C O R N I S H   &  C A R E Y  C O M M E R C I A L

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Sublessor: Diba, Inc., A Delaware Corporation         Subject Property: 270--276
                                                      Harbor Boulevard.,
                                                      Belmont, California

Sublessee: Videonics, Inc., a California corporation  Date: July 11, 1996

1. Parties:
This Sublease is made and entered into as of July 11, 1996, by and between Diba,
Inc., A Delaware Corporation  ("Sublessor"),  and Videonics,  Inc., A California
Corporation  ("Sublessee"),  under The Master  Lease dated  December  18,  1995,
between Harbor Belmont Associates, as "Lessor" and Sublessor under this Sublease
as "Lessee." A copy of the Master Lease is attached  hereto as  Attachment I and
incorporated herein by this reference.

2. Provisions Constituting Sublease:

         2.1 This Sublease is subject to all of the terms and  conditions of the
         Master Lease. Sublessee hereby assumes and agrees to perform all of the
         obligations  of  "Lessee"  under the Master  Lease to the  extent  said
         obligations apply to the Subleased  Premises and Sublessee's use of the
         Common Areas, except as specifically set forth herein. Sublessor hereby
         agrees to cause  Lessor  under the Master  Lease to perform  all of the
         obligations of Lessor  thereunder to the extent said obligations  apply
         to the  Subleased  Premises and  Sublessee's  use of the Common  Areas.
         Sublessee  shall not commit or permit to be committed on the  Subleased
         Premises  or on any other  portion of the  Project  any act or omission
         which violates any term or condition of the Master Lease. Except to the
         extent  waived or consented to in writing by the other party or parties
         hereto who are affected thereby, neither of the parties hereto will, by
         renegotiation of the Master Lease, assignment,  subletting,  default or
         any other  voluntary  action,  avoid or seek to avoid the observance or
         performance of the terms to be observed or performed  hereunder by such
         party,  but will at all times in good faith  assist in carrying out all
         the  terms of this  Sublease  and in taking  all such  action as may be
         necessary  or  appropriate  to protect the rights of the other party or
         parties hereto who are affected  thereby  against  impairment.  Nothing
         contained  in this  Section 2.1 or  elsewhere  in this  Sublease  shall
         prevent  or  prohibit  Sublessor  (a)  from  exercising  its  right  to
         terminate  the Master Lease  pursuant to the terms  thereof or (b) from
         assigning its interest in this  Sublease or subletting  the Premises to
         any other third party.

         2.2 All of the terms and  conditions  contained in the Master Lease are
         incorporated  herein,  except as specifically  provided below,  and the
         terms and  conditions  specifically  set forth in this  Sublease, shall
         constitute the complete  terms and conditions of this Sublease,  except
         the following  paragraphs of the Master Lease which shall solely be the
         obligation of Sublessor:

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           901 MARINERS ISLAND BOULEVARD, SUITE 125, SAN MATEO, CA 94404
                       (415) 341 5800 FAX (415) 341 7024
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         3  (a),  Base  Rent  (Basic  Lease  information),  Tenant  Improvements
         (exhibit B)

3. Subleased Premises and Rent:

         3.1  Subleased  Premises:
         Sublessor  leases to Sublessee and Sublessee  leases from Sublessor the
         Subleased  Premises  upon all of the terms,  covenants  and  conditions
         contained  in  this  Sublease.   The  Subleased   Premises  consist  of
         approximately 6,050 square feet, located at 270--276 Harbor Boulevard.

         3.2 Rent:
         Sublessee shall pay to Sublessor as Rent for the Subleased Premises the
         sum in accordance  with the  following  schedule,  without  deductions,
         offset,  prior notice or demand.  Rent shall be payable by Sublessee to
         Sublessor in consecutive  monthly  installments  on or before the first
         day of each  calendar  month during the Sublease  Term. If the Sublease
         commencement  date or the termination  date of the Sublease occurs on a
         date  other  than the  first day or the last  day,  respectively,  of a
         calendar month,  then the Rent for such partial month shall be prorated
         and the  prorated  Rent shall be payable on the  Sublease  commencement
         date or on the first day of the  calendar  month in which the  Sublease
         termination date occurs, respectively.

            Month                                              Monthly Rent
            August 15, 1996 through December 31, 1996          $5,570.00 NNN
            January 1, 1997 through December 31, 1997          $5,810.00 NNN
            January 1, 1998 through December 31, 1998          $6,100.00 NNN

         Sublessee  further  agrees to pay the  operating  expenses  as they are
         presented to Sublessor.

         3.3 Security Deposit:
         In  addition  to the  Rent  specified  above,  Sublessee  shall  pay to
         Sublessor an equivalent of one month's rent as a  non-interest  bearing
         Security Deposit. In the event Sublessee has performed all of the terms
         and conditions of this Sublease during the term hereof, Sublessor shall
         return to  Sublessee,  within ten days after  Sublessee has vacated the
         Subleased Premises, the Security Deposit less any sums due and owing to
         Sublessor.

4. Rights of Access and Use:

         4.1 Use:
         Sublessee  shall use the  Subleased  Premises  only for those  purposes
         permitted in the Master Lease,  unless  Sublessor  and Master  Landlord
         consent in writing to other uses prior to the commencement thereof.

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           901 MARINERS ISLAND BOULEVARD, SUITE 125, SAN MATEO, CA 94404
                       (415) 341 5800 FAX (415) 341 7024
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5. Sublease Term:

         5.1 Sublease Term:
         The  Sublease  Term  shall be for the period  commencing  on August 15,
         1996, and continuing  through  December 31, 1998. In no event shall the
         Sublease Term extend beyond the Term of the Master Lease.

         5.2 Inability to Deliver Possession:
         In the event Sublessor is unable to deliver possession of the Subleased
         Premises at the commencement of the term, Sublessor shall not be liable
         for any  damage  caused  thereby,  nor shall this  Sublease  be void or
         voidable but Sublessee  shall not be liable for Rent until such time as
         Sublessor  offers to deliver  possession of the  Subleased  Premises to
         Sublessee,  but the term hereof shall not be extended by such delay. If
         Sublessee,   with  Sublessor's  consent,   takes  possession  prior  to
         commencement  of the term,  Sublessee  shall do so  subject  to all the
         covenants  and  conditions  hereof  and shall  pay Rent for the  period
         ending  with the  commencement  of the term at the same  rental as that
         prescribed  for the  first  month of the term  prorated  at the rate of
         1/30th  thereof  per day.  In the event  Sublessor  has been  unable to
         deliver  possession of the Subleased  Premises  within 30 days from the
         commencement date, Sublessee, at Sublessee's option, may terminate this
         Sublease.

6. Notices:
All notices,  demands,  consents and  approvals  which may or are required to be
given  by  either  party to the  other  hereunder  shall be given in the  manner
provided in the Master  Lease,  at the  addresses  shown on the  signature  page
hereof.  Sublessor  shall  notify  Sublessee  of any Event of Default  under the
Master  Lease,  or of any other event of which  Sublessor  has actual  knowledge
which will  impair  Sublessee's  ability to conduct  its normal  business at the
Subleased  Premises,  as soon as reasonably  practicable  following  Sublessor's
receipt of notice from the  Landlord of an Event of Default or actual  knowledge
of such impairment. If Sublessor elects to terminate the Master Lease, Sublessor
shall so  notify  Sublessee  by  giving  at least  30 days  notice  prior to the
effective date of such termination.

7. Broker Fee:
Upon execution of the Sublease,  Sublessor shall pay Cornish & Carey Commercial,
a licensed real estate broker,  fees set forth in a separate  agreement  between
Sublessor  and Broker,  or in the event there is no separate  agreement  between
Sublessor  and Broker,  a sum  determined  per separate  agreement for brokerage
services rendered by Broker to Sublessor in these transactions.

8. Compliance With Americans With Disabilities Act:
Sublessee  shall be  responsible  for the  installation  and cost of any and all
improvements, alterations or other work required on or to the Subleased Premises
or to any other portion of the property  and/or  building of which the Subleased
Premises  are  a  part,  required  or  reasonably   necessary  because  of:  (1)
Sublessee's use of the Subleased Premises or any portion thereof; (2) the use by
a Sublessee by reason of

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           901 MARINERS ISLAND BOULEVARD, SUITE 125, SAN MATEO, CA 94404
                       (415) 341 5800 FAX (415) 341 7024
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assignment or sublease; or (3) both, including any improvements,  alterations or
other  work  required  under  the  Americans  With  Disabilities  Act  of  1990.
Compliance  with  the  provisions  of this  Section  8 shall be a  condition  of
Sublessor granting its consent to any assignment or Sublease of all or a portion
of this Sublease and the Subleased Premises described in this Sublease.

9. Compliance With Nondiscrimination Regulations:
It is  understood  that it is  illegal  for  Sublessor  to refuse to  display or
sublease  the  Subleased  Premises,  or to assign,  surrender or sell the Master
Lease, to any person because of race,  color,  religion,  national origin,  sex,
sexual orientation, marital status or disability.

10. Toxic Contamination Disclosure:
Sublessor  and  Sublessee  each  acknowledge  that they have been  advised  that
numerous federal,  state, and/or local laws, ordinances and regulations ("Laws")
affect  the  existence   and  removal,   storage,   disposal,   leakage  of  and
contamination  by materials  designated as hazardous or toxic  ("Toxics").  Many
materials,   some  utilized  in  everyday   business   activities  and  property
maintenance, are designated as hazardous or toxic.

Some of the Laws  require  that  Toxics be removed or cleaned up by  landowners,
future  landowners  or former  landowners  without  regard to whether  the party
required to pay for "clean up" caused the  contamination,  owned the property at
the time the contamination  occurred or even knew about the contamination.  Some
items,  such as  asbestos  or PCBs,  which were legal  when  installed,  now are
classified as Toxics,  and are subject to removal  requirements.  Civil lawsuits
for  damages  resulting  from  Toxics  may be filed by third  parties in certain
circumstances.

Sublessor and Sublessee each acknowledge  that Broker has no specific  expertise
with respect to environmental  assessment or physical condition of the Subleased
Premises, including, but not limited to, matters relating to: (i) problems which
may be posed by the presence or disposal of hazardous or toxic  substances on or
from the Subleased  Premises,  (ii) problems which may be posed by the Subleased
Premises  being  within  the  Special  Studies  Zone  as  designated  under  the
Alquist-Priolo  Special Studies Zone Act (Earthquake Zones),  Section 2621-2630,
inclusive of California  Public  Resources Code, and (iii) problems which may be
posed by the  Subleased  Premises  being within a HUD Flood Zone as set forth in
the U.S.  Department of Housing and Urban  Development  "Special Flood Zone Area
Maps," as applicable.

Sublessor and Sublessee each acknowledge that Broker has not made an independent
investigation or determination of the physical or environmental condition of the
Subleased Premises, including, but not limited to, the existence or nonexistence
of any underground tanks, sumps,  piping,  toxic or hazardous  substances on the
Subleased  Premises.  Sublessee  agrees  that it will rely  solely  upon its own
investigation  and/or  the  investigation  of  professionals  retained  by it or
Sublessor,  and  neither  Sublessor  nor  Sublessee  shall  rely upon  Broker to
determine the physical and environmental  condition of the Subleased Premises or
to determine whether,  to what extent or in what manner,  such condition must be
disclosed to potential  sublessees,  assignees,  purchasers or other  interested
parties. 

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           901 MARINERS ISLAND BOULEVARD, SUITE 125, SAN MATEO, CA 94404
                       (415) 341 5800 FAX (415) 341 7024
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11. Rent Abatement and Damages to Personal Property:
In the event  Sublessor,  pursuant to the terms of the Master Lease, is entitled
to and receives rent abatement,  then to the extent such rent abatement  affects
the  subleased  premises,  Sublessee  shall be entitled to rent  abatement in an
amount that the net rentable area of the subleased  premises  bears to the total
net rentable area of the Master Lease, and only to the extent any such abatement
applies to the  sublease  term.  In  addition,  any amounts  paid or credited to
Sublessor  under the terms of the Master  Lease for damage to personal  property
shall be credited to Sublessee, subject to the same limitations set forth above.

Sublessor:. DIBA, INC., a Delaware corporation

By:  /s/ Farzad Dibachi                   Date:    7/25/96
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    Farzad Dibachi, President

Address: 270 Harbor Boulevard
Belmont, CA 94002

Sublessee: VIDEONICS, INC., a California corporation

By:  /s/ Jim McNeill                      Date:    7/20/96
    --------------------------------           -------------------------------
    Jim McNeill, Vice President of 
    Finance & CFO


Address: 1370 Dell Avenue
         Campbell, California 95008

NOTICE TO SUBLESSOR AND SUBLESSEE: CORNISH & CAREY COMMERCIAL, IS NOT AUTHORIZED
TO  GIVE  LEGAL  OR  TAX  ADVICE;  NOTHING  CONTAINED  IN THIS  SUBLEASE  OR ANY
DISCUSSIONS  BETWEEN CORNISH & CAREY AND SUBLESSOR AND SUBLESSEE SHALL BE DEEMED
TO BE A REPRESENTATION OR  RECOMMENDATION BY CORNISH & CAREY COMMERCIAL,  OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL EFFECT OR TAX  CONSEQUENCES OF THIS DOCUMENT
OR ANY TRANSACTION  RELATING THERETO. ALL PARTIES ARE ENCOURAGED TO CONSULT WITH
THEIR  INDEPENDENT   FINANCIAL   CONSULTANTS  AND/OR  ATTORNEYS   REGARDING  THE
TRANSACTION CONTEMPLATED BY THIS PROPOSAL.

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           901 MARINERS ISLAND BOULEVARD, SUITE 125, SAN MATEO, CA 94404
                       (415) 341 5800 FAX (415) 341 7024
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