                                                    
Landlord for any tax based upon, allocable to, or measured by the area of the
Premises or the Building or the Parcel; or by the rent paid, payable or received
under this Lease; any tax upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy of the
Premises or any portion thereof; any privilege tax, excise tax, business and
occupation tax, gross receipts tax, sales and/or use tax, water tax, sewer tax,
employee tax, occupational license tax imposed upon Landlord or Tenant with
respect to the Premises; any tax upon this transaction or any document to which
Tenant is a party creating or transferring an interest or an estate in the
Premises.

                                       9
<PAGE>
 
     8.   Insurance.
          --------- 

          A.  Indemnity. Tenant agrees to indemnify, protect and defend Landlord
              ---------                                                         
against and hold Landlord harmless from any and all claims, causes of action,
judgments, obligations or liabilities, and all reasonable expenses incurred in
investigating or resisting the same (including reasonable attorneys' fees), on
account of, or arising out of, the operation, maintenance, use or occupancy of
the Premises and the Parcel and all areas appurtenant thereto by Tenant or its
Agents. This Lease is made on the express understanding that Landlord shall not
be liable for, nor suffer loss by reason of, injury to person or property, from
whatever cause (except for the active negligence or willful misconduct of
Landlord), which in any way may be connected with the operation, use or
occupancy of the Premises by Tenant or its Agents specifically including,
without limitation, any liability for injury to the person or property of Tenant
or its Agents.

          B.  Liability Insurance. Tenant shall, at Tenants expense, obtain and
              -------------------                          
keep in force during the term of this Lease a policy of comprehensive public
liability insurance insuring Landlord and Tenant against claims and liabilities
arising out of the operation, use, or occupancy of the Premises and all areas
appurtenant thereto, including parking areas. Such insurance shall be in an
amount of not less than Three Million Dollars ($3,000,000.00) for bodily injury
or death as a result of any one occurrence and Five Hundred Thousand Dollars
($500,000.00) for damage to property as a result of any one occurrence. The
insurance shall be with companies approved by Landlord, which approval Landlord
agrees not to withhold unreasonably. Tenant shall deliver to Landlord, prior to
possession, and at least thirty (30) days prior to the expiration thereof, a
certificate of insurance evidencing the existence of the policy required
hereunder and such certificate shall certify that the policy (1) names Landlord
as an additional insured, (2) shall not be canceled or altered without thirty
(30) days prior written notice to Landlord, (3) insures performance of the
indemnity set forth in Subparagraph 8.A above, (4) the coverage is primary and
any coverage by Landlord is in excess thereto and (5) contains a cross-liability
endorsement.

     Landlord may maintain a policy or policies of comprehensive general
liability insurance insuring Landlord (and such others as are designated by
Landlord), against liability for personal injury, bodily injury, death and
damage to property occurring or resulting from an occurrence in, on or about the
Premises or the Outside Area, with such limits of coverage as Landlord may from
time to time determine are reasonably necessary for its protection. The cost of
any such liability insurance maintained by Landlord shall be a Outside Area
Charge and Tenant shall pay, as Additional Rent, such cost to Landlord as
provided in Paragraph 12 below.

          C.  Property Insurance. Landlord shall obtain and keep in force during
              ------------------                                                
the term of this Lease a policy or policies of insurance covering loss or damage
to the Premises and the Building, in the amount of the full replacement value
thereof, providing protection against those perils included within the
classification of "all risk" insurance, plus a policy of rental income insurance
in the amount of one hundred percent (100%) of twelve (12) months rent
(including, without limitation, sums payable as Additional Rent), plus, at
Landlord's option, flood insurance and earthquake insurance, and any other
coverages which may be required from time to time by Landlord's mortgagee.
Tenant shall have no interest in nor any right to the 

                                       10
<PAGE>
 
proceeds of any insurance procured by Landlord on the Premises. Tenant shall,
within twenty (20) days after receipt of billing, pay to Landlord as Additional
Rent, an amount equal to the cost of such insurance procured and maintained by
Landlord. Tenant acknowledges that such insurance procured by Landlord shall
contain a deductible which reduces Tenant's cost for such insurance and, in the
event of loss or damage, Tenant shall be required to pay to Landlord the amount
of such deductible, not to exceed an amount equal to one month's rent in the
case of earthquake and not to exceed Ten Thousand Dollars ($10,000.00) in all
other cases.

          D.  Tenant's Insurance; Release of Landlord. Tenant acknowledges that
              ---------------------------------------                          
the insurance to be maintained by Landlord on the Premises pursuant to
Subparagraph 8.C above will not insure any of Tenant's property. Accordingly,
Tenant, at Tenant's own expense, shall maintain in full force and effect on all
of its fixtures, equipment, leasehold improvements and personal property in the
Premises, a policy of "All Risk" coverage insurance to the extent of at least
ninety percent (90%) of their insurable value.

          E.  Mutual Waiver of Subrogation. Tenant and Landlord hereby mutually
              ----------------------------                                     
waive their respective rights for recovery against each other for any loss of or
damage to the property of either party, to the extent such loss or damage is
insured by any insurance policy required to be maintained by this Lease or
otherwise in force at the time of such loss or damage. Each party shall obtain
any special endorsements, if required by the insurer, whereby the insurer waives
its right of subrogation against the other party hereto. The provisions of this
Subparagraph E shall not apply in those instances in which waiver of subrogation
would cause either party's insurance coverage to be voided or otherwise made
uncollectible.

     9.   Utilities. Tenant shall pay for all water, gas, light, heat, power,
          ---------                                                          
electricity, telephone, trash pick-up, sewer charges, and all other services
supplied to or consumed on the Premises, and all taxes and surcharges thereon.
In addition, the cost of any utility services supplied to the Outside Area or
not separately metered to the Premises shall be a Outside Area Charge and Tenant
shall pay such costs to Landlord as provided in Paragraph 12 below.

     10.  Repairs and Maintenance.
          ----------------------- 

          A.  Landlord's Repairs. Subject to the provisions of Paragraph 16,
              ------------------                                            
Landlord shall keep and maintain the exterior roof, structural elements and
exterior walls of the Building in good order and repair. Landlord shall not,
however, be required to maintain, repair or replace the interior surface of
exterior walls, nor shall Landlord be required to maintain, repair or replace
windows, doors, skylights or plate glass. Landlord shall have no obligation to
make repairs under this Subparagraph until a reasonable time after receipt of
written notice from Tenant of the need for such repairs. Tenant shall reimburse
Landlord, as additional rent, within fifteen (15) days after receipt of billing,
for the cost of such repairs and maintenance which are the obligation of
Landlord hereunder, provided however, that Tenant shall not be required to
reimburse Landlord for the cost of maintenance and repairs of the structural
elements of the Building unless such maintenance or repair is required because
of the negligence or willful misconduct of Tenant or its employees, agents, or
invitees. As used herein, the term "structural elements of the Building"

                                       11
<PAGE>
 
shall mean and be limited to the foundation, footings, floor slab (but not
flooring), structural walls, and roof structure (but not roofing or roof
membrane).

          B.  Tenant's Repairs. Except as expressly provided in Subparagraph
              ----------------                                              
10.A above, Tenant shall, at its sole cost, keep and maintain the entire
Premises and every part thereof, including without limitation, the windows,
window frames, plate glass, glazing, skylights, truck doors, doors and all door
hardware, the walls and partitions, and the electrical, plumbing, lighting,
heating, ventilating and air conditioning systems and equipment in good order,
condition and repair. The term "repair" shall include replacements, restorations
and/or renewals when necessary as well as painting. Tenant's obligation shall
extend to all alterations, additions and improvements to the Premises, and all
fixtures and appurtenances therein and thereto. Tenant shall, at all times
during the Lease Term, have in effect a service contract for the maintenance of
the heating, ventilating and air conditioning ("HVAC") equipment with an HVAC
repair and maintenance contractor approved by Landlord, which approval shall not
unreasonably withheld. The HVAC service contract shall provide for periodic
inspection and servicing at least once every three (3) months during the term
hereof, and Tenant shall provide Landlord with a copy of such contract and all
periodic service reports.

     Should Tenant fail to make repairs required of Tenant hereunder forthwith
upon five (5) days notice from Landlord or should Tenant fail thereafter to
diligently complete the repairs, Landlord, in addition to all other remedies
available hereunder or by law and without waiving any alternative remedies, may
make the same, and in that event, Tenant shall reimburse Landlord as additional
rent for the cost of such maintenance or repairs within five (5) days of written
demand by Landlord.

     Landlord shall have no maintenance or repair obligations whatsoever with
respect to the Premises except as expressly provided in Subparagraph 10.A and
Paragraph 11 and 16. Tenant hereby expressly waives the provisions of Subsection
1 of Section 1932 and Sections 1941 and 1942 of the Civil Code of California and
all rights to make repairs at the expense of Landlord as provided in Section
1942 of said Civil Code. There shall be no allowance to Tenant for diminution of
rental value, and no liability on the part of Landlord, by reason of
inconvenience, annoyance or injury to business arising from the making of, or
the failure to make, any repairs, alterations, decorations, additions or
improvements in or to any portion of the Premises or the Building or Outside
Area (or any of the areas used in connection with the operation thereof, or in
or to any fixtures, appurtenances or equipment). In no event shall Landlord be
responsible for any consequential damages arising or alleged to have arisen from
any of the foregoing matters. Tenant hereby agrees that Landlord shall not be
liable for injury to Tenant's business or any loss of income therefrom or for
damage to the goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers, or any other person in or about the Premises,
the Building, or the Outside Area, except for Landlord's gross negligence or
willful misconduct, nor shall Landlord be liable for injury to the person of
Tenant, Tenant's employees, agents or contractors whether such damage or injury
is caused by or results from fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether the said damage or injury results from conditions arising
upon the Premises or 

                                       12
<PAGE>
 
upon other portions of the Building, or from other sources or places and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant.

     11.  Outside Area. Subject to the terms and conditions of this Lease and
          ------------                                                       
such rules and regulations as Landlord may from time to time prescribe, Tenant
and Tenant's employees, invitees and customers shall, in common with others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas and facilities located on the Parcel and designated by
Landlord for the general use and convenience of the occupants of the Parcel,
which areas and facilities are referred to herein as "Outside Area." This right
shall terminate upon the termination of this Lease. Landlord reserves the right
from time to time to make changes in the shape, size, location, amount and
extent of the Outside Area. Tenant shall have the exclusive use of all of the
parking spaces in the Outside Area. Tenant shall not abandon any inoperative
vehicles or equipment on any portion of the Outside Area. Tenant shall make no
alterations, improvements or additions to the Outside Area.

     Landlord shall operate, manage, insure, maintain and repair the Outside
Area in good order, condition and repair. The manner in which the Outside Area
shall be maintained and the expenditures for such maintenance shall be at the
discretion of Landlord. The cost of such repair, maintenance, operation,
insurance and management, including without limitation, maintenance and repair
of landscaping, irrigation systems, paving, sidewalks, fences, and lighting,
shall be a Outside Area Charge and Tenant shall pay to Landlord its share of
such costs as provided in Paragraph 12 below.

     12.  Outside Area Charges. Tenant shall pay to Landlord, as Additional
          --------------------                                             
Rent, upon demand but not more often than once each calendar month, an amount
equal to One hundred percent (100%) of the Outside Area Charges as defined in
Subparagraph 8.B and Paragraphs 9, 11, 13 and 36 of this Lease. Tenant
acknowledges and agrees that the Outside Area Charges shall include an
additional five percent (5%) of the actual expenditures in order to compensate
Landlord for accounting, management and processing services.

     13.  Alterations. Tenant shall not make, or suffer to be made, any
          -----------                                                  
alterations, improvements or additions in, on, about or to the Premises or any
part thereof, without the prior written consent of Landlord (which shall not be
unreasonably withheld or delayed) and without a valid building permit issued by
the appropriate governmental authority. As a condition to giving such consent,
Landlord may require that Tenant agree to remove any such alterations,
improvements or additions at the termination of this Lease, and to restore the
Premises to their prior condition. Unless Landlord requires that Tenant remove
any such alteration, improvement or addition, any alteration, addition or
improvement to the Premises, except movable furniture and trade fixtures not
affixed to the Premises, shall become the property of Landlord upon termination
of the Lease and shall remain upon and be surrendered with the Premises at the
termination of this Lease. Without limiting the generality of the foregoing, all
heating, lighting, electrical (including all wiring, conduit, outlets, drops,
buss ducts, main and subpanels), air conditioning, partitioning, drapery, and
carpet installations made by Tenant regardless of how affixed to the Premises,
together with all other additions, alterations and improvements that have become
an integral part of the Building, shall be and become the property of the
Landlord 

                                       13
<PAGE>
 
upon termination of the Lease, and shall not be deemed trade fixtures, and shall
remain upon and be surrendered with the Premises at the termination of this
Lease.

     If, during the Term hereof, any alteration, addition or change of any sort
to all or any portion of the Premises is required by law, regulation, ordinance
or order of any public agency, Tenant shall promptly make the same at its sole
cost and expense. If during the Term hereof, any alteration, addition, or change
to the Outside Area is required by law, regulation, ordinance or order of any
public agency, Landlord shall make the same and the cost of such alteration,
addition or change shall be a Outside Area Charge and Tenant shall pay said cost
to Landlord as provided in Paragraph 12 above.

     14.  Acceptance of the Premises. By entry and taking possession of the
          --------------------------                                       
Premises pursuant to this Lease, Tenant accepts the Premises as being in good
and sanitary order, condition and repair and accepts the Premises in their
condition existing as of the date of such entry, and Tenant further accepts the
tenant improvements to be constructed by Landlord, if any, as being completed in
accordance with the plans and specifications for such improvements, except for
punch list items. Tenant acknowledges that neither Landlord nor Landlord's
agents has made any representation or warranty as to the suitability of the
Premises to the conduct of Tenant's business. Any agreements, warranties or
representations not expressly contained herein shall in no way bind either
Landlord or Tenant, and Landlord and Tenant expressly waive all claims for
damages by reason of any statement, representation, warranty, promise or
agreement, if any, not contained in this Lease. This Lease constitutes the
entire understanding between the parties hereto and no addition to, or
modification of, any term or provision of this Lease shall be effective until
set forth in a writing signed by both Landlord and Tenant.

     15.  Default.
          ------- 

          A.  Events of Default. A breach of this Lease shall exist if any of
              -----------------                                              
the following events (hereinafter referred to as "Event of Default") shall
occur:

              (1)   Default in the payment when due of any installment of rent
or other payment required to be made by Tenant hereunder, where such default
shall not have been cured within three (3) days after written notice of such
default is given to Tenant;

              (2)   Tenant's breach or violation of any provision of Paragraph
25 below;

              (3)   Tenant's breach or violation of any provision of Paragraph
39 below;

              (4)   Tenant's failure to perform any other term, covenant or
condition contained in this Lease where such failure shall have continued for
twenty (20) days after written notice of such failure is given to Tenant;

              (5)   Tenant's vacating or abandonment of the Premises;

                                       14
<PAGE>
 
              (6)   Tenant's assignment of its assets for the benefit of its
creditors;

              (7)   The sequestration of, attachment of, or execution on, any
substantial part of the property of Tenant or on any property essential to the
conduct of Tenant's business, shall have occurred and Tenant shall have failed
to obtain a return or release of such property within thirty (30) days
thereafter, or prior to sale pursuant to such sequestration, attachment or levy,
whichever is earlier;

              (8)   Tenant or any guarantor of Tenant's obligations hereunder
shall commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seek appointment of a receiver, trustee, custodian, or other
similar official for it or for all or any substantial part of its property;

              (9)   Tenant or any such guarantor shall take any corporate action
to authorize any of the actions set forth in Clause 8 above; or

              (10)  Any case, proceeding or other action against Tenant or any
guarantor of Tenant's obligations hereunder shall be commenced seeking to have
an order for relief entered against it as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property, and
such case, proceeding or other action (i) results in the entry of an order for
relief against it which is not fully stayed within seven (7) business days after
the entry thereof or (ii) remains undismissed for a period of forty-five (45)
days.

          B.  Remedies. Upon any Event of Default, Landlord shall have the
              --------                                                    
following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:

              (1)   Recovery of Rent. Landlord shall be entitled to keep this
                    ----------------
Lease in full force and effect (whether or not Tenant shall have abandoned the
Premises) and to enforce all of its rights and remedies under this Lease,
including the right to recover rent and other sums as they become due, plus
interest at the Permitted Rate (as defined in Paragraph 33 below) from the due
date of each installment of rent or other sum until paid.

              (2)   Termination. Landlord may terminate this Lease by giving
                    -----------
Tenant written notice of termination. On the giving of the notice all of
Tenant's rights in the Premises and the Building and Parcel shall terminate.
Upon the giving of the notice of termination, Tenant shall surrender and vacate
the Premises in the condition required by Paragraph 34, and Landlord may re-
enter and take possession of the Premises and all the remaining improvements or
property and eject Tenant or any of Tenant's subtenants, assignees or other
person or persons claiming any right under or through Tenant or eject some and
not others or eject none. This Lease may also be terminated by a judgment
specifically providing for termination. Any termination under this paragraph
shall not release Tenant from the payment of any sum then due 

                                       15
<PAGE>
 
Landlord or from any claim for damages or rent previously accrued or then
accruing against Tenant. In no event shall any one or more of the following
actions by Landlord constitute a termination of this Lease:

                    (a)  maintenance and preservation of the Premises;

                    (b)  efforts to relet the Premises;

                    (c)  appointment of a receiver in order to protect
Landlord's interest hereunder;

                    (d)  consent to any subletting of the Premises or assignment
of this Lease by Tenant, whether pursuant to provisions hereof concerning
subletting and assignment or otherwise; or

                    (e)  any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects from any breach of this Lease by
Tenant.

              (3)   Damages. In the event this Lease is terminated pursuant to
                    -------                                                   
Subparagraph 15.B.2 above, or otherwise, Landlord shall be entitled to damages
in the following sums:

                    (a)  the worth at the time of award of the unpaid rent which
has been earned at the time of termination; plus

                    (b)  the worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

                    (c)  the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and

                    (d)  any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would be
likely to result therefrom including, without limitation, the following: (i)
expenses for cleaning, repairing or restoring the Premises; (ii) real estate
broker's fees, advertising costs and other expenses of reletting the Premises;
(iii) costs of carrying the Premises such as taxes and insurance premiums
thereon, utilities and security precautions; (iv) expenses in retaking
possession of the Premises; and (v) reasonable attorneys' fees and court costs.

                    (e)  The "worth at the time of award" of the amounts
referred to in Subparagraphs (a) and (b) of this Paragraph 15.B(3) is computed
by allowing interest at the Permitted Rate. The "worth at the time of award" of
the amounts referred to in Subparagraph (c) of this Paragraph 15.B(3) is
computed by discounting such amount at the discount rate of the 

                                       16
<PAGE>
 
Federal Reserve Board of San Francisco at the time of award plus one percent
(1%). The term "rent" as used in this Paragraph 15 shall include all sums
required to be paid by Tenant to Landlord pursuant to the terms of this Lease.

     16.  Destruction. In the event that any portion of the Premises are
          -----------                                                   
destroyed or damaged by an uninsured peril, Landlord or Tenant may, upon written
notice to the other, given within thirty (30) days after the occurrence of such
damage or destruction, elect to terminate this Lease; provided, however, that
either party may, within thirty (30) days after receipt of such notice, elect to
make any required repairs and/or restoration at such party's sole cost and
expense, in which event this Lease shall remain in full force and effect, and
the party having made such election to restore or repair shall thereafter
diligently proceed with such repairs and/or restoration.

     In the event the Premises are damaged or destroyed from any insured peril
to the extent of fifty percent (50%) or more of the then replacement cost of the
Premises, Landlord may, upon written notice to Tenant, given within thirty (30)
days after the occurrence of such damage or destruction, elect to terminate this
Lease. If Landlord does not give such notice in writing within such period,
Landlord shall be deemed to have elected to rebuild or restore the Premises, in
which event Landlord shall, at its expense, promptly rebuild or restore the
Premises to their condition prior to the damage or destruction and Tenant shall
pay to Landlord upon commencement of reconstruction the amount of any deductible
from the insurance policy, not to exceed one month's rent in the case of
earthquake and not to exceed Ten Thousand Dollars ($10,000.00) in all other
cases.

     In the event the Premises are damaged or destroyed from any insured peril
to the extent of less than fifty percent (50%) of the then replacement cost of
the Premises, Landlord shall, at Landlord's expense, promptly rebuild or restore
the Premises to their condition prior to the damage or destruction and Tenant
shall pay to Landlord upon commencement of reconstruction the amount of any
deductible from the insurance policy, not to exceed an amount equal to one
month's rent in the case of earthquake and not to exceed Ten Thousand Dollars
($10,000.00) in all other cases.

     In the event that, pursuant to the foregoing provisions, Landlord is to
rebuild or restore the Premises, Landlord shall, within thirty (30) days after
the occurrence of such damage or destruction, provide Tenant with written notice
of the time required for such repair or restoration. If such period is longer
than two hundred seventy (270) days from the issuance of a building permit,
Tenant may, within thirty (30) days after receipt of Landlord's notice, elect to
terminate the Lease by giving written notice to Landlord of such election,
whereupon the Lease shall immediately terminate. The period of time for Landlord
to complete the repair or restoration shall be extended for delays caused by the
fault or neglect of Tenant or because of acts of God, acts of public agencies,
labor disputes, strikes, fires, freight embargoes, rainy or stormy weather,
inability to obtain materials, supplies or fuels, acts of contractors or
subcontractors, or delay of contractors or subcontractors due to such causes, or
other contingencies beyond the control of Landlord. Landlord's obligation to
repair or restore the 

                                       17
<PAGE>
 
Premises shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises.

     Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect; provided, however, that during any
period of repairs or restoration, rent and all other amounts to be paid by
Tenant on account of the Premises and this Lease shall be abated in proportion
to the area of the Premises rendered not reasonably suitable for the conduct of
Tenant's business thereon. Tenant hereby expressly waives the provisions of
Section 1932, Subdivision 2 and Section 1933, Subdivision 4 of the California
Civil Code.

     17.  Condemnation.
          ------------ 

          A.  Definition of Terms. For the purposes of this Lease, the term (1)
              -------------------                                              
"Taking" means a taking of the Premises or damage to the Premises related to the
exercise of the power of eminent domain and includes a voluntary conveyance, in
lieu of court proceedings, to any agency, authority, public utility, person or
corporate entity empowered to condemn property; (2) "Total Taking" means the
taking of the entire Premises or so much of the Premises as to prevent or
substantially impair the use thereof by Tenant for the uses herein specified;
provided, however, in no event shall a Taking of less than ten percent (10%) of
the Premises be deemed a Total Taking; (3) "Partial Taking" means the taking of
only a portion of the Premises which does not constitute a Total Taking; (4)
"Date of Taking" means the date upon which the title to the Premises, or a
portion thereof, passes to and vests in the condemnor or the effective date of
any order for possession if issued prior to the date title vests in the
condemnor; and (5) "Award" means the amount of any award made, consideration
paid, or damages ordered as a result of a Taking.

          B.  Rights. The parties agree that in the event of a Taking all rights
              ------                                                            
between them or in and to an Award shall be as set forth herein and Tenant shall
have no right to any Award except as set forth herein.

          C.  Total Taking. In the event of a Total Taking during the term
              ------------                                                
hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the Premises shall cease and terminate as of the Date of
Taking; (2) Landlord shall refund to Tenant any prepaid rent and Tenant's
Security Deposit; (3) Tenant shall pay Landlord any rent or charges due Landlord
under the Lease, each prorated as of the Date of Taking; (4) Tenant shall
receive from Landlord those portions of the Award attributable to trade fixtures
of Tenant and for moving expenses of Tenant; and (5) the remainder of the Award
shall be paid to and be the property of Landlord.

          D.  Partial Taking. In the event of a Partial Taking during the term
              --------------                                                  
hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking; (2) from and after the Date of Taking the Monthly
Installment of rent shall be an amount equal to the product obtained by
multiplying the Monthly Installment of rent immediately prior to the Taking by a
fraction, the numerator of which is the number of square feet contained in the
Premises after the Taking and the denominator of which is the number of square
feet contained in the Premises prior to the 

                                       18
<PAGE>
 
Taking; (3) Tenant shall receive from the Award the portions of the Award
attributable to trade fixtures of Tenant; and (4) the remainder of the Award
shall be paid to and be the property of Landlord.

     18.  Mechanics' Lien. Tenant shall (A) pay for all labor and services
          ---------------                                                 
performed for, materials used by or furnished to, Tenant or any contractor
employed by Tenant with respect to the Premises; (B) indemnify, defend, protect
and hold Landlord and the Premises harmless and free from any liens, claims,
liabilities, demands, encumbrances, or judgments created or suffered by reason
of any labor or services performed for, materials used by or furnished to,
Tenant or any contractor employed by Tenant with respect to the Premises; (C) if
the cost of such work is in excess of Five Thousand Dollars ($5,000.00), give
notice to Landlord in writing five (5) days prior to employing any laborer or
contractor to perform services related to, or receiving materials for use upon
the Premises; and (D) permit Landlord to post a notice of nonresponsibility in
accordance with the statutory requirements of California Civil Code Section 3094
or any amendment thereof. In the event Tenant is required to post an improvement
bond with a public agency in connection with the above, Tenant agrees to include
Landlord as an additional obligee.

     19.  Inspection of the Premises. Tenant shall permit Landlord and its
          --------------------------                                      
agents to enter the Premises at any reasonable time for the purpose of
inspecting the same, performing Landlord's maintenance and repair
responsibilities, posting a notice of non-responsibility for alterations,
additions or repairs and at any time within ninety (90) days prior to expiration
of this Lease, to place upon the Premises, ordinary "For Lease" or "For Sale"
signs.

     20.  Compliance with Laws. Tenant shall, at its own cost, comply with all
          --------------------                                                
of the requirements of all municipal, county, state and federal authorities now
in force, or which may hereafter be in force, pertaining to the use and
occupancy of the Premises, and shall faithfully observe all municipal, county,
state and federal law, statutes or ordinances now in force or which may
hereafter be in force. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action or proceeding against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such ordinance
or statute in the use and occupancy of the Premises shall be conclusive of the
fact that such violation by Tenant has occurred.

     21.  Subordination. The following provisions shall govern the relationship
          -------------                                                        
of this Lease to any underlying lease, mortgage or deed of trust which now or
hereafter affects the Premises, the Building and/or the Parcel, or Landlord's
interest or estate therein (the "Project") and any renewal, modification,
consolidation, replacement, or extension thereof (a "Security Instrument").

          A.  Priority. This Lease is subject and subordinate to all Security
              --------                                                       
Instruments existing as of the Commencement Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.

          B.  Subsequent Security Instruments. At Landlord's election, this
              -------------------------------                              
Lease shall become subject and subordinate to any Security Instrument created
after the Commencement Date. Notwithstanding such subordination, Tenant's right
to quiet possession of the Premises 

                                       19
<PAGE>
 
shall not be disturbed so long as Tenant is not in default and performs all of
its obligations under this Lease, unless this Lease is otherwise terminated
pursuant to its terms.

          C.  Documents. Tenant shall execute any document or instrument
              ---------                                                 
required by Landlord or any Lender to make this Lease either prior or
subordinate to a Security Instrument, which may include such other matters as
the Lender customarily requires in connection with such agreements, including
provisions that the Lender, if it succeeds to the interest of Landlord under
this Lease, shall not be (i) liable for any act or omission of any prior
landlord (including Landlord), (ii) subject to any offsets or defenses which
Tenant may have against any prior landlord (including Landlord), (iii) bound by
any rent or Additional Rent paid more than one (1) month in advance of its date
due under this Lease unless the Lender receives it from Landlord, (iv) liable
for any defaults on the part of Landlord occurring prior to the time that the
Lender takes possession of the Premises in connection with the enforcement of
its Security Instrument, (v) liable for the return of any Security Deposit
unless such deposit has been delivered to Lender, or (vi) bound by any agreement
or modification of the Lease made without the prior written consent of Lender.
Tenant's failure to execute any such document or instrument within ten (10) days
after written demand therefor shall constitute a default by Tenant or, at
Landlord's option, Landlord may execute such documents on behalf of Tenant as
Tenant's attorney-in-fact. Tenant does hereby make, constitute and irrevocably
appoint Landlord as Tenant's attorney-in-fact to execute such documents in
accordance with this Paragraph.

          D.  Tenant's Attornment. Tenant shall attorn (1) to any purchaser of
              -------------------                                             
the Premises at any foreclosure sale or private sale conducted pursuant to any
Security Instrument encumbering the Project; (2) to any grantee or transferee
designated in any deed given in lieu of foreclosure; or (3) to the lessor under
any underlying ground lease should such ground lease be terminated.

          E.  Lender. As used in this Lease, the term "Lender" shall mean (1)
              ------                                                         
any beneficiary, mortgagee, secured party, or other holder of any deed of trust,
mortgage, or other written security device or agreement affecting the Project;
and (2) any lessor under any underlying lease under which Landlord holds its
interest in the Project.

     22.  Holding Over. This Lease shall terminate without further notice at the
          ------------                                                          
expiration of the Lease Term. Any holding over by Tenant after expiration shall
not constitute a renewal or extension or give Tenant any rights in or to the
Premises except as expressly provided in this Lease. Any holding over after the
expiration with the consent of Landlord shall be construed to be a tenancy from
month to month, at one hundred twenty-five percent (125%) of the monthly rent
for the last month of the Lease Term, and shall otherwise be on the terms and
conditions herein specified insofar as applicable.

     23.  Notices. Any notice required or desired to be given under this Lease
          -------                                                             
shall be in writing with copies directed as indicated below and shall be
personally served or given by mail. Any notice given by mail shall be deemed to
have been given when forty-eight (48) hours have elapsed from the time such
notice was deposited in the United States mails, certified and postage prepaid,
return receipt requested, addressed to the party to be served with a copy as
indicated 

                                       20
<PAGE>
 
herein at the last address given by that party to the other party under the
provisions of this Paragraph 23. At the date of execution of this Lease, the
address of Landlord is:

          SHORELINE INVESTMENTS VII
          c/o REALPROP DEVELOPMENT COMPANY
          1710 Zanker Road, Suite 100
          San Jose, CA 95112

and the address of Tenant is:

          VeriSign, Inc.
          2593 Coast Avenue
          Mountain View, CA 94043

     After the Commencement Date, the address of Tenant shall be at the
Premises.

     24.  Attorneys' Fees. In the event either party shall bring any action
          ---------------                                                  
or legal proceeding for damages for any alleged breach of any provision of this
Lease, to recover rent or possession of the Premises, to terminate this Lease,
or to enforce, protect or establish any term or covenant of this Lease or right
or remedy of either party, the prevailing party shall be entitled to recover as
a part of such action or proceeding, reasonable attorneys' fees and court costs,
including reasonable attorneys' fees and costs for appeal, as may be fixed by
the court or jury. The term "prevailing party" shall mean the party who received
substantially the relief requested, whether by settlement, dismissal, summary
judgment, judgment, or otherwise.

     25.  Nonassignment.
          ------------- 

          A.  Landlord's Consent Required. Tenant's interest in this Lease is
              ---------------------------                                    
not assignable, by operation of law or otherwise, nor shall Tenant have the
right to sublet the Premises, transfer any interest of Tenant therein or permit
any use of the Premises by another party, without the prior written consent of
Landlord to such assignment, subletting, transfer or use, which consent Landlord
agrees not to withhold unreasonably subject to the provisions of Subparagraph
25.B below. A consent to one assignment, subletting, occupancy or use by another
party shall not be deemed to be a consent to any subsequent assignment,
subletting, occupancy or use by another party. Any assignment or subletting
without such consent shall be void and shall, at the option of Landlord,
terminate this Lease.

     Landlord's waiver or consent to any assignment or subletting hereunder
shall not relieve Tenant from any obligation under this Lease.

          B.  Transferee Information Required. If Tenant desires to assign its
              -------------------------------                                 
interest in this Lease or sublet the Premises, or transfer any interest of
Tenant therein, or permit the use of the Premises by another party (hereinafter
collectively referred to as a "Transfer"), Tenant shall give Landlord at least
thirty (30) days prior written notice of the proposed Transfer and of the terms
of such proposed Transfer, including, but not limited to, the name and legal
composition of the proposed transferee, a financial statement of the proposed
transferee, the nature of the 

                                       21
<PAGE>
 
proposed transferee's business to be carried on in the Premises, the payment to
be made or other consideration to be given to Tenant on account of the Transfer,
and such other pertinent information as may be requested by Landlord, all in
sufficient detail to enable Landlord to evaluate the proposed Transfer and the
prospective transferee. It is the intent of the parties hereto that this Lease
shall confer upon Tenant only the right to use and occupy the Premises, and to
exercise such other rights as are conferred upon Tenant by this Lease. The
parties agree that this Lease is not intended to have a bonus value nor to serve
as a vehicle whereby Tenant may profit by a future Transfer of this Lease or the
right to use or occupy the Premises as a result of any favorable terms contained
herein, or future changes in the market for leased space. It is the intent of
the parties that any such bonus value that may attach to this Lease shall be and
remain the exclusive property of Landlord, except as set forth in Paragraph
25.B(2) below. Accordingly, in the event Tenant seeks to Transfer substantially
its entire interest in this Lease or the Premises, Landlord shall have the
following options, which may be exercised at its sole choice without limiting
Landlord in the exercise of any other right or remedy which Landlord may have by
reason of such proposed Transfer:

               (1)  Landlord may elect to terminate this Lease effective as of
the proposed effective date of the proposed Transfer and release Tenant from any
further liability hereunder accruing after such termination date by giving
Tenant written notice of such termination within twenty (20) days after receipt
by Landlord of Tenant's notice of intent to transfer as provided above. If
Landlord makes such election to terminate this Lease, Tenant shall surrender the
Premises, in accordance with Paragraph 34, on or before the effective
termination date; or

               (2)  Landlord may consent to the proposed Transfer on the
condition that Tenant agrees to pay to Landlord, as Additional Rent, fifty
percent (50%) of any and all rents or other consideration (including key money)
received by Tenant from the transferee by reason of such Transfer in excess of
the rent payable by Tenant to Landlord under this Lease (less any brokerage
commissions or advertising expenses incurred by Tenant in connection with the
Transfer). Tenant expressly agrees that the foregoing is a reasonable condition
for obtaining Landlord's consent to any Transfer; or

               (3)  Landlord may reasonably withhold its consent to the proposed
Transfer.

     26.  Successors. The covenants and agreements contained in this Lease shall
          ----------                                                      
inure to the benefit of and be binding on the parties hereto and on their
respective heirs, successors and assigns (to the extent the Lease is
assignable).

     27.  Mortgagee Protection. In the event of any default on the part of
          --------------------  
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage encumbering the
Premises, whose address shall have been furnished to Tenant, and shall offer
such beneficiary or mortgagee a reasonable opportunity to cure the default,
including time to obtain possession of the Premises by power of sale or judicial
foreclosure, if such should prove necessary to effect a cure.

                                       22
<PAGE>
 
     28.  Landlord Loan or Sale. Tenant agrees promptly following request by
          ---------------------                                          
Landlord to (A) execute and deliver to Landlord any documents, including
estoppel certificates presented to Tenant by Landlord, (1) certifying that this
Lease is unmodified and in full force and effect (or, if modified, specifying
such modification and certifying that the Lease as so modified is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (2) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder (or specifying
such defaults, if any, that are claimed), and (3) evidencing the status of the
Lease as may be required either by a lender making a loan to Landlord to be
secured by a deed of trust or mortgage covering the Premises or a purchaser of
the Premises from Landlord and (B) to deliver to Landlord the financial
statement of Tenant with an opinion of a certified public accountant, including
a balance sheet and profit and loss statement, for the last completed fiscal
year all prepared in accordance with generally accepted accounting principles
consistently applied. Tenant's failure to deliver an estoppel certificate
promptly following such request shall be an Event of Default under this Lease.

     29.  Surrender of Lease Not Merger. 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
subtenants, or operate as an assignment to Landlord of any or all such subleases
or subtenants.

     30.  Waiver. The waiver by Landlord or Tenant of any breach of any term,
          ------                                                       
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained.

     31.  General.
          ------- 

          A.  Captions. The captions and paragraph headings used in this Lease
              --------                                                        
are for the purposes of convenience only. They shall not be construed to limit
or extend the meaning of any part of this Lease, or be used to interpret
specific sections. The word(s) enclosed in quotation marks shall be construed as
defined terms for purposes of this Lease. As used in this Lease, the masculine,
feminine and neuter and the singular or plural number shall each be deemed to
include the other whenever the context so requires.

          B.  Definition of Landlord. The term LANDLORD as used in this Lease,
              ----------------------                                          
so far as the covenants or obligations on the part of Landlord are concerned,
shall be limited to mean and include only the owner at the time in question of
the fee title of the Premises, and in the event of any transfer or transfers of
the title of such fee, the Landlord herein named (and in case of any subsequent
transfers or conveyances, the then grantor) shall after the date of such
transfer or conveyance be automatically freed and relieved of all liability with
respect to performance of any covenants or obligations on the part of Landlord
contained in this Lease, thereafter to be performed; provided that any funds in
the hands of Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, shall be turned over to the grantee, and provided
further that nothing contained herein shall relieve the Landlord named herein of
liability for breach of any covenants or obligations on the part of Landlord
required to have been 

                                       23
<PAGE>
 
performed prior to the time of any such transfer. It is intended that the
covenants and obligations contained in this Lease on the part of Landlord shall,
subject as aforesaid, be binding upon each Landlord, its heirs, personal
representatives, successors and assigns only during its respective period of
ownership.

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

          D.  Severability. In case any one or more of the provisions contained
              ------------                                                     
herein, except for the payment of rent, shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Lease, but this
Lease shall be construed as if such invalid, illegal or unenforceable provision
had not been contained herein. This Lease shall be construed and enforced in
accordance with the laws of the State of California.

          E.  Joint and Several Liability. If Tenant is more than one person or
              ---------------------------                                      
entity, each such person or entity shall be jointly and severally liable for the
obligations of Tenant hereunder.

          F.  Law. As used in this Lease, the term "Law", "Laws", "law" or
              ---                                                         
"laws" shall mean any judicial decision, statute, constitution, ordinance,
resolution, regulation, rule, administrative order, or other requirement of any
government agency or authority having jurisdiction over the parties to this
Lease or the Premises or both, in effect at the Commencement Date of this Lease
or any time during the Lease Term, including, without limitation, any
regulation, order, or policy of any quasi-official entity or body (e.g., board
                                                                   ----       
of fire examiners, public utility or special district).

          G.  Agent. As used in this Lease, the term "Agent" shall mean, with
              -----                                                          
respect to either Landlord or Tenant, its respective agents, employees,
contractors (and their subcontractors), and invitees (and in the case of Tenant,
its subtenants).

          H.  WAIVER OF JURY TRIAL.
              -------------------- 

         LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHT TO
         TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
         CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING
         BROUGHT BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST
         LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY
         WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD
         AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY
         CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY
         UNDER ANY LAW, STATUTE, OR REGULATION, 

                                       24
<PAGE>
 
         EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

         INITIALS: ____________    (Landlord)

                   ____________    (Tenant)

     32.  Sign. Tenant shall not place or permit to be placed any sign or
          ----                                                        
decoration on the Parcel or the exterior of the Building without the prior
written consent of Landlord. Tenant, upon written notice by Landlord, shall
immediately remove any sign or decoration that Tenant has placed or permitted to
be placed on the Parcel or the exterior of the Building without the prior
written consent of Landlord, and if Tenant fails to so remove such sign or
decoration within five (5) days after Landlord's written notice, Landlord may
enter upon the Premises and remove said sign or decoration and Tenant agrees to
pay Landlord, as Additional Rent upon demand, the cost of such removal. At the
termination of this Lease, Tenant shall remove any sign which it has placed on
the Parcel or Building and shall repair any damage caused by the installation or
removal of such sign.

     33.  Interest on Past Due Obligations. Any Monthly Installment of
          --------------------------------                            
rent or any other sum due from Tenant under this Lease which is received by
Landlord after the date the same is due shall bear interest from said due date
until paid, at an annual rate equal to the greater of (the "Permitted Rate"):
(1) ten percent (10%); or (2) five percent (5%) plus the rate established by the
Federal Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the
month immediately preceding the due date, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended. Payment of such interest shall not excuse or cure any
default by Tenant. In addition, Tenant shall pay all reasonable costs and
attorneys' fees incurred by Landlord in collection of such amounts.

     34.  Surrender of the Premises. On the last day of the Term hereof, or on 
          -------------------------                                     
the sooner termination of this Lease, Tenant shall surrender the Premises to
Landlord in their condition existing as of the Commencement Date of this Lease,
ordinary wear and tear excepted, with all originally painted interior walls
washed, and other interior walls cleaned, and repaired or replaced, all carpets
shampooed and cleaned, the air conditioning and heating equipment serviced and
repaired by a reputable and licensed service firm, all floors cleaned and waxed,
all to the reasonable satisfaction of Landlord. Tenant shall remove all of
Tenant's personal property and trade fixtures from the Premises, and all
property not so removed shall be deemed abandoned by Tenant. Tenant, at its sole
cost, shall repair any damage to the Premises caused by the removal of Tenant's
personal property, machinery and equipment, which repair shall include, without
limitation, the patching and filling of holes and repair of structural damage.
If the Premises are not so surrendered at the termination of this Lease, Tenant
shall indemnify, defend, protect and hold Landlord harmless from and against
loss or liability resulting from delay by Tenant in so surrendering the Premises
including without limitation, any proximate losses to Landlord due to lost
opportunities to lease to succeeding tenants.

                                       25
<PAGE>
 
     35.  Authority. The undersigned parties hereby warrant that they have
          ---------                                                  
proper authority and are empowered to execute this Lease on behalf of Landlord
and Tenant, respectively.

     36.  C. C. & R.'s. This Lease is made subject to all matters of public
          ------------                                              
record affecting title to the property of which the Premises are a part. Tenant
shall abide by and comply with all private conditions, covenants and
restrictions of public record now or hereafter affecting the Premises and any
amendment thereof, including, but not limited to, the following:

               Those Covenants, Conditions and Restrictions for the
          SHORELINE BUSINESS PARK regarding Architectural Control,
          Development and Use executed by New England Mutual Life
          Insurance Company and recorded on June 1, 1979, in Book E535
          at Page 22, Santa Clara County Records.

     All assessments and charges which are imposed, levied or assessed against
the Parcel and Building pursuant to the above-described covenants, conditions
and restrictions shall be a Outside Area Charge and Tenant shall pay such
assessments and charges to Landlord as provided in Paragraph 12 above.

     37.  Brokers. Tenant represents and warrants to Landlord that it has not
          -------                                                    
dealt with any broker respecting this transaction (other than Cornish & Carey)
and hereby agrees to indemnify and hold Landlord harmless from and against any
brokerage commission or fee, obligation, claim or damage (including reasonable
attorneys' fees) paid or incurred respecting any broker (other than Cornish &
Carey) claiming through Tenant or with which/whom Tenant has dealt.

     38.  Limitation on Landlord's Liability. Tenant, for itself and its
          ----------------------------------                            
successors and assigns (to the extent this Lease is assignable), hereby agrees
that in the event of any actual, or alleged, breach or default by Landlord under
this Lease that:

          A.   Tenant's sole and exclusive remedy against Landlord shall be as
against Landlord's interest in the Building and Parcel;

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

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

          D.   No partner of Landlord shall be required to answer or otherwise
plead to any service of process;

          E.   No judgment will be taken against any partner of Landlord;

                                       26
<PAGE>
 
          F.   Any judgment taken against any partner of Landlord may be vacated
and set aside at any time nunc pro tunc;

          G.   No writ of execution will ever be levied against the assets of
any partner of Landlord;

          H.   The covenants and agreements of Tenant set forth in this
Paragraph 38 shall be enforceable by Landlord and any partner of Landlord.

     39.  Hazardous Material.
          ------------------ 

          A.   Definitions. As used herein, the term "Hazardous Material" shall
               -----------                                     
mean any substance: (i) the presence of which requires investigation or
remediation under any federal, state or local statute, regulation, ordinance,
order, action, policy or common law; (ii) which is or becomes defined as a
"hazardous waste," "hazardous substance," pollutant or contaminant under any
federal, state or local statute, regulation, rule or ordinance or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii)
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of California or any political
subdivision thereof; (iv) the presence of which on the Premises causes or
threatens to cause a nuisance upon the Premises or to adjacent properties or
poses or threatens to pose a hazard to the health or safety of persons on or
about the Premises; (v) the presence of which on adjacent properties could
constitute a trespass by Landlord or Tenant; (vi) without limitation which
contains gasoline, diesel fuel or other petroleum hydrocarbons; (vii) without
limitation which contains polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde foam insulation; or (viii) without limitation radon gas.

          B.   Permitted Use. Subject to the compliance by Tenant with the
               -------------                                          
provisions of Subparagraphs C, D, E, F, G, H, and I below, Tenant shall be
permitted to use and store on the Premises those Hazardous Materials listed in
EXHIBIT "C" attached hereto, in the quantities set forth in EXHIBIT "C". In
addition, Tenant shall be permitted to use and store on the Premises reasonable
quantities of office and janitorial supplies without complying with provisions
of Subparagraph C below.

          C.   Hazardous Materials Management Plan.
               ----------------------------------- 

               Prior to Tenant using, handling, transporting or storing any
Hazardous Material at or about the Premises (including, without limitation,
those listed in EXHIBIT "C"), Tenant shall submit to Landlord a Hazardous
Materials Management Plan ("HMMP") for Landlord's review and approval, which
approval shall not be unreasonably withheld. The HMMP shall describe: (aa) the
quantities of each material to be used, (bb) the purpose for which each material
is to be used, (cc) the method of storage of each material (dd) the method of
transporting each material to and from the Premises and within the Premises,
(ee) the methods Tenant will employ to monitor the use of the material and to
detect any leaks or potential 

                                       27
<PAGE>
 
hazards, and (ff) any other information any department of any governmental
entity (city, state or federal) requires prior to the issuance of any required
permit for the Premises or during Tenant's occupancy of the Premises. Landlord
may, but shall have no obligation to review and approve the foregoing
information and HMMP, and such review and approval or failure to review and
approve shall not act as an estoppel or otherwise waive Landlord's rights under
this Lease or relieve Tenant of its obligations under this Lease. If Landlord
determines in good faith by inspection of the Premises or review of the HMMP
that the methods in use or described by Tenant are not adequate in Landlord's
good faith judgment to prevent or eliminate the existence of environmental
hazards, then Tenant shall not use, handle, transport, or store such Hazardous
Materials at or about the Premises unless and until such methods are approved by
Landlord in good faith and added to an approved HMMP. Once approved by Landlord,
Tenant shall strictly comply with the HMMP and shall not change its use,
operations or procedures with respect to Hazardous Materials without submitting
an amended HMMP for Landlord's review and approval as provided above.

          D.   Use Restriction. Except as specifically allowed in Subparagraph B
               ---------------                                   
above, Tenant shall not cause or permit any Hazardous Material to be used,
stored, generated, discharged, transported to or from, or disposed of in or
about the Premises, the Building, the Outside Area, and/or the Parcel or any
other land or improvements in the vicinity of the Premises. Without limiting the
generality of the foregoing, Tenant, at its sole cost, shall comply with all
Laws relating to the storage, use, generation, transport, discharge and disposal
by Tenant or its Agents of any Hazardous Material. If the presence of any
Hazardous Material on the Premises, Building, Outside Area and/or Parcel caused
or permitted by Tenant or its Agents results in contamination of the Premises,
Building, Outside Area and/or Parcel or any soil, air, ground or surface waters
under, through, over, on, in or about the Premises or Parcel, Tenant, at its
expense, shall promptly take all actions necessary to return the Premises,
Building, Outside Area and Parcel and/or the surrounding real property to the
condition existing prior to the appearance of such Hazardous Material introduced
to the Premises by Tenant or its Agents. In the event there is a release,
discharge or disposal of or contamination of the Premises, Building, Outside
Area and/or Parcel by a Hazardous Material which is of the type that has been
stored, handled, transported or otherwise used or permitted by Tenant or its
Agents on or about the Premises, Tenant shall have the burden of proving that
such release, discharge, disposal or contamination is not the result of the acts
or omissions of Tenant or its Agents.

          E.   Tenant Indemnity. Tenant shall defend, protect, hold
               ----------------
harmless and indemnify Landlord and its Agents and Lenders with respect to all
actions, claims, losses (including, diminution in value of the Premises), fines,
penalties, fees (including, but not limited to, reasonable attorneys' and
consultants' fees) costs, damages, liabilities, remediation costs, investigation
costs, response costs and other expenses arising out of, resulting from, or
caused by (i) any Hazardous Material used, generated, discharged, transported to
or from, stored, or disposed of by Tenant or its Agents in, on, under, over,
through or about the Premises, Parcel and/or the surrounding real property or
(ii) any disposal or release of any Hazardous Material on the surface of the
Parcel occurring during the Lease Term. Tenant shall not suffer any lien to be
recorded against the Premises or Parcel as a consequence of the disposal of any
Hazardous Material on the Premises or Parcel by Tenant or its Agents, including
any so called state, federal 

                                       28
<PAGE>
 
or local "super fund" lien related to the "clean up" of any Hazardous Material
in, over, on, under, through, or about the Premises or Parcel.

          F.   Compliance. Tenant shall immediately notify Landlord of any
               ----------                                             
inquiry, test, investigation, enforcement proceeding by or against Tenant or the
Premises concerning any Hazardous Material. Any remediation plan prepared by or
on behalf of Tenant must be submitted to Landlord prior to conducting any work
pursuant to such plan and prior to submittal to any applicable government
authority and shall be subject to Landlord's consent, which consent shall not be
unreasonably withheld or delayed. Tenant acknowledges that Landlord, as the
owner of the Premises, at its election, shall have the sole right to negotiate,
defend, approve and appeal any action taken or order issued with regard to any
Hazardous Material by any applicable governmental authority.

          G.   Assignment and Subletting. It shall not be unreasonable for
               -------------------------                              
Landlord to withhold its consent to any proposed assignment or subletting if (i)
the proposed assignee's or subtenant's anticipated use of the Premises involves
the storage, generation, discharge, transport, use or disposal of any Hazardous
Material; (ii) if the proposed assignee or subtenant has been required by any
prior landlord, lender or governmental authority to "clean up" or remediate any
Hazardous Material; (iii) if the proposed assignee or subtenant is subject to
investigation or enforcement order or proceeding by any governmental authority
in connection with the use, generation, discharge, transport, disposal or
storage of any Hazardous Material.

          H.   Surrender. Upon the expiration or earlier termination of the
               ---------                                            
Lease, Tenant, at its sole cost, shall remove all Hazardous Materials from the
Premises, the Building, Outside Area and/or Parcel that Tenant or its Agents
introduced to the Premises, the Building, Outside Area and/or Parcel. If Tenant
fails to so surrender the Premises, Tenant shall indemnify, protect, defend and
hold Landlord harmless from and against all damages resulting from Tenant's
failure to surrender the Premises as required by this Paragraph, including,
without limitation, any actions, claims, losses, liabilities, fees (including,
but not limited to, reasonable attorneys' and consultants' fees), fines, costs,
penalties, or damages in connection with the condition of the Premises
including, without limitation, damages occasioned by the inability to relet the
Premises or a reduction in the fair market and/or rental value of the Premises
by reason of the existence of any Hazardous Material in, on, over, under,
through or around the Premises.

          I.   Right to Appoint Consultant. Landlord shall have the right to
               ---------------------------
appoint a consultant to conduct an investigation to determine whether any
Hazardous Material is being used, generated, discharged, transported to or from,
stored or disposed of in, on, over, through, or about the Premises, in an
appropriate and lawful manner. If Tenant has violated any Law or covenant in
this Lease regarding the use, storage or disposal of Hazardous Materials on or
about the Premises, Tenant shall reimburse Landlord for the cost of such
investigation. Tenant, at its expense, shall comply with all reasonable
recommendations of the consultant required to conform Tenant's use, storage or
disposal of Hazardous Materials to the requirements of applicable Law or to
fulfill the obligations of Tenant hereunder.

                                       29
<PAGE>
 
          J.   Holding Over. If any action of any kind is required or requested
               ------------                                           
to be taken by any governmental authority to clean-up, remove, remediate or
monitor any Hazardous Material (the presence of which is the result of the acts
or omissions of Tenant or its Agents) and such action is not completed prior to
the expiration or earlier termination of the Lease, Tenant shall be deemed to
have impermissibly held over until such time as such required action is
completed, and Landlord shall be entitled to all damages directly or indirectly
incurred in connection with such holding over, including without limitation,
damages occasioned by the inability to re-let the Premieres or a reduction of
the fair market and/or rental value of the Premises.

          K.   Landlord's Indemnity. Landlord shall defend and, protect, hold
               --------------------                             
harmless and indemnify Tenant from and against all claims, fines, penalties,
damages, government orders, losses, liabilities costs and expenses (including
reasonable attorneys' fees) arising out of any Hazardous Material used,
generated, discharged, transported to or from, stored or disposed of in, on or
under the Premises and/or Parcel by Landlord or its Agents.

          L.   Provisions Survive Termination. The provisions of this Paragraph
               ------------------------------                        
39 shall survive the expiration or termination of this Lease

          M.   Controlling Provisions. The provisions of this Paragraph 39 are
               ----------------------                        
intended to govern the rights and liabilities of the Landlord and Tenant
hereunder respecting Hazardous Materials to the exclusion of any other
provisions in this Lease that might otherwise be deemed applicable. The
provisions of this Paragraph 39 shall be controlling with respect to any
provisions in this Lease that are inconsistent with this Paragraph 39.

     40.  Separately Stated Reimbursement. The Monthly Installment of rent due
          -------------------------------                            
for the three (3) months commencing October 1, 1996 of the Lease Term as
specified in Paragraph 4.B, includes the sum of Eighty Thousand Dollars
($80,000.00), which sum represents, for Landlord's accounting purposes, a
separately stated reimbursement by Tenant of the Eighty Thousand Dollars
($80,000.00) cost of certain renovations to the Premises.

     41.  Condition of Premises. Notwithstanding the provisions contained in
          ---------------------                                
Paragraph 14 of this Lease, Landlord agrees that the air conditioning units
shall be delivered to Tenant in good working order and repair and that the roof
of the Building shall be replaced by Landlord at Landlord's sole cost and
expense in a reasonable period of time following Tenant's completion of its
leasehold improvements.

                                       30
<PAGE>
 
          IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below.

                                   TENANT:

                                   VeriSign, Inc.
                                   a Delaware corporation


Dated:   8/19/96                   By:  /s/ Dana L. Evan
       ------------                     -------------------------

                                   Name:  Dana L. Evan
                                          -----------------------

                                   Title: CFO
                                          -----------------------


                                   LANDLORD:

                                   SHORELINE INVESTMENTS VII
                                   a California general partnership


Dated:   8/29/96                   By: /s/ Robert P. Moore
        -----------                    --------------------------

                                   Name: Robert P. Moore
                                         ------------------------

                                   Title: General Partner
                                          -----------------------


Dated:   8/29/96                   By: /s/ John J. Bertolotti
        -----------                    --------------------------

                                   Name: John J. Bertolotti
                                         ------------------------

                                   Title: General Partner
                                          -----------------------

                                       31
<PAGE>
 
                                  EXHIBIT "A"

                                   SITE PLAN
                                   ---------

                                        

                        [Schematic description of site]

                                       32
<PAGE>
 
                                  EXHIBIT "B"

                             DESCRIPTION OF PARCEL
                             ---------------------

     Lot 3 of Tract 7033, as shown on Parcel Map recorded February 25, 1981, in
Book 479 of Maps, pages 45 and 46, Santa Clara County Records, as said parcel is
shown on the Santa Clara County Assessor's Maps as Book 116, page 11, parcel 24.

                                       33

Source: OneCLE Business Contracts.