EQUIPMENT SUBLEASE AGREEMENT

              Dated as of September 28th, 2001

              LESSOR: BEI TECHNOLOGIES, INC.   (herein called "LESSOR")
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              ADDRESS: ONE POST STREET, STE. 2500, SAN FRANCISCO, CA 94104
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              LESSEE: OPTICNET, INC. (herein called "LESSEE")
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              ADDRESS: 3167 Corporate Place, Hayward, CA 94545

1. LEASE.  LESSOR  hereby  leases  and/or grants to LESSEE the right to use, and
LESSEE hereby  leases from and/or agrees to accept the right to use,  subject to
the terms and  conditions  herein set forth,  the item(s) of  personal  property
including but not limited to hardware  and/or software and herein referred to as
"Equipment'  described in each Equipment Schedule entered into from time to time
pursuant  to  this  Equipment  Sublease  Agreement  ("Lease  Agreement").   Each
Equipment  Schedule  entered  into by the parties  shall  constitute  a separate
non-cancellable  lease agreement and shall incorporate  therein all of the terms
and  conditions of this Lease  Agreement and contain such  additional  terms and
conditions as agreed upon. The term "LEASE" as used  hereinafter  shall refer to
an individual Equipment Schedule which incorporates this Lease Agreement.  Until
an  Equipment  Schedule is signed by LESSOR,  an  Equipment  Schedule  signed by
LESSEE constitutes an irrevocable offer by LESSEE to lease from LESSOR.

2. TERM. This Lease Agreement shall be effective when signed by both parties and
shall  continue in effect until all  obligations  of LESSEE under each Equipment
Schedule are fully satisfied.

    The Lease Term for each  Equipment  Schedule  shall become  effective on the
Installation Date  ("Commencement  Date").  The Installation Date is the date on
which the  Equipment is  installed  at the  location set forth in the  Equipment
Schedule  ("Equipment  Location") and is accepted by LESSEE as fully operational
and in use by the LESSEE or if LESSEE has fully paid for the  Equipment  and the
Equipment  is already  installed  at the  Equipment  Location  and being used by
LESSEE and LESSOR is purchasing the Equipment  from LESSEE for lease  hereunder,
the  Installation  Date  shall be deemed  to be the date  LESSOR  purchases  the
Equipment  from LESSEE,  said date being defined herein as the date of the check
or wire  transfer to LESSEE  representing  LESSOR'S  payment of the  Equipment's
Purchase  Price.  LESSEE shall promptly sign and deliver to LESSOR a Certificate
of Acceptance  confirming the applicable  Installation  Date. UNLESS LESSEE, NOT
MORE THAN ONE HUNDRED FIFTY (150) DAYS OR LESS THAN SIXTY (60) DAYS PRIOR TO THE
INITIAL  OR  EXTENDED  EXPIRATION  OF THE LEASE,  NOTIFIES  LESSOR IN WRITING BY
CERTIFIED MAIL OF ITS INTENTION NOT TO EXTEND THE LEASE AND EXERCISE  OPTION (A)
OR (B) BELOW, THE LEASE SHALL  AUTOMATICALLY AND CONTINUOUSLY BE EXTENDED ON THE
SAME TERMS AND CONDITIONS FOR SUCCESSIVE  THIRTY (30) DAY PERIODS.  In the event
LESSEE  notifies  LESSOR of its intention  not to extend the LEASE,  then LESSEE
must do one of the  following:  ("(A) Purchase all the Equipment for fair market
value or twenty  percent (20%) of the  Equipment's  original  acquisition  cost,
whichever  is  greater;  or (B)  Extend  the LEASE  for a period of twelve  (12)
additional  months at a fair market  value  monthly  rent equal to 1.734% of the
Equipment's  original  acquisition  cost per month. At the end of said extension
period provided by option (B) LESSEE may (i) return all but not less than all of
the  Equipment  to  LESSOR  in  accordance  with the  terms of the LEASE or (ii)
Purchase all the Equipment for a fair market value to be determined by LESSOR at
its sole and  absolute  discretion.  In the event  LESSEE  elects  option (B) in
accordance  with the terms  hereof,  said option  shall be subject to an updated
credit review and approval of LESSOR in its reasonable discretion.  In the event
LESSOR does not approve option (B), then option (A) shall prevail.

3. RENT.  LESSEE shall pay to LESSOR at its address set forth above,  or at such
other address LESSOR may  hereinafter  designate in writing,  the rent specified
for the  Equipment,  payable in advance,  effective  on the  Commencement  Date.
Subsequent  monthly or other calendar period rental payments shall be due on the
same day of subsequent months or other calendar periods as the Commencement Date
of the LEASE.

4. DISCLAIMER OF WARRANTIES.

         (a) LESSEE ACKNOWLEDGES THAT LESSEE IS NOT RELYING ON LESSOR'S SKILL OR
JUDGMENT TO SELECT OR FURNISH GOODS SUITABLE FOR ANY PARTICULAR PURPOSE.  LESSEE
ACKNOWLEDGES THAT LESSOR HAS NOT MADE AND DOES NOT MAKE ANY WARRANTIES,  EXPRESS
OR IMPLIED, DIRECTLY OR INDIRECTLY,  INCLUDING, WITHOUT LIMITATION, THE WARRANTY
OF  MERCHANTABILITY  AND OF FITNESS,  CAPACITY OR DURABILITY  FOR ANY PARTICULAR
PURPOSE,  AND  WARRANTIES AS TO THE DESIGN OR CONDITION OF THE EQUIPMENT AND THE
QUALITY OF THE MATERIAL OR WORKMANSHIP  OF THE  EQUIPMENT.  LESSOR SHALL HAVE NO
LIABILITY  TO  LESSEE  FOR ANY  CLAIM,  LOSS OR  DAMAGE  OF ANY  KIND OR  NATURE
WHATSOEVER,  INCLUDING ANY SPECIAL,  INCIDENTAL OR CONSEQUENTIAL DAMAGES, TO ANY
EXTENT  WHATSOEVER,  RELATING  TO OR  ARISING  OUT  OF THE  SELECTION,  QUALITY,
CONDITION,  MERCHANTABILITY,  SUITABILITY,  FITNESS, OPERATION OR PERFORMANCE OF
THE EQUIPMENT.  NO DEFECT IN OR UNFITNESS OF THE EQUIPMENT  SHALL RELIEVE LESSEE
OF ITS  OBLIGATIONS  UNDER THE  LEASE.  LESSEE  agrees  that  LESSOR  assumes no
liability for and makes no  representation  as to the treatment by LESSEE of the
LEASE,  the  Equipment  or the rent  payments or other sums due  thereunder  for
financial statement or tax purposes.

         (b) For the term of the LEASE, or any extension thereof,  LESSOR hereby
assigns  to LESSEE  and  LESSEE  may have the  benefit  of any and all  Vendor's
warranties,  service agreements and patent indemnities,  if any, with respect to
the  Equipment  to the extent  assignable  by LESSOR,  provided,  however,  that
LESSEE'S  sole  remedy for the breach of any such  warranty  or  indemnification
shall be against  the Vendor and not against  LESSOR,  nor shall any such breach
have any effect  whatsoever on the rights and  obligations  of either party with
respect to the LEASE.

5. STATUTORY  RIGHTS AGAINST  VENDOR.  LESSEE IS ADVISED THAT IT MAY HAVE RIGHTS
UNDER THE CONTRACT  EVIDENCING THE  ACQUISITION OF THE EQUIPMENT FROM THE VENDOR
AND THAT LESSEE SHOULD  CONTACT THE VENDOR OF THE EQUIPMENT FOR A DESCRIPTION OF
ANY SUCH RIGHTS.

6. EQUIPMENT AND LIABILITY.  LESSOR shall not be liable for specific performance
of the LEASE or for damages if, for any reason, any Vendor fails to accept order
or delays or fails to fill the  order.  LESSEE  agrees to accept  the  Equipment
notwithstanding  any such failure of any Vendor and authorizes LESSOR to add the
serial number of the Equipment to the LEASE.

7. VENDOR NOT AN AGENT.  LESSEE  understands and agrees that neither the Vendor,
nor any  salesman  or other  agent of the  Vendor,  is an  agent of  LESSOR,  no
salesman  or agent of the  Vendor  is  authorized  to waive or alter any term or
condition  of the LEASE,  and no  representation  as to  Equipment  or any other
matter by the Vendor shall in any way affect  LESSEE'S  duty to pay the rent and
perform its other obligations as set forth in the LEASE.

8. PLACE OF USE.  LESSEE  shall keep the  Equipment  at its place of business as
specified  in the  LEASE,  or at such other  place as LESSOR  may  consent to in
writing.  LESSEE  covenants and agrees not to (a) allow the use of the Equipment
by any one other than the  employees  of the LESSEE or  authorized  personnel or
representatives  of LESSOR  pursuant to the terms of that  certain  InterCompany
Agreement  between  LESSEE and LESSOR or (b) rent or sublet the Equipment or any
part thereof.  LESSEE WILL NOT WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, WHICH MAY
BE WITHHELD BY LESSOR AT LESSOR'S SOLE AND ABSOLUTE DISCRETION, ASSIGN THE LEASE
OR ITS INTEREST THEREUNDER.

9. USE AND RETURN OF  EQUIPMENT.  The LESSEE  leases and shall use the Equipment
only for its  intended  purposes  and shall  exercise due and proper care in the
use,  repair and  servicing of the Equipment and at all times and at its expense
shall keep and maintain the  Equipment in good  working  condition,  order,  and
repair.  The LESSEE shall make no alteration to the Equipment  without the prior
written  consent of the LESSOR such consent  being hereby  granted to LESSEE for
those  alterations  specifically  designed  to enhance or repair the  Equipment.
LESSEE represents and warrants that the Equipment will be covered and maintained
under the best  standard  full  service  maintenance  agreement  offered  by the
Vendor,    provided    the   Vendor   is   either   the    original    equipment
manufacturer/licensor or an authorized original equipment  manufacturer/Licensor
maintenance  organization,  or such other maintenance organization authorized by
the original equipment  manufacturer/licensor  (hereinafter  called "Maintenance
Provider"), during the full term of the LEASE or any extension thereof. Upon the
expiration  or  termination  of the  LEASE,  LESSEE  at its sole  expense  shall
forthwith have the Equipment  de-installed and properly prepared for shipment by
the Maintenance Provider,  insure, warrant eligibility for continued maintenance
provider's  best standard and most current  version full service and maintenance
agreement (or, with LESSOR'S  written  consent,  in lieu of such warranty pay to
LESSOR an  inspection  and  refurbishment  fee equal to ten percent (10%) of the
original Equipment cost) and return the Equipment unencumbered to LESSOR, except
for the liens  created by or through  LESSOR or BANKERS (as defined  below),  at
such place  designated  by LESSOR,  in the same  condition  as when  received by
LESSEE , ordinary wear and tear excepted.  LESSOR  reserves the right to approve
or  designate  the carrier and the means of shipment.  However,  if requested by
LESSOR, LESSEE will, prior to shipment, at


                                       1.

<PAGE>

its sole expense,  store the Equipment after  de-installation and packing on its
premises for ninety (90) days. All replacement parts,  additions and accessories
incorporated  in or  affixed  to the  Equipment,  including  but not  limited to
wiring,  software and operating  systems,  at or after the  commencement  of the
LEASE shall become the property of LESSOR.  All related  documentation,  manuals
and service  logs are the  property  of LESSOR and are to be  returned  with the
Equipment.

10. INTENTIONALLY OMITTED.

11. INTENTIONALLY OMITTED.

12. TAXES.  (a) General.  LESSEE assumes  liability for and shall  indemnify and
defend LESSOR against all fees,  taxes, and charges of any nature imposed by any
governmental  authorities upon or relating to the Equipment.  (b) Filing.  If at
any time such taxes, fees, or charges are imposed,  LESSOR (or its agents) shall
make and file any or all  declarations and returns in connection with such taxes
in order to pay the same (unless LESSOR otherwise directs that LESSEE shall make
and file all  declarations  and returns in  connection  with such taxes and send
LESSOR evidence of timely payment).  (c) Rental, Sales, and/or Use Taxes. LESSOR
shall  directly  remit all  rental,  sales  and/or use taxes to the  appropriate
taxing unit and LESSEE  shall  remit to LESSOR,  upon  demand,  any and all such
taxes as LESSOR  shall  require.  (d) Personal  Property  Taxes.  For  Equipment
subject to personal property taxes, to liquidate such taxes LESSEE agrees to pay
LESSOR an annual liquidated amount ("Assessed Amount") which shall be based upon
the Equipment  price (as set forth in the original Vendor  Invoice),  reduced by
depreciation  calculated in accordance  with applicable  depreciation  schedules
used by the  applicable  taxing  jurisdiction  at the  applicable  tax rate. The
Assessed  Amount shall be payable by LESSEE  without  regard to any discounts or
reduction  LESSOR  may  obtain by  reason  of early  payment  or  otherwise.  In
addition,  LESSEE shall pay LESSOR an annual Tax Administration fee equal to ten
percent (10%) of the Assessed Amount charged for each Equipment Schedule, if any
personal  property  taxes are imposed upon  Equipment  subject of that Equipment
Schedule. (e) Audits and Exemption Certificates.  LESSEE will be responsible for
any audit adjustment if a tax exemption  certificate  furnished by LESSEE is not
accepted by the applicable  taxing  authority.  LESSEE will otherwise  indemnify
LESSOR  for taxes,  interest,  penalties  and other sums  charged as a result of
audit  adjustments  occurring  for any  reason  with  respect  to the  LEASE  or
Equipment (including if a certificate is denied).

    LESSOR  reserves  the right to invoice and collect an  estimated  amount for
personal  property taxes each year, such estimate to be based on the most recent
ascertainable assessment.  Upon receipt of an invoice for the actual amount due,
LESSOR will  invoice  LESSEE and LESSEE will pay to LESSOR or LESSOR will rebate
to LESSEE any difference between the actual invoice and the estimated amount.

13. INTENTIONALLY OMMITTED.

14. TITLE. LESSEE agrees and acknowledges that this LEASE is a sublease and that
the Equipment has been originally  leased by LESSOR from Bankers Direct Leasing,
a division of EAB Leasing  Corp.  ("BANKERS")  pursuant to that certain  BANKERS
Master Lease  Agreement  dated as of September  26th,  2001,  between LESSOR and
BANKERS  ("Master  Lease").  LESSEE'S  rights under the LEASE are subject to the
terms and conditions of the Master Lease and expressly  subordinated to BANKERS'
rights under the Master Lease. All Equipment shall remain personal  property and
the title  thereto  shall remain in the name of Bankers  exclusively  unless the
Equipment  is, or  includes,  software  in which  event  and only to the  extent
required by the applicable  license,  title to said software shall remain in the
Licensor. To the extent that the License allows title to software to pass to the
Licensee,  such title shall vest and remain in BANKERS.  To the extent that such
vesting requires a specific written conveyance, LESSEE hereby conveys to BANKERS
any title it has or may hereafter  acquire in the software and  relinquishes any
subsequent claim or title in the software,  including any rights to purchase the
software  and/or retain rights to use the same beyond the Lease Term,  except to
the extent LESSEE may purchase the same or renew the LEASE as provided for under
the LEASE.  If any provision of this  paragraph  requires for its  effectiveness
Licensor's   prior  written  consent  because  the  License  limits   transfers,
encumbrance,  or assignment of the software, then LESSEE shall assist LESSOR, if
so requested, in obtaining such consent. LESSEE shall keep BANKERS' title rights
in the  Equipment  free from any and all  liens,  claims,  and legal  processes,
except for liens  created by or through  LESSOR OR  BANKERS.  LESSEE  shall give
LESSOR immediate notice of any attachment or other judicial  process,  liens, or
claims affecting the Equipment and shall indemnify and save LESSOR harmless from
any loss or damage caused thereby.  To further secure payment to LESSOR,  LESSEE
agrees that each LEASE is cross-collateralized  with all others and in the event
of default by LESSEE of any LEASE,  LESSOR may  exercise its rights and remedies
as if LESSEE defaulted on all LEASES.

    In the event the  Maintenance  Provider  deems it  necessary  to replace any
Equipment with like  equipment,  LESSEE shall  immediately  notify LESSOR of the
same.  However,  no exchange or replacement  shall occur without  LESSOR'S prior
written  approval and consent.  LESSEE  further agrees (a) to take all necessary
and reasonable steps to insure title to the replacement Equipment is, subject to
LESSOR'S  satisfaction,  transferred to BANKERS,  (b) to insure the  replacement
Equipment  as  provided  in  Paragraph  11,  and (c) to pay any and all costs in
connection with or related to such Equipment exchange.

15. FILING. LESSEE, on behalf of LESSEE and LESSOR, hereby authorizes LESSOR and
appoints  LESSOR  its  attorney-in-fact  to  execute  and  file the  LEASE,  any
financing statements or security agreements with respect to the Equipment or any
collateral  provided  by  LESSEE  to  LESSOR  prior  to  or  following  LESSOR'S
acceptance of the LEASE, in any state of the United States. LESSEE shall execute
such supplemental  instruments and financing  statements if LESSOR deems such to
be necessary or advisable and shall  otherwise  cooperate to defend the title of
BANKERS by filing or otherwise.

16. RIGHT OF  INSPECTION.  The LESSOR or BANKERS,  or their  respective  agents,
dealers,  and  representatives  shall  have the right at any time  during  usual
business  hours to inspect the  Equipment  and to have access to the location of
the Equipment.

17.  NON-WAIVER.  LESSOR'S failure at any time to require strict  performance by
LESSEE  of any of the  provisions  of the  LEASE  shall  not  waive or  diminish
LESSOR'S  right  thereafter  to demand strict  compliance  therewith or with any
other  provision.  Waiver of any  default  shall  not  waive any other  default.
LESSOR'S rights under the LEASE are cumulative and not alternative.

18. DEFAULT. Time is of the essence of the LEASE, and no waiver by LESSOR of any
breach or default  shall  constitute  a waiver of any other breach or default by
LESSEE or waiver of any of LESSOR'S  rights.  If LESSEE fails to pay any rent or
other amounts  required  within five (5) days after the same is due and payable,
or if LESSEE fails to observe,  keep or perform any other provision of the LEASE
required to be observed,  kept or performed by LESSEE, or if LESSEE ceases doing
business  as a going  concern,  or if a petition  is filed by or against  LESSEE
under the  Bankruptcy  Act or any  amendment  thereto  (including a petition for
re-organization or an arrangement),  or if a receiver is appointed for LESSEE or
its property,  or if LESSEE  commits an act of  bankruptcy,  becomes  insolvent,
makes an  assignment  for the  benefit of  creditors,  offers a  composition  or
extension  of any of its  indebtedness,  or if  LESSEE  without  LESSOR'S  prior
written consent, attempts to remove or sell or transfer or encumber or sublet or
part with the possession of the Equipment,  or if LESSOR deems itself  insecure,
LESSOR or its  agents  shall have the right to  exercise  any one or more of the
following  remedies:  (a)  to  declare  the  entire  amount  of  rent  hereunder
immediately due and payable  without notice or demand to LESSEE,  (b) to sue for
and recover from the LESSEE the amount  equal to the unpaid  balance of the rent
due and to become due  during the term of the LEASE plus an amount  equal to the
greater  of (i) the fair  market  value of the  Equipment  prior to the event of
default,  or (ii) twenty percent (20%) of the Equipment  Cost, all discounted to
present  value at an annual rate of 6%, (c) to take  possession of any Equipment
without demand or notice wherever same may be located without any court order or
other process of law. Upon retaking  possession of any Equipment,  the LESSOR at
its option may (i) lease repossessed  Equipment or any part thereof to any third
party on such terms and  conditions as the LESSOR may determine or (ii) sell the
Equipment  or any part  thereof to the  highest  bidder at public  auction or at
private sale, and will credit the net amount so realized less expenses  incurred
in  connection  with such  disposition  to the amount due pursuant to (b) above.
LESSEE  hereby  waives  any  and  all  damages  occasioned  by  such  taking  of
possession.  Any said taking of possession  shall not constitute  termination of
the LEASE and shall not relieve LESSEE of its original obligations unless LESSOR
expressly so notifies LESSEE in writing.

    To the extent  permitted by applicable law, LESSEE waives any and all rights
and remedies  conferred  upon a LESSEE by UCC Sections  2A-508  through  2A-522,
including  (without  limitation)  LESSEE'S rights to (a) cancel or repudiate the
LEASE,  (b) reject or revoke  acceptance  of the leased  Equipment,  (c) recover
damages from LESSOR for breach of warranty or for any other reason,  (d) claim a
security interest in any rejected  Equipment in LESSEE'S  possession or control,
(e) deduct from rental payments all or any part of any claimed damages resulting
from LESSOR'S default under the LEASE, (f) accept partial delivery of the leased
Equipment,  (g) "cover" by making any  purchase or lease of other  equipment  in
substitution for Equipment due from LESSOR, (h) recover from LESSOR any general,
special, incidental or consequential damages, for any reason whatsoever, and (i)
specific performance, replevin or the like for any of the leased Equipment.

    To the extent  permitted by applicable  law, LESSEE waives any rights now or
hereafter  conferred  by statute or otherwise  that may require  LESSOR to sell,
re-lease  or  otherwise  use  or  dispose  of any of  the  leased  Equipment  in
mitigation  of LESSOR'S  damages as set forth in the LEASE or that may otherwise
limit or modify any of LESSOR'S rights or remedies under the LEASE. The remedies
provided for in the LEASE shall not be deemed exclusive but shall be cumulative,
and shall be in addition to all other remedies existing at law or in equity.

    Should any legal  proceedings  be instituted by LESSOR to recover any monies
due or to become due under the LEASE and/or for the possession of the Equipment,
LESSEE shall pay LESSOR'S  reasonable  attorney's  fees,  court costs, and other
related  expenses  as well as fees  and  costs  incurred  In  connection  with a
bankruptcy proceeding including, but not limited to, any objections or disputes.
LESSEE and all endorsers and guarantors  hereby consent to LESSOR  granting,  at
its own option,  one or


                                       2.

<PAGE>

more  extensions of the time of payment or performance of any of the obligations
of LESSEE or of any security  agreement  securing the LEASE,  hereby waiving all
notice thereof.

19.  ASSIGNMENT.  NEITHER THE LEASE NOR THE RIGHTS THEREUNDER SHALL BE ASSIGNED,
NOR SHALL ANY OF THE  EQUIPMENT  BE SUBLEASED BY LESSEE  WITHOUT  PRIOR  WRITTEN
CONSENT OF LESSOR. LESSOR OR BANKERS,  WITHOUT NOTICE TO LESSEE, MAY AT ANY TIME
ASSIGN ALL OR PART OF ITS  RESPECTIVE  RIGHT,  TITLE AND  INTEREST IN AND TO THE
LEASE IN AND TO EACH ITEM OF  EQUIPMENT  AND  MONIES TO BECOME  DUE TO LESSOR OR
BANKERS THEREUNDER; and, each of LESSOR or BANKERS may grant a security interest
in the Equipment,  subject to LESSEE'S rights therein as set forth in the LEASE.
Any assignee of LESSOR or BANKERS shall have all of the rights,  but none of the
respective  obligations,  of LESSOR or BANKERS under the LEASE and LESSEE agrees
that it will not assert against any assignee of LESSOR or BANKERS,  any defense,
counterclaim  or offset  that  LESSEE may have  against  LESSOR or  BANKERS,  as
applicable.  LESSEE  acknowledges  that any  assignment or transfer by LESSOR or
BANKERS would neither materially change LESSEE'S duties or obligations under the
LEASE nor materially increase the burdens or risks imposed on LESSEE.

20.  POSSESSION AND QUIET ENJOYMENT.  Subject to BANKERS rights under the Master
Lease,  LESSOR  covenants to and with LESSEE that,  provided LESSEE performs the
conditions  of  the  LEASE  and so  long  as  LESSEE  shall  not  be in  default
thereunder, LESSEE shall peaceably and quietly hold and use the Equipment during
the LEASE term without hindrance or interruption by LESSOR.

21.  LIABILITY  AND  INDEMNITY.  Except  for the  gross  negligence  or  willful
misconduct of LESSOR,  LESSEE agrees to indemnify LESSOR against and hold LESSOR
harmless  from  any  and  all  claims,  (INCLUDING  WITHOUT  LIMITATION,  CLAIMS
INVOLVING STRICT OR ABSOLUTE LIABILITY),  actions,  suits,  proceedings,  costs,
expenses,  damages  and  liabilities  at law or in equity,  including  costs and
reasonable attorney's fees, arising out of, connected with or resulting from the
LEASE  or  the  Equipment,   including,   without  limitation  the  manufacture,
selection, purchase, ownership, delivery; possession, use, operation, condition,
sales,  return,  storage or  disposition  thereof,  any latent or other defects,
whether or not discoverable,  and any claim for patent,  trademark or trade name
infringement.

    LESSOR  shall  not be liable to LESSEE  for any  loss,  damage,  injury,  or
expense of any kind or nature, caused directly or indirectly by any Equipment or
the use or maintenance thereof; the repair,  servicing or adjustment thereto, or
for any delay or failure to provide any thereof,  any interruption of service or
loss of use of the Equipment,  or for any loss of business or damage  whatsoever
and howsoever caused.

    For purposes of this Paragraph,  the term "LESSOR" shall include LESSOR, its
successors  and assigns,  shareholders,  directors,  officers,  representatives,
employees,  and agents,  and the  provisions  of this  Paragraph  shall  survive
expiration of the LEASE with respect to events occurring prior thereto.

22. INTENTIONALLY OMMITTED.

23. REPRESENTATIONS AND WARRANTIES OF LESSEE. LESSEE hereby represents, warrants
and covenants that, with respect to the LEASE, any amendment,  addendum,  rider,
or other attachment executed thereunder:

         (a) The execution, delivery and performance thereof by LESSEE have been
duly authorized by all necessary corporate or business action.

         (b) The individual executing such is duly authorized to do so.

         (c) They  constitute  legal,  valid and  binding  agreements  of LESSEE
enforceable in accordance with their respective terms, subject to any bankruptcy
laws, laws affecting the rights of creditors generally and general principles of
equity.

         (d) Any and all financial  statements or other information with respect
to LESSEE supplied to LESSOR at the time of execution hereof and any amendments,
addendums, or riders hereto are true and complete.

    The foregoing  representations  and warranties shall survive the signing and
delivery of the LEASE and any amendments, addendums, riders or other attachments
thereto.

24.  MISCELLANEOUS.  (a) All  notices  relating  hereto  shall be in writing and
mailed to LESSOR or LESSEE by certified  mail,  return receipt  requested at its
respective address above shown or at any later address last known to the sender.
The LEASE is irrevocable for the full term thereof and for the aggregate  rental
therein  reserved,  and the rent  shall not abate by  reason of  termination  of
LESSEE's  right of  possession  and/or the taking of possession by LESSOR or for
any other reason.  If more than one LESSEE is named in the LEASE,  the liability
of each shall be joint and several.

         (b)  Delinquent  installments  of rent,  or other amounts due under the
LEASE,  of more than five (5) days shall be  subject  to a penalty  equal to ten
(10) percent of such  payment,  plus interest at the rate of one and one-half (1
1/2) percent per month, but in no event greater than the highest lawful rate. If
LESSOR  supplies  LESSEE with labels  stating that Equipment is owned by LESSOR,
LESSEE shall label the  Equipment and shall keep the same affixed in a prominent
place.

         (c) LESSEE agrees to furnish to LESSOR upon request:

                  (1) Such  additional  information  as  LESSOR  may  reasonably
request  concerning  LESSEE and LESSEE's use of the Equipment in order to enable
LESSOR to determine  whether the covenants,  terms,  and provisions of the LEASE
have been complied with by LESSEE.

                  (2)  Copies  of  annual  or  quarterly  financial  statements,
including a copy of the balance sheet and profit and loss statement of LESSEE.

                  (3)  Financial  statements  of  any  corporation  that  owns a
controlling interest in LESSEE.

                  (4) Copies of all Maintenance  Provider's reports covering the
Equipment.

                  (5) A  duly  executed  written  warranty  or  certificate,  as
applicable,  verifying the serial number(s) of the Equipment and any attachments
or  appurtenances  thereto,  specifying  the shipment date for the return of the
Equipment (if the Equipment is being returned to LESSOR), its general condition,
that the Equipment has been and continues to be in use for its intended  purpose
and within the limitations set forth and at the location specified in the LEASE.

         (d) LESSEE shall furnish to LESSOR such  information and data as LESSOR
may from time to time  reasonably  request as to  existence of and status of any
claims for damages  (whether  against the Equipment or against LESSOR or LESSEE)
arising out of the use, operation,  or condition of the Equipment;  the taxes of
the nature  provided to be paid by LESSEE under the  provisions  of Paragraph 12
which have been assessed and the amount of such taxes paid,  and such other data
pertinent to the Equipment  and the  condition,  use, and  operation  thereof as
LESSOR may from time to time reasonably request.

         (e) If LESSEE shall fail to comply with its covenants  and  obligations
under the LEASE, the payment of taxes, assessments, and other charges of keeping
the Equipment in repair and free of liens,  charges,  and  encumbrances,  LESSOR
may,  after  notice to LESSEE  of  LESSOR's  intent,  pay such  charges,  taxes,
assessments or cause compliance with such covenants,  however,  LESSOR shall not
be  obligated  to make  advances to perform  the same,  and all sums so advanced
shall be payable by LESSEE to LESSOR upon  demand as  additional  rent.  No such
advance shall be deemed to relieve LESSEE from any default under the LEASE or be
considered a waiver by LESSOR of any of its rights or remedies.

         (f) In the event a major change in the ownership or financial condition
of LESSEE occurs prior to delivery and acceptance of any Equipment,  and LESSOR,
in its sole discretion deems itself insecure as a result of such change,  LESSOR
reserves the right to cancel the LEASE and LESSEE  hereby  agrees to hold LESSOR
harmless  and to  indemnify  LESSOR from any and all  obligations,  liabilities,
costs and expenses incurred as a result of such cancellation,  including but not
limited to LESSOR's issuance of its purchase order to the Equipment Vendor.

         (g) The LEASE, any amendments,  addendums, riders, or other attachments
made thereto  shall be deemed to have been made and  executed in San  Francisco,
California, regardless of the order in which the signatures of the parties shall
be affixed  thereto,  and shall be interpreted and the rights and liabilities of
the  parties  thereto  determined  in  accordance  with the laws of the State of
California.  LESSEE  AND  LESSOR  HEREBY  WAIVE  THE RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY CLAIMS OR ANY OTHER MATTERS ARISING OUT OF THE LEASE OR ANY OTHER
AGREEMENT EXECUTED IN CONNECTION THEREWITH.

         (h) LESSEE agrees to pay LESSOR on demand  LESSOR's cost of processing,
documentation,  filing  and  search  fees,  credit  reports  and  other  related
administrative and processing expenses for each LEASE.

         (i)  Notwithstanding  anything to the contrary  contained in the LEASE,
including  but not limited to  Paragraph  18, in addition to all other  remedies
provided  therein,  in the  event  LESSEE  fails  to ship the  Equipment  to the
destination designated by LESSOR on or before the warranted date as specified In
Paragraph 24 (c) (5), LESSEE agrees to


                                       3.

<PAGE>

pay to LESSOR upon demand an amount  equal to the daily rate,  based on a 30 day
month,  of the monthly or other  calendar  period rental for each day after such
date  until such time as the  Equipment  leaves the  LESSEE's  location  for the
destination designated by LESSOR.

         (j) LESSEE and any  guarantor  agree  that any  process  served for any
action or proceeding shall be valid if mailed by certified mail,  return receipt
requested,  with delivery  directed to the LESSEE,  its registered agent, or any
agent  appointed  in writing to accept such  process.  LESSEE and any  guarantor
accordingly hereby expressly appoint CT Corporation  Systems," or its successor,
in  California  as THEIR AGENT TO ACCEPT  SERVICE of such process in  connection
with the LEASE.

25.  SEVERABILITY.  If any  provisions  of the  LEASE or any  remedy  thereunder
provided for is deemed invalid under any applicable law, such provision shall be
inapplicable and deemed omitted,  but the remaining provisions thereof including
remaining  default  remedies,  shall  be given  effect  in  accordance  with the
manifest intent thereof.

26.  CONFLICTS.  If  any of  the  provisions  of the  LEASE  conflict  with  any
provisions of any other documentation relating to the transaction,  the terms of
the LEASE shall prevail and control,  unless  otherwise  agreed to in writing by
LESSOR.

27. ENTIRE AGREEMENT,  WAIVER. This instrument  constitutes the entire agreement
between  the  parties.  No  waiver  by  LESSOR  of any  provision  hereof  shall
constitute a waiver of any other  matter.  This Lease  Agreement may be executed
simultaneously  in any number of counterparts,  each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
This  Lease  Agreement  including  any  amendments,  additions,  riders or other
attachments  is not valid and binding until  execution  thereof by an authorized
officer of LESSOR in San Francisco, California.

                                              LESSEE's INITIALS [              ]


IN WITNESS WHEREOF, LESSOR and LESSEE have signed this Lease Agreement as of the
date set forth above.

LESSOR:  BEI TECHNOLOGIES, INC.            LESSEE:  OPTICNET, INC.



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


ROBERT R. CORR                             (Print or Type Name)


Title: VICE PRESIDENT                      Title:
                                                 -------------------------------



<PAGE>

                            EQUIPMENT SCHEDULE NO. 1
                                       TO
          EQUIPMENT SUBLEASE AGREEMENT DATED AS OF SEPTEMBER 28th, 2001
                                     BETWEEN
                        BEI TECHNOLOGIES, INC., AS LESSOR
                                       AND
                            OPTICNET, INC., AS LESSEE

This  Equipment  Schedule  is  entered  into in  accordance  with the  Equipment
Sublease  Agreement  ("Lease  Agreement")  identified  above.  All the terms and
conditions of the Lease Agreement are hereby incorporated herein and made a part
hereof  as if such  terms  and  conditions  were  set  forth  in this  Equipment
Schedule.  In the event of a conflict  between the terms of the Lease  Agreement
and this Equipment Schedule, the terms of this Equipment Schedule shall prevail.

VENDOR(S):        TO BE IDENTIFIED AND DOCUMENTED AT A LATER DATE

EQUIPMENT DESCRIPTION:

This  Equipment  Schedule shall cover various new  manufacturing  and production
equipment and related soft costs to be more fully described at a later date (the
"Equipment"),  with soft  costs  not to exceed  10% of total  final  cost.  Said
Equipment has a total approximate cost of $708,000 (the "Approximate  Cost") and
is delivered and installed at the Equipment  Location  provided below. The final
monthly equivalent rent and advance rental amounts hereunder shall be determined
by multiplying the monthly rental payment factor  identified below (which may be
adjusted as provided for herein) by the total final cost of the  Equipment to be
covered hereunder.  In connection herewith,  LESSEE hereby agrees to execute and
return to LESSOR any and all documents  that LESSOR shall request within two (2)
days of LESSEE'S receipt thereof.

The Equipment shall also include any periodic updates,  revisions,  upgrades and
enhancements thereto.

EQUIPMENT LOCATION(S): LESSEE agrees that the Equipment will only be located and
used at the following  address(es):  3167 Corporate Place, Hayward, CA 94545 and
at no other location(s) unless authorized in writing by LESSOR for the full term
hereof and any extensions thereof.

INITIAL LEASE TERM:                 Thirty-six (36) months

MONTHLY EQUIVALENT


RENTAL PAYMENT FACTOR:              2.606%


RENTAL PAYMENT:                     Billed  quarterly,  plus  applicable  taxes,
                                    payable in advance

ADVANCE RENTALS:                    LESSEE agrees to an initial payment equal to
                                    a monthly  equivalent  rental  payment which
                                    shall be  applied to the final  amounts  due
                                    under the LEASE.

ADDITIONAL PROVISIONS:              1.  Upon an  event  of  default  by  LESSEE,
                                    LESSOR or BANKERS has the right to cause the
                                    Licensor of any software  under the LEASE to
                                    both  terminate  its License  with LESSEE or
                                    LESSOR  and to cease  providing  maintenance
                                    and  support  services  to LESSEE or LESSOR.
                                    LESSEE  agrees to hold LESSOR  harmless from
                                    any  claims  LESSEE  may have as a result of
                                    said License  termination and termination of
                                    maintenance and support services.


                                    2. In the event a  maintenance  agreement is
                                    covered under the LEASE, LESSEE acknowledges
                                    that LESSOR shall have no obligation for the
                                    performance of such  maintenance  and LESSEE
                                    furthermore  shall hold LESSOR harmless from
                                    any  claims  relating  to  such  maintenance
                                    agreement.

                                    3. All Equipment  description items shall be
                                    deemed  to  be  personal  property  for  all
                                    purposes under the LEASE.

                                    4.   LESSEE   hereby   further   represents,
                                    confirms,  and  warrants  that in the  event
                                    Licensor/Vendor  fails to  provide  support,
                                    service   or   maintenance   or   LESSEE  is
                                    dissatisfied  with the  support,  service or
                                    maintenance  performed  by  Licensor/Vendor,
                                    LESSEE recognizes that such events shall not
                                    affect    LESSEE'S    payment    and   other
                                    obligations  under the LEASE.  LESSEE agrees
                                    that it will not seek any relief from LESSOR
                                    as   a   result    of   the    failure    of
                                    Licensor/Vendor  to  perform  such  support,
                                    service or maintenance.

                                    5.  LESSEE  warrants  that  LESSOR will have
                                    full,   unrestricted   right   to  sell  all
                                    Equipment returned under the LEASE.

                                    6.   INCOME  TAX   INDEMNIFICATION.   LESSEE
                                    acknowledges  that BANKERS shall be entitled
                                    to  all  tax  benefits  of  ownership   with
                                    respect   to   the   Equipment   (the   "Tax
                                    Benefits"), including but not limited to (i)
                                    the  accelerated  cost  recovery  deductions
                                    determined   in   accordance   with  Section
                                    168(b)(1)  of the  Internal  Revenue Code of
                                    1986  for the  Equipment  based  on the cost
                                    thereof, (ii) deductions for interest on any
                                    indebtedness  incurred by BANKERS to finance
                                    the Equipment  and (iii)  sourcing of income
                                    and losses attributable to the LEASE. LESSEE
                                    agrees to take no action  inconsistent  with
                                    the  foregoing  or which would result in the
                                    loss,   disallowance,    unavailability   to
                                    BANKERS  of  all  or any  part  of  the  Tax
                                    Benefits.   LESSEE  hereby  indemnifies  and
                                    holds  harmless  LESSOR and its assigns from
                                    and  against  (i)  any  loss,  disallowance,
                                    unavailability  or  recapture  of all or any
                                    part of the Tax Benefits  resulting directly
                                    or  indirectly  from any action,  failure to
                                    act, statements, misrepresentation or breach
                                    of any  warranty  or covenant  contained  in
                                    this Lease Agreement, amendments, addendums,
                                    riders,  Equipment  Schedules,  or any other
                                    attachments  made  hereto  by  LESSEE of any
                                    nature whatsoever including, but not limited
                                    to,  the   breach  of  any   representation,
                                    warranties  or  covenants  contained in this
                                    section plus (ii) all  interest,  penalties,
                                    fines or  additions  to tax  resulting  from
                                    such loss,  disallowance,  unavailability or
                                    recapture  plus (iii) all taxes  required to
                                    be  paid  by  LESSOR  upon  receipt  of  the
                                    indemnity  set forth  herein.  Any  payments
                                    made by LESSEE to reimburse BANKERS for lost
                                    Tax  Benefits  shall  be  calculated  on the
                                    assumption  that  BANKERS  is subject to the
                                    maximum  Federal  Corporate  Income Tax with
                                    respect  to each  year and all Tax  Benefits
                                    are currently  utilized,  and without regard
                                    to  whether  BANKERS,  or any  members  of a
                                    consolidated  group of which  BANKERS or its
                                    assigns is also a member, is then subject to
                                    any  increase in tax as a result of the loss
                                    of the  Tax  Benefits.  The  term  "BANKERS"
                                    includes  for  all  tax  purposes  BANKERS'S
                                    assigns, heirs,  executors,  administrators,
                                    or other legal representation.

COMMENCEMENT DATE:
The Commencement  Date shall be the first day of the calendar quarter  following
the Installation  Date. A calendar quarter means a three-month period commencing
on January 1, April 1, July 1, and October I of any calendar year.  Charges from
the Installation  Date to the Commencement  Date shall be computed by converting
the monthly or other  calendar  period  rental to a daily rate based on a 30-day
month.  LESSOR assumes no  responsibility  for costs  associated  with returning
non-acceptable  Equipment, and LESSEE agrees to pay, on demand, any and all such
costs.


If on the  Installation  Date there is a difference  between the yield of United
States  Treasury  Obligations for a comparable term of the Lease as published in
The Wall Street Journal and this Equipment Schedule's assigned base rate, LESSOR
may, at its sole discretion,  adjust the monthly  equivalent rent by applying an
adjusted  monthly lease rate factor to the  Equipment  cost.  Therefore,  in the
event of such an adjustment,  the Equipment  Schedule's  base monthly lease rate
factor of .02606 may be  increased  by .011  percent for each  twenty-five  (25)
basis point difference between the aforementioned  Treasury  Obligation rate and
the Equipment  Schedule's assigned base rate. Pro-rata  adjustments will be made
for fractional changes thereof.  This Equipment Schedule's assigned base rate is
4.28 percent.


                                       1.

<PAGE>

IN WITNESS  WHEREOF,  the authorized  representatives  of LESSOR and LESSEE have
hereunto signed as of the date set forth below:



BEI TECHNOLOGIES, INC., as LESSOR        OPTICNET, INC., as LESSEE



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


Name: Robert R. Corr                     Name:
                                              ----------------------------------


Title: Vice President                    Title:
                                               ---------------------------------


Date:                                    Date:
     ---------------------------------        ----------------------------------


                                       2.