EMPLOYMENT AGREEMENT

         Agreement made as of the 23rd day of July, 2001 (the "Effective Date"),
by and between Cylink Corporation,  a California  corporation with its principal
place of  business  at 3131 Jay  Street,  Santa  Clara,  California  95054  (the
"Company"),  and Mr. Philip Breeden residing at 57 San Benito Ave., Atherton, CA
94027 (the "Executive").

                              W I T N E S S E T H :

         WHEREAS,  the Company  desires to employ  Executive  as Vice  President
Engineering, and Executive is willing to serve in such capacity; and

         WHEREAS,  the Company and  Executive  desire to set forth the terms and
conditions of such employment.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Company and Executive agree as follows:

1. Employment.

         1.1.  The Company  hereby  agrees to employ  Executive,  and  Executive
agrees  to be  employed  by the  Company,  on the terms  and  conditions  herein
contained,  as of the Effective Date, as its Vice President Engineering,  and in
such other executive  capacities  assigned by the Chief Executive  Officer which
are not inconsistent with Executive's duties.  Executive's duties, authority and
responsibilities  shall be  commensurate  with those of a similar  position  for
another  company  similar in size and business.  During the term of  Executive's
employment,  he  shall be based at the  Company's  principal  office;  provided,
however,  that Executive shall be required to travel

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as reasonably necessary in connection with the official business of the Company.
Executive  shall  maintain  his  permanent   residence  within  the  surrounding
community. If so requested by the Chief Executive Officer,  Executive shall also
serve as an officer of the  Company's  affiliated  entities  without  additional
compensation.

         1.2. The Executive shall devote substantially all of his business time,
energy,  skill and efforts to the performance of his duties and shall faithfully
serve the  Company  to the best of his  abilities  in a  diligent,  trustworthy,
businesslike  and efficient  manner.  The foregoing shall not prevent  Executive
from  participating  in  not-for-profit  activities or from managing his passive
personal  investments provided that these activities do not materially interfere
with Executive's obligations hereunder.

2. Term of Employment.

         Executive's  employment  under this Agreement  shall be for a term (the
"Employment  Term")  commencing on the "Effective Date" and terminating,  unless
otherwise  terminated  earlier as provided in this  Agreement,  on July 23, 2006
(the "Original  Employment  Term"),  provided that the Employment  Term shall be
extended  (subject to earlier  termination  as provided in this  Agreement)  for
additional  one (1) year  periods (the  "Additional  Terms"),  unless,  at least
thirty  (30)  days  prior  to the  end of the  Original  Employment  Term or any
Additional  Term, the Company or the Executive has notified the other in writing
that the Employment Term shall expire at the end of the then
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July 23, 2001

current term. If and when this  Agreement is so extended,  the term  "Employment
Term" used in this Agreement shall include all such extensions.  The Executive's
obligations concerning the Company's Inventions,  Confidential Information,  not
to compete or solicit the Company's  customers or  employees,  and the Company's
obligations to provide indemnification, as provided elsewhere in this Agreement,
shall  survive  and  remain in effect  notwithstanding  the  termination  of the
Employment  Term or a breach of this  Agreement  by either  the  Company  or the
Executive.

3. Compensation.

         3.1. As compensation for his services under this Agreement, the Company
shall pay  Executive an annual  salary of $185,000  ("Base  Salary").  Such Base
Salary shall be payable in equal installments (not less frequently than monthly)
and subject to  withholding  in  accordance  with the Company's  normal  payroll
practices.

         3.2.  Executive's Base Salary may be increased from time to time by the
Chief  Executive  Officer,  but solely in his  discretion  and not as an implied
obligation of this Agreement. Executive's Base Salary may also be decreased from
time to time by the Chief Executive  Officer in his sole discretion based on his
assessment of the Executive's performance or changes in the scope of Executive's
responsibilities,  provided that  Executive  will be given written  notice and a
minimum  of ninety  (90) days to cure any such  assessment  which,  in the Chief
Executive Officer's discretion, warrants such a reduction.

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         3.3. In addition to the Base Salary,  for each calendar year  completed
during the  Employment  Term, the Company shall pay to Executive an annual bonus
of $70,000 based,  in part, on  achievement of performance  goals which shall be
determined by the Chief Executive  Officer in  consultation  with the Executive.
The actual bonus may vary in the sole discretion of the Chief Executive  Officer
based on his  assessment  of the  Executive's  performance  (and  subject to any
Company austerity plans).

         3.4. The Company shall reimburse  Executive for all reasonable expenses
incurred  by him in the course of  performing  his duties  under this  Agreement
which are consistent  with the Company's  then current  policies with respect to
travel,  entertainment  and other  business  expenses,  subject to the Company's
requirements concerning reporting and documentation of such expenses.

4. Benefits.

         4.1. During the Employment Term, Executive shall be entitled to (i) all
benefits,  if any, which are generally provided from time to time by the Company
to its senior executive officers,  including,  without limitation, (i) any life,
medical and disability insurance plans, (ii) incentive, profit-sharing, deferred
compensation   and  similar  such  plans,   subject  to:  (A)  the   Executive's
satisfaction  of the eligibility  requirements,  if any, and (B) with due credit
for the minimum annual bonus already provided under this
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July 23, 2001

Agreement, and (iii) all other benefits provided under this Agreement.

5. Stock Options.

         5.1.  The  Compensation  Committee  of  the  Board  (the  "Compensation
Committee"),  or its delegee,  authorized  granting to Executive on September 4,
2001,  options to purchase 170,000 shares of Company common stock at an exercise
price of $0.54 per share,  pursuant and subject to the  Company's  1994 Flexible
Stock  Incentive  Plan (the  "Plan").  Such options  shall be  non-qualified  or
incentive  stock options,  or a combination  thereof as determined by the Plan's
Administrator.  The terms of the options,  as more fully set forth in the option
agreement  annexed  hereto as  Attachment A, and  specifically  modified by this
Section 5, shall provide that (i) they shall be for a maximum six (6) year term,
and (ii) shall vest and become exercisable ratably over a two (2) year period on
the last day of each  month  during  such  period,  provided  the  Executive  is
employed by the Company on each vesting date.

         5.2. Furthermore,  in the event of a "Corporate Transaction" or "Change
In Control" during the Term of this Agreement, the Executive will be entitled to
vesting  of all of the  Executive's  then  unvested  options  (the  "Accelerated
Options")  under  all  option  agreements  granted  during  the  period  of  his
employment, subject to the provisions of this Section 5:

         5.2.1.   In the  event of a  "Corporate  Transaction"  the  Accelerated
                  Options shall
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July 23, 2001

                  fully vest  immediately  prior to closing unless the Company's
                  successor in interest, or its parent, offers to:

         5.2.2.   either  (i)  assume  the  Executive's  Accelerated  Options in
                  accordance  with  Section  11 of the  Plan and  allow  them to
                  continue  vesting  in  accordance  with their  terms,  or (ii)
                  replace them with equivalent options,  having the same vesting
                  schedule as the  original  grant by the  Company,  to purchase
                  publicly  traded  shares in the successor  corporation  or its
                  Parent  by  exchanging  them at the  same  rate of  conversion
                  offered to the Company's common  shareholders in the Corporate
                  Transaction, and

         5.2.3.   provided  further  that the  successor  in interest  agrees to
                  fully vest all such assumed or exchanged  Accelerated  Options
                  on the earlier of: (i) the first  anniversary of his continued
                  employment following such Corporate Transaction,  or (ii) upon
                  termination  of the  Agreement by the Company or its successor
                  in interest if such  termination  occurs  either  without good
                  Cause or by the Executive for Good Reason.

         5.3. In the event of a Change In Control, the Accelerated Options shall
vest on the earlier of: (i) the first anniversary of such Change In Control,  or
(ii) upon  termination  of the  Agreement  by the  Company or its  successor  in
interest  if  such  termination  occurs  either  without  good  Cause  or by the
Executive for Good Reason. For purposes of the

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Agreement and this Amendment,  the terms "Corporate  Transaction" and "Change in
Control"  shall  have the  definitions  of the Plan,  except  that a  "Corporate
Transaction"  shall  also  include  the  acquisition  of  more  than  50% of the
Company's  outstanding  securities  by any person or related group of persons as
defined  in  Section  13(d)(3)  of the  Securities  Act of 1934,  other than the
entities and transactions identified on Attachment "B".

6. Paid Time Off ("PTO").

         During  the  Employment  Term,  Executive  shall  be  entitled  to PTO,
including  vacation,  equal  to the  greater  of:  (i)  fifteen  days  plus  one
additional  day for each year of employment by the Company,  or (ii) twenty days
plus one additional day for each year of employment under this Agreement; but in
no event more than 25 days, in each full calendar year (prorated for any partial
year) to be taken at such  times as  mutually  agreed by the  Executive  and the
Chief Executive Officer.

7. Termination.

         7.1. Executive's  employment under this Agreement shall terminate prior
to expiration of the Employment Term  (including any Additional  Terms which may
be in effect) upon the occurrence of any of the following events:

         7.1.1.   Automatically on the date of Executive's death.

         7.1.2.   Upon  written  notice by the Chief  Executive  Officer  to the
                  Executive  for

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                  Cause. "Cause" shall mean (A) the Executive being convicted of
                  (or  pleading  nolo  contendere  to) a  felony  (other  than a
                  traffic-related  offense); (B) the barring of the Executive by
                  any  regulatory  authority  from holding his  positions or any
                  limitations imposed on the Company by any regulatory agency if
                  the  Executive  continued to hold his  positions;  (C) willful
                  refusal by the  Executive  to attempt to properly  perform his
                  material  obligations  under  this  Agreement,  or  attempt to
                  follow any direction of the Chief Executive Officer consistent
                  with  this  Agreement,   provided  the  refusal  to  follow  a
                  direction  shall not be Cause if the  Executive  in good faith
                  believes that such  direction is not legal or is contrary to a
                  specific   provision  of  published   Professional   Standards
                  applicable to Executive's  duties,  and promptly  notifies the
                  Company's  General Counsel in writing of such belief;  (D) the
                  Executive's  willful  misconduct or material gross  negligence
                  with  regard  to the  business,  assets  or  employees  of the
                  Company  or its  affiliated  entities  (including  as  willful
                  misconduct, without limitation, the Executive's willful breach
                  of any  fiduciary  duty  he may  owe  to  the  Company  or its
                  affiliates  under  applicable law or this agreement but not de
                  minimis  personal  use of Company  assets or  reasonable  good
                  faith expense account  disputes),  (E) the Executive's  theft,
                  dishonesty  or  fraud  with  regard  to  the  Company  or  its

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                  affiliates  which is  intended  to  enrich  the  Executive  or
                  another  person or entity but not de minimis  personal  use of
                  Company  assets  or  reasonable  good  faith  expense  account
                  disputes, (F) the Executive's inability to competently perform
                  his assigned  duties,  or (G) any other material breach by the
                  Executive of this  Agreement  that remains  uncured for thirty
                  (30)  days  after  written  notice  thereof  is  given  to the
                  Executive. During any period in which the Executive is charged
                  with committing a crime covered by (A) above,  the Company may
                  suspend Executive from his titles, duties and authority herein
                  pending  resolution of his status under  applicable  law; such
                  suspension  shall  be with  pay for up to six (6)  months  and
                  thereafter shall be without pay. In the event of any Corporate
                  Transaction  or Change  in  Control,  subsections  (F) and (G)
                  shall be deemed eliminated and without force or effect.

         7.1.3.   Upon  written  notice by the Chief  Executive  Officer  to the
                  Executive,  if the  Executive  (as  determined  by  the  Chief
                  Executive  Officer in good faith) fails to  regularly  perform
                  the material duties  hereunder by reason of mental or physical
                  illness or incapacity for an aggregate period of more than 180
                  days  during  any 365 day  period (a  "Disability"),  provided
                  that,  during the Employment  Term prior to such  termination,
                  the Company's  obligations

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                  hereunder  shall be reduced by any payments  being received by
                  Executive under any long-term disability program.

         7.1.4.   Upon written  notice by the  Executive to the Chief  Executive
                  Officer for Good Reason stating with  specificity  the details
                  of the Good  Reason,  if the stated  Good  Reason is not cured
                  within  twenty (20) days of the giving of such  notice.  "Good
                  Reason"  shall mean any  material  breach of any  provision of
                  this  Agreement by the Company,  including  but not limited to
                  (i) any reduction in Executive's duties or responsibilities as
                  Vice President of  Engineering  (other than those duties which
                  may no  longer  be  required  if the  Company  ceases  to be a
                  publicly  traded  company) or (ii) any demand that he relocate
                  his principal residence beyond any of the counties immediately
                  adjacent to San Francisco Bay, without his consent. Any notice
                  for Good Reason shall be given within  ninety (90) days of the
                  later of (i) the occurrence of the triggering  event,  or (ii)
                  the date upon which Executive could be reasonably  expected to
                  know of such event.

         7.1.5.   Immediately  upon written notice to the Executive by the Chief
                  Executive Officer without Cause.

         7.1.6.   Upon the voluntary  termination by the Executive  without Good
                  Reason  upon  thirty  (30) days  prior  written  notice to the
                  Company (which the

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July 23, 2001

                  Company may, in its sole discretion,  make effective earlier).
                  A notice by Executive of non-renewal  of the  Employment  Term
                  shall be deemed a voluntary termination by Executive.

         7.2.  Upon  such  earlier  termination  of  the  Employment  Term,  the
Executive  shall be promptly  paid (i) any unpaid  salary and  accrued  vacation
through his date of  termination,  (ii) a prorated  portion of his unpaid annual
bonus,  as determined  by the Chief  Executive  Officer in accordance  with this
Agreement,  for the calendar year of his  termination,  (iii) reimbursed for any
expenses  incurred in  connection  with the business of the Company prior to his
date of termination  which he would be otherwise  entitled to in accordance with
the  Company's  policies on the  reimbursement  of business  expenses,  and (iv)
receive  any  benefits  or  fringes  due under  any  benefit  or fringe  plan or
arrangement in accordance with the terms of said plan or arrangement due for the
period prior to such termination.

         7.3. In addition,  if the  termination is by the Company without Cause,
or by the  Executive  for Good  Reason,  as  provided  above,  and  prior to the
Executive's sixty-fifth birthday, the Executive shall receive in full settlement
of all amounts owed him,  provided he signs a release running to the Company and
its related entities and their respective  officers,  directors and employees of
all claims  relating to his employment and  termination  thereof (other than any
right to  indemnification  under the  Company's

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Articles of Incorporation or By-Laws or the Indemnification Agreement annexed as
Attachment C hereto,  which shall survive) in such form as reasonably  requested
by the Company:

         7.3.1.   Thirteen  bi-weekly  installments  of severance pay each in an
                  amount equal to one  twenty-sixth  of the then sum of his Base
                  Salary and annual bonus,  based on the amount paid for service
                  during  the  prior  six month  period  (or,  in the event of a
                  corporate austerity program applied to Executive together with
                  other officers of the Company,  then the amount that otherwise
                  would have been paid in  accordance  with  Section  3.3),  pro
                  rated if  necessary,  and subject to the offset of any amounts
                  due, and

         7.3.2.   payment by the Company of the premiums for Executive's and his
                  dependents'  COBRA coverage for the Company's health insurance
                  plan that  generally  applies to executives  for the period in
                  which  Executive  is  receiving  severance  pursuant  to  this
                  Agreement or, if earlier,  until  Executive and his dependents
                  cease to be eligible for such COBRA  coverage.  The  Company's
                  payment  obligations  under this Section  (other than those in
                  the  first  sentence)  shall  immediately  cease in the  event
                  Executive  materially  breaches any of his  obligations  under
                  this   Agreement   concerning   the   Company's    Inventions,
                  Confidential  Information,  and not to

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                  compete or solicit the Company's customers or employees.

         7.3.3.   If the  Employment  Term ends early on account of  Disability,
                  Executive shall be entitled to receive only such amounts as he
                  otherwise be entitled to under any disability policy sponsored
                  by the Company in accordance with this Agreement.

         7.4. If the  Employment  Term ends early pursuant to this Section 7 for
any other reason,  Executive shall cease to have any rights to salary,  bonus or
benefits  other than:  (i) salary or bonus which has accrued but is unpaid as of
the end of the Employment  Term, and (ii) to the limited extent  provided in any
benefit or equity plan or arrangement in which Executive has  participated as an
employee of the Company,  any benefits or rights which by their  specific  terms
extend beyond termination of Executive's employment.

         7.4.1.   All  aforesaid  amounts  in this  Section  shall be subject to
                  required withholding.  The Company and its affiliated entities
                  shall  have  no  other  obligations  to the  Executive  upon a
                  termination except as specifically provided in this Agreement.

8. No Duty to Mitigate/Set-Off.

Except as  specifically  stated in this Agreement,  the Company's  obligation to
make any  payments  to the  Executive  shall  not be  affected  by any  set-off,
counterclaim,

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recoupment,  defense, or other claim, right or action which the Company may have
against  the  Executive  or  others.  The  Company  agrees  that if  Executive's
employment with the Company is terminated during the Employment Term,  Executive
shall not be  required  to seek  other  employment  or to  attempt in any way to
reduce  any  amounts  payable  to  Executive  by the  Company  pursuant  to this
Agreement.  Further,  the amount of any payment or benefit  provided for in this
Agreement  shall not be  reduced  by any  compensation  earned by  Executive  or
benefit provided to Executive as the result of employment by another employer or
otherwise.  Any amounts due under Section 7 are  inclusive,  and in lieu of, any
amounts   payable  under  any  other  salary   continuation  or  cash  severance
arrangement  of the  Company.  To the  extent  any  such  payments  are  made to
Executive  under any other salary  continuation  or cash severance  arrangement,
such payments shall be offset from the amount due Executive under Section 7.

9. Inventions and Other Intellectual Property.

The Company and Executive agree to promptly execute the Proprietary  Information
and  Invention  Agreement,  annexed  hereto  as  Attachment  D, and any  revised
versions  which are  subsequently  issued by the Company as part of its standard
terms of employment.

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10. Confidential Information.

         Executive   acknowledges   that  the  trade  secrets,   know  how,  and
proprietary  information and observations  concerning the business or affairs of
the Company, or any of its subsidiaries or affiliates or any predecessor thereof
(collectively "Confidential Information"), obtained by him while employed by the
Company  pursuant  to this  Agreement  are the  property  of the Company or such
subsidiary  or  affiliate.  Executive  agrees that he shall not  disclose to any
unauthorized  person or use for his own  account  any  Confidential  Information
without the prior  written  consent of the Chief  Executive  Officer  unless and
except to the extent that the  aforementioned  matters become generally known to
and available for use by the public other than as a result of  Executive's  acts
or omissions to act. If Executive receives legal process,  he may comply with it
provided he promptly  notifies the Company and  diligently  cooperates  with the
Company in obtaining a protective order.  Executive shall deliver to the Company
at the termination of the Employment  Term, or at any other time the Company may
request,  all memoranda,  notes,  plans,  records,  reports,  computer tapes and
software  and other  documents  and data (and  copies  thereof)  relating to the
Confidential  Information or business of the Company or any of its  subsidiaries
or affiliates which he may then possess or have under his control.

11. Non-Compete, Non-Solicitation.

         11.1. Executive  acknowledges that in the course of his employment with
the

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Company  pursuant to this  Agreement he will become  familiar with the Company's
Confidential  Information  and that his services will be of special,  unique and
extraordinary value to the Company.

         11.2.  During  the  Employment  Term and for one (1)  year  thereafter,
Executive shall not enter into Competition with the Company or its affiliates to
the  extent  such  Competition  requires  Executive  to  divulge,   disclose  or
communicate  to any  third  party,  or make  use of,  any  Company  Confidential
Information.   For  purposes  of  this  Agreement,   "Competition"   shall  mean
participating,  directly or indirectly,  as an individual  proprietor,  partner,
officer,  employee,  director,  joint  venturer,  lender,  consultant  or in any
capacity  whatsoever  (within the United States or in any foreign  country where
the Company or its  affiliates  do  business)  in a business  which  develops or
markets goods,  services or intangible property which is similar to any of those
marketed or developed by the Company or its affiliates;  provided, however, that
such participation shall not include (i) the mere ownership of not more than two
percent (2%) of the total outstanding stock of a publicly held company, (ii) the
performance  of services for any  enterprise to the extent such services are not
performed,  directly or indirectly, for a business in the aforesaid competition,
(iii) any  activity  engaged  in with the prior  written  approval  of the Chief
Executive Officer, or (iv) Executive's  employment by a non Competitive division
(or other business  unit) of a company which is in Competition  with

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the Company so long as Executive is not involved with the  competitive  division
(or other business unit).  Notwithstanding  anything else in this Section to the
contrary,  subsequent to the  termination of Executive's  employment  hereunder,
Executive may, in his sole discretion,  passively invest in any entity, provided
Executive  does not divulge,  disclose or communicate  any Company  Confidential
Information to such company or its affiliates, employees, officers, consultants,
directors,  lenders, or investors and further provided Executive does not render
services to such  company or  otherwise  violates  this  Section  (other than by
making such passive investments).

         11.3.  During  the  Employment  Term and for two (2) years  thereafter,
Executive shall not directly or indirectly  solicit for Competitive  products or
induce any customer of the Company or its affiliates to terminate,  or otherwise
to cease,  reduce,  or diminish in any way its  business  relationship  with the
Company or its affiliates.

         11.4. During the Employment Term and one (1) year thereafter, Executive
shall not recruit, solicit or induce any nonclerical employees of the Company or
its affiliates to terminate  their  employment or otherwise cease their business
relationship  with the  Company  or its  affiliates,  or hire or assist  another
person  or  entity  to hire  any  nonclerical  employee  of the  Company  or its
affiliates.  Executive  agrees not to circumvent this  prohibition by hiring any
such employee within six (6) months after the employee terminates his employment
with the Company or its affiliates.

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Notwithstanding  the foregoing,  if requested by any entity with which Executive
is not affiliated,  Executive may serve as a reference for any person who at the
time of the request is not an employee of the Company or any of its affiliates.

         11.5.  If, at the time of  enforcement  of this Section,  a court holds
that the restrictions  stated herein are unreasonable  under  circumstances then
existing,  the parties agree that the maximum period, scope or geographical area
reasonable under such circumstances  shall be substituted for the stated period,
scope or area and that the court  shall be allowed  to revise  the  restrictions
contained herein to cover the maximum period, scope and area permitted by law.

12. Refund Of Benefits.

         In the  event  Executive  is in  breach of  Section  11  ("Non-Compete,
Non-Solicitation"),  or  such  modified  version  as may  be  required  by  law,
Executive will relinquish to the Company:

         12.1. all stock options and other  benefits  under any stock  incentive
plan,  including the Options  granted under this Agreement and  Attachment  "A",
which vested in the  Executive's  interest  during the six months  preceding the
last day of Executive's  employment by the Company. In the event Executive sells
or otherwise  transfers any such Options,  Executive  will refund to the Company
the amount of the gross economic value realized by Executive.

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         12.2. all bonus payments, or any pro rata portions thereof,  which were
paid or otherwise  owed to Executive  for his services  rendered  during the six
months preceding the last day of Executive's employment by the Company.

         12.3. all severance payments  calculated on the basis of salary,  bonus
or both.

         12.4. The  relinquishment of the foregoing  benefits in accordance with
this Section shall not limit or otherwise preclude all other rights and remedies
of the Company due to the Executive's breach of this Agreement.

13. Enforcement.

         Because  Executive's  services  are unique and  because  Executive  has
access to  Confidential  Information  of the  Company  and its  affiliates,  the
parties  hereto  agree  that  money  damages,  while  not  waived,  would  be an
inadequate  remedy for any breach of this Agreement.  Therefore,  in the event a
breach or threatened breach of this Agreement,  the Company or its successors or
assigns may, in addition to other  rights and remedies  existing in their favor,
including  the  award  of  money  damages,  apply  to  any  court  of  competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions hereof (without posting
a bond or other security).

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Employment Agreement
Phillip Breeden
July 23, 2001

14. Indemnification.

         Executive  shall be entitled to be indemnified for his activities as an
officer to the full extent provided in the Articles of Incorporation and By-Laws
of the Company and in accordance with the  Indemnification  Agreement annexed as
Attachment C hereto,  which the Company and Executive agree to promptly execute.
In addition,  the Company  shall cover  Executive  under  Directors and Officers
Liability  Insurance  during the  Employment  Term in the same amount and to the
same extent as the Company covers its other officers.

15. Executive Representations.

         Executive   represents  and  warrants  to  the  Company  that  (i)  the
execution,  delivery and performance of this Agreement by Executive does not and
will not conflict with,  breach,  violate or cause a default under any contract,
agreement,  instrument,  order, judgment or decree to which Executive is a party
or by which he is bound,  (ii) except with respect to agreements which have been
furnished to the Company and relate primarily to  confidentiality,  intellectual
properties  and/or ethical conduct entered into between Executive and his former
employer(s),  Executive is not a party to or bound by any employment  agreement,
change in control agreement,  non-compete agreement or confidentiality agreement
with any other person or entity,  (iii) upon the  execution and delivery of this
Agreement  by the  Company,  this  Agreement  shall  be the  valid  and

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Employment Agreement
Phillip Breeden
July 23, 2001

binding obligation of Executive,  enforceable in accordance with its terms, (iv)
Executive is a United States  citizen or a lawfully  resident  alien entitled to
work within the United  States,  and (v) Executive will in performing his duties
not utilize any confidential information of any other person or entity.

16. Entire Agreement; Modification.

         This Agreement,  and all documents incorporated herein,  constitute the
full and complete  understanding  of the parties  hereto and will  supersede all
prior  agreements  and  understandings,  oral or  written,  with  respect to the
subject  matter  hereof.  Each  party  to this  Agreement  acknowledges  that no
representations,  inducements,  promises or agreements,  oral or otherwise, have
been made by either party, or anyone acting on behalf of either party, which are
not  embodied  in this  Agreement,  and that no other  agreement,  statement  or
promise  not  contained  in this  Agreement  shall  be valid  or  binding.  This
Agreement  may not be modified  or amended  except by an  instrument  in writing
signed by the party against whom or which enforcement may be sought.

17. Survival.

         The   provisions  of  this   agreement   which  by  their  terms  imply
continuation beyond the end of the Employment Term shall survive notwithstanding
any termination of the Employment Term.

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Employment Agreement
Phillip Breeden
July 23, 2001

18. Severability.

         Any  term  or  provision  of  this   Agreement   which  is  invalid  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or  unenforceability  without rendering invalid
or  unenforceable  the  remaining  terms and  provisions  of this  Agreement  or
affecting  the validity or  enforceability  of any of the terms of provisions of
this Agreement in any other jurisdiction.

19. Waiver of Breach.

         The  waiver  by any  party  of a  breach  of  any  provisions  of  this
Agreement, which waiver must be in writing to be effective, shall not operate or
be construed as a waiver of any subsequent breach.

20. Notices.

         All notices  hereunder  shall be in writing and shall be deemed to have
been duly given when  delivered by hand, or one (1) day after sending by express
mail or other  "overnight  mail  service,"  or three (3) days  after  sending by
certified or registered mail, postage prepaid, return receipt requested.  Notice
shall be sent as follows: if to Executive, to the last known address provided by
the  Executive in the Company's  records and, if to the Company,  at the address
set forth on the first page of this Agreement, attention of the General Counsel.
Either  party may change the notice  address by notice in  accordance  with this
Section.

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Employment Agreement
Phillip Breeden
July 23, 2001

21. Assignability; Binding Effect.

         This  Agreement  shall be  binding  upon and  inure to the  benefit  of
Executive and Executive's legal  representatives,  heirs and  distributees,  and
shall be binding  upon and inure to the benefit of the Company,  its  successors
and assigns. This Agreement may not be assigned by the Executive. This Agreement
may not be assigned by the Company, except in connection with a merger or a sale
by the  Company of all or  substantially  all of its assets  and, in such event,
only on the condition that the assignee  specifically  assumes in writing all of
the Company's obligations under this Agreement.

22. Governing Law.

         All issues  pertaining  to the  validity,  construction,  execution and
performance of this Agreement shall be construed and governed in accordance with
the laws of the State of  California,  without  giving effect to the conflict or
choice of law provisions thereof.

23. Arbitration.

         23.1.  In the event of any dispute of any kind  whatsoever  between the
parties,  arising  out of or related in any way to this  Agreement,  the parties
agree to submit all such  disputes to binding  arbitration.  Each party shall be
entitled  to appoint one  arbitrator,  who shall not be an  affiliate,  officer,
director,  employee,  agent,  vendor or contractor of that party.  The appointed
arbitrators shall then appoint a neutral arbitrator who shall serve as Chairman,
and the  arbitration  shall be  conducted  by the  arbitrators

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Employment Agreement
Phillip Breeden
July 23, 2001

so chosen.  The parties'  arbitrators  shall be  experienced  executives  in the
technology industry, and the Chairman shall be an attorney practicing litigation
in the field of  employment  law.  The  arbitration  shall be conducted in Santa
Clara County,  California.  Demand for arbitration  shall be made in writing and
shall be served upon the party or parties to whom the demand is addressed in the
manner  provided  for the  tender of  notices  in this  Agreement.  If the party
receiving the demand for arbitration  does not appoint its arbitrator  within 30
days after receiving such notice, the arbitrator  appointed by the party serving
the  demand for  arbitration  shall be  further  empowered  to serve as the sole
arbitrator,  notwithstanding  that he fails to meet the  qualifications  for the
Chairman set forth in this Section.

         23.2.  The  arbitrators  are  authorized to award any remedy,  legal or
equitable,  as well as any  interim  relief  as they deem  appropriate  in their
discretion.  However,  notwithstanding the foregoing, the arbitrators shall have
no power to add to,  subtract  from, or modify any of the terms or conditions of
this Agreement.

         23.3. Subject to the arbitration  agreement stated in this Article, the
federal and state courts  located in Santa Clara County,  California  shall have
exclusive  jurisdiction  over all other legal  proceedings  between the parties.
Executive agrees to the personal  jurisdiction of said courts and to the receipt
of service of process in the same form as other  notices  under this  Agreement.
Application  may be  made  to any  such  court  to

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Employment Agreement
Phillip Breeden
July 23, 2001

assist the  arbitrators in performing  their arbitral  duties,  to confirm their
award and to enforce any such award as a judgement of said court.

24. Headings And Gender Neutrality.

         The headings in this Agreement are intended  solely for  convenience or
reference and shall be given no effect in the construction or  interpretation of
this  Agreement.  The use of  either  masculine  or  feminine  pronouns  in this
Agreement  are  merely a  convenience  of the  draftsperson  and shall be not be
deemed determinative of any person's gender.

25. Counterparts.

         This Agreement may be executed in several  counterparts,  each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.

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Employment Agreement
Phillip Breeden
July 23, 2001

         IN WITNESS  WHEREOF,  the Company has caused this  Agreement to be duly
executed and  Executive has hereunto set his hand as of the date first set forth
above.


                                                 CYLINK CORPORATION

                                                 By: /s/ William P. Crowell
                                                     ------------------------
                                                 Name:  William P. Crowell
                                                 Title: CEO and President


                                                 EXECUTIVE

                                                 /s/ Philip Breeden
                                                 ------------------
                                                 Philip Breeden

                                       26