<PAGE>
EXHIBIT 10.1


[LOGO-CA Assoc. of Realtors] COMMERCIAL LEASE AGREEMENT
                          (C.A.R. Form CL, Revised 10/01)

Date (For reference only):_______________
Noel C. McDermott and Warren P. Yost ("Landlord") and Microtel International
Incorporated ("Tenant") agree as follows:
1.       PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord, the
         real property and improvements described as: 894 Faulstich Court, San
         Jose, CA 925112-1361 ("Premises"), which compromise approximately 100%
         of the total square footage of rentable space in the entire property.
         See Exhibit A for a further description of the Premises.
2.       TERM: The term shall be for 7 years and 0 months, beginning on (date)
         July 1, 2004 ("Commence Date").
         (Check A or B):
     [X] A.       Lease: and shall terminate on (date) June 30, 2011 at Midnight
                  AM PM. Any holding over after the term of this agreement
                  expires, with Landlord's consent, shall create a
                  month-to-month tenancy that either party may terminate as
                  specified in paragraph 2B. Rent shall be at a rate equal to
                  the rent for the immediately preceding month, payable in
                  advance. All other terms and conditions of this agreement
                  shall remain in full force and effect.

     [ ]  B.       Month-to-month: and continues as a month-to-month tenancy.
                  Either party may terminate the tenancy by giving written
                  notice to the other at least 30 days prior to the intended
                  termination date, subject to any applicable local laws. Such
                  notice may be given on any date.

     [X] C.       RENEWAL OR EXTENSION TERMS: See attached addendum Exhibit B.
3:       BASE RENT:
         A.       Tenant agrees to pay Base Rent at the rate of (CHECK ONE
                  ONLY:)
          [ ] (1) $__________ per month, for the term of the agreement.
          [ ] (2) $__________ per month, for the first 12 months of the
                  agreement. Commencing with the 13th month, and upon expiration
                  of each 12 months thereafter, rent shall be adjusted according
                  to any increase in the U.S. Consumer Price Index of the Bureau
                  of Labor Statistics of the Department of Labor for All Urban
                  Consumers ("CPI") for ________________________ (the city
                  nearest the location of the Premises), based on the following
                  formula: Base Rent will be multiplied by the most current CPI
                  preceding the first calendar month during which the adjustment
                  is to take effect, and divided by the most recent CPI
                  preceding the Commencement Date. In no event shall any
                  adjusted Base Rent be less than the Base Rent for the month
                  immediately preceding the adjustment. If the CPI is no longer
                  published, then the adjustment to Base Rent shall be based on
                  an alternate index that most closely reflects the CPI.
          [ ] (3) $__________ per month for the period commencing __________ and
                  ending __________ and $__________ per month for the period
                  commencing __________ and ending __________ and $__________
                  per month for the period commencing __________ and ending
                  __________.
          [ ] (4) In accordance with the attached rent schedule.
         [X]  (5) Other: Specified in Exhibit C.
         B.       Base Rent is payable in advance on the 1st (or _____) day of
                  each calendar month, and is delinquent on the next day.
         C.       If Commencement Date falls on any day other than the first day
                  of the month, Base Rent for the first calendar month shall be
                  prorated based on a 30-day period. If Tenant has paid one full
                  month's Base Rent in advance of Commencement Date, Base Rent
                  for the second calendar month shall be prorated based on a
                  30-day period.
4.       RENT:
         A.       Definition: ("Rent") shall mean all monetary obligations of
                  Tenant to Landlord under the terms of this agreement, except
                  security deposit.
         B.       Payment: Rent shall be paid to (Name) Noel C. McDermott and
                  Warren P. Yost, at (address) 502 Village Circle, Santa Cruz,
                  CA 95060, or at any other location specified by Landlord in
                  writing to Tenant.
         C.       Timing: Base Rent shall be paid as specified in paragraph 3.
                  All other Rent shall be paid within 30 days after Tenant is
                  billed by Landlord.

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 1 of 8)
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Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

5.       EARLY POSSESSION: Tenant is entitled to possession of the Premises on
         N/A. If Tenant is in possession prior to the Commencement Date, during
         this time (i) Tenant is not obligated to pay Base Rent, and (ii) Tenant
         is is not obligated to pay Rent other than Base Rent. Whether or not
         Tenant is obligated to pay Rent prior to Commencement Date, Tenant is
         obligated to comply with all other terms of this agreement.
6.       SECURITY DEPOSIT:
         A.       Tenant agrees to pay Landlord $35,000.00 as a security
                  deposit. Tenant agrees not to hold Broker responsible for its
                  return.
                  (IF CHECKED:) [ ] If Base Rent increases during the term of
                  this agreement, Tenant agrees to increase security deposit by
                  the same portion as the increase in Base Rent.
         B.       All or any portion of the security deposit may be used, as
                  reasonably necessary, to: (i) cure Tenant's default in payment
                  of Rent, late charges, non-sufficient funds ("NSF") fees, or
                  other sums due; (ii) repair damage, excluding ordinary wear
                  and tear, caused by Tenant or by a guest or licensee of
                  Tenant; (iii) broom clean the Premises, if necessary, upon
                  termination of tenancy; and (iv) cover any other unfulfilled
                  obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY
                  TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT. If all or any
                  portion of the security deposit is used during the tenancy,
                  Tenant agrees to reinstate the total security deposit within 5
                  days after written notice is delivered to Tenant. Within 30
                  days after Landlord receives possession of the Premises,
                  Landlord shall: (i) furnish Tenant and itemized statement
                  indicating the amount of any security deposit received and the
                  basis for its disposition, and (ii) return any remain portion
                  of security deposit to Tenant. However, if the Landlord's only
                  claim upon the security deposit is for unpaid Rent, then the
                  remain portion of the security deposit, after deduction of
                  unpaid Rent, shall be returned within 14 days after the
                  Landlord receives possession.
         C.       No interest will be paid on security deposit, unless required
                  by local ordinance.
7.       PAYMENTS:                           PAYMENT      BALANCE
                               TOTAL DUE     RECEIVED      DUE       DUE DATE
                               ---------     --------      ---       --------
A. Rent From July 1         $27,000.00/    $__________  $__________  July 1
     To July 31              month
B. Security Deposit         $35,000.00     $__________  $__________  July 1
C. Other: Taxes, Insurance
     & Maintenance Category $____________  $__________  $__________  as incurred
D. Other: Late Payment
     of Security Deposit
     Category               $100.00/day    $__________ $__________   July 1
E. Total:                   $____________  $__________ $__________

8.       PARKING: Tenant is entitled to 45 unreserved and N/A reserved vehicle
         parking spaces. The right to parking |X| is [ ] is not included in the
         Base Rent charged pursuant to paragraph 3. If not included in the Base
         Rent, the parking rental fee shall be an additional $ N/A per month.
         Parking space(s) are to be used for parking operable motor vehicles,
         except for trailers, boats, campers, buses or trucks (other than
         pick-up trucks). Tenant shall park in assigned space(s) only. Parking
         space(s) are to be kept clean. Vehicles leaking oil, gas or other motor
         vehicle fluids shall not be parked in parking spaces or on the
         Premises. Mechanical work or storage of inoperable vehicles is not
         allowed in parking space(s) or elsewhere on the Premises. No overnight
         parking is permitted.
9.       ADDITIONAL STORAGE: Storage is permitted as follows: N/A.
         The right to additional storage space is is not included in the Base
         Rent charged pursuant to paragraph 3. If not included in Base rent,
         storage space shall be an additional $ N/A per month. Tenant shall
         store only personal property that Tenant owns, and shall not store
         property that is claimed by another, or in which another has any right,
         title, or interest. Tenant shall not store any improperly packaged food
         or perishable goods, flammable materials, explosives, or other
         dangerous or hazardous material. Tenant shall pay for, and be
         responsible for, the clean-up of any contamination caused by Tenant's
         use of the storage area.
10.      LATE CHARGE; INTEREST; NSF CHECKS: Tenant acknowledges that either late
         payment of Rent or issuance of a NSF check may cause Landlord to incur
         costs and expenses, the exact amount of which are extremely difficult
         and impractical to determine. These costs my include, but are not
         limited to, processing, enforcement and accounting expenses, and late
         charges imposed on Landlord. If any installment of Rent due from Tenant
         is not received by Landlord within 10 calendar days after date due, or
         if a check is returned NSF, Tenant shall pay to Landlord, respectively,
         $ 50 as late charge, plus 10%

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 2 of 8)
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Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

         interest per annum on the delinquent amount and $100.00 as a NSF fee,
         any of which shall be deemed additional Rent. Landlord and Tenant agree
         that these charges represent a fair and reasonable estimate of the
         costs Landlord may incur by reason of Tenant's late or NSF payment. Any
         late charge, delinquent interest, or NSF fee due shall be paid with the
         current installment of Rent. Landlord's acceptance of any late change
         or NSF fee shall not constitute a waiver as to any default of Tenant.
         Landlord's right to collect a Late Charge or NSF fee shall not be
         deemed an extension of the date Rent is due under paragraph 4, or
         prevent Landlord from exercising any other rights and remedies under
         this agreement, and as provided by law.
11.      CONDITION OF PREMISES: Tenant has examined the Premises and
         acknowledges that Premise is clean and in operative condition, with the
         following exceptions:_________________________________________________.
         Items listed as exceptions shall be dealt with in the following
         manner:_______________________________________________________________.

         ______________________________________________________________________.
12.      ZONING AND LAND USE: Tenant accepts the Premises subject to all local,
         state and federal laws, regulations and ordinances ("Laws"). Landlord
         makes no representations or warranty that Premises are now or in the
         future will be suitable for Tenant's use. Tenant has made it own
         investigation regarding all applicable Laws.
13.      TENANT OPERATING EXPENSES: Tenant agrees to pay for all utilities and
         services directly billed to Tenant____________________________________.
14.      PROPERTY OPERATING EXPENSES:
         A.       Tenant agrees to pay its proportionate share of Landlord's
                  estimated monthly property operating expenses, including but
                  not limited to, common area maintenance, consolidated utility
                  and service bills, insurance, and real estate taxes, based on
                  the ratio of the square footage of the Premises to the total
                  square footage of the rentable space in the entire property.
                  100% of space .
OR       B.       [ ] (If checked) Paragraph 14 does not apply.
15.      USE: The Premises are for the sole use as LIGHT MANUFACTURING/
         TELECOMMUNICATIONS EQUIPMENT . No other use is permitted without
         Landlord's prior written consent. If any use by tenant causes an
         increase in the premium on Landlord's existing property insurance,
         Tenant shall pay for the increased cost. Tenant will comply with all
         Laws affecting its use of the Premises.
16.      RULES/REGULATIONS: Tenant agrees to comply with all rules and
         regulations of Landlord (and, if applicable, Owner's Association) that
         are at any time posted on the Premises or delivered to Tenant. Tenant
         shall not, and shall ensure that guests and licenses of Tenant do not,
         disturb, annoy, endanger, or interfere with other tenants of the
         building or neighbors, or use the Premises for any unlawful purposes,
         including, but not limited to, using, manufacturing, selling, storing,
         or transporting illicit drugs or other contraband, or violate any law
         or ordinance, or committing a waste or nuisance on or about the
         Premises.
17.      MAINTENANCE:
         A.       Tenant OR [ ] (if checked, Landlord) shall professionally
                  maintain the Premises including heating, air conditioning,
                  electrical, plumbing and water systems, if any, and keep
                  glass, windows and doors in operable and safe condition.
                  Unless Landlord is checked, if Tenant fails to maintain the
                  Premises, Landlord may contract for or perform such
                  maintenance, and charge Tenant for Landlord's cost.
         B.       Landlord OR [ ] (if checked, Tenant) shall maintain the roof,
                  foundation, exterior walls, common areas and PARKING LOT .
18.      ALTERATIONS: Tenant shall not make any alterations in or about the
         Premises, including installation of trade fixtures and signs, without
         Landlord's prior written consent, which shall not be unreasonably
         withheld. Any alterations to the Premises shall be done according to
         Law and with required permits. Tenant shall give Landlord advance
         notice of the commencement date of any planned alteration, so that
         Landlord, at its option, may post a Notice of Non-Responsibility to
         prevent potential liens against Landlord's interest in the Premises.
         Landlord may also require Tenant to provide Landlord with lien releases
         from any contractor performing work on the Premises.
19.      GOVERNMENT IMPOSED ALTERATIONS. Any alterations required by Law as a
         result of Tenant's use shall be Tenant's responsibility. Landlord shall
         be responsible for any other alterations required by Law.
20.      ENTRY: Tenant shall make Premises available to Landlord or Landlord's
         agent for the purpose of entering to make inspections, necessary or
         agreed repairs, alterations, or improvements, or to supply necessary or
         agreed services, or to show Premises to prospective or actual
         purchasers, tenants, mortgagees, lenders, appraisers, or contractors.
         Landlord and Tenant agree that 24 hours notice (oral or written) shall

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 3 of 8)
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Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

         be reasonable and sufficient notice. In an emergency, Landlord or
         Landlord's representative may enter Premises at any time without prior
         notice.
21.      SIGNS: Tenant authorizes Landlord to place a FOR SALE sign o the
         Premises at any time, and a FOR LEASE sign on the Premises within the
         90 (or [ ] _________________) day period preceding the termination of
         the agreement.
22.      SUBLETTING/ASSIGNMENT: Tenant shall not sublet or encumber all or any
         part of Premises, or assign or transfer this agreement or any interest
         in it, without the prior written consent of Landlord, which shall not
         be unreasonably withheld. Unless such consent is obtained, any
         subletting, assignment, transfer, or encumbrance of the Premises,
         agreement, or tenancy, by voluntary act of Tenant, operation of law, or
         otherwise, shall be null and void, and at the option of Landlord,
         terminate this agreement. Any proposed sublessee, assignee, or
         transferee shall submit to Landlord an application and credit
         information for Landlord's approval, and, if approved, sign a separate
         written agreement with Landlord and Tenant. Landlord's consent to any
         one sublease, assignment, or transfer, shall not be construed as
         consent to any subsequent sublease, assignment or transfer, and does
         not release Tenant of Tenant's obligation under this agreement.
23.      POSSESSION: If Landlord is unable to deliver possession of Premises on
         Commencement date, such date shall be extended to the date on which
         possession is made available to Tenant. However, the expiration date
         shall remain the same as specified in paragraph 2. If Landlord is
         unable to deliver possession within 60 (or [ ] ____________) calendar
         days after agreed Commencement Date, Tenant may terminate this
         agreement by giving written notice to Landlord, and shall be refunded
         all Rent and security deposit paid.
24.      TENANT'S OBLIGATIONS UPON VACATING PREMISES: Upon termination of
         agreement, Tenant shall: (i) give Landlord all copies of all keys or
         opening devices to Premises, including any common areas; (ii) vacate
         Premises and surrender it to Landlord empty of all persons and personal
         property; (iii) vacate all parking and storage spaces; (iv) deliver
         Premises to Landlord in the same condition as referenced in paragraph
         11; (v) clean Premises; (vi) give written notice to Landlord of
         Tenant's forwarding address; and, (vii)
         ______________________________________________________________________.
         All improvements installed by Tenant, with or without Landlord's
         consent, become the property of Landlord upon termination. Landlord may
         nevertheless require Tenant to remove any such improvement that did not
         exist at the time possession was made available to Tenant.
25.      BREACH OF CONTRACT/EARLY TERMINATION: In event Tenant, prior to
         expiration of this agreement, breaches any obligation in this
         agreement, abandons the premises, or gives notice of tenant's intent to
         terminate this tenancy prior to its expiration, in addition to any
         obligations established by paragraph 24, Tenant shall also be
         responsible for lost rent, rental commissions, advertising expenses,
         and painting costs necessary to ready Premises for re-rental. Landlord
         may also recover from Tenant: (i) the worth, at the time of award, of
         the unpaid Rent that had been earned at the time of termination; (ii)
         the worth, at the time of award, of the amount by which the unpaid Rent
         that would have bee earned after expiration until the time of award
         exceeds the amount of such rental loss the Tenant proves could have
         been reasonably avoided; and (iii) the worth, at the time of award, of
         the amount by which the unpaid Rent for the balance of the term after
         the time of the award exceeds the amount of such rental loss that
         Tenant proves could be reasonably avoided. Landlord may elect to
         continue the tenancy in effect for so long as Landlord does not
         terminate Tenant's right to possession, by either written notice of
         termination of possession or by reletting the Premises to another who
         takes possession, and Landlord may enforce all Landlord's rights and
         remedies under this agreement, including the right to recover the Rent
         as it becomes due.
26.      DAMAGE TO PREMISES: If, by no fault of Tenant, Premises are totally or
         partially damaged or destroyed by fire, earthquake, accident or other
         casualty, Landlord shall have the right to restore the Premises by
         repair or rebuilding. If Landlord elects to repair or rebuild, and is
         able to complete such restoration within 90 days from the date of
         damage, subject to terms of this paragraph, this agreement shall remain
         in full force and effect. If Landlord is unable to restore the Premises
         within this time, or if Landlord elects not to restore, then either
         Landlord or Tenant may terminate this agreement by giving the other
         written notice. Rent shall be abated as of the date of damage. The
         abated amount shall be the current monthly Base Rent prorated on a
         30-day basis. If this agreement is not terminated, and the damage is
         not repaired, then Rent shall be reduced based on the extent to which
         the damage interferes with Tenant's reasonable use of Premises.

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 4 of 8)
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Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

         If damage occurs as a result of an act of Tenant or Tenant's guest,
         only Landlord shall have the right of termination, and no reduction in
         Rent shall be made.
27.      HAZARDOUS MATERIALS: Tenant shall not use, store, generate, release or
         dispose of any hazardous material on the Premises or the property of
         which the Premises are part. However, Tenant is permitted to make use
         of such materials that are required to be used in the normal course of
         Tenant's business provided that Tenant complies with all applicable
         Laws related to the hazardous materials. Tenant is responsible for the
         cost of removal and remediation, or any clean-up of any contamination
         caused by Tenant.
28.      CONDEMNATION: If all or part of the Premises is condemned for public
         use, either party may terminate this agreement as of the date
         possession is given to the condemner. All condemnation proceeds,
         exclusive of those allocated by the condemner to Tenant's relocation
         costs and trade fixture, belong to Landlord.
29.      INSURANCE: Tenant's personal property, fixtures, equipment, inventory
         and vehicles are not insured by Landlord against loss or damage due to
         fire, theft, vandalism, rain, water, criminal or negligent acts of
         others, or any other cause. Tenant is to carry Tenant's own property
         insurance to protect Tenant from any such loss. In addition, Tenant
         shall carry liability insurance in an amount of not less than $ 3M .
         Tenant's liability insurance shall name Landlord and Landlord's agent
         as additional insured. Tenant, upon Landlord's request, shall provide
         Landlord with a certificate of insurance establishing Tenant's
         compliance. Landlord shall maintain liability insurance insuring
         Landlord, but not Tenant, in an amount of at least $1M, plus property
         insurance in an amount sufficient to cover the replacement cost of
         the property. Tenant is advised to carry business interruption
         insurance in an amount at least sufficient to cover Tenant's complete
         rental obligation to Landlord. Landlord is advised to obtain a policy
         of rental loss insurance. Both Landlord and Tenant release each other,
         and waive their respective rights to subrogation against each other,
         for loss or damage covered by insurance.
30.      TENANCY STATEMENT (ESTOPPEL CERTIFICATE): Tenant shall execute and
         return a tenancy statement (estoppel certificate), delivered to Tenant
         by Landlord or Landlord's agent, within 3 days after its receipt. The
         tenancy statement shall acknowledge that this agreement is unmodified
         and in full force, or in full force as modified, and state the
         modifications. Failure to comply with this requirement: (i) shall be
         deemed Tenant's acknowledgment that the tenancy statement is true and
         correct, and may be relied upon by a prospective lender or purchaser;
         and (ii) may be treated by Landlord as a material breach of this
         agreement. Tenant shall also prepare, execute, and deliver to Landlord
         any financial statement (which will be held in confidence) reasonably
         requested by a prospective lender or buyer.
31.      LANDLORD'S TRANSFER: Tenant agrees that the transferee of Landlord's
         interest shall be substituted as Landlord under this agreement.
         Landlord will be released of any further obligation to Tenant regarding
         the security deposit, only if the security deposit is returned to
         Tenant upon such transfer, or if the security deposit is actually
         transferred to the transferee. For all other obligations under this
         agreement, Landlord is released of any further liability to Tenant,
         upon Landlord's transfer.
32.      SUBORDINATION: This agreement shall be subordinate to all existing
         liens and, at Landlord's option, the lien of any first deed of trust or
         first mortgage subsequently placed upon the real property of which the
         Premises are a part, and to any advances made on the security of the
         Premises, and to all renewals, modifications, consolidations,
         replacements, and extensions. However, as to the lien of any deed of
         trust or mortgage entered into after execution of this agreement,
         Tenant's right to quiet possession of the Premises shall not be
         disturbed if Tenant is not in default and so long as Tenant pays the
         Rent and observes and performs all of the provisions of this agreement,
         unless this agreement is otherwise terminated pursuant to its terms. If
         any mortgagee, trustee, or ground lessor elects to have this agreement
         placed in a security position prior to the lien of a mortgage, deed of
         trust, or ground lease, and gives written notice to Tenant, this
         agreement shall be deemed prior to that mortgage, deed of trust, or
         ground lease, of the date of recording.
33.      TENANT REPRESENTATIONS; CREDIT: Tenant warrants that all statements in
         Tenant's financial documents and rental application are accurate.
         Tenant authorizes Landlord and Broker(s) to obtain Tenant's credit
         report at time of application and periodically during tenancy in
         connection with approval, modification, or enforcement of this
         agreement. Landlord may cancel this agreement: (i) before occupancy
         begins, upon disapproval of the credit report(s); or (ii) at any time,
         upon discovering that information in Tenant's application is false. A
         negative credit report reflecting on Tenant's record may be submitted
         to a credit reporting agency, if Tenant fails to pay Rent or comply
         with any other obligation under this agreement.

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 5 of 8)
<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

34.      DISPUTE RESOLUTION:
         A.       MEDIATION: Tenant and Landlord agree to mediate any dispute or
                  claim arising between them out of this agreement, or any
                  resulting transaction, before resorting to arbitration or
                  court action, subject to paragraph 34B(2) below. Paragraphs
                  34B(2) and (3) apply whether or not the arbitration provision
                  is initialed. Mediation fees, if any, shall be divided equally
                  among the parties involved. If for any dispute or claim to
                  which this paragraph applies, any party commences an action
                  without first attempting to resolve the matter through
                  mediation, or refuses to mediate after a request has been
                  made, then that party shall not be entitled to recover
                  attorney fees, even if they would otherwise be available to
                  that party in any such action. THIS MEDIATION PROVISION
                  APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED.
         B.       ARBITRATION OF DISPUTES: (1) Tenant and Landlord agree that
                  any dispute or claim in Law or equity arising between them out
                  of this agreement or any resulting transaction, which is not
                  settled through mediation, shall be decided by neutral,
                  binding arbitration, including and subject to paragraphs
                  34B(2) and (3) below. The arbitrator shall be a retired judge
                  or justice, or an attorney with a least 5 years of real estate
                  transactional law experience, unless the parties mutually
                  agree to a different arbitrator, who shall render an award in
                  accordance with substantive California Law. In all other
                  respects, the arbitration shall be conducted in accordance
                  with Part III, Title 9 of the California Code of Civil
                  Procedure. Judgment upon the award of the arbitrator(s) may be
                  entered in any court having jurisdiction. The parties shall
                  have the right to discovery in accordance to the Code of Civil
                  Procedure ss.1283.05.
                  (2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following
                  matters are excluded from Mediation and Arbitration hereunder:
                  (i) a judicial or non-judicial foreclosure or other action or
                  proceeding to enforce a deed of trust, mortgage, or
                  installment land sale contract as defined in Civil Code
                  ss.2985; (ii) an unlawful detainer action; (iii) the filing or
                  enforcement of a mechanic's lien; (iv) any matter that is
                  within the jurisdiction of a probate, small claims or
                  bankruptcy court; and (v) an action for bodily injury or
                  wrongful death, or for latent or patent defects to which Code
                  of Civil Procedure ss.337.1 or ss.337.15 applies. The filing
                  of a court 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 violation of the mediation and arbitration
                  provision.
                  (3) BROKER: Tenant and Landlord agree to mediate and arbitrate
                  disputes or claims involving either or both Brokers, provided
                  either or both Brokers shall have agreed to such mediation or
                  arbitration, prior to, or within a reasonable time after the
                  dispute or claim is presented to Brokers. Any election by
                  either or both Brokers to participate in mediation or
                  arbitration shall not result in Brokers being deemed parties
                  to the agreement.
                           "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE
                  AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATERS
                  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 A COURT OR JURY TRIAL. BY INITIALING 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."
                  Landlord's Initials _______, _______
                  Tenant's Initials _______, _______
35.      JOINT AND INDIVIDUAL OBLIGATIONS: If there is more than one Tenant,
         each one shall be individually and completely responsible for the
         performance of all obligations of Tenant under this agreement, jointly
         with every other Tenant, and individually, whether or not in
         possession.

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 6 of 8)
<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

36.      NOTICE: Notices may be served by mail, facsimile, or courier at the
         following address or location, or at any other location subsequently
         designated:
<TABLE>
<CAPTION>
<S>     <C>
         Landlord: Noel C. McDermott and William P. Yost       Tenant: MicroTel International, Inc.
                   502 Village Circle                                  9485 Haven Avenue, Suite 100
                   Santa Cruz, CA 95060                                Rancho Cucamonga, CA 91730
         _______________________________________________       _____________________________________

         _______________________________________________       _____________________________________
</TABLE>

         Notice is deemed effective upon the earliest of the following: (i)
         personal receipt by either party or their agent; (ii) written
         acknowledgment of notice; or (iii) 5 days after mailing notice to such
         location by first class mail, postage pre-paid.
37.      WAIVER: The waiver of any breach shall not be construed as a continuing
         waiver of the same breach or a waiver of any subsequent breach.
38.      INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord
         harmless from all claims, disputes, litigation judgments and attorney
         fees arising out of Tenant's use of the Premises.
39.      OTHER TERMS AND CONDITIONS/SUPPLEMENTS: None
                                                -------------------------------
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         The following ATTACHED supplements/exhibits are incorporated in this
         agreement: Exhibit A, B, C & D
         -----------------------------------------------------------------------
40.      ATTORNEY FEES: In any action or proceeding arising out of this
         agreement the prevailing party between Landlord and Tenant shall be
         entitled to reasonable attorney fees and costs for the non-prevailing
         Landlord or Tenant except as provided in paragraph 34A.
41.      ENTIRE CONTRACT: Time is of the essence. All prior agreements between
         Landlord and Tenant are incorporated in this agreement which
         constitutes the entire contract. It is intended as a final expression
         of the parties' agreement, and may not be contradicted by evidence of
         any prior agreement or contemporaneous oral agreement. The parties
         further intend that this agreement constitutes the complete and
         exclusive statement of its terms, and that no extrinsic evidence
         whatsoever may be introduced in any judicial or other proceeding, if
         any, involving this agreement. Any provision of this agreement that is
         held to be invalid shall not affect the validity or enforceability of
         any other provision in this agreement. This agreement shall be binding
         upon, and inure to the benefit of, the heirs, assignees and successors
         to the parties.
42.      BROKERAGE: Landlord and Tenant shall each pay to Broker(s) the fee
         agreed to, if any, in a separate written agreement. Neither Tenant nor
         Landlord has utilized the services of, or for any other reason owes
         compensation to, a licensed real estate broker (individual or
         corporate), agent, finder, or other entity, other than as named in this
         agreement, in connection with any act relating to the Premises,
         including, but not limited to, inquires, introductions, consultations,
         and negotiations leading to this agreement. Tenant and Landlord each
         agree to indemnify, defend and hold harmless the other, and the Brokers
         specified herein, and their agents, from and against any costs,
         expenses, or liability for compensation claimed inconsistent with the
         warranty and representation in this paragraph 42.
43.      AGENCY CONFIRMATION: The following agency relationships are hereby
         confirmed for this transactions:
         Listing Agent:______________________________ (Print Firm Name) is the
         agent of (check one):
         the Landlord exclusively; or both the Tenant and Landlord. Selling
         Agent:______________________________ (Print Firm Name)(if not same as
         Listing Agent) is the agent of (check one):
         the Tenant exclusively; or the Landlord exclusively; or both the Tenant
         and Landlord. Real Estate Brokers are not parties to the agreement
         between Tenant and Landlord.

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 7 of 8)
<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________

--------------------------------------------------------------------------------
Landlord and Tenant acknowledge and agree that Brokers: (i) do not guarantee the
condition of the Premises; (ii) cannot verify representations made by others;
(iii) will not verify zoning and land use restrictions; (iv) cannot provide
legal or tax advice; (v) will not provide other advice or information that
exceeds the knowledge, education or experience required to obtain a real estate
license. Furthermore, if Brokers are not also acting as Landlord in this
agreement, Brokers: (vi) do not decide what rental rate a Tenant should pay or
Landlord should accept; and (vii) do not decide upon the length or other terms
of tenancy. Landlord and Tenant agree that they will seek legal, tax, insurance,
and other desired assistance from appropriate professionals.
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>     <C>

Tenant By: MicroTel International Inc. /s/ Carmine T. Oliva, CEO, Chairman & Pres.       Date   7/12/04
      --------------------------------------------------------------------------------         ---------
        MicroTel International Inc.
--------------------------------------------------------------------------------------------------------
(Print Name)
Address                                               City                 State          Zip
       ----------------------------------------------    ------------------     ----------   -----------

Tenant                                                                     Date
      ---------------------------------------------------------------------    -------------------------

(Print Name)
Address                                               City                 State          Zip
       ----------------------------------------------    ------------------     ----------   -----------

Landlord    Noel C. McDermott, By Warren P. Yost, Attorney-in-Fact   Date       7/12/04
         -----------------------------------------------------------     -------------------------------
                 (Owner or agent with authority to enter into this agreement)
Address  502 Village Circle                     City  Santa Clara       State    CA         Zip   95060
       -----------------------------------------    ----------------------------------------------------

Landlord    Warren P. Yost                                                     Date   7/12/04
         ----------------------------------------------------------------------    -----------
                 (Owner or agent with authority to enter into this agreement)
Address      10324 Miner Place                      City   Cupertino           State   CA     Zip  95014
       ---------------------------------------------    -----------------------     ----------   -------

Agency relationships are confirmed as above. Real estate brokers who are not
also Landlord in this agreement are not a party to the agreement between
Landlord and Tenant.

Real Estate Broker (Leasing Firm)
                                 ------------------------------------------------------------------------
By (Agent)                                                                        Date
          -----------------------------------------------------------------------       -----------------

Address                                                City                State        Zip
       ------------------------------------------------    ----------------     --------   -------------
Telephone                                             Fax
         --------------------------------------------    ---------------------------------------
E-mail
       --------------------------------------------------------------------------

Real Estate Broker (Leasing Firm)
                                 ------------------------------------------------------------------------
By (Agent)                                                                        Date
          -----------------------------------------------------------------------       -----------------

Address                                                City                State        Zip
       ------------------------------------------------    ----------------     --------   -------------
Telephone                                             Fax
         --------------------------------------------    ---------------------------------------
E-mail
       --------------------------------------------------------------------------
</TABLE>

                                    Landlord and Tenant acknowledge receipt of
                                    a copy of this page.
                                    Landlord's initials ( NCM by WPY ) ( WPY )
                                    Tenant's initials ( CTO ) (_____)
                                    --------------------------------------------
                                    Reviewed by
                                    Broker of Designee __________ Date__________
                                    --------------------------------------------
Commercial Lease Agreement (CL-11 Page 8 of 8)
<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________


EXHIBIT A:  PROPERTY DESCRIPTION


Property:                  894 Faulstich Court
                           San Jose, CA 95112-1361

Description:               Manufacturing building
                           Building area: thirty thousand (30,000) square feet
                           Steel building construction Over fifteen (15) percent
                           build out Approximately forty-five (45) parking
                           spaces Situated on fee simple land

<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________


EXHIBIT B:  RENEWAL OR EXTENSION TERMS


The lessee will have the right for three 5-year renewal options adjusted to
market rate at the time of each renewal with an identical rate adjuster each
month, as specified tin Exhibit C.

<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________


EXHIBIT C:  BASE RENT


Seven (7) year, noncancelable lease, at a beginning rate of $0.90 per square
foot, plus any upward adjustment in the Federal Funds Discount Rate in effect at
the time of closing referenced to the Federal Reserve Discount Rate of one
percent (1%) in effect on the signing date of April 22, 2004 stated in the
Binding Agreement in Principle Regarding the Purchase of Outstanding Capital
Stock of Larus Corporation and Vista Corporation.

The lease is triple net and is adjusted as described following:

The portion of the monthly lease payment that is allocated by the lessor to
cover interest payments on the mortgage covering the facility (the "Interest
Component") will be subject to adjustment, upwards and/or downwards, at the
beginning of each month to reflect any changes in the financial index used by
the lessor's lender relating to the lessor's mortgage on the facility (the
"Index Rate") from the beginning of the prior monthly period. The maximum
adjustment in any given year shall be 1-1/2% with a maximum cumulative
adjustment over the term of the lease of 8%. No adjustment shall be made if such
adjustment would reduce the monthly square foot rental amount to an amount below
$0.90.

By way of example, if at the beginning of the second month, after the effective
date of the lease, the Index Rate has increased by 0.25% since the effective
date of the lease, the Interest Component portion of the lease rate would be
increased by 0.25% until the next adjustment, if any.

<PAGE>

Premises 894 Faulstich Court, San Jose CA 95112-1361        Date________________


EXHIBIT D:  TENANT IMPROVEMENTS


A Lessor leasehold improvement allowance of $11.00 per square foot.