SUBLEASE AGREEMENT


DATED: October 1, 1998


ARTICLE 1: FUNDAMENTAL SUBLEASE PROVISIONS.

1.1 PARTIES:  Sublessor:        CONCEPTUS INC., a Delaware corporation

              Sublessee:        AVIO DIGITAL, INC., a California corporation

1.2 MASTER  LEASE:  (Article 3):  Sublessor,  as tenant,  is leasing from Master
Lessor (named below), as landlord,  approximately 16,397 square feet of leasable
area located at: 957  Industrial  Road,  Suites D, F, G, H, J, L, P and R in the
City of San  Carlos,  State of  California  (the  "Premises")  on the  terms and
subject to the conditions of that certain lease  agreement  executed dated as of
May 31,  1997,  as amended  (collectively,  the "Master  Lease").  A copy of the
Master Lease is attached hereto as Exhibit A.

              Master Lessor:    THREE SISTERS RANCH ENTERPRISES,
                                a California general partnership

1.3 SUBLEASE PREMISES: (Article 2): The Sublease Premises constitutes all of the
Premises,  and contains  approximately  16,397 square feet of leasable area (the
"Sublease Premises"). The Sublease Premises is further described on the drawings
attached to the Master Lease.

1.4 SUBLEASE TERM:  (Article 4):  Approximately  forty-three and one-half (43.5)
calendar  months,   beginning  on  the  Commencement  Date  and  ending  on  the
Termination Date described below,  unless commenced later or terminated  earlier
pursuant to the terms of this Sublease.

1.5 COMMENCEMENT DATE: (Article 4.1): October 15, 1998

1.6 TERMINATION DATE: (Article 4.1): May 31, 2002

1.7 RENTAL COMMENCEMENT DATE: (Article 5.2): October 15, 1998

1.8 MINIMUM MONTHLY RENT: (Article 5.2):

    October 15, 1998 - September 30, 1999  $2.00/NNN/rsf  $32,794.00/month
    October 1, 1999 -  September 30, 2000  $2.10/NNN/rsf  $34,433.70/month
    October 1, 2000 -  September 30, 2001  $2.20/NNN/rsf  $36,073.40/month
    October 1, 2001 -  May 31, 2002        $2.30/NNN/rsf  $37,713.10/month

1.9 PREPAID RENT: (Article 5.4): $32,794.00

1.10 SECURITY  DEPOSIT:  (Article 6):  Letter of Credit with initial  balance of
$98,382.00

1.11 PERMITTED USE: (Article 7):    research and development, warehousing,
                                    marketing, sales and general office uses

1.12 GUARANTOR:  Vulcan  Northwest,  Inc., a Washington  corporation  [Guarantee
                 Agreement is to be signed separately.]


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1.13 ADDRESSES FOR NOTICES: (Article 11):

                 Master Lessor:   Three Sisters Ranch Enterprises
                                  P.O. Box 1444
                                  San Carlos, CA 94070-1444
                                  Attn: Mr. Marty Ruberry
                                  Fax: (650) 595-0327

                 With copy to:    Hannig Law Firm LLP
                                  2991 El Camino Real, Suite 100
                                  Redwood City, CA 94061
                                  Attn: Ted J. Hannig
                                  Fax: (650)482-2820

                 Sublessor:       Conceptus, Inc.
                                  1021 Howard Avenue
                                  San Carlos, CA 94070
                                  Attn: Sanford Fitch
                                  Fax: (650) 508-7689

                 With copy to:    Rosenblum, Parish & Isaacs, PC
                                  160 W. Santa Clara Street, 15th floor
                                  San Jose, CA 95113
                                  Attn: Lucy A. Lofrumento
                                  Fax: (408) 280-2801

                 Sublessee:       Avio Digital, Inc.
                                  1510 Page Mill Road
                                  Palo Alto, CA 94304
                                  Attn: Michele DiLorenzo
                                  Fax: (650) 354-3606

                 With copy to:    Wilson, Sonsini, Goodrich & Rosati
                                  650 Page Mill Road
                                  Palo Alto, CA 94304
                                  Attn: Thomas D. Morell
                                  Fax: (650) 493-6811

1.14 SUBLESSOR'S BROKER: (Article 20.4): CB Richard Ellis and Vertex Real Estate
Group

1.15 SUBLESSEE'S BROKER: (Article 20.4): CPS

1.16 EXHIBITS AND ADDENDA: The following exhibits and any addenda are annexed to
this Sublease:

              Exhibit A         -        Master Lease
              Exhibit B         -        Form of Letter of Credit

Each  reference in this  Sublease  Agreement  ("Sublease")  to any  provision in
Article  1 shall be  construed  to  incorporate  all of the  terms of each  such
provision.  In the event of any conflict  between this Article 1 and the balance
of the Sublease, the balance of the Sublease shall control.

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ARTICLE 2: SUBLEASE PREMISES.

2.1 Sublease.  Sublessor  hereby  subleases to Sublessee  and  Sublessee  hereby
subleases from  Sublessor for the Sublease Term  (hereinafter  defined),  at the
Rent  (hereinafter  defined) and upon the terms and conditions  hereinafter  set
forth, the Sublease  Premises,  and all common areas related thereto.  Sublessee
acknowledges  that the leasable  area of the  Sublease  Premises as specified in
Article 1 is an estimate and that  Sublessor does not warrant the exact leasable
area of the Sublease  Premises.  By taking possession of the Sublease  Premises,
Sublessee  accepts the leasable area of the Sublease  Premises as that specified
in Article 1.

2.2  Condition of the Sublease  Premises.  Sublessor  shall deliver the Sublease
Premises  to  Sublessee  with all  building  systems  (i.e.,  HVAC,  electrical,
plumbing and roof) in good  operating  condition,  and warrants the same for the
first thirty (30) days of the Sublease Term. Sublessee  acknowledges that except
as expressly  stated in this  Sublease,  (i)  Sublessor  makes no  warranties or
representations  regarding the physical condition of the Sublease Premises; (ii)
Sublessee has had an opportunity to inspect the Sublease Premises, including the
roof and structural components of the building; the electrical,  plumbing, HVAC,
and other building systems serving the Sublease Premises;  and the environmental
condition of the Sublease Premises and related common areas; and to hire experts
to conduct such  inspections on its behalf;  and (iii)  Sublessee is leasing the
Sublease Premises based on its own inspection of the Sublease Premises and those
of its  agents,  and is  not  relying  on  any  statements,  representations  or
warranties  of  Sublessor  regarding  the  physical  condition  of the  Sublease
Premises.  In  addition,  Sublessor  shall  pass on to  Sublessee  any  existing
construction warranties that are available.

2.3 Personal Property.  Sublessee  acknowledges that the Sublease Premises shall
not  include  any of the  fixtures,  equipment,  cabling,  furniture,  or  other
personal property  belonging to Sublessor,  except as specifically  agreed to by
the parties in the Furniture  Rental  Agreement dated as of October 1, 1998. The
parties  acknowledge  that the Furniture Rental  Agreement  represents  material
consideration for each party's entering into this Sublease.

2.4  Alterations  to  Premises.   Sublessee  shall  not  make  any  alterations,
additions,  or improvements to the Sublease  Premises  without the prior written
consent of Sublessor;  provided, however, that Sublessee may make non-structural
alterations  to the Sublease  Premises  costing less than five thousand  dollars
($5,000.00) in accordance with and subject to Paragraph 12 of the Master Lease.

ARTICLE 3: TERMS OF THE MASTER LEASE.

3.1 Sublease  Subordinate.  This Sublease  is subordinate  and subject to all of
the terms and conditions of the Master Lease. If the Master Lease terminates for
any reason  whatsoever,  this Sublease  shall  terminate  concurrently,  and the
parties hereto shall be relieved of any liability thereafter accruing under this
Sublease,  except for the  liabilities of the parties which by the terms of this
Sublease survive the expiration or earlier termination of this Sublease.

3.2 Sublessee's  Obligations.  Sublessee hereby expressly  assumes and agrees to
perform and  discharge,  as and when  required by the Master  Lease,  all debts,
duties and  obligations to be paid,  performed or discharged by Sublessor  under
the terms,  covenants  and  conditions  of the  Master  Lease from and after the
Commencement Date, except as specifically set forth in this Sublease.  Sublessee
shall not commit or suffer at any time any act or  omission  that would  violate
any provision of the Master Lease.

3.3  Sublessor's  Obligations.  So long as Sublessee does not default under this
Sublease,  Sublessor  shall not commit any act or omission  during the  Sublease
Term which would lead to the  termination  of the Master Lease by Master Lessor.
Notwithstanding  the  foregoing,  if  Sublessee  fails to comply with any of its
obligations under this Sublease  (including  without  limitation the obligations
assumed by  Sublessee  under the Master  Lease),  and does not cure such failure
within  the  applicable  cure  period  (or if no cure  period  is  specified  in
either this  Sublease  or the  Master  Lease,  then within  five (5) days  after
receiving  written  notice  of  such  failure),  then  Sublessor  shall  have no
obligation to Sublessee to maintain the Master Lease for Sublessee's benefit.

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3.4 Master Lessor's Obligations. Sublessor shall not be responsible to Sublessee
for furnishing any service, maintenance or repairs to the Sublease Premises that
are the  obligation  of the  Master  Lessor  under the  Master  Lease,  it being
understood  that Sublessee shall look solely to Master Lessor for performance of
any such service,  maintenance or repairs.  However, if Master Lessor shall fail
to perform its obligations  under the Master Lease,  Sublessor,  upon receipt of
written notice from  Sublessee,  shall use  commercially  reasonable  efforts to
attempt to enforce the  obligations  of Master  Lessor  under the Master  Lease;
provided,  however,  that Sublessor  shall not be required to incur any costs or
expenses in connection  therewith unless Sublessee agrees to reimburse Sublessor
for any such costs and expenses as Additional Rent hereunder.

3.5 Sublessor's Rights and Remedies.  In addition to all the rights and remedies
provided to  Sublessor at law, in equity,  or under the terms of this  Sublease,
(a) in the event of any breach by Sublessee of any of its obligations under this
Sublease,  Sublessor  shall have all of the rights and remedies  with respect to
such  breach  which are  available  to Master  Lessor in the event of any breach
under the Master  Lease;  and (b) as a further  remedy,  if  Sublessee  fails to
perform any act on its part to be performed  pursuant to the requirements of the
Master Lease or as otherwise  required by this  Sublease,  within any applicable
grace periods  provided  herein,  then Sublessor may, but shall not be obligated
to,  fulfill such  obligations  of  Sublessee,  including  entering the Sublease
Premises  to  perform  any such  act,  and all costs and  expenses  incurred  by
Sublessor  in doing so shall be deemed  Additional  Rent payable by Sublessee to
Sublessor upon demand.

3.6  Sublessee's  Right to Cure.  In the event of  default by  Sublessor  of any
obligation  under  the  Master  Lease,  subject  to Master  Lessor's  agreement,
Sublessee  shall have the right and  opportunity to cure such default within the
applicable cure period provided in the Master Lease, or within five (5) business
days after  receipt of Master  Lessor's  notice of such  default,  whichever  is
later.  In the event that Sublessee  cures such a default by Sublessor under the
Master Lease,  Sublessee  shall have the right to offset the amount paid to cure
such default and other related  costs,  including  reasonable  attorneys'  fees,
against any amounts owed by Sublessee under this Sublease.

3.7  Authorization to Direct Sublease  Payments.  Sublessor hereby  acknowledges
that  Sublessor's  failure to pay the rent and other sums owing by  Sublessor to
Master  Lessor  under the Master Lease will cause  Sublessee  to incur  damages,
costs and expenses not  contemplated by the Sublease,  especially in those cases
where Sublessee has paid sums to Sublessor  hereunder which  correspond in whole
or in part to the amounts  owing by Sublessor to Master  Lessor under the Master
Lease.  Accordingly,  Sublessee  shall  have the right to pay all rent and other
sums owing by Sublessee to  Sublessor  hereunder  for those items which also are
owed by  Sublessor to Master  Lessor  under the Master Lease  directly to Master
Lessor on the following terms and conditions:

          (a) Either (i) Sublessee reasonably believes that Sublessor has failed
to make any payment  required to be made by Sublessor to Master Lessor under the
Master Lease and Sublessor fails to provide adequate proof of payment within two
(2) business days after  Sublessee's  written demand  requesting  such proof; or
(ii) Sublessee reasonably believes that Sublessor shall fail to make any payment
required to be made by  Sublessor  to Master  Lessor  under the Master Lease and
Sublessor fails to provide adequate  assurance of future  performance within two
(2) business days after Sublessee's written demand requesting such assurance.

          (b) Sublessee shall not prepay any amounts owing by Sublessor  without
the consent of Sublessor.

          (c) Sublessee shall provide to Sublessor concurrently with any payment
to Master Lessor reasonable evidence of such payment.

          (d) If  Sublessor  notifies  Sublessee  that it  disputes  any  amount
demanded by Master Lessor,  Sublessee  shall not make any such payment to Master
Lessor unless  Master Lessor has provided a three-day  notice to pay such amount
or forfeit the Master Lease.

          Any sums paid  directly by  Sublessee to Master  Lessor in  accordance
with this  paragraph and other costs  reasonably  incurred as a  consequence  of
Sublessor's failure to pay required sums to Master Lessor,  including attorneys'
fees,  shall be credited  toward the amounts  payable by  Sublessee to Sublessor
under the Sublease.

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ARTICLE 4: SUBLEASE TERM.

4.1  Commencement and Termination  Dates.  The term of this Sublease  ("Sublease
Term") shall be for the period of time commencing on the scheduled  commencement
date  described  in  Article  1 (the  "Commencement  Date")  and  ending  on the
termination  date  described in Article I or on such earlier date of termination
as provided herein (the "Termination Date").

4.2 Delay in Commencement. If for any reason possession of the Sublease Premises
has not been  delivered to Sublessee by the scheduled  Commencement  Date or any
other date,  Sublessor  shall not be liable to  Sublessee or any other person or
entity for any loss or damage resulting  therefrom.  In the event of such delay,
the Commencement  Date and the Rental  Commencement  Date shall be delayed until
possession  of  the  Sublease  Premises  is  delivered  to  Sublessee,  but  the
Termination  Date  shall not be  extended.  If  Sublessor  is unable to  deliver
possession  of the Sublease  Premises to Sublessee  within sixty (60) days after
the scheduled  Commencement  Date, then Sublessee may terminate this Sublease by
giving  written notice to Sublessor at any time after that date, and the parties
shall  have no  further  liability  thereafter  accruing  under  this  Sublease;
provided, however, that if Sublessor tenders possession to Sublessee within five
(5) days after receipt of Sublessee's  notice of termination,  such notice shall
be void.

4.3 Early  Occupancy.  If  Sublessor  permits  Sublessee  to occupy the Sublease
Premises prior to the Commencement  Date, such occupancy shall be subject to all
of the  provisions of this  Sublease,  including the payment of Minimum  Monthly
Rent. Early occupancy of the Sublease Premises shall not advance the Termination
Date.  Sublessee  shall,  prior to entering  the Sublease  Premises,  deliver to
Sublessor   certificates  of  insurance  evidencing  the  policies  required  of
Sublessee under this Sublease.

ARTICLE 5: RENT AND ADDITIONAL EXPENSES.

5.1 Payment of Rent. All monies  payable by Sublessee  under this Sublease shall
constitute  "Rent." All Rent shall be paid in lawful money of the United States,
without any  deduction  or offset,  to  Sublessor  at the  address of  Sublessor
specified  in  Article 1 or such  other  place as  Sublessor  may  designate  in
writing.  No  payment  by  Sublessee  of a lesser  amount  than the Rent  herein
stipulated  shall  be  deemed  to be  other  than  on  account  of the  earliest
stipulated  Rent,  nor shall any  endorsement  or  statement on any check or any
letter  accompanying  any check or  payment  of Rent be  deemed  an  accord  and
satisfaction,  and Sublessor may accept such check or payment without  prejudice
to its right to recover the balance of such Rent or to pursue any other  remedy.
Rent for any partial  calendar  months at the  beginning  or end of the Sublease
Term or by early occupancy of the Sublease Premises shall be prorated based on a
thirty (30) day month.

5.2 Minimum Monthly Rent.  Sublessee shall pay to Sublessor the sum set forth in
Article 1 hereof as Minimum  Monthly Rent, in advance,  on the first day of each
calendar  month   throughout  the  Sublease  Term,   commencing  on  the  Rental
Commencement Date.

5.3 Additional Rent.  In addition to Minimum  Monthly  Rent,  commencing  on the
Commencement  Date (or, if earlier,  upon occupancy of the Sublease  Premises by
Sublessee),  Sublessee shall pay to Sublessor, on the first day of each calendar
month,  as  "Additional  Rent,"  estimated  payments for real property taxes and
assessments,  maintenance,  repair, management,  insurance,  utilities and other
charges  attributable to and/or accruing  against the Sublease  Premises and the
related  common areas for the Sublease  Term,  in such amounts as are payable by
Sublessor under the Master Lease;  provided,  however, that for the term of this
Sublease  Additional  Rent will not  exceed  $.20/rsf  (i.e.,  $3,279.40/month),
exclusive of any increases in real property taxes and  assessments and insurance
premiums  above the cost of real property  taxes and  assessments  and insurance
premiums for the period from July 1998 through June 1999,  which increases shall
be  paid  by  Sublessee.  However,  notwithstanding  anything  to  the  contrary
contained  in  this  Sublease,  Sublessee  shall  not be  required  to  pay  any
additional  rent or perform any obligation  that is (i) fairly  allocable to any
period of time prior to the Commencement  Date or following the Termination Date
or earlier  expiration  of the Sublease  Term;  or (ii) payable as a result of a
default by Sublessor of any of its  obligations  under the Master Lease  (unless
such default is a result of Sublessee's default under this Sublease).

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5.4 Prepaid Rent.  Concurrently  with  Sublessee's  execution of this  Sublease,
Sublessee shall pay to Sublessor the sum specified in Article 1 as Prepaid Rent,
which  shall  be  applied  to the  installments  of  Minimum  Monthly  Rent  and
Additional Rent first coming due under this Sublease.

5.5 Late Charge.  If Sublessee  fails to pay any Rent when due  hereunder,  then
Sublessee  shall pay  Sublessor a late charge  equal to six percent (6%) of such
delinquent amount as liquidated  damages for Sublessee's  failure to make timely
payment.  Any  notice  given by  Sublessor  pursuant  to any  statute  governing
unlawful  detainer  actions  shall be deemed to be concurrent  with,  and not in
addition to, the notice required herein.  This provision for a late charge shall
not be  deemed  to grant  Sublessee  a grace  period  or  extension  of time for
performance.  If any Rent is not paid  promptly  when due,  then, in addition to
such late charge,  Sublessee  shall pay to Sublessor  interest on the delinquent
amount from the date on which said payment is due until paid, at the rate of ten
percent (10%) per annum or the maximum rate permitted by law, whichever is less.

ARTICLE 6: SECURITY  DEPOSIT.  Upon execution of this Sublease,  Sublessee shall
provide  to  Sublessor  an  irrevocable  letter  of credit  ("LOC")  in favor of
Sublessor,  with a financial institution reasonably acceptable to Sublessor, and
in substantially  the form attached hereto as Exhibit B, in the amount specified
in Article 1 hereof as a "Security  Deposit."  Landlord  may draw on such LOC in
whole  or in  part,  in  lieu  of a  cash  Security  Deposit,  as  security  for
Sublessee's faithful performance under this Sublease.  If Sublessee fails to pay
any Rent as and when due under this  Sublease or otherwise  fails to perform its
obligations hereunder,  then after giving Sublessee five (5) days written notice
(referenced  in Exhibit B as a Letter of Intent to Draw),  Sublessor may, at its
option and without  prejudice to any other remedy which Sublessor may have, draw
on the LOC and apply,  use or retain all or any portion of the Security  Deposit
toward the payment of  delinquent  Rent or for any loss or damage  sustained  by
Sublessor due to such failure by Sublessee.

ARTICLE 7: USE.

7.1 Use of the Sublease  Premises.  Sublessee  shall use the  Sublease  Premises
solely for the purposes  specified in Article 1 in strict  conformance  with the
applicable   requirements  of  the  Master  Lease,  and  for  no  other  purpose
whatsoever,  unless  Sublessee shall first have obtained the written approval of
Sublessor  (which approval shall not be unreasonably  withheld),  Master Lessor,
and any and all applicable governmental agencies.

7.2 Suitability. Sublessee acknowledges that, except as may be explicitly stated
in this  Sublease,  neither  Sublessor  nor any agent of Sublessor  has made any
representation or warranty with respect to the Sublease Premises,  the permitted
uses that can be made of the  Sublease  Premises  under  existing  laws,  or the
suitability of the Sublease  Premises for the conduct of  Sublessee's  business,
nor  has  Sublessor  agreed  to  undertake  any   modification,   alteration  or
improvement to the Sublease Premises.

7.3 Hazardous Materials.

         7.3.1 Definitions.  As used in this Sublease, the following terms shall
have the meanings set forth below:

         (a) "Hazardous  Material" shall mean any hazardous or toxic  substance,
material or waste which is or becomes regulated by any state,  federal, or local
government  authority,  including without  limitation all of those materials and
substances  designated  as  hazardous or toxic by the  Environmental  Protection
Agency,  the  Department  of  Labor,  the  Department  of  Transportation,   the
Department of  Agriculture,  the  Department of Health  Services or the Food and
Drug  Agency.  Without  limiting  the  generality  of the  foregoing,  the  term
"Hazardous  Material" shall include (i) any substance,  product,  waste or other
material of any nature  whatsoever  which may give rise to  liability  under any
statutory or common law theory based on negligence,  trespass, intentional tort,
nuisance  or strict  liability  or under any  reported  decisions  of a state or
federal court;  (ii)  gasoline,  diesel fuel, or other  petroleum  hydrocarbons;
(iii) polychlorinated  biphenyls;  (iv) asbestos containing materials;  (v) urea
formaldehyde foam insulation; and (vi) radon gas.

         (b) "Hazardous  Material Law" shall mean any applicable  statute,  law,
ordinance, or regulation

                                     Page 6

<PAGE>


of any governmental body or agency which regulates the use, storage, generation,
discharge,  treatment,  transportation,  release,  or disposal of any  Hazardous
Material.

         (c) "Hazardous  Material Use" shall mean and include any use,  storage,
generation,  treatment, or transportation of any Hazardous Material within, from
or to,  on or  about,  or  upon  the  Sublease  Premises  or any  other  land or
improvements in the vicinity of the Sublease Premises.

         (d) "Hazardous  Material Release" shall mean and include any discharge,
release,  emission or disposal of any Hazardous Material within,  from or to, on
or about, or upon the Sublease Premises or any other land or improvements in the
vicinity of the Sublease Premises.

         (e)  "Agents"  shall mean  agents,  employees,  invitees,  contractors,
sublessees, licensees, successors and assigns.

         7.3.2  Sublessor's  Representation.  Except as previously  disclosed to
Sublessee, to Sublessor's actual current knowledge, (i) no Hazardous Material is
present  on or  about  the  Sublease  Premises  or the  soil,  surface  water or
groundwater  thereof;  (ii) no underground storage tanks are present on or about
the Sublease  Premises;  and (iii) no action,  proceeding or claim is pending or
threatened  regarding the Sublease Premises concerning any Hazardous Material or
pursuant to any Hazardous Material Law.

         7.3.3  Use  Restriction.  Sublessee  shall  not  cause  or  permit  any
Hazardous  Material Use without the prior  written  consent of Master Lessor and
Sublessor,  and in any event  Sublessee  shall not cause or permit any Hazardous
Material  Release.  Without  limiting the generality of the  foregoing,  (a) any
Hazardous  Material Use by Sublessee or Sublessee's Agents shall strictly comply
with  all  applicable  Hazardous  Material  Laws,  and (b) in the  event  of any
Hazardous Material Release by Sublessee or Sublessee's Agents, Sublessee, at its
expense,  shall  promptly  take all  actions  necessary  to return the  Sublease
Premises to the condition existing prior to such Hazardous Material Release.

         7.3.4 Exclusion from Liability.  Under no circumstances shall Sublessee
be liable for, and Sublessor shall indemnify, defend and hold harmless Sublessee
and  Sublessee's  Agents from and  against,  all costs and  expenses  (including
attorneys'  and  consultants'  fees)  related to or in  connection  with (i) the
investigation,  reporting,  removal and remediation of any Hazardous Material on
or about the Sublease Premises,  or (ii) the violation of any Hazardous Material
Law,  except to the extent that any of the  foregoing  results  from a Hazardous
Material Use or a Hazardous Material Release by Sublessee or Sublessee's Agents.

ARTICLE 8: SURRENDER.

         8.1 Condition of the Sublease Premises.  Upon the expiration or earlier
termination of this Sublease,  Sublessee shall  surrender the Sublease  Premises
broom clean and in the same  condition and repair as the Sublease  Premises were
delivered to Sublessee on the  Commencement  Date,  excepting only ordinary wear
and tear and damage by fire, earthquake,  act of God or the elements.  Sublessee
agrees to repair any damage to the Sublease  Premises,  or the building of which
the  Sublease  Premises  are a part,  caused by or related to the removal of any
articles of personal property, business or trade fixtures, machinery, equipment,
cabinetwork,  signs, furniture,  movable partitions or permanent improvements or
additions which  Sublessor  allows or requires  Sublessee to remove,  including,
without  limitation,  repairing the floor and patching and/or painting the walls
where required by Sublessor to the reasonable  satisfaction of Sublessor  and/or
Master  Lessor,  all at  Sublessee's  sole  cost and  expense.  Sublessee  shall
indemnify  Sublessor  against  any  loss or  liability  resulting  from delay by
Sublessee  in  so  surrendering  the  Sublease  Premises,   including,   without
limitation,  any claims made by the Master Lessor and/or any  succeeding  tenant
founded on such delay. Such indemnity obligation shall survive the expiration or
earlier termination of this Sublease.

         8.2 Sublessor's  Right to Access.  Unless  otherwise agreed pursuant to
the Furniture Rental Agreement  referenced  above, in the thirty (30) days prior
to the  expiration  of this  Sublease,  or such  shorter  time as is  reasonably
necessary,  Sublessor shall have the right, upon at least twenty-four (24) hours
prior notice, to enter the Sublease Premises during non-business hours to remove
personal property belonging to Sublessor, if any (including without

                                     Page 7

<PAGE>


limitation any business or trade fixtures,  machinery,  equipment,  cabinetwork,
signs,  furniture,  and movable partitions owned by Sublessor and located within
the Sublease Premises) and to remove any improvements or additions, if any, that
Sublessor is required to remove  prior to surrender of the Premises  pursuant to
the Master Lease (not including those items to be removed by Sublessee  pursuant
to Article 8.1 of this  Sublease).  Any work performed by Sublessor  pursuant to
the terms of the  preceding  sentence  shall be done in a  reasonable  manner to
minimize the amount of  inconvenience  and  interference  to Sublessee's use and
occupancy of the Sublease Premises;  provided,  however,  Sublessor shall not be
liable  to  Sublessee  for any such  inconvenience  or  interference  caused  by
Sublessor's reasonable exercise of its rights pursuant to this provision.

ARTICLE 9:  CONSENT.  Whenever  the  consent  or  approval  of Master  Lessor is
required  pursuant to the terms of the Master  Lease,  for the  purposes of this
Sublease,  Sublessee,  in each such  instance,  shall be  required to obtain the
written  consent or  approval  of both Master  Lessor and  Sublessor.  If Master
Lessor  refuses to grant its consent or  approval,  Sublessor  may  withhold its
consent or approval and Sublessee  agrees that such action by Sublessor shall be
deemed reasonable.

ARTICLE  10:  INSURANCE.  All  insurance  policies  required  to be  carried  by
Sublessor  under the Master Lease shall be maintained  by Sublessee  pursuant to
the terms of the Master Lease,  and shall name  Sublessor and Master Lessor (and
such other  lenders,  persons,  firms,  or  corporations  as are  designated  by
Sublessor or Master Lessor) as additional insureds by endorsement.  All policies
shall be written as primary  policies  with  respect to the  interests of Master
Lessor and Sublessor and such other  additional  insureds and shall provide that
any  insurance  carried by Master  Lessor or Sublessor or such other  additional
insureds is excess and not contributing  insurance with respect to the insurance
required  hereunder.  All  policies  shall also  contain  "cross  liability"  or
"severability  of interest"  provisions and shall insure the  performance of the
indemnity  set forth in Article 14 of this  Sublease.  Sub lessee shall  provide
Master  Lessor  and  Sublessor  with  copies or  certificates  of all  policies,
including in each instance an endorsement  providing  that such insurance  shall
not be cancelled or amended  except after thirty (30) days prior written  notice
to  Master  Lessor  and  Sublessor.  All  deductibles,  if any,  under  any such
insurance  policies  shall  be  subject  to the  prior  reasonable  approval  of
Sublessor,  and all certificates  delivered to Master Lessor and Sublessor shall
specify the limits of the policy and all deductibles thereunder.

ARTICLE 11: NOTICES.

11.1 Notice Requirements.   All notices, demands,  consents, and approvals which
may or are required to be given by either party to the other under this Sublease
shall be in writing and may be given by (i) personal  delivery,  (ii)  overnight
courier such as Federal Express,  or (iii) United States registered or certified
mail  addressed  as shown in Article 1.  Any notice or demand so given  shall be
deemed to be  delivered  or made on (i) the date  personal  service is effected,
(ii) the next  business  day if sent by overnight  courier,  or (iii) the second
business day after the same is deposited in the United States Mail as registered
or certified and addressed as above provided with postage thereon fully prepaid.
Either party hereto may change its address at any time by giving  written notice
of such  change to the other  party in the manner  provided  herein at least ten
(10) calendar days prior to the date such change is desired to be effective.

11.2 Notices from Master  Lessor.  Each party shall provide to the other party a
copy of any notice or demand  received from or delivered to Master Lessor within
twenty four (24) hours of receiving or delivering such notice or demand.

ARTICLE 12:  DAMAGE,  DESTRUCTION,  CONDEMNATION.  To the extent that the Master
Lease  gives  Sublessor  any rights  following  the  occurrence  of any  damage,
destruction or  condemnation to terminate the Master Lease, to repair or restore
the Sublease Premises,  to contribute toward such repair or restoration costs to
avoid termination,  to obtain and utilize insurance or condemnation  proceeds to
repair or restore the  Sublease  Premises,  or any similar  rights,  such rights
shall be  reserved  to and  exercisable  solely  by  Sublessor,  in its sole and
absolute  discretion,  and not by  Sublessee.  The exercise of any such right by
Sublessor shall under no circumstances constitute a default or breach under this
Sublease or subject Sublessor to any liability therefor.

                                     Page 8

<PAGE>


ARTICLE  13:  INSPECTION  OF  THE  SUBLEASE  PREMISES.  Sublessee  shall  permit
Sublessor and its agents to enter the Sublease  Premises at any reasonable  time
for the purpose of inspecting the same or posting a notice of  nonresponsibility
for alterations, additions or repairs, provided that Sublessor provides at least
twenty-four (24) hours prior notice (except in the case of emergency).

ARTICLE 14: INDEMNITY; EXEMPTION OF SUBLESSOR FROM LIABILITY.

14.1  Sublessee  Indemnity.  Sublessee  shall  indemnify,  defend (with  counsel
reasonably  satisfactory to Sublessor),  protect and hold harmless Sublessor and
its  agents,  employees,   contractors,   stockholders,   officers,   directors,
successors  and assigns from and against any and all claims,  demands,  actions,
suits, proceedings, liabilities, obligations, losses, damages, judgments, costs,
penalties,  fines,  and  expenses,  including,  but not limited to,  attorneys',
consultants' and expert witness fees  (collectively,  "Claims")  arising out of,
resulting from, or related to (i) any injury or death to any person or injury or
damage to property  caused by, arising out of, or involving (A)  Sublessee's use
of the Sublease Premises,  the conduct of Sublessee's  business therein,  or any
activity, work or thing done, permitted or suffered by Sublessee in or about the
Sublease  Premises  or the  common  areas,  (B) a  breach  by  Sublessee  in the
performance  in a timely  manner of any  obligation of Sublessee to be performed
under this Sublease,  or (C) the negligence or intentional  acts of Sublessee or
Sublessee's Agents, and/or (ii) any Hazardous Material Use or Hazardous Material
Release by Sublessee or Sublessee's Agents;  provided,  however,  that Sublessor
shall not be  indemnified  to the  extent  any  Claims  are  caused by the gross
negligence  or willful  misconduct  of Sublessor  or  Sublessor's  Agents.  This
indemnity shall survive the expiration or earlier termination of this Sublease.

14.2 Sublessee  Waiver.  Sublessee,  as a material part of the  consideration to
Sublessor,  hereby  assumes  all risk of damage to property or injury to persons
in, upon or about the Sublease  Premises  arising  from any cause and  Sublessee
hereby waives all claims in respect  thereof  against  Sublessor,  except to the
extent damage or injury is caused by the gross negligence or willful  misconduct
of Sublessor or Sublessor's Agents;  provided,  however,  that in no event shall
Sublessor  be  liable  for  any  loss  of  profits  or  any  special,  indirect,
incidental,  consequential or punitive damages, however caused and on any theory
of liability. This waiver shall survive the expiration or earlier termination of
this Sublease.

14.3 Mutual Waiver of  Subrogation.  The parties  hereto  release each other and
their  respective  Agents from all  liability for damage to any property that is
caused by or results from a risk that is actually  insured against or that would
normally  be covered by  the  standard  form of "all risk"  property  insurance,
without  regard  to the  negligence  or  willful  misconduct  of the  entity  so
released.  Each party shall use its best efforts to cause each insurance  policy
it obtains to provide that the insurer  thereunder  waives all right of recovery
by way of subrogation as required  herein in connection with any property damage
covered by the policy.

ARTICLE 15:  ASSIGNMENT AND  SUBLETTING.  Sublessee  shall not voluntarily or by
operation  of law  assign  this  Sublease  or enter into  license or  concession
agreement,  sublet  all or any  part  of the  Sublease  Premises,  or  otherwise
transfer,  mortgage,  pledge,  hypothecate  or  encumber  all  or  any  part  of
Sublessee's  interest in this  Sublease or in the Sublease  Premises or any part
thereof,  without the prior written  consent of Master  Lessor  (pursuant to the
terms  of  the  Master  Lease)  and  Sublessor   (whose  consent  shall  not  be
unreasonably withheld or conditioned). Any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a default
by Sublessee under this Sublease.  However, Sublessor hereby agrees that it will
consent to any  subletting  of the Sublease  Premises or any  assignment of this
Sublease to (i) a corporation controlling, controlled by or under common control
with Sublessee; (ii) a corporation related to Sublessee by merger, consolidation
or non-bankruptcy  reorganization;  or (iii) a purchaser of substantially all of
Sublessee's  assets;  provided  that (a)  Sublessee  first  obtains  the written
consent of Master Lessor to such  transaction;  and (b) any and all compensation
realized by Sublessee  under any such  sublease or  assignment  in excess of the
Rent payable  under this Sublease  shall belong to Sublessor,  to be included as
part of  "bonus  rent" as  described  in  Paragraph  21.B of the  Master  Lease.
Notwithstanding any assignment or subletting, Sublessee shall not be relieved of
its obligations  hereunder,  and a consent to one assignment or subletting shall
not  constitute a consent to any other  assignment  or subletting or a waiver of
the provisions of this section.

                                     Page 9

<PAGE>


ARTICLE  16:  DELIVERY OF  DOCUMENTS.  Sublessee  shall  execute and deliver any
document or other instrument  required by Master Lessor or Sublessor pursuant to
the Master Lease  within five (5) days  following  receipt of a written  request
from Master Lessor or  Sublessor.  Failure to comply with this  provision  shall
constitute a default by Sublessee under this Sublease.

ARTICLE 17: HOLDING OVER.

17.1 Without Consent.  Any holding over by Sublessee after the Termination Date,
without the prior  written  consent of Master  Lessor and  Sublessor,  shall not
constitute a renewal or extension of this Sublease or give  Sublessee any rights
in or to the Sublease Premises. In the event of any such non-permissive  holding
over,  Sublessor  and Master  Lessor may seek any and all remedies  available to
Sublessor  and/or  Master Lessor at law or in equity,  and  Sublessee  shall pay
Sublessor upon demand, (i) all damages,  costs,  expenses,  and fees incurred or
suffered by  Sublessor  under the Master  Lease as a result of such  holdover by
Sublessee,  including  without  limitation  any  increase  in rentals  resulting
therefrom,  and (ii) all  attorneys'  fees and  out-of-pocket  costs incurred by
Sublessor arising out of or in connection with such holdover.

17.2 With Consent.  Any holding over by Sublessee  after the  Termination  Date,
with the  prior  written  consent  of  Master  Lessor  and  Sublessor,  shall be
construed  as a  month-to-month  tenancy  on the same  terms and  conditions  as
specified  in this  Sublease,  except that the Minimum  Monthly Rent during such
tenancy  shall be  increased  to an amount  equal to One Hundred  Fifty  Percent
(150%) of the most recent applicable Minimum Monthly Rent amount.

ARTICLE 18:  OPTIONS.  Any right of Sublessor to extend or renew the term of the
Master  Lease or to expand  the  Premises  (if any),  shall be  reserved  to and
exercisable solely by Sublessor,  in its sole discretion,  and not by Sublessee.
Sublessor  agrees to exercise  such  rights to extend or renew the Master  Lease
only to the extent necessary to fulfill its obligations under this Sublease.

ARTICLE 19: REPRESENTATIONS AND WARRANTIES.

19.1 Sublessor's  Representations and Warranties.  As an inducement to Sublessee
to enter the  Sublease,  to  Sublessor's  actual  current  knowledge,  Sublessor
represents and warrants with respect to the Sublease Premises that:

         (a) The Master  Lease is in full  force and  effect,  and there  exists
under the Master Lease no default or event of default by either Master Lessor or
Sublessor,  nor has there occurred any event which, with the giving of notice or
passage of time or both, could constitute such a default or event of default.

         (b) There are no pending or threatened  actions,  suits or  proceedings
before any court or  administrative  agency against  Sublessor or against Master
Lessor or third  parties which could,  in the  aggregate,  adversely  affect the
Sublease Premises or any part thereof or the ability of Master Lessor to perform
its  obligations  under  the  Master  Lease  or  of  Sublessor  to  perform  its
obligations  under the  Sublease,  and Sublessor is not aware of any facts which
might result in any such actions, suits or proceedings.

         (c)  There  is  no  pending  or  threatened   condemnation  or  similar
proceedings  affecting the Premises or any portion thereof, and Sublessor has no
knowledge that any such action currently is contemplated.

         (d) Sublessor has not received any notice from any insurance company of
any defects or inadequacies  in the Sublease  Premises or any part thereof which
could adversely affect the insurability of the Sublease Premises or the premiums
for the insurance thereof.

19.2 Sublessee's  Representations and Warranties.  As an inducement to Sublessor
to enter the  Sublease,  to  Sublessee's  actual  current  knowledge,  Sublessee
represents and warrants with respect to the Sublease Premises that:

                                     Page 10

<PAGE>


         (a) There are no pending or threatened  actions,  suits or  proceedings
before any court or  administrative  agency  against  Sublessee or third parties
which could,  in the aggregate,  adversely  affect the Sublease  Premises or any
part thereof or the ability of Sublessee  to perform its  obligations  under the
Sublease, and Sublessee is not aware of any facts which might result in any such
actions, suits or proceedings.

ARTICLE 20: GENERAL PROVISIONS.

20.1  Severability.  If any term or provision  of this  Sublease  shall,  to any
extent,  be  determined  by a court of competent  jurisdiction  to be invalid or
unenforceable, the remainder of this Sublease shall not be affected thereby, and
each term and provision of this Sublease  shall be valid and  enforceable to the
fullest extent permitted by law.

20.2  Attorneys'  Fees;  Costs of Suit.  In the event of any  breach  under this
Sublease by Sublessee or Sublessor, the non-breaching party shall be entitled to
recover,  from the breaching  party,  its reasonable  attorney's  fees and other
out-of-pocket  costs incurred to enforce the provisions of this Sublease against
the breaching party or to exercise any remedy available to it in connection with
such  breach,  including  fees and costs  incurred  in  bringing  any  action or
proceeding  for any relief  arising  out of this  Sublease,  but in the event of
litigation,  the  prevailing  party shall be entitled to recover its  reasonable
attorneys' fees and costs from the other party only as determined by the court.

20.3 Waiver.  No covenant,  term or  condition  or the breach  thereof  shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed,  and any waiver of the breach of any covenant,  term or condition shall
not be deemed to be a waiver of any other  covenant,  term or  condition  or any
subsequent  failure to perform  the same or any other  such  term,  covenant  or
condition.  Acceptance by Sublessor of any  performance  by Sublessee  after the
time the same shall have become due shall not  constitute  a waiver by Sublessor
of the breach or default of any  covenant,  term or condition  unless  otherwise
expressly agreed to by Sublessor in writing.

20.4 Brokerage Commissions. The parties represent and warrant to each other that
they have dealt with no brokers,  finders,  agents or other person in connection
with the transaction contemplated hereby to whom a brokerage or other commission
or fee may be  payable,  except for the  brokers  named in Article 1, whose fees
shall be paid  pursuant to a separate  agreement.  Each party  shall  indemnify,
defend and hold the other  harmless  from any claims  arising from any breach by
the indemnifying party of the representation and warranty in this Section.  

20.5 Binding  Effect.  Preparation  of this Sublease by Sublessor or Sublessor's
agent and  submission  of the same to Sublessee  shall not be deemed an offer to
lease. This Sublease shall become binding upon Sublessor and Sublessee only when
fully executed by Sublessor and Sublessee.  Sublessor and Sublessee  acknowledge
and agree that this Sublease is expressly conditioned upon obtaining the consent
of Master  Lessor  hereto  following  such  fully  execution  by  Sublessor  and
Sublessee.  In the event such consent is not so obtained within  forty-five (45)
days following the date of this Sublease, then this Sublease shall automatically
terminate and be without  further force or effect,  and Sublessor shall promptly
return to Sublessee  the advance rent and Security  Deposit paid by Sublessee to
Sublessor pursuant to Sections 5.4 and Article 6 above.

20.6 Entire  Agreement.  This instrument and the Furniture  Rental  Agreement of
even date  herewith,  along with any  exhibits  and addenda to those  documents,
constitutes the entire agreement between Sublessor and Sublessee relative to the
Sublease Premises.  This Sublease may be altered,  amended or revoked only by an
instrument in writing signed by both Sublessor and Sublessee.  There are no oral
agreements or representations  between the parties affecting this Sublease,  and
this  Sublease  supersedes  and  cancels  any  and  all  previous  negotiations,
arrangements, brochures, agreements, representations and understandings, if any,
between the parties hereto.

20.7 Covenant of Quiet Enjoyment.  Sublessor covenants with Sublessee that, upon
the  payment  of Rent and  performance  of all other  obligations  of  Sublessee
hereunder,  Sublessee  shall be entitled to possession of the Sublease  Premises
for the  Sublease  Term,  in  accordance  with and  subject to the terms of this
Sublease.

20.8 Execution. This Sublease may be executed in one or more counterparts,  each
of which shall be considered an original counterpart,  and all of which together
shall  constitute  one and the  same  instrument.  Each  person  executing  this
Sublease represents that the execution of this Sublease has been duly authorized
by the party on whose behalf the person is executing this Sublease.

                                     Page 11

<PAGE>


20.9  Approvals.   Whenever  this  Sublease   requires  an  approval,   consent,
designation,  determination,  selection  or  judgment  by  either  Sublessor  or
Sublessee,  such approval,  consent,  designation,  determination,  selection or
judgment and any conditions imposed thereby shall be reasonable and shall not be
unreasonably  withheld  or  delayed  and,  in  exercising  any  right or  remedy
hereunder,  each party shall at all times act reasonably and in good faith.


Sublessor:                                   Sublessee:

CONCEPTUS, INC.,                             AVIO DIGITAL, INC.,
a Delaware corporation                       a California corporation


By: /s/ Sanford Fitch                        By: /s/ Michele DiLorenzo
    ----------------------------                 --------------------------

Name:  Sanford Fitch                         Name: Michele DiLorenzo
                                                   --------------------------

Title: Senior Vice-President &               Title: Chief Executive Officer
       Chief Financial Officer                      --------------------------



                                             By: /s/ Michele DiLorenzo
                                                 --------------------------

                                             Name: Michele DiLorenzo
                                                   --------------------------

                                             Title: Chief Financial Officer
                                                    -------------------------


                                     Page 12

<PAGE>


                                    Exhibit B

<PAGE>


                              FORM LETTER OF CREDIT
                              ---------------------

We hereby open in favor of Conceptus,  Inc. 1021 Howard Avenue,  San Carlos,  Ca
94070 and for the account of our client, Avio Digital, Inc. ("Applicant"),  this
Irrevocable Standby Letter of Credit No. _________ (this "Letter of Credit") for
the  aggregate  sum  of  USD98,382.00   (Ninety-Eight   Thousand  Three  Hundred
Eighty-Two and 00/100 U.S. Dollars).&(P)&(P) We agree to honor payment of drafts
drawn at sight on us when  presented on or before the  expiration  date.  Drafts
must be accompanied by the following documents:  1. Beneficiary's  certification
bearing a signature purporting to be that of an authorized officer of Conceptus,
Inc.,  certifying that: "The  undersigned,  duly authorized by Conceptus,  Inc.,
hereby  certifies  that an event of default by the Applicant has occurred and is
continuing  (beyond any  applicable  notice and cure periods) under that certain
Sublease agreement dated ________________________, 1998 between Conceptus, Inc.,
as Sublessor, and Applicant, as Sublessee, (the "Sublease");  that the amount of
the  accompanying  draft does not exceed the  amount  owing  resulting  from the
default.  We further  certify that we have  delivered to the  Subtenant  all the
required notices as agreed to under the Sublease,  including without limitation,
the five (5) days  notice of our  intent to draw as  evidenced  by the  attached
copies of the Letter of Intent to Draw and Certified Mail Receipt, however up to
the time of this drawing the Subtenant has not remedied the default." &(P)&(P)2.
Copy of Letter of Intent  to Draw  dated at least 5 days  prior to  presentation
date together with a copy of the Certified Mail Receipt. &(P)&(P)3. The original
of this  standby  letter of credit.  &(P)&(P)  Each draft must be marked  "Drawn
under irrevocable Letter of Credit  No.____________  dated ___________ issued by
Seafirst  Bank."  &(P)&(P)  Partial  drawings  are  permitted.  &(P)&(P) It is a
condition of this letter of credit that it will automatically be reduced per the
following schedule without further notice from Seafirst Bank to you:&(P)

Date of                Amount of                Maximum Amount
Reduction              Reduction                available after
                                                Reduction.

Oct 15, 1999           USD32,794.00             USD65,588.00
Oct 15, 2000              32,794.00             USD32,794.00


This Letter of Credit  shall  expire at our  Counters  currently  located at 800
Fifth  Avenue,  Floor 31,  Seattle,  WA at 3:30 P.M. on June 30,  2002.  &(P) We
hereby  engage  with you that  drafts and  documents  drawn  under and in strict
compliance  with the terms and  conditions of this letter of credit will be duly
honored upon presentation to us.&(P)&(P) This letter of credit is subject to the
uniform  customs and  practice  for  documentary  credits,  1993  revision,  ICC
publication  no. 500,  with the  exception  of article no. 41 and, to the extent
where there is a conflict the laws of the State of California shall prevail.