STANDARD SUBLEASE American Industrial Real Estate Association [LOGO]

STANDARD SUBLEASE
American Industrial Real Estate Association
[LOGO]

1. Parties. This Sublease, dated, for reference purposes only, June 20, 1997, is
made by and between Verticom, Inc. (herein called "Sublessor") and Arterial
Vascular Engineering, Inc. (herein called "Sublessee").

2. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property situated in the County
of Sonoma, State of California, commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and described as approximately 10,000 s.f. of a 47,938 s.f. building known as
Building B in the complex A.P. #▇▇▇-▇▇▇-▇▇▇ as shown on Exhibit A.

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Said real property, including the land and all improvements thereon, is
hereinafter called the "Premises".

3. Term.

3.1 Term. The term of this Sublease shall be for eighteen (18) months
commencing on September 1, 1997 and ending on February 28, 1999 unless sooner
terminated pursuant to any provision hereof.

3.2 Delay in Commencement. Notwithstanding said commencement date, if for
any reason Sublessor cannot deliver possession of the Premises to Sublessee on
said date. Sublessor shall not be subject to any liability therefore, nor shall
such failure affect the validity of this Lease or the obligations of Sublessee
hereunder or extend the term hereof, but in such case Sublessee shall not be
obligated to pay rent until possession of the Premises is tendered to Sublessee;
provided, however, that if Sublessor shall not have delivered possession of the
Premises within sixty (60) days from said commencement date, Sublessee may, at
Sublessee's option, by notice in writing to Sublessor within ten (10) days
thereafter, cancel this Sublease, in which event the parties shall be discharged
from all obligations thereunder. If Sublessee occupies the Premises prior to
said commencement date, such occupancy shall be subject to all provisions
hereof, such occupancy shall not advance the termination date and Sublessee
shall pay rent for such period at the initial monthly rates set forth below. See
Exhibit B-1, Paragraph 2.

4. Rent. Sublessee shall pay to Sublessor as rent for the Premises equal monthly
payments of $12,500, in advance, on the 1st day of each month of the term
hereof. Sublessee shall pay Sublessor upon the execution hereof $12,500 as rent
for September. See ▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ 7.

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Rent for any period during the term hereof which is for less than one month
shall be a prorata portion of the monthly installment. Rent shall be payable in
lawful money of the United States to Sublessor at the address stated herein or
to such other persons or at such other places as Sublessor may designate in
writing.

5. Security Deposit. Sublessee shall deposit with Sublessor upon execution
hereof $12,500 as security for Sublessee's faithful performance of Sublessee's
obligations hereunder. If Sublessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Sublease,
Sublessor may use, apply or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment of any other
sum to which Sublessor may become obligated by reason of Sublessee's default, or
to compensate Sublessor for any loss or damage which Sublessor may suffer
thereby. If Sublessor so uses or applies all or any portion of said deposit.
Sublessee shall within ten (10) days after written demand therefore deposit cash
with Sublessor in an amount sufficient to restore said deposit to the full
amount hereinabove stated and Sublessee's failure to do so shall be a material
breach of this Sublease. Sublessor shall not be required to keep said deposit
separate from its general accounts. If Sublessee performs all of Sublessee's
obligations hereunder, said deposit, or so much thereof as has not theretofore
been applied by Sublessor, shall be returned, without payment of interest or
other increment for its use to Sublessee (or at Sublessor's option, to the last
assignee, if any, of Sublessee's interest hereunder) at the expiration of the
term hereof, and after Sublessee has vacated the Premises. No trust relationship
is created herein between Sublessor and Sublessee with respect to said Security
Deposit.

6. Use.

6.1 Use. The Premises shall be used and occupied only for research and
development, manufacturing, general office and for no other purpose.

6.2 Compliance with Law.

(a) Sublessor warrants to Sublessee that the Premises, in its existing
state, but without regard to the use for which Sublessee will use the Premises,
does not violate any applicable building code regulation or ordinance at the
time that this Sublease is executed. In the event that it is determined that
this warranty has been violated, then it shall be the obligation of the
Sublessor, after written notice from Sublessee, to promptly, at Sublessor's sole
cost and expense, rectify any such violation. In the event that Sublessee does
not give to Sublessor written notice of the violation of this warranty within 1
year from the commencement of the term of this Sublease, it shall be
conclusively deemed that such violation did not exist and the correction of the
same shall be the obligation of the Sublessee.

(b) Except as provided in paragraph 6.2(a). Sublessee shall, at
Sublessee's expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, restrictions of record, and requirements in effect
during the term or any part of the term hereof regulating the use by Sublessee
of the Premises. Sublessee shall not use or permit the use of the Premises in
any manner that will tend to create waste or a nuisance or, if there shall be
more than one tenant of the building containing the Premises, which shall tend
to disturb such other tenants.

6.3 Condition of Premises. Except as provided in paragraph 6.2(a) Sublessee
hereby accepts the Premises in their condition existing as of the date of the
execution hereof, subject to all applicable zoning, municipal, county and state
laws, ordinances, and regulations governing and regulating the use of the
Premises, and accepts this Sublease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto Sublessee acknowledges that neither
Sublessor nor Sublessor's agents have made any representation or warranty as to
the suitability of the Premises for the conduct of Sublessee's business.

7. Master Lease

7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter referred to as the "Master Lease", a copy of which is attached
hereto marked Exhibit 1, dated October 27, 1995 wherein Santa ▇▇▇▇ Corporate
Center Associates is the lessor, hereinafter referred to as the "Master Lessor".

7.2 This Sublease is and shall be at all times subject and subordinate to
the Master Lease.

7.3 The terms, conditions and respective obligations of Sublessor and
Sublessee to each other under this Sublease shall be the terms and conditions of
the Master Lease. Therefore, for the purposes of this Sublease, wherever in the
Master Lease the word "Lessor" is used it shall be deemed to mean the Sublessor
herein and wherever in the Master Lease the word "Lessee" is used it shall be
deemed to mean the Sublessee herein.

7.4 During the term of this Sublease and for all periods subsequent for
obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each, and every obligation of
Sublessor under the Master Lease except as otherwise set forth in Addendum No.
1.

7.5 The obligations that Sublessee has assumed under paragraph 7.4 hereof
are hereinafter referred to as the "Sublessee's Assumed Obligations". The
obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".

7.6 Sublessee shall hold Sublessor free and harmless of and from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.

7.7 Sublessor agrees to maintain the Master Lease during the entire term of
this Sublease, subject, however, to any earlier termination of the Master Lease
without the fault of the Sublessor, and to comply with or perform Sublessor's
Remaining Obligations and to hold Sublessee free and harmless of and from all
liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.

7.8 Sublessor represents to Sublessee that the Master Lease is in full
force and effect and that no default exists on the part of any party to the
Master Lease.

8. [Section omitted]

9. Consent of Master Lessor.

9.1 In the event that the Master Lease requires that Sublessor obtain the
consent of Master Lessor to any subletting by Sublessor then, this Sublease
shall not be effective unless, within 10 days of the date hereof, Master Lessor
signs this Sublease thereby giving its consent to this Subletting.

9.2 [Paragraph omitted]

9.3 In the event that Master Lessor does give such consent then:

(a) Such consent will not release Sublessor of its obligations or alter
the primary liability of Sublessor to pay the rent and perform and comply with
all of the obligations of Sublessor to be performed under the Master Lease.

(b) The acceptance of rent by Master Lessor from Sublessee or any one
else liable under the Master Lease shall not be deemed a waiver by Master Lessor
of any provisions of the Master Lease.

(d) In the event of any default of Sublessor under the Master Lease,
Master Lessor may proceed directly against Sublessor, any guarantors or any one
else liable under the Master Lease or this Sublease without first exhausting
Master Lessor's remedies against any other person or entity liable thereon to
Master Lessor.

(e) Master Lessor may consent to subsequent sublettings and assignments
of the Master Lease or this Sublease or any amendments or modifications thereto
without notifying Sublessor nor any one else liable under the Master Lease and
without obtaining their consent and such action shall not relieve such persons
from liability.

(f) In the event that Sublessor shall default in its obligations under
the Master Lease, then Master Lessor, at its option and without being obligated
to do so, may require Sublessee to attorn to Master Lessor in which event Master
Lessor shall undertake the obligations of Sublessor under this Sublease from the
time of the exercise of said option to termination of this Sublease but Master
Lessor shall not be liable for any prepaid rents nor any security deposit paid
by Sublessee, nor shall Master Lessor be liable for any other defaults of the
Sublessor under the Sublease.

9.4 The signatures of the Master Lessor and any Guarantors of Sublessor at
the end of this document shall constitute their consent to the terms of this
Sublease.

9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.

9.6 In the event that Sublessor defaults under its obligations to be
performed under the Master Lease by Sublessor, Master Lessor agrees to deliver
to Sublessee a copy of any such notice of default. Sublessee shall have the
right to cure any default of Sublessor described in any notice of default within
ten days after service of such notice of default on Sublessee. If such default
is cured by Sublessee then Sublessee shall have the right of reimbursement and
offset from and against Sublessor.

10. Brokers Fee.

10.1 After execution hereof by all parties and upon occupancy by Sublessee,
Sublessor shall pay to ▇▇▇▇▇▇ and Coppin Co. Inc., a licensed real estate
broker, (herein called "Broker"), a fee as set forth in a separate agreement
between Sublessor and Broker, or in the event there is no separate agreement
between Sublessor and Broker, the sum of $13,500 for brokerage services rendered
by Broker to Sublessor in this transaction.

10.2 Sublessor agrees that if Sublessee exercises any option or right of
first refusal granted by Sublessor herein, or any option or right substantially
similar thereto, either to extend the term of this Sublease, to renew this
Sublease, to purchase the Premises, or to lease or purchase adjacent property
which Sublessor may own or in which Sublessor has an interest, or if Broker is
the procuring cause of any lease, sublease, or sale pertaining to the Premises
or any adjacent property which Sublessor may own or in which Sublessor has an
interest, then as to any of said transactions Sublessor shall pay to Broker a
fee, in cash, in accordance with the schedule of Broker in effect at the time of
the execution of this Sublease. Notwithstanding the foregoing, Sublessor's
obligation under this Paragraph 10.2 is limited to a transaction in which
Sublessor is acting as a sublessor, lessor or seller.

10.3 [Paragraph omitted]

10.4 Any fee due from Sublessor or Master Lessor hereunder shall be due and
payable upon the exercise of any option to extend or renew, as to any extension
or renewal; upon the execution of any new lease, as to a new lease transaction
or the exercise of a right of first refusal to lease; or at the close of escrow,
as to the exercise of any option to purchase or other sale transaction.

10.5 Any transferee of Sublessor's interest in this Sublease, or of Master
Lessor's interest in the Master Lease, by accepting an assignment thereof, shall
be deemed to have assumed the respective obligations of Sublessor or Master
Lessor under this Paragraph 10. Broker shall be deemed to be a third-party
beneficiary of this paragraph 10.

11. Attorney's fees. If any party or the Broker named herein brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action, on trial and appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the Court. The
provision of this paragraph shall inure to the benefit of the Broker named
herein who seeks to enforce a right hereunder.

Al1 parties to the Sublease and the Broker agree to the Arbitration of Disputes
language attached as Exhibit E.

l2. Additional Provisions. [If there are no additional provisions draw a line
from this point to the next printed word after the space left here. If there are
additional provisions place the same here.]

Addendum #1
Exhibit A - Floor Plan
Exhibit C - Standard Lease Disclosure
Exhibit D - Agency Disclosure
Exhibit E - Arbitration of Disputes

If this Sublease has been filled in it has been prepared for submission to your
attorney for his approval. No representation or recommendation is made by the
real estate broker or its agents or employees as to the legal sufficiency, legal
effect, or tax consequences of this Sublease or the transaction relating
thereto.

Executed at
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on July 8, 1997 By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CEO
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address By
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-------------------------------------- "Sublessor" (Corporate Seal)

Executed at Arterial Vascular Engineering, Inc.
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on July 9, 1997 By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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address By General Counsel and Secretary
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-------------------------------------- "Sublessee" (Corporate Seal)

Executed at
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on
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address By
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-------------------------------------- "Master Lessor" (Corporate Seal)

-------------------------------------- "Guarantors"

NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are
utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION, ▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇-▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (213)
687-8777.

▇▇▇▇▇▇▇▇ # ▇

To Lease dated July 2, 1997 by and between
Sublessor Verticom, Inc., and Sublessee Arterial Vascular Engineering. Inc.

1. Tenant Improvement Scope:

Sublessor and Sublessee have approved plans and specifications covering the
layout of the premises and the scope of responsibility of the Tenant
Improvements between Sublessor and Sublessee as stipulated in lease, in the
Exhibit B of lease or Work Letter. Said approval shall be forthcoming
within thirty (30) days of acceptance hereof.

Sublessee to install Tenant Improvements in a quality good workmanlike
manner in accordance with approved plans and specification within sixty
(60) days of acceptance hereof.

Sublessor shall inspect said premises within three (3) business days of
completion to ascertain that Tenant Improvements have been installed in
accordance with plans and specifications. Sublessor shall provide a "punch
list" of items not in accordance with plans and specifications or not
installed in a good workmanlike manner. Sublessee shall have thirty (30)
days to correct said punch list items.

Sublessee shall remove all mechanic's liens, and will satisfy all claims
and meet all contract requirements with suppliers, contractors and
employees arising out of said installation of improvements. Sublessee to
have ▇▇▇▇▇▇▇ compensation and liability insurance with a minimum $1,000,000
per occurrence for said installation and to name Sublessor additional
insured. Sublessee shall indemnify and hold harmless Sublessor for all
claims of employees, invitees, materialmen, supplier arising out of said
installation.

2. Financial Information

Sublessor has reviewed and approved financial statements regarding
Sublessee.

3. Permits

If required Sublessee will obtain a use permit and a wastewater discharge
permit from the appropriate municipality within thirty (30) days of
acceptance hereof. Sublessee shall use due diligence in pursuing such
permits and pay all costs associated with them. Sublessee shall have the
responsibility to maintain any use permits and to comply with all terms and
conditions of said use permits during the term of this Lease. If
Sublessee's application for a use permit is denied, Sublessor or Sublessee
may declare this lease void, in which event all deposits and prepaid rent
shall be returned to Sublessee.

4. Hazardous Waste

Sublessee has provided Sublessor with its MSDA on the following chemicals -
Isopropyl alcohol, Posphoric Acid, Nitric Acid, Synergy CCS, Eposy Resin
and Oxalic Acid which may be stored on site. Sublessor has reviewed and
approved the use of these materials in the premises.

"If Sublessee, his invitees, employees, agents or associates cause or allow
a spill, or contamination of the premises, common area, soil or surrounding
area, then it will be the responsibility of Sublessee to clean up said
hazard to the degree required and within the time frame set by any public
entity which has jurisdiction and particularly in response to the Super
Fund Act and Proposition 65."

5. Area Measurement:

Sublessee and Sublessor has reviewed and approved the system of
measurement, the useable and rentable square footage of the subject
premises.

6. Associations and Expenses:

Sublessee has reviewed and approved CC&R's, any common area association and
budget, rules, expenses, and use conditions pertaining thereto. Sublessee
is not required to make any payments for common area charges detailed in
Paragraph 11.4 of the Master Lease.

7. Rent:

This Sublease is on a Full Service Basis. There are no additional charges
in excess of the $12,500 per month rental charge contemplated by this
Sublease. The full service sublease includes the following services:
a. Janitorial service on every weekday (see janitorial below)
b. All utility services including sewer, water, electrical power, gas and
compressed air, (see utilities and facility requirements below).

All additional payments made by Sublessor to Masterlessor pursuant to the
terms of the Master Lease including the cost of property taxes (Paragraph
10.1), the cost of property insurance (Paragraph 8.2) and, the cost of
common area charges (Paragraph 11.4) shall remain the sole obligation of
the Sublessor.

8. Parking:

Sublessee shall be entitled to the use of sixty (60) parking spaces on an
unreserved basis free of charge.

9. Facility Requirements:

Sublessor shall provide the following services to the Sublessee:
a. Electrical - 225 amp, three phase supply; sublessee will distribute.
b. Compressed Air - ▇▇▇▇▇▇, ▇▇▇ system, maximum 520 SCFH @ 120 PSI
c. Temperature and humidity support equipment to be furnished and
maintained by Verticom to achieve 68 to 73 degrees and 20%-70% relative
humidity.
d. 10" exhaust duct, AVE to supply fan and roof penetration.

While every possible attempt will be made to guarantee that all services,
facilities and systems are available for use by AVE at all times, VertiCom
will not be responsible for any charges or damages relating to mechanical
failure, system performance issues, maintenance downtime or any other
conditions that would temporarily prevent the services from being available
to AVE.

10. Janitorial Services:

Sublessor to provide Sublessee with daily janitorial service i.e., Monday
through Friday with a monthly expense cap of $1,200 per month. Any
specialized cleaning materials related to AVE's clean room operation will
be funished by AVE.

11. Utilities:

Sublessor shall provide Sublessee with all standard business park
utilities, however, electrical service shall be capped at $2,500 per month.
Any excess electrical charge attributable to AVE occupancy shall be paid by
AVE as additional rent with the following months rental payment.

12. Early Access:

Upon full execution of the Sublease Agreement, issuance of an insurance
certificate and payment of prepaid rent and security deposit, AVE will be
allowed access to the sublet premises to design and construct the proposed
interior improvements.

13. Roll-up Door Access:

Verticom to approve the use of the shipping and receiving docks by AVE for
the movement of large pieces of equipment with prior notification and
according to security procedures. No shared use of space is contemplated by
this Sublease.

Agreed by: Sublessee: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date: 7/9/97
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Agreed by: Sublessor: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: 7/8/97
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Chairman & CEO

WORK LETTER
EXHIBIT B 1

Arterial Vascular Engineering, Inc. (AVE) and Verticom, Inc. (VI) are executing
simultaneously with this Letter Agreement, the written lease to which this
Letter Agreement is attached covering the premises described in said lease
(hereinafter called "the premises").

To induce AVE to enter into said lease (which is hereby incorporated by
reference to the extent that the provisions of this agreement may apply thereto)
and in consideration of the mutual covenants hereinafter contained, VI and AVE
mutually agree as follows:

1. AVE PLANS AND SPECIFICATIONS

(a) Except to the extent otherwise provided in subparagraphs (b) and (c) of this
paragraph, AVE agrees to furnish at its sole cost and expense, all
architectural, mechanical, and electrical engineering plans required for the
performance of the work herein below described, including complete detailed
plans and specifications for Lessee's partition layout, reflective ceiling,
heating and air conditioning, electrical outlets and switches and telephone
outlets. ▇▇▇▇ ▇▇▇▇▇ of Glass Architecture has been retained to perform
architectural services. A preliminary space plan has been attached as Exhibit
B2.
The layout shall be approved by each of the parties hereto and attached to this
lease and shall become a part thereof and shall be described as Exhibit B2.

(b) It is understood and agreed that any interior decorating service, such as
selection of special wall coverings, fixtures, carpeting, and any or all other
decorator items required by Lessee in the performance of said work referred to
hereinabove in subparagraph (a) shall be at AVE's sole cost and expense.

(c) It is understood and agreed that all plans and specifications referred to
hereinabove in subparagraph (a) are subject to VI's approval, which VI agrees
shall not be unreasonably withheld. It is also understood that VI is not making
any improvements to the premises and that the space is to be subleased on an
"as-is" basis except for seismic bracing of T-bar ceiling.

2. IMPROVEMENT WORK

AVE to install improvements in a good workmanlike manner and in accordance with
the City approved plans and specifications. AVE to proceed diligently with said
installation so as to meet the occupancy date stipulated in the lease. If AVE
encounters third party delays in completion of the improvements, and as long as
AVE maintains a best efforts basis to complete construction, then the occupancy
date and lease commencement date shall be extended by the amount of such delay.

A general contractor's cost breakdown is provided as Exhibit B3 for a scope of
work reference.

Upon termination of the Sublease, VI shall have the right to have AVE restore
the sublet premises to its original condition except for the toilet
improvements. AVE shall have the right to remove its trade fixtures including
clean room, HEPA filters, duct fan, chiller, office furniture, etc. AVE will
repair all damage caused by said removal.

SUBLESSOR SUBLESSEE

/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT B2
Preliminary Space Plan

[GRAPHIC OMITTED]

LEASING DISCLOSURE REGARDING
REAL ESTATE AGENCY RELATIONSHIP

When you enter into a discussion with a real estate agent regarding a real
estate transaction, you should from the outset understand what type of agency
relationship or representation you wish to have with the agent in the
transaction.
SUBLESSOR'S AGENT
A Sublessor's agent under a listing agreement with the Sublessor acts as the
agent for the Sublessor. A Sublessor's agent or a subagent of that agent has the
following affirmative obligations:
To the Sublessor:
(a) A fiduciary duty of utmost care, integrity, honesty and loyalty in dealing
with the Sublessor.
To the Sublessee and the Sublessor:
(a) Diligent exercise of reasonable skill and care in performance of the agent's
duties.
{b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecting the
value or desirability of the property that are not known to, or within the
diligent attention and observation of, the parties.

An agent is not obligated to reveal to either party any confidential information
obtained from the other party which does not involve the affirmative duties set
forth above.
SUBLESSEE'S AGENT
A Sublessee's agent can, with a Sublessee's consent, agree to act as agent for
the Sublessee only. In these situations, the agent is not the Sublessor's agent,
even if by agreement the agent may receive compensation for services rendered,
either in full or in part from the Sublessor. An agent acting only for a
Sublessee has the following affirmative obligations.
To the Sublessee:
(a) A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings
with the Sublessee.
To the Sublessee and the Sublessor:
(a) Diligent exercise of reasonable skill and care in performance of the agent's
duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecting the
value or desirability of the property that are not known to, or within the
diligent attention and observation of, the parties.

An agent is not obligated to reveal to either party any confidential information
obtained from the other party which does not involve the affirmative duties set
forth above.
AGENT REPRESENTING BOTH SUBLESSOR AND SUBLESSEE
A real estate agent, either acting directly or through one or more associate
licensees, can legally be the agent of both the Sublessor and the Sublessee in a
transaction, but only with the knowledge and consent of both the Sublessor and
the Sublessee.

In a dual agency situation, the agent has the following affirmative obligations
to both the Sublessor and the Sublessee.

(a) A fiduciary duty of utmost care, integrity, honest and loyalty in the
dealings with either Sublessor or Sublessee.
(b) Other duties to the Sublessor and the Sublessee as stated above in their
respective sections.

In representing both Sublessor and Sublessee, the agent may not, without the
express permission of the respective party, disclose to the other party that the
Sublessor will accept a rent less than the listed rent or that the Sublessee
will pay a rent greater than the rent offered.

The above duties of the agent in a real estate transaction do not relieve a
Sublessor or Sublessee from the responsibility to protect their own interests.
You should carefully read all agreements to assure that they adequately express
your understanding of the transaction. A real estate agent is a person qualified
to advise about real estate. If legal or tax advice is desired, consult a
competent professional.

You should read its contents each time it is presented to you, considering the
relationship between you and the real estate agent in your specific transaction.

We acknowledge receipt of a copy of this disclosure.

Sublessor/Sublessee /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date 7/8/97
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Sublessor/Sublessee /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date 7/9/97
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================================================================================
SIGN BELOW TO AUTHORIZE TYPE OF AGENCY

▇▇▇▇▇▇ & ▇▇▇▇▇▇ Company, Inc., is the agent of (check one).
(Name of Listing Agent)
The Sublessor exclusively; or
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X Both the Sublessee and Sublessor
-----

CONFIRMED AND AUTHORIZED:

Sublessor /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date 7/8/97
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Sublessor Date
----------------------------- ---------------

Agent By Date
----------------------------------------- -------- ---------------
--------------------------------------------------------------------------------
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Company, Inc., is the agent of (check one):
(Name of Sublessee's agent)
The Sublessee exclusively; or
-----
The Sublessor exclusively; or
-----
X Both the Sublessee and Sublessor
-----

CONFIRMED AND AUTHORIZED:

Sublessee /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date 7/9/97
----------------------------- ---------------
Sublessee Date
----------------------------- ---------------

Agent By Date
----------------------------------------- -------- ---------------

EXHIBIT E

ARBITRATION OF DISPUTES

FOR LEASE

Any dispute or claim in law or equity arising out of this contract or any
resulting transaction shall be decided by neutral binding arbitration in
accordance with the rules of the American Arbitration Association, and not by
court action except as provided by California law for judicial review of
arbitration proceedings. Judgment upon the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof. The parties shall have
the right to discovery in accordance with Code of Civil Procedure Section
1283.05. The following matters are excluded from arbitration hereunder: (a) a
judicial or non-judicial foreclosure or other action or proceeding to enforce a
deed of trust, mortgage, or real property sales contract as defined in Civil
Code Section 2985, (b) an unlawful detainer action, (c) the filing or
enforcement of a mechanic's lien, (d) any matter which is within the
jurisdiction of a probate court, or small claims court, or an action for bodily
injury or wrongful death, or for latent or patent defects to which Code of Civil
Procedure Section 337.1 or Section 337.15 applies. The filing of a judicial
action to enable the recording of a notice of pending action, for order of
attachment, receivership, injunction, or other provisional remedies, shall not
constitute a waiver of the right to arbitrate under this provision.

Any dispute or claim by or against broker(s) and/or associate licensee(s)
participating in this transaction shall be submitted to arbitration consistent
with the provision above only if the broker(s) and/or associate licensee(s)
making the claim or against whom the claim is made shall have agreed to submit
it to arbitration consistent with this provision.

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

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

( ) (/s/ LF) Lessee agrees ( ) ( ) Lessee does not agrees
---- ------- ---- ----
( ) (/s/ DGD) Lessor agrees ( ) ( ) Lessor does not agrees
---- ------- ---- ----
( ) (/s/ FR) Lessee's Broker agrees
---- -------
( ) ( ) Lessor's Broker agrees
---- -------

Exhibit B3
▇▇▇▇ ▇▇▇▇▇▇ Construction, Inc.
--------------------------------------------------------------------------------
Contractors License No. 550323 ▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ 5/30/97
(▇▇▇)▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

COST BREAKDOWN NOTES/CHANGES
Job: Applied Vascular Engnieering Circadian Way
------------------------------------------------------------------------------------------------------------------------------------
Item Cost

1. Walls - complete $18,236. Framing, insulation and sheetrock, patching as required
2. HVAC $2,000. Allowance for duct relocation and restroom exhaust
3. Electrical $4,100. Allowance for light relocation, plugs, phone jacks and power poles in open areas
4. Acoutsic Ceiling $2,100. Vinyl tiles in clean room, gown and wash areas
5. Fire Sprinklers $1,550. Additional heads at new walls - allowance
6. Doors, Hdwr & Trim $4,430. Relocated doors and frames from Skylane
7. Interior glass $504. Tempered panels and new windows
8. Mini-blinds $0.
9. Cabinets & Shelves $540. Restroom counters
10. Painting $3,876. Paint new walls, doors and frames
11. Wallcovering $0.
12. Plumbing $8,500. Restroom plumbing allowance
13. Carpet/flooring/base $5,000. Patch VCT throughout, new rubber base at new walls - allowance
14. Restroom partitions $2,400.
15. Restroom accessories $1,500.
16. 0 $0.
17. Clean Room allowance $26,000. $15/sq.ft. allowance for clean room related HVAC, electrical and gas/air
18. 0 $0.
19. Concrete cut / patch $780. For restroom plumbing
20. Demolition $858. Wall cap, some walls, minimal floor areas
21. Dumpsters $280.
22. Lift rental $0.
23. Clean up $1,500.
24. Contingency $5,000. 5% for siesmic retrofit on grid and other unknowns.

25. Sub-contract Total $89,154.

26. Supervision and misc. $4,458.
27. Overhead and Profit $8,915.

28. Total of D.B.C. Costs $102,527.
29. Architertural/permit $0.
-----------------------------------------------------------------------------------------------------
30. ***TOTAL COST $102,527.

EXHIBIT C

STANDARD LEASE DISCLOSURE ADDENDUM

Notice to Owners, Buyers and Tenants Regarding Hazardous Waste or Substances
and Underground Storage Tanks

Comprehensive federal and state laws and regulations have been enacted in the
the last few years in an effort to develop controls over the use, storage,
handling, cleanup, removal and disposal of hazardous wastes or substances. Some
of these laws and regulations, such as, for example, the so-called "Super Fund
Act", provide for broad liability schemes wherein an owner, tenant or other user
of the property may be liable for cleanup costs and damages regardless of fault.
Other laws and regulations set standards for the handling of asbestos or
establish requirements for the use, modification, abandonment, or closing of
underground storage tanks.

It is not practical or possible to list all such laws and regulations in this
Notice. Therefore, lessors and lessees are urged to consult legal counsel to
determine their respective rights and liabilities with respect to the issues
described in this Notice as well as other aspects of the proposed transaction.
If various materials that have been or may be in the future determined to be
toxic, hazardous or undesirable, or are going to be used, stored, handled or
disposed of on the property, or if the property has or may have underground
storage tanks for storage of such hazardous materials, or that such materials
may be in the equipment, improvements or soil, it is essential that legal and
technical advice be obtained to determine, among other things, what permits and
approvals have been or may be required, if any, the estimated costs and expenses
associated with the use, storage, handling, cleanup, removal or disposal of the
hazardous wastes or substances and what contractual provisions and protection
are necessary or desirable. It may also be important to obtain expert assistance
for site investigations and building inspections. The past uses of the property
may provide valuable information as to the likelihood of hazardous wastes or
substances, or underground storage tanks being on the property.

The term "hazardous wastes or substances" is used in this Notice in its very
broadest sense and includes, but is not limited to, all those listed under
Proposition 65, petroleum base products, paints and solvents, lead, cyanide,
DDT, printing inks, acids, pesticides, ammmonium compounds, asbestos, PCBs and
other chemical products. Hazardous wastes or substances and underground storage
tanks may be present on all types of real property. This Notice is, therefore,
meant to apply to any transaction involving any type of real property, whether
improved or unimproved.

Although ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Co., Inc. or its salespeople, will disclose any
knowledge it actually possesses with respect to the existence of hazardous
wastes or substances, or underground storage tanks on the property, ▇▇▇▇▇▇ &
Coppin Co., Inc. has not made investigations or obtained reports regarding the
subject matter of this Notice, except as may be described in a separate written
document, studies or investigation by experts. Therefore, unless there are
additional documents or studies attached to this notice, lease or contract, this
will serve as notification that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Co., Inc. or its salespeople
make no representation regarding the existence or non-existence of hazardous
wastes or substances, or underground storage tanks on the property. You should
contact a professional, such as a civil engineer, geologist, industrial
hygienist or other persons with experience in these matters to advise you
concerning the property.

Americans with Disabilities Act (ADA)

On July 26, 1991, the federal legislation known as the Americans with
Disabilities Act (ADA) was signed into law by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. The purpose of the
ADA is to integrate persons with disabilities into the economic and social
mainstream of American life. Title III of the ADA applies to Lessors and Lessees
of "places of public accommodation" and "commercial facilities", and requires
that places of public accommodation undertake "readily achievable" removal of
communication and access barriers to the disabled. This requirement of Title III
of the ADA is effective January 26, 1992.

It is important that building owners identify and undertake "readily achievable"
removal of any such barriers in the common areas, sidewalks, parking lots and
other areas of the building under their control.

The lessor and lessee is responsible for compliance with ADA relating to removal
of barriers within the workplace i.e., arrangement of interior furnishings and
access within the premises, and any improvements installed by lessor and lessee.

▇▇▇▇▇▇ & ▇▇▇▇▇▇ Company, Inc. recommends that both parties seek expert advice
regarding the implications of the Act as it affects this agreement.

▇▇▇▇▇▇▇-▇▇▇▇▇▇:

"The property which is the subject of this contract may be situated in a Special
Study Zone as designated under the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Geologic Hazard Act, Sections
2621-2625, inclusive, of the Caifornia Public Resources Code; and, as such, the
construction or development on this property of any structure for human
occupancy may be subject to the findings of geologic report prepared by a
geologist registered in the State of California, unless such report is waived by
the City or County under the terms of that act. No representations on the
subject are made by the lessor or agent, and the lessee should make his own
inquiry or investigation".

Flood Hazard Area Disclosure:

The subject property may be situated in a "Special Flood Hazard Area" as set
forth on a Federal Emergency Management Agency (FEMA) "Flood Insurance Rate Map"
(FIRM) or "Flood Hazard Boundary Map" (FHBM). The law provides that, as a
condition of obtaining financing on most structures located in a "Special Floods
Hazard Area", lender requires flood insurance where the property or its
attachments are security for a loan. Lessee should consult with experts
concerning the possible risk of flooding.

Acknowledgment:

Lessee: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date: 7/9/97
------------------------ ------------

Lessor: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: 7/8/97
------------------------ ------------

INDUSTRIAL LEASE

BETWEEN

Santa ▇▇▇▇ Corporate Center Associates

as LANDLORD

and

Verticom, Inc.

as TENANT

TABLE OF CONTENTS

PAGE

Defined Terms .................................... ii
Article 1. Parties ................................................... 1
Article 2. Premises .................................................. 1
Article 3. Term ...................................................... 1
Article 4. Rent ...................................................... 1
Article 5. Security Deposit .......................................... 3
Article 6. Use ....................................................... 3
Article 7. Maintenance, Repairs and Alterations ...................... 4
Article 8. Insurance; Indemnity ...................................... 7
Article 9. Damage or Destruction ..................................... 9
Article 10. Real Property Taxes ....................................... 10
Article 11. Common Areas .............................................. 11
Article 12. Utilities ................................................. 12
Article 13. Assignment and Subletting ................................. 12
Article 14. Defaults; Remedies ........................................ 14
Article 15. Condemnation .............................................. 16
Article 16. General Provisions ........................................ 16
Article 17. Performance Bond ...... ................................... 18
Article 18. Brokers ................................................... 18
Article 19. Interest on Past Due Obligations .......................... 19
Article 20. Interest Rate ............................................. 19
Article 21. Signs, etc. ............................................... 19
Article 22. Notices ................................................... 19
Article 23. Control of Lease Over Laws of General Application ......... 19

EXHIBIT A Map showing Park and Premises
EXHIBIT B Sign Criteria
EXHIBIT C Subordination, non-disturbance and Attornment Agreement
ADDENDUM 1 Hazardous Materials

DEFINED TERMS

Defined Term Article in which Defined
Additional Rent ........................................................... 4.4
Adjustment Dates .......................................................... 4.3
Base Rent ................................................................. 4.2
Commencement Date ......................................................... 3.1
Common Areas ............................................................. 11.1
Condemnation .............................................................. 15
Consumer Price Index ...................................................... 4.3
Interest Rate ............................................................. 20
Landlord ........................................................... 1 and 16.2
Landlord Delay .......................................................... 3.2(d)
Option Period ............................................................. 3.4
Option Period Adjustment Dates .......................................... 4.5(b)
Park ...................................................................... 2
Preliminary Improvement Plan ............................................ 7.6(c)
Premises .................................................................. 2
Real Property Tax ........................................................ 10.2
Special Improvements .................................................... 7.6(a)
Target Date ........................ ...................................... 3.1
Tenant .................................................................... 1
Tenant Allowance ........................................................ 7.6(a)
Tenant Allowance Termination Date ....................................... 4.2(b)
Tenant Delay ............................................................ 3.2(c)
Third Party Delay ....................................................... 3.2(b)
Toxic Materials ........................................................... 6.3

INDUSTRIAL LEASE

-- MODIFIED NET --

1. Parties. This lease, dated for reference purposes only October 27, 1995, is
made by and between Santa ▇▇▇▇ Corporate Center Associates, a general
partnership (hereinafter called "Landlord"), and Verticom Inc., a California
Corporation (hereinafter called "Tenant").

2. Premises. Landlord hereby Leases to Tenant and Tenant Leases from Landlord
for the term, at the rental, and upon all of the conditions set forth herein,
that certain real property situated in the City of Santa ▇▇▇▇, County of Sonoma,
State of California, and described as approximately 47,938 square feet, known as
Building B and located in the complex of office/research and development
buildings and related Common Areas (as hereinafter defined) commonly known as
Santa ▇▇▇▇ Corporate Center and more particularly described as assessor's Parcel
No. ▇▇▇-▇▇▇-▇▇▇ (such complex hereinafter referred to as the "Park") Said
Building B, or portion thereof, is herein called the "Premises." The address of
the Premises is 1201 Corporate Center Parkway. A map showing the Park and
Premises outlined in blue is attached hereto as EXHIBIT A and by this reference
made a part hereof.

3. Term

3.1 Term. The term of this Lease shall be for One-Hundred-Twenty ( 120 )
months, unless sooner terminated pursuant to any provision hereof. The term
shall commence on December 15, 1995 (hereinafter referred to as the
"Commencement Date"), notwithstanding the fact that the Special Improvements to
the Premises (as defined in Section 7.6) may not be completed by said date.

3.2 Intentionally Omitted

3.3 Possession. Tenant shall be entitled to possession of the Premises
immediately upon commencement of the term of this lease, provided, however, that
Tenant shall be granted early access to the Premises upon mutual execution of
this Lease for the purpose of installing the Special Improvements as provided
for in Section 7.6 hereof. Any such early access shall be subject to the terms,
provisions and conditions of this Lease (except for the payment of Base Rent,
Common Area Charges and Real Property Taxes and (a) Tenant shall indemnify
Landlord with respect to all claims arising out of such access and provided in
Article 8.7, and (b) Tenant shall, prior to such access, deliver to Landlord a
certificate evidencing the existence and amount of insurance policies which
fulfill the requirements set forth in Article 8 but which, in addition, commence
prior to such early access and insure Landlord and Tenant against any liability,
loss or damage arising out of such early access. It is specifically acknowledged
and agreed that Tenant shall be responsible for the payment of utilities (as
defined in Section 12) during any such period of early access.

3.4 Intentionaily Omitted.

4. Rent

4.1 Time and Manner of Payment. Except as provided in the last sentence of
this Article 4.1, no Base Rent shall be due and owing hereunder until on and
after the Commencement Date. Tenant shall pay the monthly Base Rent for the
Premises in advance upon the Commencement Date and thereafter on the first day
of each month of the term hereof. All rentals shall be paid to Landlord, without
deductions of offset, in lawful money of the United States of America, at the
address set forth herein for delivery of notices to Landlord, or to such other
person or at such other place as Landlord may from time to time designate in
writing. Base Rent for any period during the term hereof which is for less that
one (1) month shall be a pro-rata portion of the monthly installment. Upon the
execution of this Lease, Tenant shall pay Landlord the sum of Thirty-Eight
Thousand Three Hundred-Fifty Dollars and Forty Cents ($ 38,350.40 ) as advance
payment of Base Rent for the first month of the initial term hereunder.

4.2 Base Rent

(a) Subject to the rent adjustment provisions of Articles 4.2(b) and
4.3 hereof, Tenant shall pay to Landlord, without notice from Landlord, Base
Rent each month as follows (such rent, as adjusted from time to time hereunder,
hereinafter referred to as "Base Rent"):

MONTHS BASE RENT
------ ---------

1-120 $38,350.40 (subject to adjustment as
provided in Section 4.3.)

(b) Tenant shall be responsible from and after the Commencement Date
for all other items payable by Tenant hereunder whether or not such items are
designated as Additional Rent (defined in Article 4.4).

4.3 Adjustment of Base Rent During Initial Term. The Base Rent payable
hereunder shall be subject to an upward adjustment during the initial term of
this Lease on the following dates (the "Adjustment Dates"):

December 15, 1998 (thirty-seventh month) and December 15, 2001 (seventy-third
month).

The Base Rent payable hereunder shall be increased on each of the Adjustment
Dates to an amount determined by multiplying $38,350.40 by a fraction, the
numerator of which shall be the average of the three most recent monthly
Consumer Price Index (as hereinafter defined) figures published prior to the
date of such adjustment, and the denominator of which shall be the average of
the three most recent monthly Consumer Price Index figures published prior to
the Commencement Date; provided, however, that in no event shall the Base Rent
for any month be less than the Base Rent for the immediately preceding month,
nor shall the amount of the increase at each Adjustment Date be greater than
115% of the Base Rent Payable immediately prior to such Adjustment Date. As used
herein, the term "Consumer Price Index" shall mean the monthly United States
Department of Labor's Bureau of Labor Statistics Consumer Price Index, All Urban
Wage Earners and Clerical Workers, All Items, for San Francisco-Oakland (1967
equals 100). Should Landlord lack sufficient data to make the determination
specified in this section on the date of any such adjustment, Tenant shall
continue to pay the monthly Base Rent payable immediately prior to such
Adjustment Date. As soon as Landlord obtains the necessary data, it shall
determine the Base Rent payable from and after such Adjustment Date and notify
Tenant of the adjustment in writing. Should the monthly Base Rent for the period
following such Adjustment Date exceed the amount previously paid by Tenant for
such period, Tenant shall forthwith pays the difference to Landlord. If the
Consumer Price Index is changed so that the base year differs from that used as
of the month immediately preceding the Commencement Date, the Consumer Price
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor's Bureau of Labor Statistics. If the
Consumer Price Index is discontinued or revised during the term of this Lease,
such other government index or computation with which it is replaced shall be
used in order to obtain substantially the same result as would be obtained if
the Consumer Price Index had not been discontinued or revised.

4.4 Net Rental. Landlord shall receive the Base Rent set forth in this
Lease free and clear of any and all taxes (other than withholding taxes or
income taxes), utilities, insurance premiums described in Article 8, Common Area
charges described in Article 11.4, impositions, liens, charges or other expenses
of any nature whatsoever in connection with the ownership and operation of the
Premises during the term of this Lease. All such charges and expenses shall be
deemed additional rent ("Additional Rent") hereunder and upon the failure of
Tenant to pay any of such charges or expenses Landlord shall have the same
rights and remedies as otherwise provided in this Lease for the failure of
Tenant to pay Base Rent. In addition to the foregoing charges and expenses,
Tenant shall reimburse to Landlord as Additional Rent Landlord's cost of
administration and management of this Lease and the Common Areas, to be paid at
such time as other Additional Rent is required hereunder to be paid up to a
maximum amount of $300.00 per month.

5. Security Deposit. Upon execution of this lease, Tenant shall deliver to
Landlord a security deposit in the amount of $651,956.80 (Initial Security
Deposit), as security for Tenants performance of all of Tenant's covenants and
obligations under this Lease; provided, however, that said Initial Security
Deposit shall not be deemed an advance rent deposit or an advance payment of any
other kind, or a measure of Landlord's damage upon Tenant's default. If Tenant
fails to pay Base Rent or Additional Rent as required hereunder, or otherwise
defaults with respect to any provision of this Lease, Landlord may use, apply or
retain all or any portion of said Initial Security Deposit for the payment of
any Base Rent or Additional Rent in default or for the payment of any other sum
which Landlord may become obligated by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer thereby,
including without limitation, the cleaning, restoration and repair of the
Premises. Landlord and Tenant agree that the Initial Security Deposit shall be
invested in an interest bearing "money market" account in the name of the
Landlord and shall be deposited at a interest rate and with a banking
institution of Landlord's choice, both in Landlord's sole and absolute
discretion. Tenant acknowledges that preservation of the principal balance of
the Initial Secuirty Deposit is an important consideration with respect to its
investment, and as such, Tenant hereby waives any claims, past, present or
future with respect to the method of investment of the Initial Security Deposit,
including, but not limited to, any claim that alternative investment options may
have earned a higher rate of interest; provided, however, that Landlord shall
bear all risk with respect to any loss or reduction in the principle balance of
the Initial Security Deposit.

Provided that (i) Tenant is not in breach of or in default under the Lease and
there exists no act or omission on the part of Tenant which, with the passage of
time or the giving of notice, or both would constitute a breach of or default
under the Lease, and (ii) the Initial Security Deposit has not been used,
applied or retained by Landlord pursuant to the foregoing provisions of this
Article 5, then (a) as and when the monthly installments of Base Rent come due
with respect to each of the second (2nd) through seventeenth (17th) months of
the Term, the Initial Security Deposit shall be reduced by the amount of
$38,350.40 and such amount will be applied as a credit to pay the respective
monthly installments of Base Rent as and when they become due during the second
(2nd) through the seventeenth (17th) months of the Term and (b) as and when the
monthly installment of Base Rent comes due with respect to the eighteenth (18th)
month of the Term, the entire remaining balance (including interest earned
thereon) of the Initial Security Deposit shall be disbursed to Tenant (as
opposed to being applied as a credit against Base Rent) provided; however, that
said disbursement shall be conditioned upon Tenant first providing Landlord a
cash deposit in the amount of $38,350.40 (Replacement Security Deposit), as
security for Tenant's continued faithful performance of all of Tenant's
covenants and obligations under this Lease. Landlord shall not be required to
keep said $38,350.40 Replacement Security Deposit as a separate fund, but may
commingle it with other funds. If Tenant performs all of Tenant's obligations
hereunder, said Replacement Security Deposit or so much as has not theretofore
been applied by Landlord, shall be returned, without payment of interest or
other increment for its use, to Tenant (or, at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) within thirty (30) days after
the expiration of the term hereof, or after Tenant has vacated the Premises,
whichever is later.

6. Use.

6.1 Use. The premises shall be used and occupied only for research and
development, manufacturing, warehousing, sales, general office and related uses
and for no other purpose without prior written consent of Landlord, which
consent may be withheld or conditioned as Landlord may deem appropriate within
the exercise of its sole discretion. Tenant shall at its own cost and expense
obtain any and all licenses and permits necessary for any such use.

6.2 Compliance with Law. Tenant shall, at Tenant's expense, comply promptly
with all applicable statutes, ordinances, rules, regulations, orders, and
requirements in effect during the term of any part of the term hereof regulating
the use by Tenant of the Premises; provided that Tenant shall not be responsible
for making any structural changes to the Building that may be required by
applicable laws, unless such changes are necessitated by Tenant's acts, by
Tenant's business or use of the Premises or by improvements made by or for
Tenant. Tenant shall not use or permit the use of the Premises in any manner
that will tend to create waste or a nuisance or which shall tend to unreasonably
disturb other tenants in the Park.

6.3 Hazardous Materials. See Addendum I.

6.4 Condition of Premises. Tenant hereby accepts the Premises in their
condition existing as of

the date of the possession hereunder, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and
regulating the use of the Premises, and accepts this Lease subject thereto and
to all matters disclosed thereby and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business.

6.5 Landlord's Rules and Regulations. Tenant shall faithfully observe and
comply with the reasonable, nondiscriminatory rules and regulations that
Landlord shall from time to time promulgate. Landlord reserves the right from
time to time to make all reasonable modifications to said rules and regulations.
The additions and modifications to those rules and regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the nonperformance of any of said rules and
regulations by any other tenants or occupants provided that Landlord shall use
reasonable efforts to enforce such compliance. Notwithstanding any other
provision of this Article 6.5, Tenant shall in all events comply with all rules
and regulations of Landlord designed to maintain the first-class image and
aesthetically attractive nature of the Park.

7. Maintenance, Repairs and Alterations.

7.1 Landlord's Obligations. Subject to the limitations on Landlord's
obligations as set forth in Article 9, and except for damage caused by any
negligent or intentional act or omission of Tenant, Tenant's agents, employees,
or invitees, Landlord, at Landlord's expense, shall keep in good order,
condition and repair the structural components of the (i) foundations, (ii)
exterior walls and (iii) roof of the Premises. Notwithstanding the foregoing,
Landlord shall not be responsible for any such maintenance, upkeep or repairs of
the Premises to the extent that the same may be made necessary by or arise from
Tenant's placement or servicing of, or other activities in relation to the
location of, equipment on the roof (or penetration of the roof by such
equipment) of the Premises (regardless of Tenant's having obtained, prior to the
placement of any such equipment, the written approval of Landlord in accordance
with Article 7.5 hereof), and Tenant shall be solely responsible for and shall
pay the full cost of any such maintenance, upkeep or repairs. Landlord shall be
obligated to paint such exterior walls as reasonably required, in Landlord's
sole judgement. Landlord shall not be required to maintain the interior surface
of exterior walls, windows, doors or place glass. In the event Landlord paints
the exterior walls of the Premises, Landlord shall pay the costs thereof
provided, that if the painting of such walls is made necessary because of
Tenant's extraordinary or any acts of Tenant or its agents, employees,
independent contractors, quests or invites use of the Premises or Tenant's
failure to exercise ordinary care in its use and occupation of the Premises, all
of Landlord's costs and expenses in connection with painting the exterior walls
shall be borne by Tenant and shall become due and payable as Additional Rent
together with Tenant's next rental installment. Landlord shall make repairs
under this Article 7.1 within a reasonable time after receipt of written notice
of the need for such repairs, which notice Tenant shall give promptly after it
becomes aware of the need for such repairs. Tenant expressly waives the benefits
of any statute now or hereafter in effect which would otherwise afford Tenant
the right to make repairs at Landlord's expense, to deduct the cost of repairs
from Base Rent payable to Landlord or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and repair.

7.2 Tenant's Obligations. Subject to the provisions of Article 7.1 and
Landlord's obligations under Article 9, Tenant, at Tenant's expense, shall keep
in good order, condition and repair the Premises and every part thereof
(regardless of whether the damaged portion of the Premises or the means of
repairing the same are accessible to Tenant) including, without limiting the
generality of the foregoing, all plumbing, heating, air conditioning,
ventilating, electrical and lighting facilities and equipment within the
Premises fixtures, interior walls, ceilings, windows, doors, plate glass, and
roofing membrane and skylights located within the Premises and all truck loading
areas and tank farm areas adjacent to the Premises and other areas included
within the Premises,. Without limiting the generality of the foregoing, Tenant
shall be obligated to make such repair or alterations to the Premises
(including, without limitation, any improvements therein constructed by Tenant)
in compliance with all applicable statutes, ordinances, rules, regulations,
orders and requirements in effect during the term of this Lease, and such
repairs or alterations shall be constructed in a manner and with materials equal
to or better than the existing quality of the construction and materials of the
Premises and performed by a contractor approved by Landlord. At Tenant's sole
expense, Tenant shall hire and contract with a qualified heat, ventilation and
air conditioning maintenance service approved by Landlord to provide
inspections, repairs and maintenance of all such systems in the Premises. Such
inspections, repairs and maintenance shall be performed at a minimum frequency
of

once each quarter. Tenant shall provide Landlord with a copy of Tenant's
maintenance service contract.

7.3 Surrender. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in good condition,
broom clean, uninsured casualty losses not caused by Tenant or Tenant's agents
or employees, ordinary wear and tear and repair obligations of Landlord under
this Lease excepted. Tenant shall repair any damage to the Premises occasioned
by its use thereof, or by the removal of Tenant's trade fixtures, furnishings
and equipment pursuant to Article 7.5, which repair shall include the patching
and filling of holes and repair of structural damage.

7.4 Landlord's Rights. If Tenant fails to perform Tenant's obligations
under any provision of this Lease, Landlord may, at its option (but shall not be
required to), enter upon the Premises, after ten (10) days prior written notice
to Tenant or with no prior written notice of an emergency, and put the same in
good order, condition and repair or otherwise perform Tenant's obligations
hereunder, and the cost thereof (including, without limitation, Landlord's
out-of-pocket expenses and reasonable attorneys' fees) together with interest
thereon at the Interest Rate (as defined hereafter) shall, after Landlord
notifies Tenant of such cost, become due and payable as Additional Rent to
Landlord together with Tenant's next rental installment.

7.5 Alterations and Additions.

(a) Tenant shall not, without Landlord's prior written consent, which
consent shall not be unreasonably withheld, make any alterations, improvements,
or additions in, on, or about the Premises, except for non-structural
alterations not exceeding Five Thousand Dollars ($5,000) in cost. In the event
Tenant requests Landlord to consent to such alterations, improvements or
additions, Tenant shall submit such information as Landlord may require,
including but not limited to (i) plans and specifications, (ii) permits,
licenses and bonds and (iii) evidence of contractor's insurance coverage in the
types and amounts as Landlord shall deem appropriate. As a condition to giving
such consent, Landlord may require that Tenant remove any such alterations,
improvements, additions or utility installations at the expiration of the term,
and restore the Premises to their prior condition, which requirement may be
imposed by Landlord at the time of giving such consent.

(b) Before commencing any work relating to alterations, additions and
improvements affecting the Premises, Tenant shall notify Landlord in writing of
the expected date of commencement thereof. Landlord shall then have the right at
any time and from time to time to post and maintain on the Premises such notices
as Landlord reasonably deems necessary to protect the Premises and Landlord from
mechanics' liens, materialmen's liens, or any other liens. In any event, Tenant
shall pay, when due, all claims for labor or materials furnished to or for
Tenant at or for use in the Premises. Tenant shall not permit any mechanics' or
materialmen's liens to be levied against the Premises for any labor or material
furnished to Tenant or claimed to have been furnished to Tenant or to Tenant's
agents or contractors in connection with work of any character performed or
claimed to have been performed on the Premises by or at the direction of Tenant.

(c) Unless Landlord requires their removal, as set forth in Article 7.5
(a), all alterations, improvements, or additions which may be made on the
Premises shall become the property of Landlord and remain upon and be
surrendered with the Premises at the expiration of the term. Notwithstanding the
provisions of this Article 7.5(c), Tenant's machinery, equipment and trade
fixtures other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises or which otherwise constitutes
real property or a fixture under California law, shall remain the property of
Tenant and may be removed by Tenant subject to the provisions of Article 7.3.

(d) Notwithstanding the provisions of subparagraph (b) above, if any
mechanics' or materialmen's lien is levied against the Premises for any labor or
material furnished to Tenant or claimed to have been furnished to Tenant or to
Tenant's agents or contractors in connection with work of any character
performed or claimed to have been performed on the Premises by or at the
direction of Tenant, and Tenant contests in good faith the subject claim, then
Tenant shall cause such lien to be released of record within twenty (20) days of
Tenant's acquiring knowledge of its filing by payment or posting of a proper
bond. If Tenant has not caused the lien to be so released within such 20-day
period, Landlord, in addition to all other remedies provided in this Lease and
by law, shall have the right, but shall not be obligated, to cause the lien to
be released by such means as Landlord

deems proper, including payment of the claim giving rise to the lien. All
payments made and expenses incurred by Landlord in connection with lien shall be
considered Additional Rent pursuant to Article 14.5 below.

7.6 Special Improvements.

(a) Plans and Specifications. Tenant may cause the construction of
special improvements to the Premises ("Special Improvements), all in accordance
with the provisions set forth below.

Tenant shall deliver to Landlord preliminary plans ("Preliminary Plans"),
to be utilized in the preparation of final working drawings and specifications
for any Special Improvements. Promptly (but in no event less than three (3)
business days after its receipt of the Preliminary Plans), Landlord shall return
the same to Tenant marked and accompanied by comments and Landlord's required
revisions. Within five (5) days thereafter, Tenant shall submit two (2) sets of
revised Preliminary Plans, revised to reflect and conform to Landlord's comments
and requirements, to Landlord for its final review and approval. Within five (5)
days following Landlord's approval of the Preliminary Plans, Tenant shall cause
its architect to prepare and submit two (2) copies of working drawings and
specifications ("Working Plans") to Landlord for its review and approval.
Landlord shall advise Tenant promptly after landlord's receipt of the Working
Plans, but in no event less than three (3) business days after its receipt
thereof, of any required revisions. Within five (5) days thereafter, Tenant
shall submit two (2) copies of the revised Working Plans to Landlord for its
final review and approval.

Concurrently with the above review and approval process, Tenant shall
submit all plans and specifications to the City of Santa ▇▇▇▇ and other
applicable governmental agencies to obtain governmental approvals and issuance
of necessary permits and licenses to construct any Special Improvements as shown
on the Working Plans.

(b) Tenant shall cause the construction of any Special Improvements to be
carried out in compliance with the Working Plans and all applicable zoning laws
and regulations, applicable covenants, conditions, and restrictions, and
otherwise in compliance with the provisions of Article 7.2 of the Lease. Prior
to the commencement of construction, Tenant shall obtain course of construction
and builder's "all risk" insurance in such amounts and form as Landlord
requires, Liability insurance in the form and amounts required under the Lease,
and such performance bonds in form and amounts as Landlord requires.

Tenant shall cause the construction of any Special Improvements to be
carried out with such materials, equipment, contractors and subcontractors as
Tenant shall select, all of which shall be subject to Landlord's reasonable
approval. Within ten (10) days after the approval of the final Working Plans in
accordance with subparagraph (a) above or as soon as is reasonably possible
thereafter, Tenant shall submit to Landlord for its review and approval (i)
copies of all proposed construction contracts between Tenant and all contractors
and between such contractors and all subcontractors for any Special
Improvements, together with such background information on such contractors and
subcontractors as Landlord may require; (ii) a listing of the make, model, type,
grade, and all other characteristics requested by Landlord, of all materials,
equipment and fixtures which Tenant proposes to install in or use in connection
with any Special Improvements; and (iii) a budget setting forth in itemized
fashion the costs of all materials, equipment, fixtures, contractors,
subcontractors, laborers, permits, fees, licenses, and all other costs and
expenses Tenant proposes to incur in connection with the construction of any
Special Improvements (hereafter collectively any "Special Improvements Costs").
All such matters shall be subject to the approval of Landlord prior to the
commencement of construction of any Special Improvements, provided that Landlord
shall not unreasonably withhold its approval of any such matters and provided,
further, that Landlord's failure to respond in writing to Tenant's request for
approval of any such matter within five (5) business days shall be deemed to be
an approval of such matter.

Tenant shall have the responsibility to obtain all necessary construction
and building permits and licenses necessary for the construction of any Special
Improvements. Tenant shall cause construction of any Special Improvements in a
good and workmanlike manner in strict accordance with the approved Working
Plans. All Special Improvements Costs shall be paid for by and shall be the sole
responsibility of the Tenant, including without limitation all costs of
utilities, services and insurance on the Premises arising out of the
construction of the Special Improvements. All

construction of the Special Improvements shall be performed and completed lien
free, and Tenant hereby indemnifies and agrees to defend and hold Landlord and
the Premises free and harmless from any and all claims, losses, damages, actions
and causes of action as may be incurred as a result of work performed or
materials furnished in connection with construction of the Special Improvements.
Landlord shall have the right to post notices of non-responsibility prior to the
commencement of construction of the Special Improvements.

(c) Tenant may from time to time request and obtain change orders
during the course of construction of the Special Improvements, provided that:

(i) each such request shall be reasonable and in writing
signed by or on behalf of Tenant;

(ii) each such request shall not result in any major
structural change in the Building or Special Improvements;

(iii) Landlord shall have the right to approve or disapprove
any requested change order, which approval shall not be unreasonably withheld;

(iv) all costs arising out of any approved change order, if
any, shall be borne by Tenant;

(v) any resulting delay in the completion of the Special
Improvements arising out of such change order shall not delay or extend the
Commencement Date.

(d) Landlord agrees to provide Tenant an allowance, (the "Allowance"),
in the amount of Three-Hundred and Fifty-Thousand Dollars ($350,000) to defer
costs associated with occupation of the Building; use of the allowance to be at
the sole discretion of Tenant. Landlord to deliver the Three-Hundred and
Fifty-Thousand Dollars ($350,000) to Tenant within seven (7) business days from
deposit as required in paragraph 5.

(e) Throughout the course of construction of any Special Improvements,
Landlord shall have the unconditional right to review and inspect such
construction by and through its agents and employees, including without
limitation Landlord's Architect. If at any time Landlord disapproves of the
materials or workmanship of any Special Improvements by Tenant, Landlord shall
promptly give Tenant written notice thereof specifying the deficiencies or
defects therein. Upon receipt of any such notice, Tenant shall immediately
commence correction of the defect or deficiency in a manner and to a condition
acceptable to Landlord. Should Tenant fail to commence to complete any such
correction as herein provided, or should Landlord deliver to Tenant three (3) or
more such notices during the course of construction of any Special Improvements,
Landlord shall have the immediate right to order the discontinuance of any
further construction of any Special Improvements by or on behalf of Tenant, and
the Landlord may, but shall not be obligated to, complete the construction of
any such Special Improvements in accordance with the Working Plans. Should
Landlord elect to complete any Special Improvements as herein provided, Landlord
shall be entitled to recover the costs of completing said construction, and any
additional costs incurred in connection therewith shall be the obligation of and
shall be paid by Tenant within ten (10) days after written demand by Landlord.

8. Insurance; Indemnity.

8.1 Liability Insurance. Tenant shall obtain and keep in force during the
term of this Lease a policy of comprehensive public liability insurance insuring
Landlord and Tenant against any liability arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be in an amount of not less than Three Million Dollars
($3,000,000) combined single limit for injury or death of any person or persons
and damage to property on an occurrence basis. The limit of said insurance shall
not, however, limit the liability of Tenant hereunder. Said insurance policy
shall not be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord. In
the even the Premises constitute a part of a larger property said insurance
shall have a Landlord's Protective Liability endorsement attached thereto. If
Tenant shall fail to procure and maintain said insurance Landlord may, but shall
not be required to, procure and maintain the same, but at the expense of Tenant.
Tenant shall, prior to possession of the Premises, deliver to Landlord a
certificate evidencing the existence and amount of the public liability
insurance required hereunder. Tenant shall be responsible

for payment of any deductible amount required under such policy of insurance.

8.2 Property Insurance. Landlord shall obtain and keep in force during the
term of this Lease (i) a policy or policies of insurance covering loss or damage
to the Premises, in the amount of the full replacement value thereof, providing
protection against all peril included within the classification of fire,
extended coverage, vandalism, malicious mischief, special extended perils
(excluding earthquake and flood if not available at commercially reasonable
rates) (all risk) and sprinkler leakage, (ii) full coverage plate glass
insurance on the Premises, (iii) boiler machinery insurance on all boilers, air
conditioning equipment, and other pressure vessel systems located in, on, or
about the Premises with limits of not less than One Million Dollars ($1,000,000)
per occurrence, (iv) rent (including Additional Rent as specified in this Lease)
loss insurance in favor of Landlord insuring Landlord against any loss of rental
from damage or destruction of the Premises for a period of at least one year
from the date of such damage or destruction. Landlord may also obtain (but shall
not be obligated to do so) such other insurance as may be required by the
holder(s) of a mortgage or deed of trust on the Premises or by prudent property
management practices if available at commercially reasonable rates. Said
insurance shall provide for payment for loss thereunder to Landlord or to the
holder(s) of a mortgage or deed of trust on the Premises.

8.3 Personal Property Insurance. Tenant shall keep in force during the term
of this Lease insurance against loss or damage by fire and such other risk and
hazards as are insurable under present and future standard forms of fire and
extended coverage insurance policies, to the personal property, furniture,
furnishings and fixtures belonging to Tenant located in the Premises for not
less than 100% of the actual replacement value thereof. Tenant shall be
responsible for payment of any deductible amount required by this Article 8.3.

8.4 Insurance Policies. Insurance required hereunder shall be in companies
rated "A8" or better in "Best Insurance Guide" or as otherwise approved by
Landlord. Whether the insuring party under the provisions of this Article 8 is
Landlord or Tenant, Tenant shall, as Additional Rent for the Premises, pay the
cost of all insurance required hereunder. Tenant shall, within ten (10) days
following demand by Landlord, reimburse Landlord for the cost of insurance
obtained by Landlord. Tenant shall, forthwith upon Landlord's demand, reimburse
Landlord for any additional premiums attributable to any act or omission or
operation or Tenant causing such increase in the cost of insurance.

8.5 Waiver of Subrogation. Subject to first obtaining approval of the
insurer and an endorsement to the applicable policies of insurance, Tenant and
Landlord each waives any and all rights of recovery against the other or against
the officers, employees agents and representatives of the other, for loss of or
damage to such waiving party or its property or the property of others under its
control, where such loss or damage is insured against under any insurance policy
in force at the time of such loss or damage.

8.6 Insurance Cancellation. Tenant shall not do anything, or permit
anything to be done, in or about the Premises that shall (a) invalidate or be in
conflict with the provisions of any fire or other insurance policies covering
the Premises or the Park or any property located therein, (b) result in a
refusal by casualty insurance companies of good standing to insure the Premises
or the part or any such property in amounts reasonably satisfactory to Landlord,
(c) subject Landlord to any liability or responsibility for injury to any person
or property by reason of any business operation being conducted in or about the
Premises, (d) cause any increase in the casualty insurance rates applicable to
the Premises at the beginning of the term of this Lease or at any time
thereafter or (e) be in violation of any certificate of occupancy for the
Premises. Tenant, at Tenant's expense, shall comply with all rules, orders,
regulations and requirements of the American Insurance Association (formerly the
National Board of Fire Underwriters) and of any similar body that shall
hereafter perform the function of such association.

8.7 Hold Harmless. Tenant shall indemnify, defend and hold Landlord
harmless from any and all claims, losses, costs, damages, liabilities, or causes
of action (including attorney's fees) arising from Tenant's use of the Premises
or from the conduct of its business or from any activity, work or things which
may be permitted or done by Tenant in or about the Premises and shall further
indemnity, defend and hold Landlord harmless from and against any and all
claims, losses, costs, damages, liabilities or cause of action (including
attorney's fees) arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the provisions of this

Lease or arising from any negligence or intentional act of Tenant or any of its
agents, contractors, employees or invitees and from any and all costs,
attorney's fees, expenses and all liabilities incurred in the defense of any
such claim or action or proceeding brought thereon. Without limiting the
generality of the foregoing, the foregoing indemnity and agreement by Tenant to
defend and hold Landlord harmless shall extend to any claims, losses, costs,
damages, liabilities, or causes of action (including attorney's fees) arising
out of or pertaining to failure by Tenant to comply with all laws and
regulations concerning the protection of or discharge of materials into the
environment. Tenant hereby assumes all risk of damage to property or injury to
persons in or about the Premises from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, excepting where said damage arises
out of negligence of Landlord. Nothing in this article 8.7, however, shall
require Tenant to indemnify, defend or hold Landlord harmless from any claims,
liabilities or expenses to the extent such claims, liabilities or expenses are
due to Landlord's or Landlord's agents, employees or contractors active
negligence or willful misconduct.

9. Damage or Destruction.

9.1 Partial Damage--Insured. If the Premises are damaged and such damage
was caused by a casualty covered under an insurance policy required to be
maintained pursuant to Article 8.2, Landlord shall, at Landlord's expense,
repair such damage as soon as reasonably possible, and this Lease shall continue
in full force and effect. Notwithstanding the foregoing, Landlord shall not be
required to expend for repairs any funds in excess of the insurance proceeds
received by Landlord relating to such damage, nor shall Landlord be responsible
for repair or replacement of any of Tenant's personal property, alterations to
the Premises not approved by Landlord or any other property of Tenant, and
Tenant shall be required to pay the portion of repair costs covered by any
deductible amount under the subject insurance policy whether or not the total
cost of repair exceeds such deductible amount. In the event that the insurance
proceeds otherwise payable by virtue of the damage are reduced or rendered
completely unavailable because of acts or omissions of Tenant causing
cancellation of, or giving rise to insurer defenses under the insurance policy,
Tenant shall be obligated to pay such excess.

9.2 Damage--Uninsured. In the event the Premises may be damaged by a
casualty which is not covered by fire and extended coverage insurance carried by
Landlord, then Landlord shall have the option to restore the Premises or elect
not to restore and to terminate this Lease. Landlord must give Tenant written
notice of its election not to restore within sixty (60) days from the date
Landlord receives notice of such damage, and, if not given, Landlord shall be
deemed to have elected to restore and in such event shall repair any damage as
soon as reasonably possible, at Landlord's cost. In the event Landlord elects to
give such notice of Landlord's intention to cancel and terminate this Lease,
Tenant shall have the right within ten (10) days after receipt of such notice to
give written notice to Landlord of Tenant's intention to repair such damage at
Tenant's expense, without reimbursement from Landlord, in which event this Lease
shall continue in full force and effect and Tenant shall proceed to make such
repairs as soon as reasonably possible. If Tenant does not give such notice
within such ten (10) day period, this Lease shall be cancelled and terminated as
of the date of the occupance of such damage.

9.3 Total Destruction. If at any time during the term hereof the Premises
are totally destroyed from any cause whether or not covered by the insurance
required to be maintained by Landlord pursuant to Article 8.2 (including total
destruction required by any authorized public authority). Landlord shall have
the option to terminate this Lease as of the date of such total destruction.
Subject to Article 9.6, if Landlord elects not to terminate this Lease, the
provisions of Article 9.1 and 9.2 shall be applicable.

9.4 Damage Near End of Term. If the Premises are partially destroyed or
damaged during the last twelve (12) months of the term of this Lease, Landlord
or Tenant may, at Landlord's or Tenant's option cancel and terminate this Lease
as of the date of occurrence of such damage by giving written notice to Landlord
or Tenant of Landlord's or Tenant's election to do so within thirty (30) days
after Landlord receives notice of the occurrence of such damage.

9.5 Abatement of Rent.

(a) If the premises are partially destroyed or damaged and Landlord or
Tenant repairs or restores them pursuant to the provisions of this Article 9,
the Base Rent payable hereunder for the

period during which such damage, repair or restoration continues shall be abated
in proportion to the degree to which Tenant's reasonable use of the Premises is
substantially impaired. Except for abatement, if any, of Base Rent, Tenant shall
have no claim against Landlord for any damage suffered by reason of any such
damage, destruction, repair or restoration, unless Landlord unreasonably
interferes with the conduct of Tenant's business within the Premises.

(b) If Landlord shall be obligated to repair or restore the Premises
under the provisions of this Article 9 and shall not commence such repair or
restoration within sixty (60) days after such obligations shall accrue, Tenant
may, at Tenant's option, cancel and terminate this Lease by giving Landlord
▇▇▇▇▇▇ notice of Tenant's election to do so at any time prior to the
commencement of such repair or restoration. In such event this Lease shall
terminate as of the date of such notice. The commencement of preparation of
plans and/or specifications or application for permits for repair or restoration
shall be deemed commencement of repair or restoration within the meaning of the
foregoing provisions of this Article 9.5(b).

9.6 Tenant's Right to Terminate: If Landlord elects to repair any damage or
destruction to the Premises under this Article 9, then unless such damage or
destruction is caused by an act of Tenant or Tenant's use of the Premises,
Tenant shall have the right to terminate this Lease if Landlord's reasonable
estimate of the time required to repair such damage or destruction exceeds one
hundred eighty (180) days. Tenant shall exercise such right to terminate, if at
all, within ten (10) days after receipt of Landlord's estimate, and if not
exercised within such ten (10) day period such right shall terminate and be of
no further force or effect.

10. Real Property Taxes.

10.1 The Payment of Taxes. Tenant shall pay to Landlord as Additional Rent
all real property taxes applicable to the Premises and Tenant's pro-rata share
(computed in accordance with Article 11.4) of all real property taxes applicable
to the Common Areas during the term of this Lease. All such payments shall be
made to Landlord on or before the later to occur of (a) 30 days following
Landlord's issuance of a ▇▇▇▇ therefore, accompanied by a copy of Real Estate
Tax invoice or (b) fifteen (15) days prior to the delinquency date of such
payment. If any such taxes paid by Tenant shall cover any period of the time
prior to or after expiration of the term hereof, Tenant's share of such taxes
shall be equitably prorated to cover only the period of time within the tax
fiscal year during which this Lease shall be in effect. If Tenant shall fail to
pay such taxes to Landlord by the aforesaid date, the amount due Landlord shall
bear interest at the Interest Rate from the date the sum is due until Landlord
is paid by Tenant. The sum, together with interest, shall be deemed Additional
Rent hereunder.

10.2 Definition of "Real Property Tax". As used herein, the term "real
property tax" shall include any form of assessment (other than the improvement
bond assessment existing as of the date of this lease), license fee, rent, tax,
levy, penalty, imposition or tax, of whatever nature (other than franchise,
corporate, inheritance or estate taxes) imposed by any authority having the
direct or indirect power to tax, including city, county, state or federal
government, or any school, agricultural, lighting, drainage, traffic mitigation
costs or other improvement district thereof, as against any legal or equitable
interest of Landiord in the Premises or in the real property of which the
Premises are a part, as against Landlord's right to Base Rent or other income
therefrom, or as against Landlord's business of leasing the Premises, and Tenant
shall pay any and all charges and fees which may be imposed by the EPA or other
similar governmental regulations or authorities.

10.3 Joint Assessment. If the Premises are not separately assessed,
Tenant's liability shall be an equitable proportion of the real property taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Landlord from the respective valuations
assigned in the assessor's work sheets or other such information as may be
reasonably available. Landlord's reasonable determination thereof, in good
faith, shall be conclusive. In the event that the Premises and related,
supporting Common Areas are not the subject of a separate legal parcel and,
accordingly, separate real property tax assessment, then Tenant shall pay a
portion of the real property taxes for all land and improvements included within
the Common Areas, Tenant's share of Common Area real property taxes to be
determined on the basis of the percentage set forth in Article 11.4.

10.4 Personal Property Taxes.

(a) Tenant shall pay prior to delinquency all taxes assessed against
and levied upon Leasehold improvements, fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises or elsewhere. Tenant
shall use its best efforts to cause Leasehold improvements, trade fixtures,
furnishings, equipment, and all other personal property to be assessed and
billed separately from the real property of Landlord.

(b) If any of Tenant's personal property shall be assessed with the
real property, Tenant shall pay Landlord the taxes attributable to Tenant within
ten (10) days after receipt of a written statement setting forth the taxes
applicable to Tenant's property.

11. Common Areas. When, in fact, there are Common Areas, then the following
shall apply:

11.1 Definitions. The phrase "Common Areas" means all areas and facilities
outside of the Premises that are provided and designated for general use and
convenience of Tenant and other tenants and their respective officers, agents
and employees, customers and invitees. Common Areas include (but are not limited
to) pedestrian sidewalks, landscaped areas, roadways, parking areas and railroad
tracks, if any, but specifically do not include areas covered by or within
building improvements constructed from time to time by Landlord in the Park.
Landlord reserves the right from time to time to make changes in the shape,
size, location, number and extent of the land and improvements constituting the
Common Areas provided, however, that no such change shall (a) materially
increase the obligations or decrease the benefits of Tenant hereunder, or (b)
impair Tenant's access to the Premises, and, if appropriate, Tenant's pro rata
share of Common Area Charges shall be properly adjusted. Landlord may designate
from time to time additional parcels of land for use as a part thereof; and any
additional land so designated by Landlord for such use shall be included until
such designation is revoked by Landlord.

11.2 Maintenance. During the term of this Lease, Landlord shall operate,
manage, repair and maintain the Common Areas so that they are clean and free
from accumulation of debris, filth, rubbish and garbage. Landlord shall maintain
the Common Areas in a good, safe and clean condition and the use of the Common
Areas shall be subject to such reasonable regulations and changes therein as
Landlord shall make from time to time, including (but not by way of limitation)
the right to close from time to time, if necessary, all or any portion of the
Common Areas to such extent as may be legally sufficient, in the opinion of
Landlord's counsel, to prevent a dedication thereof or the accrual of rights of
any person or the public therein, or to close temporarily all or any portion of
such Common Areas for such purposes.

11.3 Tenant's Rights and Obligations. Landlord hereby grants to Tenant,
during the term this Lease, the non-exclusive right to use, for the benefit of
Tenant and its officers, agents, employees, customers, and invitees, in common
with the others entitled to such use, the Common Areas as they from time to time
exist, subject to the rights, powers, and privileges herein reserved to
Landlord. Tenant shall not use the Common Areas for the conduct of its business
other than for parking. Without limiting the foregoing, storage, either
permanent or temporary, of any materials, supplies, equipment or refuse in the
Common Areas is strictly prohibited. Should Tenant violate this provision of the
Lease, then in such event, Landlord may, at its option, upon five (5) days
written notice to Tenant either terminate this Lease, or, without further notice
to Tenant, remove said materials, supplies or equipment from the Common Areas
and place such items in storage, the cost thereof to be reimbursed by Tenant
within ten (10) days from receipt of a statement submitted by Landlord. All
subsequent costs in connection with the storage of said items shall be paid to
Landlord by Tenant as accrued. Failure of Tenant to pay these charges within ten
(10) days from receipt of statement shall constitute a material breach of this
Lease. Tenant and its officers, agents, employees, customers and invitees shall
park their motor vehicles only in areas designated by Landlord for that purpose
from time to time. Tenants shall not at any time park or permit the parking of
motor vehicles, belonging to it or to others, so as to interfere with the
pedestrian sidewalks, roadways, and loading areas, or in any portion of the
parking areas not designated by Landlord for such use by Tenant. Tenant agrees
that receiving and shipping goods and merchandise and all removal of refuse
shall be made only by way of the loading areas constituting part of the
Premises. Tenant shall repair, at its cost, all deterioration or damage to the
Common Areas occasioned by its lack of ordinary care. Tenant acknowledges that
the Premises are burdened by certain recorded covenants, conditions and
restrictions and agrees to comply with the provisions thereof.

11.4 Common Area Charges. Tenant shall pay to Landlord within 10 days
following demand

by Landlord, as Additional Rent, (a) Tenant's pro rata share of the cost of (i)
operation and management of the Common Areas, including without limitation
utility and insurance charges, (ii) maintenance, repairs and replacements (other
than those replacements which by their nature are considered capital
improvements) to Common Areas or to any property or improvements located
thereon, and (iii) maintenance of storm drains located outside the Park which
are maintained by Landlord, and which service the Park and (b) the entire amount
of such costs and charges to the extent required by reason of any negligent act
or omission by Tenant or its agents, invitees, licensees, employees or
contractors. Tenant's pro rata share shall be computed by multiplying the
aforementioned costs and charges times a percentage obtained by dividing the
total square footage of the Premises by the total building square footage of the
whole of Landlord's buildings and improvements within the Park. The percentage
will initially be Twenty and six-five tenths percent (20.65%). Anything
contained in the Lease to the contrary notwithstanding, Common Area charges
described in this Article shall exclude: (i) additions to the Common Area; (ii)
depreciation on the Premises or any of the Common Areas, other than depreciation
on personal property actually used in the maintenance and operation of the
Premises or the Common Areas; (iii) all costs of tenant improvements and the
cost of any special utility or VAC services supplied to Tenant or any other
tenants; (iv) attorneys' fees incurred in preparing, reviewing or enforcing
leases; (v) real estate brokerage commissions; (vi) fines and penalties; (vii)
loan fees, points and other financing costs; and (viii) any costs reimbursed to
Landlord by other tenants or from insurance of condemnation proceeds.

11.5 Construction. Landlord or Tenant, while engaged in constucting
improvements or making repairs or alterations in or about the Premises or in
their vicinity, shall have the right to make reasonable use of the Common Areas.

12. Utilities. Tenant shall pay for, as Additional Rent, all water, gas, heat,
light power, telephone and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Tenant. Tenant shall pay a reasonable proportion to be
determined by Landlord of all charges jointly metered with other premises.

13. Assignment and Subletting.

13.1 Assignment, Mortgage and Subletting.

(a) Neither Tenant, nor Tenant's legal representatives, successors or
assigns, shall assign, mortgage or encumber this Lease, or sublease, or use or
occupy or permit the Premises or any part thereof to be occupied by others
without the prior written consent of Landlord, and any assignment, mortgage,
encumbrance or sublease without Landlord's prior written consent shall be
voidable, at the option of Landlord, and, at the further option of Landlord,
shall terminate this Lease. Landlord shall consent to an assignment of the Lease
or subletting to any corporation which controls, is controlled by or is under
common control with Tenant, or to a transfer of the Lease by operation of law
resulting from a merger, consolidation, liquidation, or change in fifty percent
(50%) or more of the voting control of Tenant, or to any person or entity which
acquires all of the assets of Tenant's business as a going concern, provided
that (i) the business reputations, creditworthiness and net worth of the person
or entity to which the Lease is assigned or transferred or the Premises are
sublet are reasonably acceptable to Landlord, (ii) such person or entity uses
the Premises for the purposes specified in the Lease and for no other purpose,
and (iii) Tenant remains fully liable under this Lease. If this Lease be
assigned, or if the Premises or any part thereof be subleased or occupied by any
other party other than Tenant, Landlord may, after default by Tenant, collect
Base Rent and Additional Rent from the Assignee, Sublease or occupant and apply
the net amount collected to the Base Rent and Additional Rent herein reserved,
but no such assignment, sublease occupancy or collection shall be deemed a
waiver of this covenant or the acceptance of the assignee, sublessee or occupant
as Tenant, or release of Tenant from the further performance by Tenant of the
obligations on the part of Tenant herein contained. Any sale or other transfer,
including consolidation, merger, or reorganization, of a majority of the voting
stock of Tenant, if Tenant is a corporation, or any sale or other transfer of a
majority of the partnership interests in the Tenant, if Tenant is a partnership,
shall be an assignment for purposes of this Article 13.1. As used in this
Article 13.1 the term "Tenant" shall also mean any entity that has guaranteed
Tenant's obligations under this Lease, and the prohibition hereof shall be
applicable to any sales or transfers of the stock or partnership interests of
said guarantor.

(b) Notwithstanding any contrary provision of the foregoing, but
subject to Article 13.1(d),

Tenant may assign this Lease or sublease the Premises upon the following express
conditions:

(1) that Tenant provide Landlord with written notice of its intent to
assign or sublease the Premises, which notice is accompanied by copies
of the proposed assignment or sublease to be executed by Tenant and the
proposed assignee or sublessee and all documents relating thereto, at
least ten (10) days before the effective date of the proposed
assignment or sublease;

(2) that the proposed assignee or sublessee shall be subject to the
prior written consent of landlord, which consent will not be
unreasonably withheld, but without limiting the generality of the
foregoing, it shall be reasonable for Landlord to deny such consent if:

(i) the use to be made of the Premises by the proposed
assignee or sublease (x) is not generally consistent with the
character and nature of all other tenancies in the Park, or
(y) conflicts with any so-called "exclusive" then in favor of,
or for any use which is the same as that stated in any
percentage Lease to, another tenant of the Park, or (z) would
be prohibited by any other portion of this Lease; or

(ii) the character, creditworthiness, reputation and financial
responsibility of the proposed assignee or sublessee are not
satisfactory to Landlord;

(3) that Tenant shall pay to Landlord Landlord's then standard
processing fee and shall reimburse Landlord for all reasonable
attorney's fees incurred by Landlord in connection therewith, not to
exceed $1,000, whether or not such proposed assignment or sublease is
consented to by Landlord;

(4) that any proposed assignee shall execute an assignment and
assumption agreement on Landlord's then standard form, pursuant to
which it shall agree to perform faithfully and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease.
Any such agreement shall be delivered to Landlord not later than 5 days
after the effective date thereof;

(5) that any proposed subleasee shall execute a sublease agreement in
form satisfactory to Landlord, pursuant to which it agrees to
faithfully perform and to be bound by all of the terms, conditions and
agreements of this Lease as the same relate to the subleased Premises.
Any such agreement shall be delivered to Landlord not later than five
days after the effective date thereof; provided, however, that such
agreement shall not be binding upon Landlord until the delivery thereof
to Landlord and the execution and provided, however, that such
agreement shall not be binding upon Landlord until the delivery thereof
to Landlord and the execution and delivery of Landlord's consent
thereto; and;

(6) that the consent by Landlord to an assignment or sublease shall not
in any way be construed to relieve Tenant or the assignee or the
sublessee from obtaining the express consent in writing of Landlord to
any further assignment or sublease or to release Tenant from any
liability whether past, present or future under this lease or to
release Tenant from any liability under this Lease because of
Landlord's failure to give notice of default under or in respect of any
of the terms, covenants, conditions, provisions or agreements of this
Lease.

(7) that Tenant shall not be in default under the terms and provisions
of this Lease as of the date of the proposed assignment or sublease.

(c) In the event Landlord consents to an assignment of this Lease and
Tenant receives cash or other consideration, in respect of such assignment,
Tenant shall pay to Landlord, upon receipt thereof, seventy-five percent (75%)
of any such cash or other consideration received by Tenant which is properly
attributable to the assignment, after first deducting therefrom any leasing
commission paid for by Tenant and the cost of necessary improvements to the
Premises approved by Landlord and paid for by Tenant, and Tenant's out of pocket
costs incurred in connection with such assignment sublease. In the event that
Landlord consents to a sublease of the Premises, Tenant shall pay to Landlord,
upon receipt thereof, seventy-five percent (75%) of any rent or other
consideration received by Tenant as a result of such Sublease, after first
deducting therefrom any leasing commissions paid for

by Tenant in connection with such sublease, whether denominated as rent under
the sublease or otherwise, and Tenant's out of pocket costs incurred in
connection with such assignment sublease which exceed, in the aggregate, the
Base Rent and Additional Rent (prorated to reflect obligations allocable to that
portion of the Premises subject to such sublease).

(d) Notwithstanding the foregoing provisions of this Article 13, it is
expressly agreed and understood that Landlord shall have the option to terminate
this Lease rather than approve the assignment or sublease hereof. Tenant
understands and acknowledges that such option is a material inducement for
Landlord's agreeing to lease the Premises to Tenant upon the terms and
conditions herein set forth. Should Landlord elect to terminate the Lease,
Tenant shall have three (3) business days to withdraw the request for
Assignment.

14. Defaults; Remedies.

14.1 Defaults. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:

(a) The vacating or abandonment of the Premises by Tenant.

(b) The failure by Tenant to make any payment Base Rent or Additional
Rent required to be made by Tenant hereunder as when due, except that Tenant
shall have a grace period of five (5) days after delivery of written notice from
Landlord (which notice Tenant agrees shall be inclusive of and in lieu of the
notice requirements of California Civil Code sec. 1161). Notwithstanding the
foregoing, Landlord shall not be required to provide such written notice more
than two (2) time in each twelve (12) month period after the commencement Date.

(c) The failure by Tenant to observe or perform any of the covenants,
conditions, or provisions of this Lease to be observed or performed by Tenant,
other than described in paragraph (b) above, where such failure shall continue
for a period of thirty (30) days after written notice thereof from Landlord to
Tenant provided, however, that if the nature of Tenant's default is such that
more than thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commenced such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.

(d) (i) The making by Tenant of any general assignment, or general
assignment for the benefit of creditors; (ii) the filing by or against Tenant of
a petition to have Tenant adjudged bankrupt or petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days.

(e) The failure by Tenant to substantially complete the Special
Improvements to the Premises on or before March l, 1996.

14.2 Remedies in Default. In the event of any such default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach:

(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including be not limited to:

(i) the cost of recovering possession of the Premises; and

(ii) expenses of reletting, including necessary renovation and
alteration of the Premises; and

(iii) reasonable attorney's fees, any real estate commission
actually paid, and that portion of the leasing commission, if any, paid by
Landlord pursuant to Article 18 applicable to the unexpired term of this Lease;
and

(iv) the worth at the time of award of the unpaid Base Rent
and Additional Rent that had been earned at the time of termination of this
Lease; and

(v) the worth at the time of award of the amount by which the
unpaid Base Rent and Additional Rent that could have been earned after the date
of termination of this Lease until the time of award exceeds the amount of the
loss of rental that Tenant proves could have been reasonably avoided; and

(vi) the worth at the time of award of the amount by which the
unpaid Base Rent and Additional Rent that could have been earned for the balance
of the term of this Lease after the time of award exceeds the amount of the loss
of Base Rent that Tenant proves could have been reasonably avoided; and

(vii) any other amount, and court costs, necessary to
compensate Landlord for all detriment proximately caused by Tenant's default.
Unpaid installments of Base Rent or Additional Rent shall bear interest from the
date due at the Interest Rate. In the event Tenant shall have abandoned the
Premises, Landlord shall have the option of (1) retaking possession of the
Premises and recovering from Tenant the amount specified in this Article 14.2(a)
or (2) proceeding under article 14.2(b). As used in this paragraph, the term
"the worth at the time of award" is to be computed by discounting the amount of
award by the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award, plus one percent (1%).

(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to all of Landlord's rights
and remedies under this Lease including the right to recover Base Rent and
Additional Rent as it becomes due hereunder.

(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the State of California.

14.3 Default by Landlord. Landlord shall not be in default unless Landlord
fails to perform obligations required by Landlord within a reasonable time, but
in no event later than thirty (30) days after written notice by Tenant to
Landlord and to holder of any mortgage or deed of trust covering the Premises,
whose name and address shall have theretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of the Landlord's obligation is such that
more than (30) days are required for performance, then Landlord shall not be in
default if Landlord or any such lienholder commences performance within such
thirty (30) period and thereafter diligently prosecutes the same to completion.

14.4 Late Charges. Tenant hereby, acknowledges that late payment by Tenant
to Landlord of Base Rent or Additional Rent 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 term of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of Base Rent or Additional Rent due from Tenant
shall not be received by Landlord or Landlord's designee within ten (10) days
after said amount is past due, then Tenant shall pay to Landlord a late charge
of five percent (5%) of such overdue amount, and interest shall accrue on the
overdue installment at the Interest Rate calculated from the time that payment
was first due under the terms of this Lease. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the cost 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 the other
rights and remedies granted hereunder.

14.5 Cure by Landlord. Landlord, at any time after Tenant commits a
default, which remains uncured after any applicable cure period, may take steps
to remedy the default at Tenant's cost. If Landlord at any time, by reason of
Tenant's default, pays any sum or does any act that requires the

payment of any sum, the sum paid by Landlord at the time the sum is paid shall
be due immediately from Tenant to Landlord, and if paid at a later date shall
bear interest at the Interest Rate from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant. The sum, together with interest shall be
deemed Additional Rent hereunder.

15. Condemnation.

If the Premises or any portion thereof are taken under the power of
eminent domain, or sold by Landlord under the threat of the exercise of said
power (all of which is herein referred to as "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever occurs first. If more than twenty-five percent
(25%) of the floor area of the Premises is taken by condemnation, or parking is
taken such that 25% or more of the floor area of the Premises becomes unusable
by Tenant, either Landlord or Tenant may terminate this Lease as of the date the
condemning authority takes possession by notice in writing of such election
within twenty (20) days after Landlord shall have notified Tenant of the taking,
or, in the absence of such notice, then within twenty (20) days after the
condemning authority shall have taken possession. If this Lease is not
terminated by either Landlord or Tenant then it shall remain in full force and
effect as to the portion of the Premises remaining, provided that unless and
until the Premises are restored as provided in the next sentence, the Base Rent
shall be reduced in the proportion that the floor area taken bears to the total
original floor area of the Premises. In the event this Lease is not so
terminated, then Landlord agrees, at Landlord's sole cost, as soon as reasonably
possible, to restore the Premises to a complete unit of like quality and
character as existed prior to the condemnation. All awards for the taking of any
part of the Premises or any payment made under the Threat of the exercise of
power of eminent domain shall be the property of Landlord, whether made as
compensation for diminution of value of the Leasehold or for the taking of the
fee or as severance damages; provided, however, that Tenant shall be entitled to
any separate award for loss of or damage to Tenant's trade fixtures, removable
personal property, and moving expenses.

16. General Provisions.

16.1 Tenant Estoppel; Financial Statements.

(a) Tenant shall at any time upon not less than fifteen (15) days prior
written notice from landlord, execute, acknowledge and deliver to Landlord a
statement in writing certifying that this Lease is unmodified and in full force
and effect without any claim by Tenant against Landlord (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the date to which the rent, security
deposit, and other charges are paid in advance, if any. Any such statement may
be conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.

(b) Tenant's failure to deliver such statement within such time period
shall be conclusive upon Tenant that (i) this Lease is in full force and effect
and without any claim of Tenant against Landlord, without modification except as
may be represented by Landlord, and (ii) not more than one (1) month's rent has
been paid in advance.

(c) If Landlord desires to finance or refinance the Premises, or any
part thereof, Tenant hereby agrees to deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender. Such statements shall include the past three (3) years' financial
statements of Tenant. All such financial statements shall be received by
Landlord and/or Landlord's lender in confidence and shall be used only for the
purposes herein set forth.

16.2 Landlord's Interest. The term "Landlord" as used herein shall mean
only the owner or owners at the time in question of the fee title or a tenant's
interest in a ground Lease of the Premises. In the event of any transfer of such
title or interest, and assumption of the Landlord's interest herein by the
transferee Landlord herein named (and in case of any subsequent transfers, the
then grantor) shall be relieved from and after the date of such transfer of
liability as respects Landlord's obligations 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 delivered to the
grantee. The obligations contained in this Lease to be performed by Landlord
shall, subject as aforesaid, be binding upon Landlord's successors and assigns,
only during their respective periods of ownership. Tenant hereby agrees to
attorn any assignee of Landlord's interest hereunder, whether such assignment is

voluntary or by operation of law.

16.3 Severability. In the event any term, covenant, condition, provision or
agreement herein is held to be invalid or void by any court of competent
jurisdiction, the invalidity of any such term, covenant, condition, provision or
agreement shall in no way affect any other term, covenant, condition, provision
or agreement herein contained.

16.4 Time of Essence. Time is of the essence.

16.5 Captions. Article and paragraph captions are not a part hereof.

16.6 Incorporation of Prior Agreement; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may me modified in writing only, signed by the paries in interest at
the time of the modification.

16.7 Waivers. No waiver by Landlord of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of Base Rent or
Additional Rent hereunder by Landlord shall not be a waiver of any existing
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular Base Rent or Additional Rent so accepted, regardless of
Landlord's knowledge of such existing breach at the time of acceptance of such
Base Rent or Additional Rent.

16.8 Short Form Lease. Tenant agrees to execute, deliver and acknowledge,
at the request of Landlord, a short form of this Lease satisfactory to counsel
for Landlord, and Landlord may in its sole discretion record this Lease or such
short form in the county where the Premises are located. Tenant shall not record
this Lease, or a short form of this Lease, without Landlord's prior written
consent.

16.9 Holding Over. If Tenant remains in possession of the premises or any
part thereof after the expiration of the term hereof with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental equal to 125% of the amount of the last monthly Base Rent plus all other
charges payable hereunder, and upon the terms hereof applicable to month to
month tenancy. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof without the express written
consent of Landlord, Tenant shall be in default of this Lease and Landlord shall
be entitled to pursue any remedy now or hereafter available to Landlord under
the laws or judgment decisions of the State of California.

16.10 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive, but shall, wherever possible, be cumulative with all other remedies
at law or in equity.

16.11 Covenants and Conditions. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.

16.12 Binding Effect; Choice of Law; Proration. Subject to any provisions
hereof restricting assignment or subletting by Tenant and subject to the
provisions of Article 13.1, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by and
construed in accordance with the laws of the State of California. All prorations
shall be on the basis of a thirty (30) day month.

16.13 Subordination. Tenant agrees that this Lease shall be subordinate to
any mortgages or deeds of trust that may hereafter be placed upon the Premises
and to any and all advances to be made thereunder, and to the interest thereon,
and all renewals, replacements and extensions thereof. Within fifteen (15) days
after written request from Landlord, Tenant shall execute any documents that may
be necessary or desirable to effectuate the subordination of this Lease to any
such mortgages or deeds of trust and shall execute estoppel certificates as
requested by Landlord from time to time in the standard form of any such
mortgagee or beneficiary. Anything contained in the Lease to the contrary
notwithstanding, Tenant's obligation to subordinate its rights under the Lease
to a subsequent ground lessor, mortgagee, beneficiary under a deed of trust, or
any lending entity, shall be conditioned upon Landlord first delivering to
Tenant a nondisturbance agreement from such ground lessor, mortgagee,

beneficiary or lender substantially in the form of Exhibit "C" attached hereto,
which form is hereby approved by Tenant.

16.14 Attorney's Fees. If either party named herein brings an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to his reasonable
attorney's fees and court costs to be paid by the losing party as fixed by the
court.

16.15 Landlord's Access. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times upon reasonable notice (or,
during emergencies, at any time) for the purpose of inspecting the same, showing
the same to prospective tenants, purchasers or lender, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part as Landlord may deem necessary or desirable.

16.16 Quiet Enjoyment. Upon Tenant's paying the Base Rent and any
Additional Rent required hereunder and performing all of Tenant's obligations
under this Lease, Tenant may peacefully and quietly enjoy the Premises during
the term of this Lease as against all persons or entities lawfully claiming by
or through Landlord.

16.17 Merger. The voluntary or other surrender of this Lease by Tenant or
termination of this Lease by Tenant's default, or a mutual cancellation thereof,
shall not work a merger, and shall, at the option of Landlord, terminate all or
any existing subtenancies, or may at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

16.18 Authority. Each individual executing this Lease on behalf of a party
hereto represents and warrants that he is duly authorized to execute and deliver
this Lease on behalf of said party, and that this Lease is binding upon said
party corporation in accordance with its terms.

16.19 Landlord's Liability. The liability of Landlord hereunder or in
connection with the Premises shall be limited to its interest therein, and in no
event shall any other assets Landlord or any constituent partner of Landlord be
subject to any claim arising out of or in connection with this Lease.

16.20 Financing. Tenant shall not execute any document purporting to affect
the Premises or any other property of which the Premises are a part, including,
without limitation, any financing statement, without prior written consent of
Landlord, which may be withheld or conditioned in Landlord's sole discretion.

16.21 Landlord's Approval. The review, approval, inspection or examination
by Landlord of any item to be reviewed, approved, inspected or examined by
Landlord under the terms of this Lease or the exhibits attached hereto shall not
constitute the assumption of any responsibility by Landlord for either the
accuracy or sufficiency of any such item or the quality or suitability of such
item for its intended use. Any such review, approval, inspection or examination
by Landlord is for the sole purpose of protecting Landlord's interest in the
Park and under this Lease, and no third parties, including, without limitation,
Tenant or any person or entity claiming through or under Tenant, or the
contractors, agents, servants, employees, visitors or licensees of Tenant or any
such person or entity, shall have any rights hereunder.

17. Performance Bond. At any time Tenant either desires to or is required to
make any repairs, alterations, additions, improvements or utility installation
thereon, pursuant to Articles 7.2, 7.5 or 9.2 herein or otherwise, Landlord may,
at its sole option, require Tenant, at Tenant's sole cost and expense, to obtain
and provide to Landlord payment and performance bonds in amounts equal to one
and one-half (1-1/2) times the estimated cost of such repairs or improvements,
to insure Landlord against any liability for mechanics' and materialmen's liens
and to insure completion of the work.

18. Brokers. It is acknowledged and agreed by both parties that C.B. Commercial
and ▇▇▇▇▇ ▇▇▇▇▇▇ & Associates are the only brokers representing either party in
this transaction. It is agreed that Landlord will pay a commission for this
Lease transaction and CB Commercial and ▇▇▇▇▇ ▇▇▇▇▇▇ Associates split, 50/50,
the commission for the remaining term of the existing Tenant's (▇▇▇▇▇▇ Research
Corporation) lease term. For the remaining term of the Lease, ▇▇▇▇▇ ▇▇▇▇▇▇
Associates will receive 100% of the proceeds. The commission shall be calculated
at the rate of 5% of the Base Rent for the first 60 months of the Lease Term and
2% of the Base Rent for the remaining 60 months of the Lease Term. Apart from
the foregoing, each party represents that it

has not had any dealings with any real estate broker, finder, or other person,
with respect to this Lease in any manner and that no commissions are due to any
brokers whatsoever other than such commissions as may be due or may become due
to the above-named brokers. Each party agrees to defend indemnify and hold
harmless the other party from and against all costs, expenses, and/or damages,
resulting from any claims that my be asserted against such other party by any
broker, finder, or other person, with whom the indemnifying party has or
purportedly has dealt.

19. Interest on Past Due Obligations. Except as expressly herein provided, any
amount due to Landlord not paid when due shall bear interest at the Interest
Rate from the due date. Payment of such interest shall not excuse or cure any
default by Tenant under this Lease.

20. Interest Rate. As used herein, the term "Interest Rate" shall mean a per
annum rate of interest equal to three percentage points (3%) above the rate most
recently announced by ▇▇▇▇▇ Fargo Bank, National Association, at its principal
office in San Francisco as its "Prime Rate" serving as the basis upon which
effective rates of interest are calculated for those transactions making
reference thereto, but in no event in excess of the then highest applicable
usury limit, if any, under Federal or state law.

21. Signs, etc. Tenant may affix and maintain on the exterior of the Premises
only such signs, names, insignia, trademarks and other descriptive material of
any kind as shall have first received the written approval of Landlord as to
type, size, color, location and other design qualities. Landlord review of
proposed signs and other items described in this Article 21 shall be made in
accordance with the sign criteria attached hereto as EXHIBIT B. The provisions
of this Article 21 shall likewise apply to any signs or other item as aforesaid
which may be placed in any window area within and which shall be visible for the
exterior of the Premises. Notwithstanding any other provision of this Lease, in
no event shall Tenant make any other alterations or additions to or improvement
on or visible from the exterior of the Premises without Landlord's prior
written consent, which may be withheld in Landlord's sole and absolute
discretion.

22. Notices. Whenever under this Lease provision is made for any demand, notice
or declaration of any kind, or where it is deemed desirable or necessary by
either party to give or serve any such notice, demand or declaration to the
other party, it shall be in writing and served either personally or sent by
registered United States mail, postage prepaid, return receipt requested,
addressed at the address set forth hereinbelow:

To Landlord: Santa ▇▇▇▇ Corporate Center Associates
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

with a copy to: Metropolitan Life Insurance Company
Attention: Assistant Vice President & Regional
Manager
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

with a copy to: ▇'▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Partners
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

To Tenant: H.O.H. ▇▇▇▇▇▇▇▇▇
Vice President
Verticom, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

23. Control of Lease Over Laws of General Application. Tenant hereby
acknowledges and agrees that the terms, covenants, conditions and provisions of
the Lease shall control the rights and obligations of Landlord and Tenant with
regard to the subject matter of the Lease, and shall

supersede any laws of general application which would otherwise control if the
Lease was silent as to such matters, including but not limited to the provisions
of Sections 1941 and 1942 of the California Civil Code and any similar or
successor laws regarding Tenant's right to make repairs to the Premises at the
expense of Landlord (governed by Article 7 of the Lease); the provisions of
Sections 1932 (2) and 1933 (4) of the California Civil Code and any similar or
successor laws regarding the termination of leases based upon damage or
destruction of leased premises (governed by Article 9 of the Lease); the
provisions of Section 1265.130 of the California Code of Civil Procedure
regarding petitions to courts of law to terminate a lease in the event of a
partial taking by condemnation (governed by Article 15 of the Lease); and the
provisions of California code of Civil Procedure

The parties hereto have executed this Lease on the dates specified
immediately adjacent to their respective signatures.

Executed at Santa Rosa, California on Nov 3, 1995.

LANDLORD: TENANT:

SANTA ▇▇▇▇ CORPORATE CENTER VERTICOM, INC.
ASSOCIATES, a California
general partnership

By: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇'▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & --------------------------
Partners/San Francisco ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
a California partnership Its: CEO and President

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ H.O.H. ▇▇▇▇▇▇▇▇▇
---------------------------- ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ H.O.H. ▇▇▇▇▇▇▇▇▇
Trustee of the Its: Vice President and CFO
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Revocable
Trust dated May 5, 1987,
partner

-OR-

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Partner

STANDARD SUBLEASE American Industrial Real Estate Association [LOGO]

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