Document:

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                                                                    EXHIBIT 10.3

                          RITA MEDICAL SYSTEMS, INC.

                                2000 STOCK PLAN

     1.   Purposes of the Plan.  The purposes of this 2000 Stock Plan are to
          --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a)  "Administrator" means the Board or any of its Committees
                -------------
appointed pursuant to Section 4 of the Plan.

          (b)  "Applicable Laws" means the legal requirements relating to the
                ---------------
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any stock exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

          (c)  "Board" means the Board of Directors of the Company.
                -----

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.
                ----

          (e)  "Committee" means one or more committees or subcommittees
                ---------
appointed by the Board of Directors to administer the plan in accordance with
Section 4 below.

          (f)  "Common Stock" means the Common Stock of the Company.
                ------------

          (g)  "Company" means RITA Medical Systems, Inc., a Delaware
                -------
corporation.

          (h)  "Consultant" means any person, including an advisor, who is
                ----------
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any Director of the Company whether
compensated for such services or not.

          (i)  "Continuous Service Status" means the absence of any interruption
                -------------------------
or termination of service as an Employee or Consultant.  Continuous Service
Status shall not be considered interrupted in the case of:  (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
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statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Subsidiaries or their respective successors. For
purposes of this Plan, a change in status from an Employee to a Consultant or
from a Consultant to an Employee will not constitute an interruption of
Continuous Service Status.

          (j)  "Director" means a member of the Board of Directors of the
                --------
Company.

          (k)  "Employee" means any person employed by the Company or any Parent
                --------
or Subsidiary of the Company, with the status of employment determined based
upon such minimum number of hours or periods worked as shall be determined by
the Administrator in its discretion, subject to any requirements of the Code or
the Applicable Laws. The payment by the Company of a director's fee to a
Director shall not be sufficient to constitute "employment" of such Director by
the Company.

          (l)  "Exchange Act" means the Securities Exchange Act of 1934, as
                ------------
amended.

          (m)  "Fair Market Value" means, as of any date, the Fair Market Value
                -----------------
of the Common Stock as determined by the Administrator in good faith on such
basis as it deems appropriate and applied consistently with respect to
Participants.  Whenever possible, the determination of Fair Market Value shall
be based upon the closing price for the Shares as reported in the Wall Street
                                                                  -----------
Journal for the applicable date.
-------

          (n)  "Incentive Stock Option" means an Option intended to qualify as
                ----------------------
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written Option Agreement.

          (o)  "Listed Security" means any security of the Company that is
                ---------------
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.

          (p)  "Named Executive" means any individual who, on the last day of
                ---------------
the Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

          (q)  "Nonstatutory Stock Option" means an Option not intended to
                -------------------------
qualify as an Incentive Stock Option, as designated in the applicable written
Option Agreement.

          (r)  "Officer" means a person who is an officer of the Company within
                -------
the meaning of Section 16(a) of the Exchange Act and the rules and regulations
promulgated thereunder.

          (s)  "Option" means a stock option granted pursuant to the Plan.
                ------

                                      -2-
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          (t)  "Option Agreement" means a written agreement between an Optionee
                ----------------
and the Company reflecting the terms of an Option granted under the Plan and
includes any documents attached to such Option Agreement, including, but not
limited to, a notice of stock option grant and a form of exercise notice.

          (u)  "Optioned Stock" means the Common Stock subject to an Option or a
                --------------
Stock Purchase Right.

          (v)  "Optionee" means an Employee or Consultant who receives an
                --------
Option.

          (w)  "Parent" means a "parent corporation," whether now or hereafter
                ------
existing, as defined in Section 424(e) of the Code, or any successor provision.

          (x)  "Participant" means any holder of one or more Options or Stock
                -----------
Purchase Rights, or the Shares issuable or issued upon exercise of such awards,
under the Plan.

          (y)  "Plan" means this 2000 Stock Plan.
                ----

          (z)  "Reporting Person" means an Officer, Director, or greater than
10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

          (aa) "Restricted Stock" means shares of Common Stock acquired pursuant
                ----------------
to a grant of a Stock Purchase Right under Section 11 below.

          (bb) "Restricted Stock Purchase Agreement" means a written agreement
                -----------------------------------
between a holder of a Stock Purchase Right and the Company reflecting the terms
of a Stock Purchase Right granted under the Plan and includes any documents
attached to such agreement.

          (cc) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
                ----------
as the same may be amended from time to time, or any successor provision.

          (dd) "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 13 of the Plan.

          (ee) "Stock Exchange" means any stock exchange or consolidated stock
                --------------
price reporting system on which prices for the Common Stock are quoted at any
given time.

          (ff) "Stock Purchase Right" means the right to purchase Common Stock
                --------------------
pursuant to Section 11 below.

          (gg) "Subsidiary" means a "subsidiary corporation," whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.

          (hh) "Ten Percent Holder" means a person who owns stock representing
                ------------------
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.

                                      -3-
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     3.  Stock Subject to the Plan.  Subject to the provisions of Section 12 of
         -------------------------
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 5,000,000 shares of Common Stock, plus an automatic annual
increase on the first day of each of the Company's fiscal years beginning in
2001 and ending in 2010 equal to the lesser of (i) 1,250,000 Shares, (ii) seven
percent (7%) of the Shares outstanding on the last day of the immediately
preceding fiscal year, or (iii) such lesser number of shares as is determined by
the Board of Directors. The Shares may be authorized, but unissued, or
reacquired Common Stock.

     If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. In addition, any Shares of Common Stock which are retained
by the Company upon exercise of an Option or Stock Purchase Right in order to
satisfy the exercise or purchase price for such Option or Stock Purchase Right
or any withholding taxes due with respect to such exercise shall be treated as
not issued and shall continue to be available under the Plan. Shares repurchased
by the Company pursuant to any repurchase right which the Company may have shall
not be available for future grant under the Plan.

     4.  Administration of the Plan.
         --------------------------

         (a)  General.  The Plan shall be administered by the Board or a
              -------
Committee, or a combination thereof, as determined by the Board.  The Plan may
be administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to grant Options and Stock Purchase Rights under
the Plan.

         (b)  Administration With Respect to Reporting Persons. With respect to
              ------------------------------------------------
Options and Stock Purchase Rights granted to Reporting Persons and Named
Executives, the Plan may (but need not) be administered so as to permit such
Options and Stock Purchase Rights to qualify for the exemption set forth in Rule
16b-3 and to qualify as performance-based compensation under Section 162(m) of
the Code.

         (c)  Committee Composition.  If a Committee has been appointed
              ---------------------
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of
a Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws and, in the case of a Committee administering
the Plan pursuant to Section 4(b) above, to the extent permitted or required by
Rule 16b-3 and Section 162(m) of the Code.

         (d)  Powers of the Administrator.  Subject to the provisions of the
              ---------------------------
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:

                                      -4-
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               (i)    to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(m) of the Plan;

               (ii)   to select the Consultants and Employees to whom Options
and Stock Purchase Rights or any combination thereof may from time to time be
granted hereunder;

               (iii)  to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof are granted hereunder;

               (iv)   to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;

               (v)    to approve forms of agreement for use under the Plan;

               (vi)   to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder;

               (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;

               (viii) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights; and

               (ix)   to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan; and

               (x)    in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options or Stock Purchase Rights to
participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs.

          (e)  Effect of Administrator's Decision. All decisions, determinations
               ----------------------------------
and interpretations of the Administrator shall be final and binding on all
holders of Options or Stock Purchase Rights.

     5.   Eligibility.
          -----------

          (a)  Recipients of Grants.  Nonstatutory Stock Options and Stock
               --------------------
Purchase Rights may be granted to Employees and Consultants.  Incentive Stock
Options may be granted only to Employees.  An Employee or Consultant who has
been granted an Option or Stock Purchase Right may, if he or she is otherwise
eligible, be granted additional Options or Stock Purchase Rights.

          (b)  Type of Option.  Each Option shall be designated in the Option
               --------------
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

                                      -5-
<PAGE>

          (c)  $100,000 Limitation.  Notwithstanding any designation under
               -------------------
Section 5(b), to the extent that the aggregate Fair Market Value of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options.  For purposes of this Section
5(b), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.

          (d)  Employment Relationship.  The Plan shall not confer upon the
               -----------------------
holder of any Option or Stock Purchase Right any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with such holder's right or the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.

     6.   Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 20 of the Plan.  It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 16 of the Plan.

     7.   Term of Option.  The term of each Option shall be the term stated in
          --------------
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, is a
Ten Percent Holder, the term of the Option shall be five years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.

     8.   Limitation on Grants to Employees.  Subject to adjustment as provided
          ---------------------------------
in Section 13 below, the maximum number of Shares which may be subject to
Options granted to any one Employee under this Plan for any fiscal year of the
Company shall be 1,000,000  Shares, provided that this Section 8 shall apply
only after such time, if any, as the Common Stock becomes a Listed Security.

     9.   Option Exercise Price and Consideration.
          ---------------------------------------

          (a)  The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board and
set forth in the applicable agreement, but shall be subject to the following:

               (i)    In the case of an Incentive Stock Option that is:

                      (A)  granted to an Employee who, at the time of the grant
of such Incentive Stock Option, is a Ten Percent Holder, the per Share exercise
price shall be no less than 110% of the Fair Market Value per Share on the date
of grant.

                                      -6-
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                      (B)  granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

               (ii)   In the case of a Nonstatutory Stock Option that is:

                      (A) granted prior to the date, if any, on which the Common
Stock becomes a Listed Security, to a person who, at the time of the grant of
such Option, is a Ten Percent Holder, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of the grant.

                      (B) granted, prior to the date, if any on which the Common
Stock becomes a Listed Security, to any other person, the per share Exercise
Price shall be no less than 85% of the Fair Market Value on the date of grant,
if required by the Applicable Laws and, if not so required, shall be such price
as it determined by the Administrator; or

                      (C) granted on or after the date, if any, on which the
Common Stock becomes a Listed Security to any person, the per Share exercise
price shall be such price as determined by the Administrator; provided, however,
that if the person is, at the time of grant of such option, a Named Executive of
the Company, the per share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant if such Option is intended to
qualify as performance-based compensation under Section 162(m) of the Code; or

               (iii)  Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.

          (b)  The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note (subject to the provisions of Section 153 of the
Delaware General Corporation Law), (4) cancellation of indebtedness, (5) other
Shares that (x) in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date of surrender or
such other period as may be required to avoid a charge to the Company's
earnings, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (6) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) any combination of the foregoing methods of
payment, or (8) such other consideration and method of payment for the issuance
of Shares to the extent permitted under the Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

                                      -7-
<PAGE>

     10.  Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder.  Any Option
               -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan; provided, however, that if required by the Applicable Laws, any
Option granted prior to the date, if any, upon which the Common Stock becomes a
Listed Security shall become exercisable at the rate of at least 20% per year
over five years from the date the Option is granted.  In the event that any of
the Shares issued upon exercise of an Option (which exercise occurs prior to the
date, if any, upon which the Common Stock becomes a Listed Security) should be
subject to a right of repurchase in the Company's favor, such repurchase right
shall, if required by the Applicable Laws, lapse at the rate of at least 20% per
year over five years from the date the Option is granted.  Notwithstanding the
above, in the case of an Option granted to an officer (including but not limited
to Officers), Director or Consultant of the Company or any Parent or Subsidiary
of the Company, the Option may become fully exercisable, and a repurchase right,
if any, in favor of the Company shall lapse, at any time or during any period
established by the Administrator.  The Administrator shall have the discretion
to determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such leave.

     An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised.  Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option.  The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.

          (b)  Termination of Employment or Consulting Relationship.  Subject to
               ----------------------------------------------------
Section 10(c) below, in the event of termination of an Optionee's Continuous
Service Status, such Optionee may, but only within three months (or such other
period of time not less than 30 days as is determined by the Administrator, with
such determination in the case of an Incentive Stock Option being made at the
time of grant of the Option and not exceeding three months) after

                                      -8-
<PAGE>

the date of such termination (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), exercise his or
her Option to the extent that the Optionee was entitled to exercise it at the
date of such termination. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate. No termination shall be deemed to occur and this
Section 10(b) shall not apply if (i) the Optionee is a Consultant who becomes an
Employee, or (ii) the Optionee is an Employee who becomes a Consultant.

          (c)   Disability of Optionee.
                ----------------------

                (i)   Notwithstanding Section 10(b) above, in the event of
termination of an Optionee's Continuous Service Status as a result of his or her
total and permanent disability (within the meaning of Section 22(e)(3) of the
Code), such Optionee may, but only within six months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

               (ii)   In the event of termination of an Optionee's Continuous
Service Status as a result of a disability which does not fall within the
meaning of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), such Optionee may, but only within six months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. However, to
the extent that such Optionee fails to exercise an Option which is an Incentive
Stock Option ("ISO") (within the meaning of Section 422 of the Code) within
               ---
three months of the date of such termination, the Option will not qualify for
ISO treatment under the Code. To the extent that the Optionee was not entitled
to exercise the Option at the date of termination, or if the Optionee does not
exercise such Option to the extent so entitled within six months from the date
of termination, the Option shall terminate.

          (d)  Death of Optionee.  In the event of the death of an Optionee
               -----------------
during the period of Continuous Service Status since the date of grant of the
Option, or within 30 days following termination of the Optionee's Continuous
Service Status, the Option may be exercised, at any time within twelve months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), by such
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of death or, if earlier, the date of termination of the
Optionee's Continuous Status as an Employee or Consultant.  To the extent that
the Optionee was not entitled to exercise the Option at the date of death or
termination, as the case may be, or if the Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

                                      -9-
<PAGE>

          (e)  Extension of Exercise Period.  The Administrator shall have full
               ----------------------------
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Service
Status from the periods set forth in Sections 10(b), 10(c) and 10(d) above or in
the Option Agreement to such greater time as the Board shall deem appropriate,
provided that in no event shall such Option be exercisable later than the date
of expiration of the term of such Option as set forth in the Option Agreement.

          (f)  Rule 16b-3.  Options granted to Reporting Persons shall comply
               ----------
with Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption for Plan
transactions.

     11.  Stock Purchase Rights.
          ---------------------

          (a)  Rights to Purchase.  Stock Purchase Rights may be issued either
               ------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan.  After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed 30 days from the date upon
which the Administrator made the determination to grant the Stock Purchase
Right. If required by the Applicable Laws, the purchase price of Shares subject
to Stock Purchase Rights shall not be less than 85% of the Fair Market Value of
the Shares as of the date of the offer, or, in the case of a Ten Percent Holder,
the price shall not be less than 100% of the Fair Market Value of the Shares as
of the date of the offer.  If the Applicable Laws do not impose restrictions on
the purchase price, the purchase price of Shares subject to Stock Purchase
Rights shall be as determined by the Administrator.  The offer to purchase
Shares subject to Stock Purchase Rights shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

          (b)  Repurchase Option.  Unless the Administrator determines
               -----------------
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine; provided, however, that with respect to an Optionee
who is not an officer, director or Consultant of the Company or of any Parent or
Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year if
required by the Applicable Laws.

          (c)  Other Provisions.  The Restricted Stock Purchase Agreement shall
               ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

                                      -10-
<PAGE>

          (d)  Rights as a Stockholder.  Once the Stock Purchase Right is
               -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 12
of the Plan.

     12.  Taxes.
          -----

          (a)  As a condition of the exercise of an Option or Stock Purchase
Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of Option and the
issuance of Shares.  The Company shall not be required to issue any Shares under
the Plan until such obligations are satisfied.

          (b)  In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option.

          (c)  This Section 12(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security.  In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right that number of Shares having a
Fair Market Value determined as of the applicable Tax Date (as defined below)
equal to the minimum statutory amounts required to be withheld.  For purposes of
this Section 12, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
under the Applicable Laws (the "Tax Date").
                                --------

          (d)  If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right by surrendering to the Company Shares that (i)
in the case of Shares previously acquired from the Company, have been owned by
the Participant for more than six (6) months on the date of surrender, and (ii)
have a Fair Market Value determined as of the applicable Tax Date equal to the
minimum statutory amounts required to be withheld.

          (e)  Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 12(d) above must be made on or prior
to the applicable Tax Date.

                                      -11-
<PAGE>

          (f)  In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option is exercised but such
Participant shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the applicable Tax Date.

     13.  Adjustments Upon Changes in Capitalization, Merger or Certain Other
          -------------------------------------------------------------------
Transactions.
------------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, the number of shares of Common
Stock that have been authorized for issuance under the Plan but as to which no
Options or Stock Purchase Rights have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, and the number of shares set forth in Sections 3(a)(i) and 8
above, as well as the price per share of Common Stock covered by each such
outstanding Option or Stock Purchase Right, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase
or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration."  Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, the Board shall notify the
Participant at least 15 days prior to such proposed action.  To the extent it
has not been previously exercised, the Option or Stock Purchase Right will
terminate immediately prior to the consummation of such proposed action.

          (c)  Merger or Sale of Assets.  In the event of a proposed sale of all
               ------------------------
or substantially all of the Company's assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company's stockholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the Option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such Option or Stock Purchase Right shall terminate as of the date of closing of
the merger or sale of assets. For purposes of this Section 13(c), an Option or a
Stock Purchase Right shall be considered assumed, without limitation, if, at the
time of issuance of the stock or other consideration upon such merger or sale of
assets, each holder of an Option or a Stock Purchase Right would be entitled to
receive upon exercise of the Option or Stock Purchase Right the same number and
kind of shares

                                      -12-
<PAGE>

of stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of such transaction if the
holder had been, immediately prior to such transaction, the holder of the number
of Shares of Common Stock covered by the Option or the Stock Purchase Right at
such time (after giving effect to any adjustments in the number of Shares
covered by the Option or Stock Purchase Right as provided for in this Section
13).

          (d)  Certain Distributions.  In the event of any distribution to the
               ---------------------
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

     14.  Non-Transferability of Options and Stock Purchase Rights.
          --------------------------------------------------------

          (a)  General.  Except as set forth in this Section 14, Options and
               --------
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent or distribution.  The designation of a beneficiary by a Participant will
not constitute a transfer.  An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of an Option or Stock Purchase Right, only by
such holder or a transferee permitted by this Section 14.

          (b)  Limited Transferability Rights.  Notwithstanding anything else in
               ------------------------------
this Section 14, prior to the date, if any, on which the Common Stock becomes a
Listed Security, the Administrator may in its discretion grant Nonstatutory
Stock Options that may be transferred by instrument to an inter vivos or
testamentary trust in which the Options are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift to "Immediate Family" (as defined
below), on such terms and conditions as the Administrator deems appropriate.
Following the date, if any, on which the Common Stock becomes a Listed Security,
the Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to Option Agreements specifying the manner in which such
Nonstatutory Stock Options are transferable.  "Immediate Family" means any
                                               ----------------
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships.

     15.  Time of Granting Options and Stock Purchase Rights. The date of grant
          --------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board; provided,
however, that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.

                                      -13-
<PAGE>

     16.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Authority to Amend or Terminate.  The Board may at any time
               -------------------------------
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with the Applicable
Laws, the Company shall obtain stockholder approval of any Plan amendment in
such a manner and to such a degree as required.

          (b)  Effect of Amendment or Termination.  No amendment or termination
               ----------------------------------
of the Plan shall adversely affect Options already granted, unless mutually
agreed otherwise between the Optionee and the Board, which agreement must be in
writing and signed by the Optionee and the Company.

     17.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange.

     As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by law.

     18.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

     19.  Agreements.  Options and Stock Purchase Rights shall be evidenced by
          ----------
written Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall approve from time to
time.

     20.  Stockholder Approval.  Continuance of the Plan shall be subject to
          --------------------
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted.  Such stockholder approval shall be obtained in
the degree and manner required under the Applicable Laws.  All Options and Stock
Purchase Rights issued under the Plan shall become void in the event such
approval is not obtained.

                                      -14-
<PAGE>

     21.  Information and Documents to Participants and Purchasers.  Prior to
          --------------------------------------------------------
the date, if any, on which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Participant and to each individual who acquired Shares
Pursuant to the Plan, during the period such Participant or purchaser has one or
more Options or Stock Purchase Rights outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares.  The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.  In addition, at the time of issuance of
any securities under the Plan, the Company shall provide to the Participant or
the Purchaser a copy of the Plan and any agreement(s) pursuant to which
securities granted under the Plan are issued.

                                      -15-
<PAGE>

                           RITA MEDICAL SYSTEMS, INC.

                                2000 STOCK PLAN

                          NOTICE OF STOCK OPTION GRANT
                          ----------------------------

((Optionee))
((OptioneeAddress1))
((OptioneeAddress2))

     You have been granted an option to purchase Common Stock of RITA Medical
Systems, Inc., (the "Company") as follows:
                     -------

     Board Approval Date:               ((BoardApprovalDate))

     Date of Grant (Later of Board
     Approval Date or
     Commencement of
     Employment/Consulting):            ((GrantDate))

     Exercise Price Per Share:          ((ExercisePrice))

     Total Number of Shares Granted:    ((NoofShares))

     Total Exercise Price:              ((TotalExercisePrice))

     Type of Option:                    ((NoSharesISO)) Shares Incentive Stock
                                        Option

                                        ((NoSharesNSO)) Shares Nonstatutory
                                        Stock Option

     Expiration Date:                   ((Term))/((ExpirDate))

     Vesting Commencement Date:         ((VestingCommenceDate))

     Vesting/Exercise Schedule:         So long as your employment or consulting
                                        relationship with the Company continues,
                                        the Shares underlying this Option shall
                                        vest and become exercisable in
                                        accordance with the following schedule:
                                        ___________ of the Shares subject to the
                                        Option shall vest and become exercisable
                                        on the ________ month anniversary of the
                                        Vesting Commencement Date and _______ of
                                        the total number of Shares subject to
                                        the Option shall vest and become
                                        exercisable each month thereafter.
<PAGE>

     Termination Period:                Option may be exercised for three (3)
                                        months after termination of employment
                                        or consulting relationship except as set
                                        out in Section 5 of the Stock Option
                                        Agreement (but in no event later than
                                        the Expiration Date). Optionee is
                                        responsible for keeping track of these
                                        exercise periods following termination
                                        for any reason of his or her service
                                        relationship with the Company. The
                                        Company will not provide further notice
                                        of such periods.

     Transferability:                   This Option may not be transferred.

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the RITA Medical Systems, Inc. 2000 Stock Plan and the
Stock Option Agreement, both of which are attached and made a part of this
document.

     In addition, you agree and acknowledge that your rights to any Shares
underlying the Option will be earned only as you provide services to the Company
over time, that the grant of the Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any
period of time, nor does it interfere in any way with your right or the
Company's right to terminate that relationship at any time, for any reason, with
or without cause.

                                             RITA Medical Systems, Inc.

_________________________________            By:________________________________
((Optionee))                                 Name:______________________________
                                             Title:_____________________________
_________________________________
Print Name

                                      -2-
<PAGE>

                           RITA MEDICAL SYSTEMS, INC.

                                2000 STOCK PLAN

                             STOCK OPTION AGREEMENT
                             ----------------------

     1.   Grant of Option. RITA Medical Systems, Inc., a Delaware corporation
          ---------------
(the "Company"), hereby grants to ((Optionee)) ("Optionee"), an option (the
      -------                                    --------
"Option") to purchase the total number of shares of Common Stock (the "Shares")
-------                                                                ------
set forth in the Notice of Stock Option Grant (the "Notice"), at the exercise
                                                    ------
price per Share set forth in the Notice (the "Exercise Price") subject to the
                                              --------------
terms, definitions and provisions of the RITA Medical Systems, Inc. 2000 Stock
Plan (the "Plan") adopted by the Company, which is incorporated in this
           ----
Agreement by reference.  Unless otherwise defined in this Agreement, the terms
used in this Agreement shall have the meanings defined in the Plan. This Stock
Option Agreement shall be deemed executed by the Company and Optionee upon
execution by such parties of the Notice.

     2.   Designation of Option.  This Option is intended to be an Incentive
          ---------------------
Stock Option as defined in Section 422 of the Code only to the extent so
designated in the Notice, and to the extent it is not so designated or to the
extent the Option does not qualify as an Incentive Stock Option, it is intended
to be a Nonstatutory Stock Option.

     Notwithstanding the above, if designated as an Incentive Stock Option, in
the event that the Shares subject to this Option (and all other Incentive Stock
Options granted to Optionee by the Company or any Parent or Subsidiary,
including under other plans of the Company) that first become exercisable in any
calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5(c) of the Plan.

     3.   Exercise of Option.  This Option shall be exercisable during its term
          ------------------
in accordance with the Vesting/Exercise Schedule set out in the Notice and with
the provisions of Section 10 of the Plan as follows:

          (a)  Right to Exercise.
               -----------------

               (i)    This Option may not be exercised for a fraction of a
share.

               (ii)   In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 5 below, subject to the limitations contained in this Section 3.

               (iii)  In no event may this Option be exercised after the
Expiration Date of the Option as set forth in the Notice.
<PAGE>

          (b)  Method of Exercise.
               ------------------

               (i)    This Option shall be exercisable by delivering to the
Company a written notice of exercise (in the form attached as Exhibit A or in
                                                              ---------
any other form of notice approved by the Plan Administrator) which shall state
Optionee's election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered to the Company
by such means as are determined by the Plan Administrator in its discretion to
constitute adequate delivery. The written notice shall be accompanied by payment
of the Exercise Price. This Option shall be deemed to be exercised upon receipt
by the Company of such written notice accompanied by the Exercise Price.

               (ii)   As a condition to the exercise of this Option and as
further set forth in Section 12 of the Plan, Optionee agrees to make adequate
provision for federal, state or other tax withholding obligations, if any, which
arise upon the vesting or exercise of the Option, or disposition of Shares,
whether by withholding, direct payment to the Company, or otherwise.

               (iii)  The Company is not obligated, and will have no liability
for failure, to issue or deliver any Shares upon exercise of the Option unless
such issuance or delivery would comply with the Applicable Laws, with such
compliance determined by the Company in consultation with its legal counsel.
This Option may not be exercised until such time as the Plan has been approved
by the stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 221 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.

     4.   Method of Payment.  Payment of the Exercise Price shall be by any of
          -----------------
the following, or a combination of the following, at the election of Optionee:

          (a)  cash or check; or

          (b)  following the date, if any, upon which the Common Stock is a
Listed Security, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the exercise
price.

     5.   Termination of Relationship.  Following the date of termination of
          ---------------------------
Optionee's Continuous Service Status for any reason (the "Termination Date"),
                                                          ----------------
Optionee may exercise the Option only as set forth in the Notice and this
Section 5.  To the extent that Optionee is not

                                      -2-
<PAGE>

entitled to exercise this Option as of the Termination Date, or if Optionee does
not exercise this Option within the Termination Period set forth in the Notice
or the termination periods set forth below, the Option shall terminate in its
entirety. In no event, may any Option be exercised after the Expiration Date of
the Option as set forth in the Notice.

          (a)  Termination.  In the event of termination of Optionee's
               -----------
Continuous Service Status other than as a result of Optionee's disability or
death, Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
                  ----------------
Termination Period set forth in the Notice.

          (b)  Other Terminations.  In connection with any termination other
               ------------------
than a termination covered by Section 5(a), Optionee may exercise the Option
only as described below:

               (i)    Termination upon Disability of Optionee.  In the event of
                      ---------------------------------------
termination of Optionee's Continuous Service Status as a result of Optionee's
disability, Optionee may, but only within six months from the Termination Date,
exercise this Option to the extent Optionee was entitled to exercise it as of
such Termination Date.

               (ii)   Death of Optionee.   In the event of the death of Optionee
                      -----------------
(a) during the term of this Option and while an Employee or Consultant of the
Company and having been in Continuous Service Status since the date of grant of
the Option, or (b) within thirty (30) days after Optionee's Termination Date,
the Option may be exercised at any time within twelve months following the date
of death by Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was
entitled to exercise the Option as of the Termination Date.

     6.   Non-Transferability of Option.  Except as otherwise set forth in the
          -----------------------------
Notice, this Option may not be transferred in any manner otherwise than by will
or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him or her.  The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of
Optionee.

     7.   Tax Consequences.  Below is a brief summary as of the date of this
          ----------------
Option of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant.
THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

          (a)  Incentive Stock Option.
               ----------------------

               (i)    Tax Treatment upon Exercise and Sale of Shares.  If this
                      ----------------------------------------------
Option qualifies as an Incentive Stock Option, there will be no regular federal
income tax liability upon the exercise of the Option, although the excess, if
any, of the fair market value of the Shares on the date of exercise over the
Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax

                                      -3-
<PAGE>

in the year of exercise. If Shares issued upon exercise of an Incentive Stock
Option are held for at least one year after exercise and are disposed of at
least two years after the Option grant date, any gain realized on disposition of
the Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares issued upon exercise of an Incentive Stock Option are
disposed of within such one-year period or within two years after the Option
grant date, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the fair market
value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.

               (ii)   Notice of Disqualifying Dispositions.  With respect to any
                      ------------------------------------
Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or
otherwise disposes of such Shares on or before the later of (i) the date two
years after the Option grant date, or (ii) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that he or she may be subject to
income tax withholding by the Company on the compensation income recognized by
Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.

          (b)  Nonstatutory Stock Option.  If this Option does not qualify as an
               -------------------------
Incentive Stock Option, there may be a regular federal (and state) income tax
liability upon the exercise of the Option. Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the fair market value of the Shares on the date of exercise
over the Exercise Price.  If Optionee is an Employee, the Company will be
required to withhold from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.  If Shares issued upon exercise of
a Nonstatutory Stock Option are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

     8.   Effect of Agreement.  Optionee acknowledges receipt of a copy of the
          -------------------
Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan.  Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option.  In the event of a
conflict between the terms and provisions of the Plan and the terms and
provisions of the Notice and this Agreement, the Plan terms and provisions shall
prevail.  The Option, including the Plan, constitutes the entire agreement
between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties
relating to such subject matter.

     9.   Lock-Up Agreement.  In connection with the initial public offering of
          -----------------
the Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Optionee hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company however and
whenever acquired (other than those included in the registration)

                                      -4-
<PAGE>

without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of the public offering.

                                      -5-
<PAGE>

                                   EXHIBIT A
                                   ---------

                               NOTICE OF EXERCISE
                               ------------------

To:       RITA Medical Systems, Inc.
Attn:     Stock Option Administrator
Subject:  Notice of Intention to Exercise Stock Option
          --------------------------------------------

     This is official notice that the undersigned ("Optionee") intends to
                                                    --------
exercise Optionee's option to purchase __________ shares of RITA Medical
Systems, Inc. Common Stock, under and pursuant to the Company's 2000 Stock Plan
and the Stock Option Agreement dated ___________, as follows:

          Grant Number:            _____________________________________________

          Date of Purchase:        _____________________________________________

          Number of Shares:        _____________________________________________

          Purchase Price:          _____________________________________________

          Method of Payment
          of Purchase Price:       _____________________________________________

     Social Security No.:  _____________________________________________________

     The shares should be issued as follows:

          Name:     _____________________________________________

          Address:  _____________________________________________

                    _____________________________________________

                    _____________________________________________

          Signed:   _____________________________________________

          Date:     _____________________________________________<PAGE>

                                                                 EXHIBIT 10.6(a)

                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

            STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET

1.   Basic Provisions ("Basic Provisions"):

     1.1  Parties:  This Lease ("Lease"), dated for reference purposes only,

July 12, 1994 is made by and between The Brown Mountain View Joint Venture
-------------                        -------------------------------------
("Lessor") and ZoMed International, a California Corporation ("Lessee"),
               -------------------
(collectively the "Parties," or individually a "Party").

     1.2  Premises:  That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known by the street address of 967 North Shoreline Boulevard, Mountain View
                               --------------------------------------------
located in the County of Santa Clara, State of California and generally
               ------------------------------------------
described as (describe briefly the nature of the property) Free-standing
                                                           -------------
building of l8.000 +/- Sq. Ft. ("Premises").  (See Paragraph 2 for further
-----------------------------
provisions).

     1.3  Term:  Five (5) years and 0 months ("Original Term") commencing August
                 ---------------------------                              ------
15, 1994 ("Commencement Date") and ending August 14, 1999 ("Expiration Date").
--------                                  ---------------
If the Commencement Date has not occurred for any reason whatsoever (other than
due to a Lessee delay) on or before August 15, 1994.  then in addition to
                                    ---------------
Lessee's other rights or remedies, the date Lessee is otherwise obliged to
commence payment of rent shall be delayed by one day for each day that the
Commencement Date is delayed beyond August 15, 1994, (see Paragraph 3 for
                                    ---------------
further provisions.)

     1.4  Early Possession:  N/A ("Early Possession Date") (See Paragraphs 3.2
and 3.3 for further provisions.)

     1.5  Base Rent:  $13,500.00 per month ("Base Rent"), payable on the
                      --------------------
fifteenth (15th) day of each month commencing September 15, 1994 - Lessee shall
---------------- ----                         ------------------
receive Free Base rent (exclusive of operating expenses) for August 15 -
September 14, 1994.  (See paragraph 4 for further provisions.)

     [X] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.  (See Paragraph 4.2)

     1.6  Base Rent Paid Upon Execution:  $13,500.00 as Base Rent for the period
                                          ----------
September l5, 1994 through October 14, 1994.
-------------------------------------------

     1.7  Security Deposit:  $13,500.00 ("Security Deposit).  (See Paragraph 5
                              ---------
for further provisions.)

     1.8  Permitted Use:  General office administration, research and
development of the medical device industry and warehousing.  (See Paragraph 6
for further provisions.)

     1.9  Insuring Party:  Lessor is the "Insuring Party" unless otherwise
stated herein.  (See Paragraph 8 for further provisions.)
<PAGE>

     1.10  Real Estate Brokers:  The following real estate brokers
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and are consented to by the Parties:  Cornish & Carey Commercial
                                                  --------------------------
represents the Lessor exclusively ("Lessor's Broker"); and Wayne Mascia
                                                           ------------
Associates represents the Lessee exclusively ("Lessee's Broker").  (See
----------
Paragraph 15 for further provisions.)

     1.11  Guarantor:  The obligations of the Lessee under this Lease are to be
guaranteed by N/A ("Guarantor").  (See Paragraph 37 for further provisions.)

     1.12  Addenda:  Attached hereto are Addenda consisting of Exhibits A & B.

2.   Premises:

     2.1   Letting:  Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease.  Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental, is an approximation which Lessor
and Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.

     2.2   Condition:  Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the
Premises, including, without limitation, the roof, structural elements of the
Building and all building systems serving the Premises, including, without
limitation, electrical, plumbing, fire sprinkler system, lighting, air
conditioning, heating, and loading doors, if any, in the Premises, other than
those constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a noncompliance with said warranty exists as of the
Commencement Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a non-
compliance with this warranty within thirty days after the Commencement Date,
correction of that non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense. Notwithstanding the foregoing, non-conformance of the
roof with the foregoing warranty shall be remedied by Landlord upon notice, at
any time during the term.

     2.3   Compliance with Covenants, Restrictions and Building Code:  Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date.  Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee.  If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense.  If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
twelve (12) months following the Commencement Date, correction of that
noncompliance shall be the obligation of Lessee at Lessee's sole cost and
expense.

                                      -2-
<PAGE>

     2.4  Acceptance of Premises:  Lessee hereby acknowledges:  (a) that it has
been advised by the Brokers to satisfy itself with respect to the present and
future suitability of the Premises for Lessee's intended use, (b) that Lessee
has made such investigation as it deems necessary with reference to such matters
and assumes all responsibility therefor as the same relate to Lessee's occupancy
of the Premises and/or the term of this Lease, and (c) that neither Lessor, nor
any Lessor's agents, has made any oral or written representations or warranties
with respect to the said matters other than as set forth in this Lease.

     2.5  Operating Expense History:  Lessor has provided to Lessee a true and
correct breakdown of current operating expenses relating to the Premises for
which Lessee shall be responsible in addition to Base Monthly Rent, and Lessor
warrants and represents that the current operating expenses for the Premises,
limited to real property taxes, landscaping and insurance costs for the
Premises, is approximately five and six-tenths cents ($0.056) per square foot of
space.

3.   Term:

     3.1  Term:  The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.

     3.2  Early Possession:  If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession.  All other terms of this
Lease, however, (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in
effect during such period.  Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.

4.   Rent:

     4.1  Base Rent:  Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time as provided herein to be
received by Lessor in lawful money of the United States, without offset or
deduction, on or before the day on which it is due under the terms of this
Lease.  Base Rent and all other rent and charges for any period during the term
hereof which is for less than one (1) full calendar month shall be prorated
based upon the actual number of days of the calendar month involved.  Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lease.

     4.2  Base Rent Adjustment: Consumer Price Index. It is agreed that on
February 14th, 1997, the Base Rent provided for in Paragraph 1.5 on the Lease
shall be adjusted in accordance with the following formula based on the Consumer
Price Index ("CPI") for All Urban Consumers, subgroup "All Items", San Francisco
- Oakland, California Metropolitan Area (1982-84 = 100) published by the Bureau
of Labor Statistics, U.S. Department of Labor (the "Index") published nearest
but prior to the date tenant took possession of the premises (the "Beginning
Index") and the Index which is published nearest but prior to February 14, 1997
(the "Adjustment Index").  The CPI adjusted base rent shall be calculated by
multiplying the base

                                      -3-
<PAGE>

rent provided for in Paragraph 1.5 of the lease by a fraction, the numerator of
which is the Adjustment Index and the denominator of which is the Beginning
Index. In no event, however, shall the adjusted basic rent decrease below the
basic rental provided for in Paragraph 1.5 of the lease or any subsequent
adjustment hereof, nor shall it be less than four percent (4%) or greater than
eight percent (8%) per annum. On such adjustment, the parties shall execute an
amendment to the lease stating the new (adjusted) base rent. If the Index is
changed so that the base year of the Index differs from that used as of the
month immediately preceding the month in which the term commences, the Index
shall be converted in accordance with the conversion factor published by the
United States Department of Labor, Bureau of Labor Statistics. If the Index is
discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.

5.   Security Deposit:  Lessee shall deposit with Lessor upon execution hereof
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease.  If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under the Lease (as defined in Paragraph 13.1).  Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof.  If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefor
deposit moneys with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease.  Lessor shall not be required to keep all or
any part of the Security Deposit separate from its general accounts.  Lessor
shall, at the expiration or earlier termination of the term hereof and after
Lessee has vacated the Premises, return to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor.  Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be considered
to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.

6.   Use:

     6.1  Use:  Lessee shall use and occupy the Premises only for the purposes
set forth in paragraph 1.8, or any other use which is comparable thereto and for
no other purpose unless approved in writing by Lessor, which approval shall not
be unreasonably withheld.  Lessee shall not use or permit the use of the
Premises in a manner that creates waste or a nuisance, or that unreasonably
disturbs owners and/or occupants of, or causes damage to, neighboring premises
or properties.

     6.2  Hazardous Substances:

          (a) Reportable Uses Require Consent:  The term "Hazardous Substance"
as used in this Lease shall mean any product, substance, chemical material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials

                                      -4-
<PAGE>

expected to be on the Premises is either: (i) potentially injurious to the
public health, safety or welfare, the environment or the Premises, (ii)
regulated or monitored by any governmental authority, or (iii) a basis for
liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substance shall include, but
not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any products,
by products or fraction thereof. Lessee shall not engage in any activity in on
or about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent of
Lessor which consent shall not be unreasonably withheld or delayed and
compliance in a timely manner (at Lessee's sole cost and expense) with all
Applicable Law (as defined in Paragraph 6.3). "Reportable Use" shall mean (i)
the installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Use shall also include Lessee's being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may without Lessor's prior consent, but in
compliance with all Applicable Law, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of Lessee's
business permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any meaningful
risk of contamination or injury and/or liability therefor. Lessor hereby deems
those Hazardous Substances set forth on Exhibit "A" to be ordinary and customary
materials reasonably required to be used by Lessee in the normal course of the
Permitted Use. Lessor hereby consents to the existence, use, manufacture,
storage and transportation of such Hazardous Substances in, on and about the
Premises during the Term of this Lease in compliance with Applicable Laws, and
acknowledges that the same shall not constitute a Reportable Use under this
Lease. If Lessee's use of the Premises changes at any time during the Lease Term
from the Permitted Use identified at Paragraph 1.8 hereof, Lessee immediately
shall notify Lessor of the change in use and whether any changes are required to
the information contained on Exhibit "B"

          (b)  Duty to Inform Lessor: If Lessee knows or has reasonable cause to
believe that a Hazardous Substance or a condition involving or resulting from
same has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor; Lessee shall immediately give written notice
of such fact to Lessor. Lessee shall within Lessee's possession or control also
immediately give Lessor a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action or proceeding given
to, or received from, any governmental authority or private party, or persons
entering or occupying the Premises, concerning the presence, spill, release,
discharge of, or exposure to, any Hazardous Substance or contamination in, on,
or about the Premises, including but not limited to all such documents as may be
involved in any Reportable Uses involving Premises.

          (c)  Indemnification: Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgements, costs, claims, liens, expenses, penalties, permits, and
attorney's and consultant's fees during the Lease Term arising out of or
involving any Hazardous Substance or storage tank brought onto the Premises by
or for

                                      -5-
<PAGE>

Lessee or under Lessee's control. Lessee's obligations under this Paragraph 6
shall include, but not be limited to the effects of any contamination or injury
to person property or the environment created or suffered by Lessee and the cost
of investigation (including consultant's and attorney's fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved required by law and shall survive the expiration
or earlier termination of this Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous Substances or storage
tanks, unless specifically so agreed by Lessor in writing at the time of such
agreement.

     6.3  Lessee's Compliance with Law:  Except as otherwise provided in this
Lease, Lessee shall at Lessee's sole cost and expense fully, diligently and in a
timely manner comply with all "Applicable Law" which term is used in this Lease
to include all laws, rules, regulations, ordinances, directives, covenants,
easements and restrictions of record permits the requirements of any applicable
fire insurance underwriter or rating bureau relating to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance or storage tank), now in effect or which may hereafter
come into effect, and whether or not reflecting a change in policy from any
previously existing policy.  Lessee shall, within ten (10) business days after
receipt of Lessor's written request, provide Lessor with copies of all documents
and information, including, but not limited to, permits, registrations,
manifests, applications, reports and certificates, evidencing Lessee's
compliance with any Applicable Law specified by Lessor, and shall immediately
upon receipt, notify Lessor in writing (with copies of any documents involved)
of any threatened or actual claim notice, citation, warning, complaint or report
pertaining to or involving failure by Lessee or the Premises to comply with any
Applicable Law.

     6.4  Inspection; Compliance:  Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time in the
case of an emergency, and otherwise at reasonable times, upon one (1) business
day's prior written notice and subject to Lessee's reasonable security
precautions, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all Applicable Laws (as
defined in Paragraph 6.3), and to employ experts and/or consultants in
connection therewith and/or to advise Lessor with respect to Lessee's
activities, including but not limited to the installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Substance or storage tank
on or from the Premises.  The costs and expenses of any such inspections shall
be paid by the party requesting same, unless a Default or Breach of this Lease,
violation of Applicable Law, or a contamination, caused by Lessee is found to
exist or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination.  In any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.

     6.5  Lessor's Representation and Indemnity:  Lessor represents and warrants
that, to the best of Lessor's knowledge, prior to and as of the Commencement
Date, there have been

                                      -6-
<PAGE>

and are no Hazardous Substances located on, under, in or about the Premises, or
the soil, groundwater or surface water thereof. Except to the extent resulting
from the release, discharge or emission of Hazardous Substances in violation of
Applicable Law on or about the Premises during the term by Lessee, its agents,
employees, contractors or invitees, Lessee is released from and shall not be
responsible for, and Lessor shall indemnify, defend, protect and hold Lessee,
its employees, agents, shareholders, licensees, invitees, officers and
directors, harmless from and against, any claims, actions, losses, costs,
damages, liabilities or expenses (including, without limitation, reasonable
attorneys', experts' and consultants' fees, investigation and laboratory fees)
(collectively, "Claims"), arising out of or in connection with any Hazardous
Substance (including, without limitation, asbestos) present at any time on,
under, in or about the Premises, soil, groundwater or surface water thereof,
caused by or resulting from (i) the acts or omissions of Lessor, its agents,
employees, contractors or invitees; and (ii) the acts or omissions of any
previous tenant of Lessor, or the tenant's agents, employees, contractors or
invitees. In addition, except to the extent resulting from the release,
discharge or emission of Hazardous Substances on or about the Premises in
violation of Applicable Law during the term of this Lease by Lessee, its agents,
employees, contractors or invitees, Lessee also is released from and shall not
be responsible for any Claims arising out of or in connection with Hazardous
Substances present on, under, in or about the Premises caused by any person
other than Lessor or its previous tenants (or their agents, employees,
contractors or invitees), including, without limitation, caused by migration,
dumping or other third party source. Lessor's indemnification and warranty under
this Paragraph shall survive termination of this Lease.

7.   Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations:

     7.1  Lessee's Obligations:

          (a)  Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition), 2.3 (Lessor's warranty as to compliance with covenants, etc), 7.2
(Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), and except to the extent required as a result of the negligence
or willful misconduct of Lessor or Lessor's employees, agents, licensees or
invitees, Lessee shall, at Lessee's sole cost and expense and at all times keep
the Premises and every part thereof in good order, condition and repair
excluding structure elements of the Premises, the roof structure, exterior walls
and foundation of the Premises (whether or not the need for such repairs occurs
as a result of Lessee's use, any prior use, the elements or the age of such
portion of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing system, including fire alarm and/or
smoke detector systems and equipment, fire hydrants, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows, doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, on, about or adjacent to the Premises.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including through the plumbing or
sanitation sewer system) in violation of hazardous substances laws.  Lessee, in
keeping the Premises in good order, condition and repair shall exercise and
perform good maintenance practices.

                                      -7-
<PAGE>

          (b)  Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance and
with contractors specializing and experienced in, the inspection, maintenance
and service of the following equipment and improvements, if located on the
Premises:  (i) heating, air conditioning and ventilation equipment, (ii) boiler,
fired or unfired pressure vessels, (iii) fire sprinkler and standpipe and hose
or other automatic fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems (v) roof covering and drain
maintenance and (vi) asphalt and parking lot maintenance.

     7.2  Lessor's Obligations:  Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises) 2.3
(relating to compliance with covenants, restrictions and building code), 9
(relating to destruction of the premises) and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises,
improvements located thereon, or the equipment therein, whether structural or
non structural, all of which obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof.  It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance
and repair of the Premises.  Lessee and Lessor expressly waive the benefit of
any statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of any
needed repairs.

     7.3  Utility Installations; Trade Fixtures; Alterations:

          (a)  Definitions; Consent Required:  The term "Utility Installations"
is used in this Lease to refer to all carpeting, window coverings, air lines,
power panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises
installed at Lessee's sole expense.  The term "Trade Fixtures" shall mean
Lessee's machinery and equipment installed at Lessee's sole expense that can be
removed without doing material damage to the Premises that cannot be repaired.
The term "Alterations" shall mean any modification of the improvements on the
Premises from that which provided by Lessor under the terms of this Lease, other
than Utility Installations or Trade Fixtures, whether by addition or deletion
installed at Lessee's sole expense.  Lessee shall not make any Alterations or
Utility Installations in, on, under or about the Premises without Lessor's prior
written consent.  Lessee may, however, make non-structural Utility Installations
or Alterations to the interior of the Premises (excluding the roof), as long as
they are not visible from the outside, do not involve puncturing, relocating or
removing the roof, and the cost thereof in any one instance does not exceed
$25,000.00.

          (b)  Consent:  Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans.  All consents,
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent special
consent, shall be deemed conditioned upon:  (i) Lessee's acquiring all
applicable permits required by governmental authorities, (ii) the furnishing of
copies of such permits together with a copy of the plans and specifications for
the

                                      -8-
<PAGE>

Alteration or Utility Installation to Lessor prior to commencement of the work
thereon, and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the terms of this Lease shall be done in good and workmanlike
manner, with good and sufficient materials, and in compliance with Applicable
Law. Lessee shall promptly upon completion thereof furnish Lessor with as-built
plans and specification therefor. Lessor may (but with no obligation to do so)
condition its consent to any requested Alteration or Utility Installation that
costs $25,000.00 or more upon Lessee's providing Lessor with a lien and
completion bond in an amount equal to one and one quarter times the estimated
cost of such Alteration or Utility Installation.

          (c)  Indemnification:  Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
and for use on the Premises, which claims are or may be secured by an mechanics'
or materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim, or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one quarter
times the amount of such contested lien claim or demand indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.

     7.4  Ownership; Removal; Surrender; and Restoration:

          (a)  Ownership:  Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph all
Alterations and Utility Additions made to the Premises by Lessee shall be the
property of and owned by Lessee.  Unless otherwise instructed per subparagraph
7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at
expiration or earlier termination of this Lease, become the property of Lessor
and remain upon and be surrendered by Lessee with the Premises.

          (b)  Removal:  Unless otherwise agreed in writing, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor.  Lessor may require removal
at any time of all or any part of any Lessee Owned Alterations or Utility
Installations made without the required consent of Lessor.

          (c)  Surrender/Restoration: Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, all of
the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and state of repair, ordinary wear and tear,
acts of God, casualties, condemnation, Hazardous Substances (other than those
stored, used or disposed of by Lessee in or about the Premises), and Alterations

                                      -9-
<PAGE>

or Utility Installations which Lessor states in writing may be surrendered at
the termination of the Lease, excepted.  "Ordinary wear and tear" shall not
include any damage or deterioration that would have been prevented by good
maintenance practices by Lessee performing all of its obligations under this
Lease.  Except as otherwise agreed or specified in writing by Lessor, the
Premises, as surrendered, shall include the Utility Installations.  The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance, removal of Lessee's Trade Fixtures, furnishings,
equipment, and Alterations and/or Utility Installations, as well as the removal
of any storage tank installed by or for Lessee, all as may then be required by
Applicable Law and/or good practice.  Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to obligation to
repair and restore the Premises per this Lease.

8.   Insurance; Indemnity:

     8.1  Payment For Insurance:  Regardless of whether the Lessor or Lessee is
the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per occurrence.  Premiums policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term.  Payment shall be made Lessee to Lessor within
fifteen (15) business days following receipt of an invoice for any amount due.

     8.2  Liability Insurance:

          (a)  Carried by Lessee:  Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving, or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto.  Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured Managers or Lessors of Premises
Endorsement and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire.  The policy shall not
contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease.  The limits of said insurance required by this Lease as
carried by Lessee shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder.  All insurance to be carried by Lessee shall
be primary to and not contributory with any similar insurance carried by Lessor,
whose insurance shall be considered excess insurance only.

          (b)  Carried by Lessor:  In the event Lessor is the Insuring Party,
Lessor shall also maintain liability insurance described in Paragraph 8.2(a)
above, in addition to, and not in lieu of, the insurance required to be
maintained by Lessee, Lessee shall not be named as an additional insured
therein.

                                      -10-
<PAGE>

     8.3  Property Insurance Building, Improvements and Rental Value:

          (a) Building and Improvements:  The Insuring Party shall obtain and
keep in force during the term of this lease a policy or policies in the name of
Lessor, with loss payable to Lessor but naming Lessee as an additional insured)
and to the holders of any mortgages, deeds of trust or ground leases on the
Premises ("Lender(s)"), insuring loss or damage to the Premises.  The amount of
such insurance shall be equal to the full replacement cost of the Premises, as
the same shall exist from time to time, or the amount required by Lenders, but
in no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved,
such latter amount is less than full replacement cost.  If Lessor is the
Insuring Party, however, Lessee Owned Alterations and Utility Installations
shall be insured by Lessee under Paragraph 8.4 rather than by Lessor.  If the
coverage is available and commercially appropriate, such policy or policies
shall insure against all risks of direct physical loss or damage (except the
perils of flood unless required by a Lender), including coverage for any
additional cost resulting from debris removal and reasonable amounts of coverage
for the enforcement of any building, zoning, safety or land use laws as the
result of a covered cause of loss. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1(c).

          (b) Rental Value:  The Insuring Party shall, in addition, obtain and
keep in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender (s), insuring the loss of the
full rental and other charges payable by Lessee to Lessor under this Lease for
one (1) year (including all real estate taxes, insurance costs, and any
scheduled rental increases).  Said insurance shall provide that in the event the
Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss.  Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any, otherwise
payable by Lessee, for the next twelve (12) month period.  Lessee shall be
liable for any deductible amount in the event of such loss.

          (c) Tenant's Improvements:  If the Lessor is the Insuring Party, the
Lessor shall not be required to Insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.  If Lessee is the Insuring Party, the policy
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.

     8.4  Lessee's Property Insurance:  Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessee's option,
by endorsement to a

                                      -11-
<PAGE>

policy already carried, maintain insurance coverage on all Lessee's personal
property, Lessee Owned Alterations and Utility Installations and the Tenant
Improvements in, on, or about the Premises similar in coverage to that carried
by the Insuring Party under Paragraph 8.3. Such insurance shall be full
replacement cost coverage with a deductible not to exceed $1,000 per occurrence.
Lessee shall be the Insuring Party with respect to the insurance required by
this Paragraph 8.4 and shall provide Lessor with written evidence that such
insurance is in force.

     8.5  Insurance Policies:  Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender having a
lien on the Premises, as set forth in the most current issue of "Best's
Insurance Guide."  Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Paragraph 8.  If Lessee is
the Insuring Party, Lessee shall cause to be delivered to Lessor certified
copies of policies of such insurance or certificates evidencing the existence
and amounts of such insurance with the insureds and loss payable clauses as
required by this Lease.  No such policy shall be cancelable or subject to
modification except after thirty (30) days prior written notice to Lessor.
Lessee shall at least thirty (30) prior to the expiration of such policies,
furnish Lessor with evidence of renewals or "insurance binders" evidencing
renewal thereof, or Lessor may order such insurance and charge the cost thereof
to Lessee, which amount shall be payable by Lessee to Lessor upon demand.  If
the Insuring Party shall fail to procure and maintain the insurance required to
be carried by the Insuring party under this Paragraph 8, the other Party may,
but shall not be required to, procure and maintain the same, but at Lessee's
expense.

     8.6  Waiver of Subrogation:  The parties hereto release each other and
their respective agents, employees, successors, assignees and subtenants from
all liability for injury to any person or damage to any property that is caused
by or results from a risk which is actually insured against, which is required
to be insured against under this Lease, or which would normally be covered by
the standard form of "all risk-extended coverage" casualty 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 the way of
subrogation as required herein in connection with any injury or damage covered
by the policy.  If such insurance policy cannot be obtained with such waiver of
subrogation, or if such waiver of subrogation is only available at additional
cost and the party for whose benefit the waiver is not obtained does not pay
such additional cost, then the party obtaining such insurance shall immediately
notify the other party of that fact.

     8.7  Indemnity:  Except for Lessor's negligence or willful misconduct
and/or breach of express warranties or other provisions of this Lease by Lessor
or Lessor's agents, employees, contractors or invitees, and subject to Paragraph
8.6 above, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
use of the Premises by Lessee the negligence or willful misconduct of Lessee,
its agents, contractors, employees or invitees, and out of any Breach by Lessee
in the performance in a timely manner of any obligation on Lessee's part to be

                                      -12-
<PAGE>

performed under this Lease.  The foregoing shall include, but not be limited to,
the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment, and whether well founded or not.  In case
any action or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonable satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense.  Lessor need not have first paid any such
claim in order to be so indemnified.

     8.8  Exemption of Lessor from Liability:  Except to the extent caused by
the negligence or willful misconduct of Lessor, its agents, employees,
contractors or invitees, Lessor shall not be liable for injury or damage to the
person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, invites, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Except to the extent caused by the negligence or willful misconduct of Lessor,
its agents, employees, contractors, or invitees, Lessor shall not be liable for
any damages arising from any act or neglect of any other tenant of Lessor.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall under
no circumstances be liable for injury to Lessee's business or for any loss of
income or profit therefrom.

     8.9  Lessor's Indemnity:  Except to the extent caused by the negligence or
willful misconduct of Lessee, its agents, employees, contractors, or invites,
Lessor shall indemnify, protect, defend and hold harmless Lessee from any and
all damages, liabilities, claims, judgements, actions, attorneys' fees,
consultants' fees, cost and expenses arising from the negligence or willful
misconduct of Lessor or its employees, agents, contractors or invites; any
violation of Applicable Law; or the breach of Lessor's obligations or
representations under this Lease.

9.   Damage or Destruction:

     9.1  Definitions:

          (a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, the repair cost of which damage or destruction is
less than 50% of the then Replacement Cost of the Premises immediately prior to
such damage or destruction.

          (b) "Premises Total Destruction" shall mean damage or destruction to
the Premises the repair cost of which damage or destruction is 50% or more of
the then Replacement Cost of the Premises immediately prior to such damage or
destruction.

                                      -13-
<PAGE>

          (c) "Insured Loss" shall mean damage or destruction to improvements on
the Premises which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.

          (d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.

     9.2  Partial Damage Insured Loss:  If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's a Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect.

     9.3  Partial Damage - Uninsured Loss:  If a Premises Partial Damage that is
not an insured loss occurs, Lessor may at Lessor's option, either:  (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date of the damage or destruction.  In the event Lessor elects to give such
notice of Lessor's intention to terminate this Lease, Lessee shall have the
right within ten (10) days after the receipt of said notice to given written
notice to Lessor of Lessee's commitment to pay for the repair of such damage
totally at Lessee's expense and without reimbursement from Lessor.  Lessee shall
provide Lessor with the required funds or satisfactory assurance thereof within
thirty (30) days following Lessee's commitment in such event this Lease shall
continue in full force and effect, and Lessor shall proceed to make such repairs
as soon as reasonably possible and the required funds are available.  If Lessee
does not give such notice and provide the funds or assurance thereof within the
times specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination.

     9.4  Total Destruction:  Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by an
authorized public authority), this Lease shall terminate as of the date of such
Premises Total Destruction, whether or not the damage or destruction in an
Insured Loss or was caused by a negligent or willful act of Lessee.

     9.5  Insured Casualty:  Lessor shall not have the right to terminate this
Lease if damage to or destruction of the Premises results from a casualty
ordinarily covered by insurance required to be carried by Lessor under this
Lease.

     9.6  Uninsured Casualty:  In the case of damage which is not required to be
covered by insurance, Lessor shall not have the right to terminate this Lease
(i) if the damage is relatively minor (e.g., repair or restoration would take
fewer than one hundred twenty (120) days or would cost less than ten percent
(10%) of the replacement cost of the Building); or (ii) if Lessee agrees to pay
the cost of repair in excess of a pre-agreed base amount.

                                      -14-
<PAGE>

     9.7  Damage at the End of Lease Term:  If the Premises are damaged by any
peril during the last twelve (12) months of the Lease Term, and in the
reasonable opinion of the Lessor's architect or construction consultant, the
restoration of the Premises cannot by substantially completed within sixty (60)
days, either party shall have the option to terminate this Lease, which option
may be exercised only by delivery to the other party of a written notice of
election to terminate within thirty (30) days after the date of such damage;
provided, however, that Lessor may not terminate this Lease pursuant to this
Paragraph 9.7 if Lessee, at the time of such damage, has an express written
option to extend further the Term of this Lease and Lessee exercises such option
so to extend further the Lease Term within thirty (30) days following the
delivery to Lessee of Lessor's written termination notice.

     9.8  Lessee's Right to Terminate:  Lessor shall notify Lessee within thirty
(30) days after any damage to or destruction of the Premises, the length of time
Lessor reasonably estimates to be necessary for repair or restoration.  Lessee
shall have the right to terminate this Lease within fifteen (15) days after the
receipt of such notice if restoration or repair of the Premises will take more
than ninety (90) days.

     9.9  Construction Standard:  If this Lease is not terminated by Lessor or
Lessee pursuant to this Paragraph, Lessor shall restore the Premises and all
tenant improvements installed by Lessor to the condition in which they existed
immediately prior to the destructive event.

     9.10 Abatement of Rent:  Rent shall be temporarily abated proportionately
during any period when, by reason of any damage or destruction, Lessee
reasonably determines that there is substantial interference with Lessee's use
of the Premises, having regard to the extent to which Lessee may be required to
discontinue Lessee's use of the Premises.  Such abatement shall commence upon
the date of such damage or destruction and end upon substantial completion by
Lessor of the repair or reconstruction which Lessor is obligated or undertakes
to do.  Lessee shall not be entitled to any compensation or damages from Lessor
for loss of the use of the Premises, damage to Lessee's personal property or any
inconvenience occasioned by such damage, repair or restoration.

     9.11 Termination - Advance Payments:  Upon termination of this Lease
pursuant to this Paragraph 9, a prorata adjustment shall be made concerning any
advance Base Rent and any other advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor under the terms
of this Lease.

     9.12 Waive Statutes:  Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.

                                      -15-
<PAGE>

10.  Real Property Taxes:

     10.1  (a).  Payment of Taxes:  Lessee shall pay the Real Property Taxes, as
defined in Paragraph 10.2 applicable to the Premises during the term of the
Lease.  All such payments shall be made at least ten (10) days prior to the
delinquency date of the applicable installments upon Lessor's request, Lessee
shall promptly furnish Lessor with satisfactory evidence that such taxes have
been paid.  If any such taxes to be paid by Lessee shall cover a period of time
prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such proration if Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor
therefor upon demand.

     10.2  Definition of "Real Property Taxes":  As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income,
gift, transfer, conveyance or estate taxes) imposed upon the Premises by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, levied against any legal or
equitable interest of Lessor in the Premises or in the real property of which
the Premises are a part, Lessor's right to rent or other income therefrom.  The
term "Real Property Taxes" shall also include any tax, fee, levy, assessment or
charge or increase thereon imposed by reason of events occurring, or changes in
applicable law taking effect, during the term of this Lease, but shall exclude
any such tax, fee, levy, assessment or charge, or any increases in the foregoing
caused by or relating to a voluntary or involuntary change in ownership or other
conveyance of the Premises.

     10.3  Joint Assessment:  If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes,
all of the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuation assigned in
the assessor's work sheets or such other information as may be reasonably
available.  Lessor's reasonable determination thereof, in good faith shall be
conclusive.

     10.4  Personal Property Taxes:  Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere.  When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor.  If any
of Lessee's said personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten
(10) days prior to delinquency thereof as detailed in a written statement
setting forth the taxes applicable to Lessee's property.

11.  Utilities:  Lessee shall pay for all water, gas, heat, light, power,
telephone trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon.

                                      -16-
<PAGE>

12.  Assignment and Subletting:

     12.1.  Lessor's Consent Required:

            (a) Lessee shall not voluntarily or by operations of law assign,
transfer, mortgage, or otherwise transfer or encumber (collectively
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Paragraph 36.

            (b) Lessee may, without Lessor's prior written consent and without
any participation by Lessor in assignment and subletting proceeds, sublet the
Premises or assign the Lease to: (i) a subsidiary, affiliate, division or
corporation controlling, controlled by or under common control with Lessee; or
(ii) a successor corporation related to Lessee by merger, consolidation, non-
bankruptcy reorganization, or government action. For the purpose of this Lease,
a sale or transfer of Lessee's capital stock through any public exchange shall
not be deemed an assignment, subletting, or any other transfer of this Lease or
the Premises requiring Lessor's consent. Lessee shall notify Lessor in writing
within ten (10) days after any of the foregoing assignments or sublets has
become effective.

            (c) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c)

     12.2   Terms and Conditions Applicable to Assignment and Subletting:

            (a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease (ii) release
Lessee of any obligations hereunder, or (iii) after the primary liability of
Lessee for the payment of Base Rent and other sums due Lessor hereunder or for
the performance of any other obligations to be performed by Lessee under this
Lease.

            (b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this lease.

            (c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent subletting and assignments of the sublease or
any amendments or modifications thereto so long as lessor notifies Lessee or
anyone else liable on the Lease or sublease and obtain their consent and such
action shall not relieve such persons from liability under this Lease or
sublease.

                                      -17-
<PAGE>

          (d)  In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or
any one else responsible for the performance of the Lessee's obligations under
this Lease, including the sublessee without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor or Lessee.

          (e)  Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination and to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including, but not limited to, the intended usage and/or
required modification of the Premises if any, together with a non-refundable
deposit of $500.00 as reasonable consideration for Lessor's considering and
processing the request for consent.  Lessee agrees to provide Lessor with
provisions of an assignment or sublease to which Lessor has specifically
consented in writing.

     12.3 Additional Terms and Conditions Applicable to Subletting:  The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

          (a)  Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1)
shall occur in the performance of Lessee's obligations under this Lease, Lessee
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents accruing under such sublease.  Lessor shall not, by reason of this or any
other assignment of such sublease to Lessor, nor by reason of the collection of
the rents from a sublease, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease.  Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary.  Lessee shall have no right or claim against
said sublessee or, until the Breach has been cured, against Lessor, for any such
rents and other charges so paid by said sublessee to Lessor unless received by
Lessor.

          (b)  In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.

                                      -18-
<PAGE>

          (c)  Any matter or thing requiring the consent of the sublessor under
a sublease shall also require the consent of the Lessor herein.

          (d)  No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.

          (e)  Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice.

     12.4 Lessor's Response: If Lessor's consent to any assignment or subletting
shall not be given or withheld within twenty (20) business days following
Lessee's request for consent, such consent shall be deemed given.

13.  Default; Breach; Remedies:

     13.1 Default; Breach:  A "Default" is defined as a failure by the Lessee
to observe, comply with or perform any of the terms, covenants, conditions or
rules applicable to Lessee under this Lease.  A "Breach" is defined as the
occurrence of any one or more of the following Defaults, and, where a grace
period for cure after notice is specified herein, the failure by Lessee to cure
such a Default prior to the expiration of the applicable grace period, and shall
entitle Lessor to pursue the remedies set forth in Paragraph 13.2 and/or 13.3.

          (a)  The abandonment of the Premises without payment of Rent or
performance of Lessee's other obligations hereunder.

          (b)  Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent or any other monetary payment
required to be made by Lessee hereunder, whether to Lessor or to a third party,
as and where due when such failure continues for three (3) days after receipt of
written notice by Lessee from Lessor or the failure by Lessee to provide Lessor
with reasonable evidence of insurance or surety bond required under this Lease,
or the failure of Lessee to fulfill any other obligation under this Lease where
such failure continues for a period of ten (10) days following receipt of
written notice thereof by Lessee.

          (c)  A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereafter
that are to be observed, complied with or performed by Lessee other than those
described in subparagraphs (a) or (b) above, where such Default continues for a
period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.

          (d)  The occurrence of any of the following events:  (i) The making by
Lessee of any general arrangement or assignment for the benefit of creditors
(ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. (S) 101 or any
successor statue thereto (unless, in the case of a

                                      -19-
<PAGE>

petition filed against Lessor or same is dismissed within sixty (60) days),
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at, the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within sixty
(60) days; or (iv) the attachment, executed by other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is discharged within sixty (60) days;
provided, however, in the event that any provision of this subparagraph (d) is
contrary to any applicable law. This provision shall be of no force or effect,
and not affect the validity of the remaining provisions.

          (e)  The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder
intentionally and materially false.

     13.2 Remedies:  If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessor (or in case of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals.  The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor.  If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn more than three (3)
times in any year, Lessor, at its option, may require all future payments to be
made under this Lease by Lessee to be made only by cashier's check in the event
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1 with or
without further notice, demand, and without limiting Lessor in the exercise of
any right or remedy which Lessor may have by reason of such Breach, Lessor may:

          (a)  Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor.  In
such event, Lessor shall be entitled to recover from Lessee:  (i) the worth at
the time of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that the Lessee proves could have been
reasonably avoided; (iii) the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the amount of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably
avoided; and (iv) any other amount necessary to compensate Lessor for all the
detriment proximately caused by the Lessee's failure to perform its obligations
under this Lease or which in the ordinary course of time would be likely to
result therefrom, including but not limited to the cost of recovering possession
of the Premises, expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorney's fees, and that portion of the
leasing commission paid by Lessor applicable to the unexpired term of this
Lease.  The worth at the time of award of the amount referred to in provision
(iii) of the prior sentence shall be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent.  Efforts by Lessor to mitigate damages caused by Lessee's
Default or Breach of this Lease shall not waive Lessor's right to recover
damages under this Paragraph.  If termination of this Lease is obtained through
the provisional remedy of unlawful detainer, Lessor shall have the right to
recover in such

                                      -20-
<PAGE>

proceeding the unpaid rent and damages that are recoverable therein, or Lessor
may reserve therein the right to recover all or any part thereof in a separate
suit for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1(a), (b) or (d) was not previously given, a notice to pay rent
or quit, or to perform or quit as the case may be, given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(a), (b), or (d). In such case, the applicable grace period
under subparagraphs 13.1(a), (b), or (d) and the unlawful detainer statute shall
run concurrently after the one such statutory notice, and the failure of Lessee
to cure the Default within the greater of the two such grace periods shall
constitute both an unlawful detainee and a Breach of this Lease entitling Lessor
to the remedies provided for in this lease and/or by said statute.

          (b)  Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations of Paragraphs
12 and 36 for the limitations on assignment and subletting which limitations
Lessee and Lessor agree are reasonable.  Acts of maintenance or preservation,
efforts to relet the Premises, or the appointment of a receiver to protect the
Lessor's interest under the Lease, shall not constitute termination of the
Lessee's right to possession.

          (c)  Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises is
located.

          (d)  The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof prior to such termination or by reason of
Lessee's use of the Premises.

     13.3 Inducement Recapture in Event Of Breach:  Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or the giving
or paying by Lessor to or for Lessee of any cash or other bonus, inducement or
consideration for Lessee's entering into this Lease, all of which concessions
are hereinafter referred to as "Inducement Provisions," shall be deemed
conditioned upon Lessee's full and faithful performance of all terms, covenants
and conditions of this Lease to be performed or observed by Lessee during the
term hereof as the same may be extended.  Upon occurrence of a monetary Breach
of this Lease, more than three (3) times during the term by Lessee, as defined
in Paragraph 13.1(a), any such inducement Provision shall automatically be
deemed deleted from this Lease and of no further force or effect, and any rent,
other charge, bonus, inducement or consideration theretofore abated, given or
paid by Lessee under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, and recoverable by Lessor as additional rent due
under this Lease, notwithstanding any subsequent cure of said Breech by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiates the
operation of this Paragraph shall not be deemed a waiver by Lessor of the
provisions of this Paragraph unless specifically so stated in writing to Lessor
at the time of such acceptance.

                                      -21-
<PAGE>

     13.4  Late Charges: Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited processing and
accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) days after
receipt by Lessee of written notice from Lessor that such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee's Default
Breach with respect to such overdue amount, nor prevent Lessor from exercising
any of the other rights and remedies granted hereunder. In the event that a late
charge is payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other
provision of this Lease to the contrary. Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.

     13.5  Breach by Lessor: Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall be thirty (30) days after receipt by Lessor, and by the holders of
any ground lease, mortgage or deed of trust covering the Premises whose name and
address shall have been furnished to Lessee in writing for such purpose, of
written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that the nature of Lessor's obligation is such
that more than thirty (3) days after such notice are reasonably required for its
performance, then Lessor shall be in breach of this Lease if performance is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion. If Lessor should fail to make payment of any amount payable by
Lessor to third parties, or fall to perform any of its other obligations
hereunder, and if such failure continues for thirty (30) days following written
notice from Lessee (unless the nature of Lessor's obligation is such that more
than thirty (30) days is required for performance and Lessor commences such
performance within such thirty (30) day period and thereafter diligently
prosecutes the same to completion), Lessee shall have the right, in addition to
any other rights or remedies it may have under this Lease, or at law or in
equity, to cure such default; provided however, in case of emergency, where
immediate action is necessary to protect persons or property, Lessee shall have
the right to effect such cure immediately, without prior notice to Lessor, but
shall notify Lessor of the action taken as soon thereafter as is reasonably
practicable. All costs incurred by Lessee in effecting such cure, together with
interest thereon at the rate of two percent (2%) plus the "prime rate" charged
by Bank of America NT & SA or the highest rate permitted by law, whichever is
less ("Interest Rate"), from the date such costs were incurred until paid, shall
be reimbursed to Lessee by Lessor within thirty (30) days after Lessor's receipt
of a statement therefor.

14.  Condemnation: If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of power (all
of which are herein called "condemnation"). This Lease shall terminate as to the
part so taken as of the date the

                                      -22-
<PAGE>

condemning authority takes title or possession, whichever first occurs. If the
portion of the Premises taken by condemnation materially impairs Lessee's use
and occupancy of the Premises in Lessee's reasonable opinion, Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days and Lessor
shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises, and Rent shall be
further equitably abated during any restoration of the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade fixtures, Utility
Installations, Alterations, personal property and the "bonus value" of the
Lease. In the event that this Lease in not terminated by reason of such
condemnation, Lessor shall to the extent of its net severance damages received,
over and above the legal and other expenses incurred by Lessor in the
condemnation, repair any damage to the Premises caused by such condemnation,
except the extent that Lessee has been reimbursed therefor by the condemning
authority and Lessee shall be responsible for the payment of any amount in
excess of such net severance damages required to complete such repair to the
extent that Lessee has been reimbursed therefor by the condemning authority.

15. [Intentionally left blank.]

                                      -23-
<PAGE>

16.  Tenancy Statement:

     16.1  Each Party (as "Responding Party") shall within ten (10) business
days after written notice from the other Party (the "Requesting Party") execute,
and deliver to the Requesting Party a statement in writing certifying: (1) that
none of the terms or provisions of this Lease have been changed (or, if they
have been changed, stating how they have been changed); (2) that this Lease has
not been canceled or terminated; (3) the last date of payment of Base Rent and
other charges and the time period covered by such payment; and (4) that, to the
party's actual current knowledge; the other party is not in default under this
Lease (or, if the other party is claimed to be in default, stating why).

     16.2  If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such available financial statements of
Lessee and such Guarantors as may be reasonably required by such lender or
purchaser, including but not limited to Lessee's financial statements for the
past three (3) years. All such financial statements shall be received by Lessor
and such lender or purchaser in confidence and shall be used only for the
purpose herein set forth.

17.  Lessor's Liability: The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor, provided that the
transferee or assignee assumes in writing all of Lessor's obligations under this
Lease. Nothing contained herein shall, however, release Lessor from any
obligations accruing during such Lessor's ownership or possession of the
Premises. Subject to the foregoing, the obligations and/or covenants in this
Lease to be performed by the Lessor shall be binding only upon the Lessor as
hereinabove defined.

18.  Severability: The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19.  Interest on Past-Due Obligations: Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per

                                      -24-
<PAGE>

annum, but not exceeding the maximum rate allowed by law, in addition to the
late charge provided for in Paragraph 13.4. Notwithstanding anything to the
contrary contained in this Lease, for each late payment, (i) Lessee shall not be
required to pay interest pursuant to this Paragraph 19 if Lessee has paid a late
charge pursuant to Paragraph 13.4 hereof for such late payment; and (ii) Lessee
shall not be required to pay any such late charge if Lessee has made an interest
payment pursuant to this Paragraph 19.

20.  Time of Essence: Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

21.  Rent Defined: All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22.  No Prior or Other Agreements; Broker Disclaimer: This Lease and the
exhibits attached hereto contains all agreements between the Parties with
respect to any matter mentioned herein, and no other prior or contemporaneous
agreement or understanding shall be effective.

23.  Notices:

     23.1  All notices required or permitted by this Lease shall be in writing
and may be delivered in person (by hand or by messenger or courier service) or
may be sent regular, certified or registered mail or U.S. Postal Service Express
Mail, with postage prepaid, or by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this Paragraph 23. The
addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may, by
written notice to the other specify a different address for notice purposes. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.

     23.2  Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.

24.  Waivers: No waiver by Lessor or Lessee of the Default or Breach of any
term, covenant or condition hereof by Lessee or Lessor shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee or Lessor of the same or of any other term, covenant or
condition hereof Lessor's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Lessor's consent to, or approval
of, any subsequent or similar act by Lessee, or be constructed as the basis of
an estoppel to enforce the

                                      -25-
<PAGE>

provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach by Lessee of any provision hereof,
other than the failure of Lessee to pay the particular rent so accepted. Any
payment given Lessor by Lessee may be accepted by lessor on account of moneys or
damages due Lessor, notwithstanding any qualifying statements or conditions made
by Lessee in connection therewith, which such statements and/or conditions shall
be of no force or effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.

25.  Recording: Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.

26.  No Right To Holdover: Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.

27.  Cumulative Remedies: No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

28.  Covenants and Conditions: All provisions of this Lease to be observed or
performed by Lessee and Lessor are both covenants and conditions.

29.  Binding Effect; Choice of Law: This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the court
in which the Premises are located.

30.  Subordination; Attornment: Non-Disturbance:

     30.1  Subordination: Provided that the ground Lessor, Lender, or other
holder of the interest to which this Lease would be subordinated executes a
recognition and non-disturbance agreement reasonably acceptable to Lessee which
(i) provides that this Lease shall not be terminated so long as no Breach by
Lessee exists under this Lease; and (ii) recognizes all of Lessee's rights
hereunder, this Lease and any Option granted hereby shall be subject and
subordinate to any ground lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, "Security Device"), now or hereafter placed by
Lessor upon the real property of which the Premises are part, to any and all
advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof Lessee agrees that the
Lenders holding any such Security Device shall have no duty, liability or
obligation to perform any of the obligations of Lessor under this Lease, but
that in the event of Lessor's default with respect to any such obligation,
Lessee will give any Lender whose name and address has been furnished Lessee in
writing for such purpose notice of Lessor's default and allow such Lender thirty
(30) days following receipt of such notice, the cure of said default before
invoking any remedies Lessee may have by reason thereof. If any Lender shall
elect to have this Lease and/or any Options granted hereby superior to the lien
of its Security Device and shall give written notice thereof to Lessee, this
Lease and such Options shall be deemed prior to

                                      -26-
<PAGE>

such Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.

     30.2  Attornment: Subject to the non-disturbance provisions of paragraph
30.3 and such recognition and attornment agreement, Lessee agrees to attorn to a
Lender or any other party who acquires ownership of the Premises by reason of a
foreclosure of a Security Device, provided that such Lender or other party
assumes in writing all of Lessor's obligations under this Lease, and that in the
event of such foreclosure, such new owner shall not: (i) be liable for any act
or omission of any prior Lessor or with respect to events occurring prior to
acquisition of ownership unless such Lender had previously consented to the
same; or (iii) be bound by prepayment of more than one month's rent unless the
same was paid to such Lender.

     30.3  Non-Disturbance: With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

     30.4  Self-Executing: Upon written request from Lessor or a Lender in
connection with a sale, financing or refinancing of the Premises, Lessee and
Lessor shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment and
non-disturbance agreement as is provided for herein.

31.  Attorney's Fees: If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term "Prevailing Party" shall
include, without limitation, a Party or Broker who substantially obtains or
defeats the relief sought, as the case may be, whereby compromise, settlement,
judgment, or the abandonment by the other Party or Broker of its claim or
defense. The attorney's fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorney's fees
reasonably incurred. Lessor shall be entitled to attorney's fees, costs and
expenses incurred in the preparation and service of notices of Default and
consultations in connection therewith whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach.

32.  Lessor's Access; Showing Premises; Repairs: Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of
emergency, and otherwise at reasonable times upon one (1) business day's prior
notice, subject to Lessee's reasonable security measures, for the purpose of
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or the building
of which they are a part, as Lessor may reasonably deem necessary. Lessor may at
any time place on or about the Premises or building any ordinary "For Sale"
signs and Lessor may at any time during the last one hundred twenty (120) days
of the term hereof place on or about the Premises any ordinary "For Lease"
signs. All such activities of Lessor shall be without abatement of rent or

                                      -27-
<PAGE>

liability to Lessee. Lessor, however, at all times shall minimize any
interference with Lessee's operations at the Premises.

33.  Auctions: Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34.  Signs: Lessee shall have the right to erect and install building and
monument signage at Lessee's expense; provided however, that Lessee first
obtains all necessary governmental approvals therefor. Lessee shall remove all
such signage at Lessee's expense promptly upon the expiration or sooner
termination of this Lease. The installation of any sign on the Premises by or
for Lessee shall be subject to provision of Paragraph 7 (Maintenance, Repairs,
Utility Installation, Trade Fixtures and Alteration).

35.  Termination; Merger: Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate of the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or more of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.

36.  Consents:

     (a)   Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent, approval, designation, determination
or judgment, of a Party is required, such consent, approval, designation,
determination or judgment shall not be unreasonably withheld or delayed.
Lessor's actual reasonable costs and expenses (including but not limited to
architects', engineers' or other consultants' fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor consent
pertaining to the Lease or the Premises, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
practice or storage tank, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor.

     (b)   All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify hereafter any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as then
reasonable with reference to the particular matter for which consent is being
given.

37.  Quiet Possession: Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

                                      -28-
<PAGE>

38.  Options:

     38.1  Definition: As used in this Paragraph 38 the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor.

     38.2  Options Personal To Original Lessee: Each Option granted to Lessee in
this Lease may only be assigned concurrently with an assignment of this Lease.
The Options, if any, herein granted to Lessee are not assignable separately or
apart from this Lease, and no Option may be separated from this Lease in any
manner, by reservation or otherwise.

     38.3  Multiple Options: In the event that Lessee has any multiple Options
to extend or renew this Lease, a later option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.

     38.4  Effect of Default on Options:

           (a)  Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, during the
time the Lessee is in Breach of this Lease.

           (b)  The period of time within which an Option maybe exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 38.4(a).

39.  Security Measures: Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises. Lessee,
its agents and invitees and their property from the acts of third parties.

40.  Reservations: Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights , dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee or increase Lessee's cost of such use of occupancy or Lessee's
obligations hereunder. Lessee agrees to sign any documents reasonably requested
by Lessor to effectuate any such easement rights, dedication, map or
restrictions.

41.  Performance Under Protest: If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum of
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.

                                      -29-
<PAGE>

42.  Authority: If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

43.  Conflict: Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions. Any conflict between this form of the Lease and any
Addenda, Work Letter of Exhibits shall be controlled by the Latter. This Lease
is meant to supersede a previous Lease between the Lessor and VidaMed, Inc. The
substance of this Lease is meant to be identical to the previous Lease.

44.  Offer: Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.

45.  Multiple Parties: Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.

46.  Lessee Improvements: Lessor shall pay for and complete interior
improvements "Tenant Improvements" mutually agreed upon as shown on attached
Exhibit B.

47.  Truck Access: Lessee will allow passage of semi-truck deliveries to Abbott
Critical Care Systems, Hospital Products Division of Abbott Laboratories and
Illness Corp., an average of five times per business day through the parking
lot.

48.  Right to Inspect Books and Records: Notwithstanding anything to the
contrary contained in this Lease, within thirty (30) days after receipt by
Lessee of Lessor's statement of operating expenses for any prior calendar year
during the Term, Lessee or its authorized representative shall have the right to
inspect the books of Lessor during the business hours of Lessor at Lessor's
office in the Building, or, at Lessor's option, such other location as Lessor
reasonably may specify, for the purpose of verifying the information contained
in the statement. Unless Lessee asserts specific errors within thirty (30) days
after receipt of the statement, the statement shall be deemed correct as between
Lessor and Lessee, except as to individual components subsequently determined to
be in error by a future audit.

49.  Option to Extend: Notwithstanding anything to the contrary contained in
this Lease:

     (a)   Grant of Option: Lessor hereby grants to Lessee one (1) option
("Option") to extend the term of this Lease, for an additional term of five (5)
years, commencing when the then existing Term expires, upon the terms and
conditions set forth in this Paragraph.

     (b)   Exercise of Option: Lessee may exercise such option by giving Lessor
written notice of its intention not less than one hundred eighty (180) days'
notice prior to the expiration of the then-existing term of the Lease.

                                      -30-
<PAGE>

     (c)   Extended Term Rent: If the Option is exercised, the monthly rent for
the Premises shall be the then current fair market monthly rent ("Fair Market
Rent") for the Premises as of the commencement date of the applicable extended
term, as determined by the agreement of the parties, or, if the parties cannot
agree term, then the Fair Market Rent shall be determined by three competent
Real Estate Professionals mutually agreeable to the parties. All other terms and
conditions contained in this Lease, as the same may be amended from time to time
by the parties in accordance with the provisions of this Lease, shall remain in
full force and effect and shall apply during the Option Term.

     (d)   Rescission: Notwithstanding anything to the contrary contained in
this Paragraph, if the monthly rent for an Option period is determined by
appraisal and if Lessee does not, in its discretion, approve the rental amount
established by the appraisal, Lessee may rescind its exercise of the Option by
giving Lessor written notice of its election to rescind within ten (10) days
after the receipt of all appraisals. If Lessee rescinds its exercise of the
Option, the (i) this Lease shall terminate on the sixtieth (60th) day after
Lessee's notice of rescission or on the date this Lease would have otherwise
terminated absent Lessee's exercise of the Option, whichever date is later; and
(ii) Lessee shall pay all costs and expenses of the appraisal.

50.  Right of First Refusal: If at any time during the Term, as extended, Lessor
shall solicit or receive a bona fide offer in writing ("Offer") from a third
party to purchase the Premises, Lessee shall have a right of first refusal
("Right of First Refusal") to purchase the Premises upon the same terms and
conditions as set forth in the Offer. Lessor, promptly following Lessor's
receipt of the Offer, Shall deliver written notice to Lessee specifying the
terms and conditions contained in the Offer. Lessee shall exercise its Right of
First Refusal by providing Lessor with written notice of its exercise within
twenty (20) business days after the date of receipt of Lessor's notice regarding
the Offer. If Lessee exercises its Right of First Refusal within the twenty (20)
business-day period, Lessor and Lessee promptly shall execute an amendment to
this Lease relating to the Premises, which includes the terms and conditions set
forth in the Offer. If Lessee fails to provide Lessor with its written notice of
exercise within the twenty (20) business day period, then Lessee shall be deemed
to have elected not to exercise its Right of First Refusal with respect to the
particular Offer at issue. Notwithstanding the foregoing, if Lessor negotiates
with the proposed purchaser terms materially more favorable then those offered
to Lessee but rejected, Lessor shall be required to submit the more favorable
terms to Lessee for its review. Lessee shall have seven (7) business days after
receipt of the more favorable terms to accept or reject the Premises. If Lessee
rejects the more favorable terms, Lessor shall be free to enter a purchase
agreement with the proposed purchaser. Lessee's Right of First Refusal; shall be
continuous during the Term of this Lease and any extension thereof. Lessee's
rejection of any particular Offer shall not relieve Lessor of its obligation to
again offer the Premises to Lessee at any time that the Premises subsequently
becomes available.

51.  Construction of Tenant Improvements: At Lessor's sole cost and expense,
Lessor shall construct the improvements ("Tenant Improvements") described in
that certain letter from Vance M. Brown & Sons, Inc. to VidaMed Inc., dated July
13, 1994, attached hereto as Exhibit "B" and incorporated by reference herein.
The Tenant Improvements shall be constructed in accordance with such attached
plans and specifications, in a good and workmanlike manner, free of defects and
using new materials and equipment of good quality and

                                      -31-
<PAGE>

in compliance with all Applicable Law (including, without limitation, the
Americans with Disabilities Act of 1990). Within thirty (30) days after the
Commencement Date, Lessee shall have the right to submit a written "punchlist"
to Lessor, setting forth any defective items to be corrected. Notwithstanding
anything to the contrary contained in this Lease or in the foregoing, Lessee's
acceptance of the Premises or submission of a "punchlist" shall not be deemed a
waiver of Lessee's right to have defects in the Tenant Improvements or the
Premises repaired at Lessor's sole expense. Lessee shall give notice to Lessor
whenever any such defect becomes reasonably apparent, and Lessor shall repair
such defect as soon as practicable. Lessor also hereby assigns to Lessee all
warranties with respect to the Tenant Improvements, including, without
limitation, warranties which would reduce Lessee's maintenance obligations
hereunder, and shall cooperate with Lessee to enforce such warranties.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
     YOUR ATTORNEY FOR HIS APPROVAL.  FURTHER, EXPERTS SHOULD BE CONSULTED TO
     EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
     ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES.  NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
     OR BY THE REAL ESTATE BROKERS(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
     LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
     TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELAY SOLELY UPON THE
     ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
     LEASE, IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
     AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BY
     CONSULTED.

The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.

Executed at Palo Alto, CA                   Executed at Zomed/Mountain View, CA
        -----------------------------               ----------------------------

On February 13, 1995                        On February 13, 1995
  -----------------------------------         ----------------------------------

By: LESSOR                                  By:  LESSEE

The Brown Mountain View Joint Venture       ZoMed International
-------------------------------------       ------------------------------------

By: /s/: Allan Brown                        By: /s/: Hugh R. Sharkey
   ----------------------------------          ---------------------------------

                                      -32-
<PAGE>

Name Printed: Allan Brown                   Name Printed: Hugh R. Sharkey

Title: Managing Joint Venturer              Title: Executive Vice President

Address: 2747 Park Boulevard                Address: 967 N. Shoreline Boulevard
         Palo AIto.CA 94304                          Mountain View, CA 94043

Phone: (4l5) 321-8432                       Phone: (415) 390-8500

                                      -33-
<PAGE>

                                  EXHIBIT "B"

Vance M. Brown & Sons, Inc.
General Contractors
2747 Park Boulevard
Palo Alto, California 94306
(415) 321-8432

July 13, 1994

VIDAMED
1380 Willow Road
Menlo Park, CA 94025

RE:  Preliminary Cost Estimate Qualifications

All work is based on Zomed/Scionex floor plan, 1 sheet dated 7/1/94

1.   Demolition:
     ----------

     Remove approximately 9000 SF of carpet; remove approximately 10 lineal feet
     of wall; remove one sink and cabinet for relocation to kitchen/dining room.

2.   Metal Studs and Gypsum Drywall:
     ------------------------------

     Construct 480 lineal feet of 10 ft. high metal stud and gypsum board wall.
     Gypsum wallboard will have a light skip trowel finish to match existing
     walls. Metal studs will be 3 5/8" 25 gauge and will be installed 24" on
     center.

3.   Carpentry/Miscellaneous:
     -----------------------

     Install new backing for cabinetry; install fire extinguishers; install
     backing for door frames.

4.   Casework:
     --------

     Install relocated cabinet with sink in kitchen/dining room. Install new
     plastic laminate top on cabinet. Includes cabinet under sink in Tissue Lab.

5.   Acoustic Insulation:
     -------------------

     Furnish and install sound insulation in wall cavities of conference room
     dividing wall and in new kitchen walls.

6.   Doors, Frames and Hardware:
     --------------------------

     Furnish and install 13 each 3090 and 2 each 6090 prefinished plain sliced
     red oak doors in bronze anodized aluminum frames; Schlage L series mortised
     hardware; plan bearing

                                      -34-
<PAGE>

     butts; dome stops. Furnish and install 3 each 2090 sidelites and 4 each
     4040 fixed windows in bronze anodized aluminum frames. Includes all glass
     lites as shown in doors and view panels.

7.   Glass and Glazing:
     -----------------

     Furnish and install glass for sidelites and fixed glass windows. Remove one
     single glass door and retrofit existing storefront with one pair of 6090
     glass doors to match building standards.

8.   Painting:
     --------

     Paint all walls latex semi gloss enamel to match existing wall paint
     finish.

9.   Acoustic Ceilings:
     -----------------

     Remove ceiling tiles for HVAC ducting rework; replace damaged ceiling
     tiles; install Vinyl rock ceiling tiles in the Tissue Lab and the Clean
     Room.

10.  Floor Coverings:
     ---------------

     Furnish and install the following: Flexco welded anti static sheet vinyl in
     Tissue Lab and Clean Room; Armstrong 1/8" gauge Standard Excelon VCT; 30
     ounce direct glue down commercial grade carpet throughout offices; 4"
     rubber top set base.

11.  Fire Sprinklers:
     ---------------

     Add and relocate fire sprinklers as necessary due to new construction.

12.  Plumbing:

     Sawcut slab, replace concrete and install new sinks as shown on floor plan.
     Sinks will be outfitted with vents, hot and cold water piping and faucets.

13.  HVAC:
     ----

     Modify HVAC zoning as necessary due to new wall and office layout; install
     new programmable T-Stats; comfort balance HVAC upon completion of work.

14.  Electrical:
     ----------

     Furnish and install - 18 additional new lay-in lights; 14 dual level
     switches; 28 duplex outlets; 6 fourplex outlets; (4) 20 amp. 110 volt
     circuits; 16 telephone/data outlets.

15.  General Conditions:
     ------------------

     Full time jobsite supervision; janitorial clean-up; jobsite clean-up;
     chemical toilet; telephone jobsite expense; design fees; miscellaneous.

                                      -35-
<PAGE>

Exclusions:

       --  Security, telephone and data wiring.

       --  Furniture partitions.

       --  Office equipment.

       --  Fit-up of owner furnished equipment.

End of Qualifications.

                                      -36-
<PAGE>

                       BROWN MOUNTAIN VIEW JOINT VENTURE
                              3197 Park Boulevard
                         Palo Alto, California  94306

May 12, 1999

Mr. Ronald T. Steckel, Vice President, Operations
Rita Medical Systems, Inc.
967 North Shoreline Boulevard
Mountain View, CA 94043

Subject:  Extension of Lease of 967 North Shoreline Boulevard,
          Mountain View, CA

Dear Ron:

     This shall serve as the formal agreement to extend the lease between The
                                                                          ---
Brown Mountain View Joint Venture ("Lessor") and Rita Medical Systems, Inc.
---------------------------------                --------------------------
("Lessee") the successor to ZoMed International, the original lessee, said lease
                            -------------------
dated July 12, 1994; the lease extension shall be subject to the following
terms, all other terms still apply:

     1)        Beginning date:  August 15, 1999

     2)        Ending date:  August 14, 2004

     3)        Basic rental:  $40,770.00 per month

     4)        Additional Security Deposit: $27,270.00 (Due upon execution of
          this lease extension.)

     5)        Mid-term Base Rent Adjustment: February 14, 2002 with beginning
          index to be the index published nearest but prior to August 15, 1999.

     6)        Lessee's sublease to Cohesive Technology Solutions, Inc. or its
          subsequent merger entity is approved by Lessor.

     7)        Lessor shall contract with Therma Inc. to bring HVAC up to good
          operating condition at a cost of $8,090.00 at its sole expense.

     8)        Lessor asserts that the roof is in good condition and is still
          under warranty by Innovative Roof Services.

     9)        Lessor shall employ Vance Brown, Inc. to touch up exterior paint
          at a cost of $525.00 at is sole expense.

                                      -37-
<PAGE>

     10)       Lessor shall employ Vance Brown, Inc. to seal coat and restripe
          the parking lot at a cost of $9,245.00 at its sole expense.

     11)       Lessor shall provide Lessee the sum of $12,000.00 to pay for
          interior painting, acoustic ceiling repairs, interior lighting repairs
          and carpet replacement as per quote (Exhibit A) and prior to the
          beginning of the extension on August 15, 1999.

     All other terms of the original lease shall remain the same except that any
reference to Real Estate Brokers, Real Estate Commissions and Construction of
Tenant Improvements shall not apply to this lease extension. Paragraph 47 of the
original lease refers to semi-truck deliveries by or for Abbott Laboratories or
Subsidiary Companies. The right of passage shall now belong to GET
Manufacturing, although, they are not currently using this right.

     Please sign your acceptance of this Extension of Lease in the space
provided below and return one copy to us.

Sincerely,                                   Acceptee:

Brown Mountain View Joint Venture            Rita Medical Systems, Inc.

/s/: Allan F. Brown                          /s/: Ronald T. Steckel

Allan F. Brown                               Ronald T. Steckel
Managing Joint Venture                       Vice President, Operations

Date: May 27, 1999                           Date: June 1, 1999

                                      -38-

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