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                                                                 EXHIBIT 10.16

                THIRD AMENDMENT TO AGREEMENT RE EFFECTIVENESS AND
                      CANCELLATION OF AGREEMENT FOR OPTION

         This THIRD AMENDMENT TO AGREEMENT RE EFFECTIVENESS AND CANCELLATION
OF AGREEMENT FOR OPTION (the "THIRD AMENDMENT TO EFFECTIVENESS AGREEMENT") is
made and entered into as of this 29th day of March 2000, by and between 3333
Hillview Associates, LLC, a Delaware limited liability company
("ASSOCIATES"), Watkins-Johnson Company, a California corporation ("WJ"),
with reference to the following facts and circumstances:

                                    RECITALS

         A.   Associates requested that WJ execute and deliver that certain
              AGREEMENT FOR OPTION TO AMEND SUBLEASE, AMENDMENT OF SUBLEASE
              AND JOINT ESCROW INSTRUCTIONS, dated as of March 6, 2000 (the
              "OPTION AGREEMENT") and that certain Long Term Amendment to
              Lease (as defined in the Option Agreement);

         B.   Associates and WJ entered into that certain Agreement Re
              Effectiveness And Cancellation Of Agreement For Option, dated
              as of March 8, 2000 ("ORIGINAL EFFECTIVENESS AGREEMENT"),
              pursuant to which the Associates and WJ agreed that the Option
              Agreement and the Long Term Amendment to Lease would cease to
              be effective unless WJ notified Associates in writing (the
              "EFFECTIVENESS NOTICE") that it had entered into a binding
              lease for a building or buildings in which WJ may conduct its
              business on or before March 15, 2000;

         C.   Associates and WJ entered into that certain First Amendment to
              Agreement Re Effectiveness And Cancellation Of Agreement For
              Option, dated as of March 15, 2000 ("FIRST AMENDMENT TO
              EFFECTIVENESS AGREEMENT"), pursuant to which the Associates and
              WJ agreed that the Option Agreement and the Long Term Amendment
              to Lease would cease to be effective unless WJ notified
              Associates in writing (the "EFFECTIVENESS NOTICE") that it had
              entered into a binding lease for a building or buildings in
              which WJ may conduct its business on or before March 22, 2000;

         D.   Associates and WJ entered into that certain First Amendment to
              Agreement Re Effectiveness And Cancellation Of Agreement For
              Option, dated as of March 22, 2000 ("SECOND AMENDMENT TO
              EFFECTIVENESS AGREEMENT"), pursuant to which the Associates and
              WJ agreed that the Option Agreement and the Long Term Amendment
              to Lease would cease to be effective unless WJ notified
              Associates in writing (the "EFFECTIVENESS NOTICE") that it had
              entered into a binding lease for a building or buildings in
              which WJ may conduct its business on or before March 29, 2000;

         E.   Associates and WJ desire to extend the date on or before which
              WJ shall deliver to Associates the Effectiveness Notice under
              the Effectiveness Agreement from March 29, 2000 to April 05,
              2000.


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         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, WJ, Associates and Morrco
hereby agree as follows:

         1. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Original Effectiveness
Agreement.

         2. The Original Effectiveness Agreement is hereby amended by
deleting the date "March 29, 2000" wherever it appears in the Original
Effectiveness Agreement and substituting therefor the date "April 05, 2000."

         3. Except as modified by this Third Amendment to Effectiveness
Agreement, the Original Effectiveness Agreement, as amended by the First
Amendment to Effectiveness Agreement and the Second Amendment to
Effectiveness Agreement shall remain in full force and effect, without
modification or impairment.


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         4. This Third Amendment to Effectiveness Agreement may be executed
in counterparts, each of which when taken together shall constitute but one
agreement.

         IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first above written.

                                     3333 HILLVIEW ASSOCIATES, LLC, a
                                     Delaware limited liability company

                                     By:  JD Palo Alto Group, L.L.C.,
                                     a Delaware limited liability company,
                                     Manager

                                        By:
                                           -----------------------------------

                                        Its:  MANAGER
                                            ----------------------------------

                                     WATKINS-JOHNSON COMPANY,
                                     a California corporation

                                     By:  /s/ MALCOM J. CARABALLO
                                        --------------------------------------
                                          Malcom J. Caraballo

                                     Its:  PRESIDENT AND CEO
                                         -------------------------------------


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