Document:

Exhibit 10.7

               AMENDMENT ONE TO AGREEMENT FOR PURCHASE & SALE OF
                           REMOTE MONITORING PRODUCTS

     This  Amendment  for  Purchase  &  Sale  of  Remote   Monitoring   Products
(hereinafter  this "Amendment") is made effective as of this 16th day of January
2004  ("Effective  Date")  by  and  between  Harris   Corporation,   a  Delaware
corporation,  operating  through  its  Broadcast  Communications  Division  with
offices located at 4393 Digital Way, Mason, Ohio 45040  (hereinafter  "Harris"),
and Statmon  Technologies Corp., a Nevada  corporation,  with offices located at
345 N. Maple Drive, Suite 120, Beverly Hills, CA 90210 (hereinafter  "Statmon"),
each a "Party" and together the "Parties".

     WHEREAS,  the Parties  entered  into an  agreement  for  Purchase & Sale of
Remote Monitoring Products on February 25th, 2003 (hereinafter the "Agreement");

     WHEREAS,  pursuant  to Section  4.2 of the  Agreement,  the  Parties met on
quarterly basis to have general discussions about the current market conditions,
product features,  including  competitive  climate,  and technical  features and
improvements to new products;

     WHEREAS,  based  on those  discussions,  and for  Harris  to  maintain  all
exclusive rights and licenses granted under the Agreement through June 2004, the
Parties  have agreed to modify the Annual  Forecast and the  Quarterly  Forecast
stated in Appendix D - Payment, Specifications, Delivery Schedule and Test Plan;
and

     WHEREAS,  all capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Agreement.

     NOW THEREFORE in  consideration  of the premises and the mutual  agreements
and covenants herein contained,  and other good and valuable consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the Parties  hereby
agree and covenant as follows:

1.   Appendix D - Payments, Specifications, Delivery Schedule and Test Plan will
be modified as follows:

     a)  Delete  Sections  5, 6 and 7 in their  entirety  and  replace  with the
following:  "On or about January 16, 2004,  Harris will issue a Blanket Purchase
Order in the amount of  $337,500.  Harris  will make  payment to Statmon  within
twenty-four  (24) hours of receipt by Harris of the Hardware  required under the
Blanket  Purchase  Order.  Furthermore,  during the next six (6) months from the
Effective Date, Harris will issue additional  Blanket Purchase Orders at the end
of each  month,  starting on January 31, 2004 and ending on June 30, 2004 in the
amount of $_______ each. With regards to each Blanket Purchase Order starting on
January 31, 2004, no more than twenty-five  (25%) percent of the total amount of
each such Blanket  Purchase Order shall be for the purchase of Hardware.  Harris
will make payment to Statmon within  twenty-four (24) hours of receipt by Harris
of the Hardware  required under each  corresponding  Blanket Purchase Order. The

<PAGE>

Parties  agree to negotiate  the Annual and  Quarterly  Forecasts for the period
beginning  July 01, 2004 until  December 31, 2005 by May  31,2004." In the event
Harris and Statmon are unable to agree upon Annual and  Quarterly  Forecasts  by
May 31, 2004, Statmon reserves the right to convert Harris' exclusive rights and
licenses to non-exclusive,  effective upon thirty (30) days prior written notice
to Harris.  Notwithstanding  the foregoing,  should the parties reach  agreement
regarding Annual and Quarterly  Forecasts by June 30, 2004, such agreement shall
include  the terms set forth in the  deleted  Sections  6 and 7 of the  original
Exhibit "D" to the Agreement.

2.   No modification or amendment to this Amendment may be made unless agreed to
by the  Parties  hereto in  writing.  All  other  terms  and  conditions  of the
Agreement shall remain unchanged.

IN WITNESS HEREOF,  Harris and Statmon have caused this Amendment to be executed
by their duly authorized representatives.

STATMON TECHNOLOGIES

By: /s/ Geoffrey P. Talbot
  -------------------------------
  Name:  Geoffrey P. Talbot
  Title: CEO

HARRIS CORPORATION
BROADCAST COMMUNICATIONS DIVISION

By:  /s/ Haldale S. Wilson
  -------------------------------
  Name:  Haldale S. Wilson
  Title: Vice President
         Studio Products & Systems

<PAGE>

                        AGREEMENT FOR PURCHASE & SALE OF
                           REMOTE MONITORING PRODUCTS

     This  Agreement  for  Purchase  &  Sale  of  Remote   Monitoring   Products
(hereinafter this "Agreement") is made effective as of this 25th day of February
2003  ("Effective  Date")  by  and  between  Harris   Corporation,   a  Delaware
corporation,  operating  through  its  Broadcast  Communications  Division  with
offices located at 4393 Digital Way, Mason, Ohio 45040  (hereinafter  "Harris"),
and Statmon  Technologies Corp., a Nevada  corporation,  with offices located at
345 N. Maple Drive, Suite 120, Beverly Hills, CA 90210 (hereinafter "Statmon").

     WHEREAS  Statmon  manufactures  and supplies  the Products (as  hereinafter
defined); and

     WHEREAS,  Harris  manufactures,  markets and promotes digital, AM, FM, IBOC
and Television  broadcast  systems and finished  products which  integrate among
other products,  network interface and system  controllers,  other broadcast and
data products and components; and

     WHEREAS, Harris wishes to engage in the manufacture, marketing, and sale of
digital, AM, FM, IBOC and Television broadcast systems which integrate Statmon's
products and to exclusively  market,  distribute and resell  Statmon's  Products
worldwide; and

     WHEREAS,  Harris  and  Statmon  desire to enter into an  agreement  whereby
Harris may place purchase orders from time to time with Statmon for the purchase
of the Products  which  Statmon may accept and complete in  accordance  with the
terms of this Agreement.

     NOW THEREFORE, in consideration of the premises and mutual covenants herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:

                            ARTICLE 1 - DEFINITIONS

For purposes of this Agreement,  the following terms and their definitions shall
apply:

     "AFFILIATE"  with  respect  to any  Person,  shall  mean any  other  Person
directly  or  indirectly  controlling,  controlled  by, or under  the  direct or
indirect  common  control  with such  Person,  including  without  limitation  a
corporation's  Subsidiaries,  any company of which it is a Subsidiary, and other
Subsidiaries of such company.

     "ANNUAL  FORECAST" shall mean the number of units projected by Harris to be
purchased for delivery to Harris in a given Harris fiscal year (July - June).

     "ATSC TRANSPORT  STREAM" shall mean a bit stream that is compliant with the
Advanced Television Systems Committee Standard.

     "BROADCAST  CUSTOMER" shall mean those entities  engaged in the business of
NTSC, PAL,  SECAM,  ATSC  broadcasting,  DVB-television  broadcasting,  AM radio
broadcasting,  FM radio  broadcasting and IBOC broadcasting who use Products and
Licensed  Materials  procured  by Harris  hereunder  only for the  broadcast  of
terrestrial over-the-air signals to television consumers.

     "CONFORMANCE  TESTING" shall mean the testing and acceptance procedures for
the Products as agreed to by the parties and incorporated  into an Appendix from
time to time.

     "DAYS" shall mean calendar days unless otherwise noted.

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     "DESIGNATED  PROCESSOR" shall mean the Product for which the license to Use
Licensed Materials is granted under this Agreement.

     "END  USER"  shall  mean:   (i)  with   respect  to  Software  and  Related
Documentation,  any third party to whom a sub-license to Use Licensed  Materials
is granted by Harris  hereunder in  connection  with the purchase of Products by
such third party from Harris for use by such third party and not for resale, and
(ii) with respect to Products  purchased by Harris hereunder,  a third party who
purchases Products for use by such third party and not for resale.

     "EXCLUSIVE  PRODUCT"  shall  mean,  Statmon  software  packages  and remote
terminal  units  including  those listed in Appendix A, any  upgrades,  software
revisions and any product  extensions  exclusively  manufactured  by Statmon for
Harris.

     "GENERAL  RELEASE DATE"   means the time at which Statmon  notifies  Harris
that  Statmon is ready to ship to Harris a specific  Product or set of  products
previously under development.

     "HARDWARE"  shall  mean  remote  terminal  units,  punch  down  blocks  and
associated connections.

     "LICENSED  MATERIALS"  shall mean any  Software  and Related  Documentation
offered  under this  Agreement  for which a license to Use is granted  under the
terms and conditions of this Agreement.

     "NEW  PRODUCTS"  shall mean  Products  which are added from time to time to
Appendix A and  designated  as "New  Products"  by the mutual  agreement  of the
Parties.

     "NON-EXCLUSIVE  PRODUCT"  shall mean products  which are added from time to
time to Appendix A and  designated  as  "Non-Exclusive  Products"  by the mutual
agreement of the Parties and in which Harris has non-exclusive  rights to market
and resell to customers.

     "OBJECT  CODE"  shall mean that  representation  of Software in binary form
intended to be readily usable by a processor.

     "ORDER"  shall mean an order  submitted by Harris in writing to Statmon for
the purchase of Products in accordance with this Agreement.

     "OUTSTANDING  QUOTES" shall mean all Statmon  quotes  outstanding as of the
Effective Date and listed in Appendix E.

     "PERSON" means any individual, corporation,  partnership, limited liability
company, joint venture, association, trust, unincorporated association,  entity,
governmental body, or any other entity or organization.

     "PRICE SCHEDULES" shall mean Statmon's  official listings and explanations,
in written  or  electronic  form,  for  Products,  Licensed  Materials,  prices,
discount plans,  discount rates, special price conditions and terms as listed in
Appendix  A,  Exclusive  Products  attached  hereto  and  made  a part  of  this
Agreement.

     "PRODUCTS"  shall   collectively  mean  the  Hardware  and  Software  which
comprises the Exclusive Products, Non Exclusive Products, and New Products.

     "QUARTERLY  FORECAST" shall mean the number of units projected by Harris to
be purchased for delivery to Harris in a given three (3) month period.

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     "RELATED  DOCUMENTATION"  shall  mean  materials  in  any  form  useful  in
connection with Software and/or its use and Products including,  but not limited
to,  flowcharts,   logic  diagrams  and  listings,   and  program  descriptions,
Specifications and Product manuals.

     "RETURN MATERIAL AUTHORIZATION (RMA) NUMBER" means the authorization number
provided by Statmon's  customer service department to Harris after Harris or its
End User has notified  Statmon's  customer service department of a deficiency or
malfunction in a Product.

     "SOFTWARE" shall mean a computer program in Object Code consisting of a set
of logical  instructions and tables of information that guide the functioning of
a processor.  Such program may be contained in any medium whatsoever,  including
firmware containing a pattern of bits,  representing such program.  However, the
term "Software" does not mean or include such medium.

     "SOURCE  CODE" shall mean the most current  representation  of Software (as
updated from time to time ) incorporating  high-level or assembly  language that
generally is not directly executable by a processor.

     "SPECIFICATIONS"   shall  mean   Statmon's   or  its   vendor's   technical
specifications for particular Products or Software furnished hereunder.

     "SUBSIDIARY"  of a Person  means a Person the  majority of whose  shares or
other  securities  or  ownership  interests  entitled  to vote for  election  of
directors or other  governing  body is now or hereafter  owned or  controlled by
such Person either directly or indirectly,  but a Person shall be deemed to be a
Subsidiary of such Person only as long as such ownership or control exists.

     "USE"  with  respect to  Licensed  Materials  means  loading  the  Licensed
Materials,  or any portion thereof, into a Designated Processor for execution of
the instructions and tables contained in such Licensed Materials.

APPENDICES:  The following Appendices are incorporated by reference hereunto and
form a part of this Agreement:

     (a)  APPENDIX A - EXCLUSIVE PRODUCTS

     (b)  APPENDIX B - PRIVATE LABELING AND BRANDING INSTRUCTIONS

     (c)  APPENDIX C - ESCROW AGREEMENT

     (d)  APPENDIX D - SPECIFICATIONS, DELIVERY SCHEDULE AND TEST PLAN

     (e)  APPENDIX E - OUTSTANDING QUOTES

     (f)  APPENDIX F - END USER LICENSE AGREEMENT

     (g)  APPENDIX G - CONFIDENTIALITY AGREEMENT

                                ARTICLE 2 - TERM

     This  Agreement  shall  commence  on the  Effective  Date  and,  except  as
otherwise  provided in Article 24 - Termination,  shall continue in effect for a
period  of three  (3)  years  from the  Effective  Date of this  Agreement  (the
"Term"). The modification, termination or expiration of this Agreement shall not
affect  the  rights  or  obligations  of  either  party  under  any Order or any
outstanding  Harris  quotation(s)  to an End User which  Statmon has approved in
writing  before  the  effective  date  of  the   modification,   termination  or
expiration,  which outstanding  quotation shall not extend more than ninety (90)
days following any such modification, termination, or expiration.

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<PAGE>

                               ARTICLE 3 - SCOPE

3.1 The terms and conditions set forth in this Agreement shall govern any Orders
placed by Harris during the Term for Exclusive  Products and Licensed  Materials
set forth in Appendix A - Exclusive - Products.  Harris  shall have the right to
procure Exclusive Products and Licensed Materials under this Exclusive Agreement
with respect to Exclusive Products, to market and resell (subject to the license
terms stated herein) the same on an exclusive basis to Broadcast  Customers on a
worldwide  basis.  Statmon  shall  remain free to market and sell all  Exclusive
Products and Licensed Materials as it, in its sole discretion, deems appropriate
to any customer which is not a Broadcast Customer.

Moreover,  during the Term of this  Agreement,  Statmon may continue to directly
sell the Statmon  products to the  following end users for their own use and not
for resale to any other group or Affiliate.

(a)  SINCLAIR BROADCAST GROUP, INC.
     10706 Beaver Dam Road
     Hunt Valley,  Maryland 21030

(b)  LIN TV CORPORATION
     1 Richmond Square
     Providence, Rhode Island 02906

(c)  NATIONAL BROADCASTING COMPANY, INC., A DELAWARE CORPORATION
     includes 13 NBC TV and 22
     Telemundo owned and operated stations

3.2  Statmon, its officers, directors,  Affiliates, Key Personnel, and employees
shall not  directly or through  indirect  channels  (except  for those  accounts
identified  in 3.1 above) sell,  market,  promote,  or  otherwise  engage in any
activity the effect of which would compete or interfere  with Harris'  exclusive
rights pursuant to this Agreement.

3.3  The Parties may add to Appendix A - at any time, provided that the addition
of new Products or Licensed  Materials shall not create any purchase  obligation
on Harris' part.  The parties may delete any  Exclusive  Product from Appendix A
only upon mutual written agreement between Harris and Statmon.

3.4  Statmon  hereby assigns the  Outstanding  Quotes to Harris and Harris shall
have the right to fill those orders.  Statmon shall notify Harris when contacted
by a customer to place an order listed in the Outstanding Quotes.

                          ARTICLE 4 - EXCLUSIVE RIGHTS

4.1  The term of all exclusive rights and exclusive licenses granted to Harris'
hereunder  shall be for the Term of this  Agreement and subject to the terms and
conditions set forth in Appendix D - Specifications,  Delivery Schedule and Test
Plan, but in no event less than six (6) months  commencing  the Effective  Date,
unless this Agreement is terminated pursuant to the provisions of Article 24.

4.2  Both  parties  shall  meet on a quarterly basis to have general discussions
including, but not limited to, the review of current market conditions,  product
features,  regulatory  and  competitive  climate  including  pricing,  technical
features  and  improvements  to new  products.  The parties  shall in good faith
discuss  strategies  necessary to  facilitate  meeting the Annual and  Quarterly
Forecasts.

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4.3  COST REDUCTION. The parties agree to use commercially reasonable efforts to
reduce  the  costs of the  Products.  Cost  improvements  will be  targeted  for
design-related   improvement,   material   handling,   sourcing,   manufacturing
operations, business practices and quality improvements.

                  ARTICLE 5 - RESPONSIBILITIES OF THE PARTIES

5.1  In addition to all other obligations of Harris under this Agreement, Harris
shall:

     (a)  where  appropriate,  train its End Users in the  effective  use of the
Products and Licensed Materials,  including providing any instructional material
furnished by Statmon;

     (b) inform its customers of service and maintenance  options available from
Harris;

     (c) report in writing  within  thirty  (30)  business  days to Statmon  all
suspected  Products and Licensed  Materials  defects or safety problems and keep
Statmon informed of Customer complaints.

     (d) comply with all  applicable  requirements  of federal,  state and local
laws, ordinances, administrative rules and regulations.

     (e)  offer  to its End  User a  warranty  for such  Products  and  Licensed
Materials as a minimum on the same terms as the warranty  granted to Harris from
Statmon.

     (f) be responsible  for all other expenses  associated with its personnel's
attendance at training including, but not limited to, travel, lodging and meals.
In  addition,  Harris  shall be  responsible  for all travel,  lodging and meals
expenses  associated  with the  attendance of Statmon  personnel at any training
session.

5.2  In  addition  to all other  obligations  of Statmon  under this  Agreement,
Statmon shall:

     (a) review  Harris'  written  reports  referred  to in Section  5.1 (c) and
respond with a remedy or proposed remedy to such reports within 14 business days
from Statmon's receipt thereof;

     (b) make commercially  reasonable efforts to participate in mutually agreed
upon joint marketing and development  efforts, in order to enhance the sales and
industry acceptance of the Products;

     (c) develop and manufacture  the Exclusive  Products in compliance with the
Specifications  and provide  Harris with service or  replacement  for  Exclusive
Products in accordance with the terms and conditions of this Agreement.

     (d) comply with all  applicable  requirements  of federal,  state and local
laws, ordinances, administrative rules and regulations including.

     (e) provide  Harris with  instructional  materials in mutually  agreed upon
quantities  relating  to the  Exclusive  Products  and  Licensed  Materials  for
training and educational purposes as needed; and

     (f) provide  Harris with  training for  Exclusive  Products  free of charge
during the first six months for Harris  personnel.  In the event Harris  desires
additional  training,  such shall be  provided by Statmon at $150.00 per hour or
$1,200 per day.

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     (g) retain the following  software and business  developers  for at least a
period of one (1) year from the Effective Date: Peter  Upfold and Michael Hurst,
(the "Key Personnel").  Notwithstanding the foregoing, Statmon may terminate its
agreement  with Michael  Hurst at any time for cause and,  after the first year,
Statmon may replace  Michael Hurst or Peter Upfold for any reason with the prior
written approval of Harris, such consent not to be unreasonable withheld.

                               ARTICLE 6 - ORDERS

6.1  All Orders  submitted by Harris for Products and Licensed  Materials  shall
incorporate and be subject to the terms and conditions of this Agreement. To the
extent that any terms contained within this Agreement are in conflict with those
referenced  in any  particular  Order,  the terms set forth  herein  shall  take
precedence  and  control.  Harris  shall  issue an Order to  Statmon  to procure
Products hereunder. Any Order submitted pursuant to a firm price quotation shall
include  such firm price  quotation  number.  All Orders,  including  electronic
Orders, shall contain the information as detailed below:

     (i)  Complete and correct ship to and bill to address;

     (ii) The  quantity  and  type of  Products  and  Licensed  Materials  being
          ordered;

     (iii) The price;

     (iv) The  requested  delivery date in accordance  with  Statmon's  standard
          interval for the Products and Licensed Materials being ordered, or, in
          the event a  non-standard  interval has been agreed to by the parties,
          reference  shall  be made to the  specific  document  agreeing  to the
          interval; and

     (v)  Reference to this Agreement.

6.2  Harris  shall have the right to cancel any Order  without  liability in the
event Statmon does not deliver any Products within the then delivery time of the
Order  except  when  such a delay  is  caused  by a force  majeure  event  which
continues for less than 30 days.

               ARTICLE 7 - PRICES, INVOICES AND TERMS OF PAYMENT

7.1  Statmon  will  invoice  Harris all amounts due for  Products  and  Licensed
Materials upon shipment or in either event,  as soon as practical  thereafter in
accordance  with prices set forth in the then  applicable  Price Schedules or as
amended in  accordance  with the teens  hereof and of Articles 13 and 14 hereof.
Unless  otherwise  agreed in writing,  Harris may elect to pay all such invoiced
amounts,  less any disputed  amounts for receipt by Statmon 2% 10 days or within
(30) days of the invoice date.

            ARTICLE 8 - DELIVERY; INSPECTION AND TESTING; ACCEPTANCE

8.1  DELIVERY  OF  UNITS:  Statmon  shall  deliver  the  Products  to  Harris or
designated  End User at the address and  according  to the  respective  delivery
schedules specified in the Orders.

8.2  TESTING OF PRODUCTS  BY STATMON;  QUALITY  CONTROL:  Statmon  shall have no
obligation  to develop  any New  Products.  However,  should  Statmon  desire to
develop a New  Product  and seek to have it  included  within  the terms of this
Agreement,  the following  guidelines  shall govern the  development of such New
Product:  Statmon shall provide and maintain a quality  control,  inspection and
test system for all Products in  accordance  with the  Specifications  and, upon
Harris' request,  issue to Harris a certificate as to the compliance of Products
with applicable Specifications pursuant to each Product shipment.  Statmon shall
configure  and assemble all Products in  accordance  with the Orders.  Except as
specified in Section 8.3 Statmon shall not ship any Product to Harris until such
Product has satisfied the  Conformance  Testing.  Harris shall have the right to
inspect and witness Statmon's testing of the Products at Statmon's manufacturing
facility and Harris shall provide all  reasonable  facilities and assistance for
such  inspection  if at Harris'  request  the  testing is to be done at a Harris
facility.  In the event that Harris  witnesses the Conformance  Testing of a New
Product at  Statmon's  manufacturing  facility and  determines  that the Product

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<PAGE>

satisfies all requirements of the Conformance  Testing and otherwise conforms to
all applicable Specifications,  Harris will so notify Statmon. Statmon's quality
control procedures will include a mechanism by which Products may be traced back
to a particular lot.  Complete and accurate records relating to such tests shall
be maintained by Statmon at all times during the term of this  Agreement and for
a period of three (3) years  thereafter  and shall be made  available  to Harris
upon Harris request.

8.3  ACCEPTANCE OF NEW  PRODUCTS:  All New Products not accepted by Harris shall
be  subject  to  inspection  and  testing  by  Harris  in  accordance  with  the
Conformance  Testing  within  thirty  (30) days  after  Harris'  receipt of such
Products at the site of Harris  specified in the Order to  determine  conformity
with the Order and  Specifications.  Statmon shall have the right to witness all
such inspections and testing by Harris.

8.4  ACCEPTANCE OF PRODUCTS  (OTHER THAN NEW PRODUCTS):  If any Products  (other
than  New  Products)  delivered  do not  conform  to the  Accepted  Order or the
Specifications,  Harris  shall  have the right to reject  such  Products  within
thirty (30) days after  Harris'  receipt of such  Products at the site of Harris
specified in the Order.  Statmon shall bear the costs and  expenses,  including,
without limitation, storage, transportation,  shipping, recalling,  repackaging,
reshipping,   and  the  like  associated  with  repair  and/or   replacement  of
nonconforming Products or lots.

8.5  STATMON'S  OBLIGATIONS WITH RESPECT TO REJECTED PRODUCTS: In the event that
any Product is rejected by Harris following the Conformance  Testing  procedures
set forth in Sections 8.2, 8.3 and 8.4 due to failure of the Products to perform
in accordance with the  Specifications,  Statmon shall promptly inspect and test
such  Product at Harris'  facility  (or,  at the  election of either  party,  at
Statmon's  facility) in  accordance  with the  Conformance  Testing to determine
whether the Product conforms to all  Specifications  applicable to such Product.
Harris shall have the right to be present at all inspections and tests conducted
by  Statmon.  In  the  event  that a  rejected  Product  does  not  satisfy  the
Conformance Testing, Statmon shall, as soon as possible but no later than within
thirty (30) days after its receipt of Harris'  notice of  rejection  and without
expense  to Harris,  correct  defects in any  nonconforming  Product  or, at its
option,  replace the  nonconforming  Product so that such Product or replacement
Product  satisfies  the  Conformance  Testing..  If Statmon is unable to correct
defects in the  nonconforming  Product or replace the  Products  Statmon will so
notify Harris. Harris shall have the option to have Statmon provide a credit for
such Products.

8.6  In the event Statmon  promptly  inspects and tests a rejected  Product at a
Harris facility (or, at the election of either party, at Statmon's  facility) in
accordance  with the  Conformance  Testing and  satisfies all such test included
therein,  such  Product  shall be deemed to be accepted for all purposes of this
Agreement,  effective upon Harris' receipt of Statmon's written certification of
such test results or, if later,  upon the  subsequent  return of such Product to
Harris.

             ARTICLE 9 - REPRESENTATIONS, WARRANTIES AND CONVENANTS

9.1  Statmon  represents,  warrants  and  agrees  that:

     (a)  the execution and  performance  by Statmon of this  Agreement will not
          conflict  with or result in any violation of or constitute a breach or
          trigger a default under the agreement between Statmon and NBC or under
          any agreement or contract to which Statmon is a party.

     (b)  should  Statmon  become  unable to perform  its  material  obligations
          pursuant to this Agreement for any consecutive ninety (90) day period,
          after being  notified in writing of such default  notwithstanding  any
          non-competition  clause to the contrary,  Harris shall have a right to
          retain or hire the Key Personnel without any interference from Statmon
          and Statmon shall cooperate and support Harris in its endeavor.

     (c)  no other party except for NBC, and certain  lienholders  or holders of
          security  interests of Statmon  identified  herein,  have or will have
          rights to the Source  Code under any  escrow or other  agreement,  the
          effect of which would  compete or  interfere  with  Harris'  exclusive
          rights  pursuant  to this  Agreement.  With the  exception  of  escrow
          deposits, no third party has or ever had a copy of the Source Code.

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     (d)  it shall not create, or allow any third party to create,  any security
          interest in the Licensed  Materials without notifying Harris first and
          requiring  that the party seeking the security  interest  enter into a
          security  interest  subordination  and subrogation  agreement based on
          substantially  the same terms and conditions as those contained in the
          Security Interest Subordination and Subrogation Agreement entered into
          by Statmon, Harris and the Holders on February 7, 2003

     (e)  it is the  sole and  exclusive  owner of the  Licensed  Materials  and
          related  intellectual  property  rights and has the right to grant the
          rights and licenses hereunder.

9.2  The   representations  and  warranties  made  by  Statmon  shall  be  fully
enforceable  at law or in equity against  Statmon and its respective  successors
and assigns.

                           ARTICLE 10- DOCUMENTATION

10.1 Statmon  shall  furnish  Harris  with an  electronic  master copy of source
documentation,  including but not limited to instruction and technical  manuals,
for use by Harris in  creating  product  information,  brochures,  and  manuals,
("Product   Information")   relating  to  the  Products  with  Hams'  logo.  The
instruction  manual and  related  software  will be Harris  branded by  Statmon.
Harris shall use such Product  Information  in sales  promotion  and training of
Harris personnel and customers only with respect to the Products purchased under
this  Agreement.  Harris shall have the right to use the Statmon name and/or any
Statmon trademark without Statmon's prior written consent.

10.2 For  Products  listed in Appendix A - Products,  Statmon  shall  provide to
Harris the following product documentation in electronic format:

Operations and Maintenance Manuals
Product pictures in the highest resolution possible
Application Guide
Brochures

Harris shall use such information in sales promotion, marketing activity and for
End Users only with respect to the Products  purchased  under this Agreement and
in accordance with the terms of this Agreement.

                ARTICLE 11- DISCONTINUED AVAILABILITY/SPARE PARTS

11.1 Statmon  shall not  discontinue  making any  Products  available  to Harris
without  providing  Harris with at least 180 days prior  written  notice of such
discontinuance and an opportunity to purchase such quantities of the Products as
Harris estimates it may need to support the Products sold to Harris' End Users.

11.2 Statmon  shall keep in stock a supply of at least twenty (20)  Hardware and
software  components and shall replace any discontinued part with one that meets
or exceeds the performance specifications of the discontinued or non-functioning
part to make the system operational.

                          ARTICLE 12 - EXPORT CONTROL

     The  parties  acknowledge  that  any  Products,   Software,  and  technical
information  (including,  but not limited to,  services and  training)  provided
under this Agreement are subject to U.S. export laws and regulations and any use
or  transfer of such  Products,  Software,  and  technical  information  must be
authorized  under  those  regulations.  Harris  agrees  that  it will  not  use,
distribute,   transfer,  or  transmit  the  Products,   Software,  or  technical
information (even if incorporated into other products) except in compliance with
U.S. export regulations.

                                       8
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                        ARTICLE 13 - SALES OR USE TAXES

     Harris shall provide Statmon with a valid tax exempt certificate,  in which
case Harris shall not be liable for all sales taxes and related charges exempted
under  such  certificate,  however  designated,  imposed  upon or based upon the
provision,  sale, license or use of Products, and Licensed Materials levied upon
the sale.

                    ARTICLE 14 - TRANSPORTATION AND PACKING

     Statmon  will arrange for prepaid  transportation  (from a list of carriers
pre-approved  by Harris) to  destinations  in the  contiguous  United States and
invoice  transportation  charges  to  Harris,  which  Harris  agrees  to  pay in
accordance with Article 7. Premium  transportation  will be used only at Harris'
request.  Statmon  shall pack  Products  for delivery in the  contiguous  United
States, in accordance with its standard practices for domestic shipments. Where,
in order to meet  Harris'  requests,  Statmon  packs  Products in other than its
normal manner or for destinations outside the contiguous United States,  Statmon
may bill Harris for the additional charges for such packing and transportation.

                      ARTICLE 15 - TITLE AND RISK OF LOSS

     Risk of loss to Products and Licensed  Materials  shall pass to Harris upon
delivery to a common carrier,  Harris or its designated  carrier or agent. Title
to the Products  shall pass to Harris upon  delivery to Harris,  or if Harris so
instructs,  to  Harris'  End User in  accordance  with the  Order.  Title to all
Licensed Materials (whether or not part of firmware)  furnished by Statmon,  and
all copies thereof made by Harris,  including  translations,  compilations,  and
partial  copies are,  and shall at all times  remain,  the  property of Statmon.
Harris  shall  notify  Statmon  promptly of any claim with respect to loss which
occurs  while  Statmon  has the  risk of  loss  and  shall  cooperate  in  every
reasonable way to facilitate  the settlement of any claim.  For purposes of this
clause,  "delivery" shall mean the point at which Statmon or Statmon's  supplier
or agent turns over possession of the Product or Licensed  Materials to a common
carrier, Harris, Harris' End User, Harris' employee, Harris' designated carrier,
Harris'  warehouse,  or  other  Harris  agent  and  not  necessarily  the  final
destination shown on the Order.

                 ARTICLE 16 - PRODUCT CHANGES AND DEVELOPMENTS

16.1 Statmon may modify the Product  drawings and  Specifications  or substitute
products  of  later  design.  Statmon  guarantees  that  such  modifications  or
substitutions  will not impact  upon form,  fit, or  function  under  normal and
proper  use of the  ordered  Product as  provided  in the  Specifications.  With
respect to changes,  modifications,  and substitutions  that do impact the form,
fit, or function of the Products,  Statmon shall notify Harris in writing thirty
(30) days prior to the date the changes become effective and Harris shall notify
Statmon of any objections  thereto  before the effective date of the change;  if
Harris fails to notify Statmon of any such objections, Harris shall be deemed to
have  consented to such change.  Statmon shall inform Harris on a periodic basis
of any planned changes to the form, fit, or function of Products.

16.2 All  inventions   (whether   patentable  or  unpatentable),   improvements,
discoveries and creations (including computer programs and custom interfaces for
Harris branded  products,) and all intellectual  property rights therein,  which
are  conceived or first  reduced to practice  jointly by Harris and Statmon,  or
solely by Harris, in performance of this Agreement and intended for use with the
Exclusive Products, or with other Harris branded products, shall be owned solely
by Harris, and with respect to such joint efforts, Statmon shall, without charge
to Harris, but at Harris' expense,  execute and deliver applications for patents
and copyright  registrations on such inventions,  improvements,  discoveries and
creations,  together  with  assignment  to Harris of Statmon's  entire  interest
therein,  and shall give to Harris reasonable  assistance as may be requested in

                                       9
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securing,  enforcing and  protecting  such  applications,  patents,  unpublished
copyrights and copyright registrations.  Notwithstanding the foregoing, with the
exception of the licenses granted herein, neither the foregoing language nor any
other  provision  of this  Agreement  shall be  interpreted  to grant Harris any
right,  title or interest  of any kind in any  Software  developed  and owned by
Statmon, nor any subpart or derivative hereof including, but not limited to, any
enhancement,  upgrade, modification,  extension or improvement to such Software.
Any idea, regardless of how expressed,  suggested by any party, including Harris
and/or any End User of the Software, which is subsequently incorporated into the
Software  by Statmon  shall be deemed to have become  part of the  Software  and
therefore remains the sole property of Statmon.

16.3 With  regard  to  all  other  inventions,  improvements,   discoveries  and
creations,  and all intellectual property rights therein, which are conceived or
first  reduced to practice  jointly by Harris and Statmon,  the parties agree to
negotiate  in good  faith  their  respect  rights,  taking  into  account  their
respective inventive contributions and markets of interest.

                              ARTICLE 17 - LICENSE

17.1 Upon delivery of Licensed  Materials  pursuant to this  Agreement,  Statmon
grants to Harris a perpetual,  personal,  nontransferable,  (except as specified
herein),  and nonexclusive license to Use the Licensed Materials on an exclusive
use  Designated   Processor  for  its  own  business  operations  and  to  grant
sublicenses  as provided  below  commencing  in Section  17.3.  Harris shall not
reverse engineer,  decompile or disassemble Software furnished as object code to
generate  corresponding  Source  Code.  Unless  otherwise  agreed in  writing by
Statmon,  Harris  shall not modify  Software  furnished  by  Statmon  under this
Agreement  except as  provided in  Statmon's  documentation.  If the  Designated
Processor becomes  temporarily  inoperative,  Harris shall have the right to use
the Licensed  Materials  temporarily on a backup processor until operable status
is restored and processing on the backup processor is completed, Harris may make
up to two (2)  archival  copies of the  Software  for use as backup  for  failed
Software,

17.2 All  Licensed  Materials  (whether or not part of  firmware)  furnished  by
Statmon,  and  all  copies  thereof  made  by  Harris,  including  translations,
compilations and partial copies, are and shall remain the property of Statmon.

17.3 Notwithstanding  the provisions of this article,  in  consideration  of the
fees to be paid hereunder,  Harris may sub-license the Use of Licensed Materials
with finished Products on behalf of Statmon to End Users, but only in connection
with the sale or lease to such End User of the finished  products  incorporating
Products  purchased under this Agreement for which such Licensed  Materials were
furnished  in  connection  with  such  Products.   Such  sub-license   shall  be
administered  electronically  by Statmon for  electronic  acceptance by each End
User the first time the Licensed  Materials are used and shall  incorporate  the
terms and  conditions  set  forth in  Appendix  F,  Statmon's  End User  License
Agreement.  Upon request by Harris, Statmon agrees to provide Harris with copies
of all such  sub-licenses  for the sole purpose of verifying  acceptance  of the
required terms and conditions.  The terms of such sub-licenses shall survive any
termination of rights under this Agreement,  including termination under Section
17.4.

17.4 Statmon may cancel any license  granted  under this article if Harris fails
to  materially  comply  with the terms and  conditions  of such  License or this
Agreement and this Agreement is terminated.  Statmon may cancel any  sub-license
to an End User of Harris who fails to  materially  comply with the terms of such
sublicenee.  If a license or sub-license is canceled,  or if Licensed  Materials
are no longer needed,  the corresponding  copies of Licensed  Materials shall be
returned  to  Statmon,  or Statmon  shall be  assured,  in  a format  reasonably
required by Statmon,  that all copies of Licensed  Materials have been destroyed
and software has been erased from all media;  provided however,  that Harris may
retain  copies of the  Licensed  Materials  reasonably  required  to fulfill its
warranty and maintenance  obligations to its  non-breaching  sublicensees.  This
paragraph shall not affect (1) the proper sub-license of Licensed Materials made
before Harris' license is canceled,  or (2) Harris' license  hereunder if an End
User fails to comply with a sublicense,  provided,  in either  event,  that such
sub-licenses fully comply and comport with this article.

                                       10
<PAGE>

                            ARTICLE 18 - WARRANTIES

18.1 PRODUCT WARRANTIES:  To the extent and subject to the terns of the warranty
given by the original  manufacturer  of the remote  terminal  units,  Videoquip,
Statmon  warrants to Harris that the Hardware  components  of any Products  will
conform  to all  applicable  Specifications,  and  will  be  free  from  defects
(including  latent  defects)  in design  (except to the extent that a Product is
manufactured  according  to  Harris's  design  specifications),   material,  and
workmanship  for a period of (a) twelve (12) months from the date of delivery by
Harris of a Product to an End User.

18.2 SOFTWARE  WARRANTIES;  Statmon warrants to Harris that the Software will be
free from defects which materially affect the performance of the Software or the
related  Products and will operate in accordance with the  Specifications  for a
period of twelve  (12) months from the date of delivery by Harris of Software to
an End User.  In addition the media in which the  Software is provided  shall be
free from  defects in  materials  and  workmanship  for a period of twelve  (12)
months from the date of delivery by Harris of the media to an End User.

18.3 OTHER WARRANTIES: Statmon warrants to Harris only that any and all services
to be performed by Statmon hereunder  including,  without limitation,  technical
support and  training,  will be performed  by Statmon in a good and  workmanlike
manner.  If any Products or Software  furnished  by Statmon  contain one or more
third party manufacturer's warranties, Statmon hereby assigns such warranties to
Harris,  to the extent such  warranties are  assignable.  Except as disclosed in
Article 9.1(c) and the Security Interest Subordination and Subrogation Agreement
entered into by Statmon,  Harris and the Holders concurrently herewith,  Statmon
warrants that at the time of delivery to Harris, all Products and Software shall
be free of any  security  interest  or any other  lien or any other  encumbrance
whatsoever.   Furthermore,  Statmon  warrants  that  it  is  the  owner  of  all
intellectual  property  rights relating to the Products and Software and that it
has the rights to grant the licenses contained herein.

18.4 REPAIR/REPLACE:  Statmon shall repair or replace defective or nonconforming
Products or Software under  warranty or, at its option,  replace the Products or
Software  under  warranty with Products and Software that are conforming and not
defective.  If  Statmon  is  unable  to so repair or  replace  the  Products  or
Software, Statmon will notify Harris. Hams shall have the option to have Statmon
provide a credit or, as  otherwise  requested  by Harris,  a refund equal to the
price of the Product  and, if installed  by Statmon,  the original  installation
charges which were charged to Harris.

18.5 RETURN OF PRODUCTS AND SOFTWARE: Defective or  non-conforming  Products and
Software under  warranty will be returned to Statmon for repair or  replacement,
at  Statmon's  cost,  with risk of loss and damage in transit  borne by Statmon.
Unless  otherwise  agreed  upon by Statmon and Harris,  Statmon  shall  complete
repairs and ship the repaired Products and/or Software,  or replacement Products
and/or  Software  within  fifteen  (15)  days  after  Statmon's  receipt  of the
defective or non-conforming Products and/or Software.  Notwithstanding the above
provision of this Section  18.5,  if a Product or Software is  determined  to be
defective  within  thirty (30) days use by an  End-User of Product or  Software,
Statmon  agrees to replace or repair the  defective  Product or Software  within
five (5) business days. In addition, if a Harris field engineer is on site for a
field  installation  or repair under warranty,  if requested by Harris,  Statmon
agrees to use its best efforts to expedite a replacement  on the same day to the
End-User  site.  Statmon shall bear the risk of loss and damage  in-transit  and
shall prepay and bear the cost of freight for shipments to the owner of repaired
or replaced Products and Software.

If Products or Software  returned to Statmon for any repair or  replacement  are
not defective or  nonconforming,  and,  Statmon did not require or recommend the
return,  Harris  shall pay  Statmon  for any  handling,  inspection,  repairs or
transportation provided by Statmon at Statmon's then prevailing rates.

                                       11
<PAGE>

During the warranty period,  all replacements of defective Products shall be new
Products and not refurbished Products,

18.6 WARRANTY ON REPAIRED OR REPLACEMENT  PRODUCTS AND SOFTWARE:  Any Product or
Software  under  warranty  which is repaired  or  replaced  by Statmon  shall be
warranted as provided in this  Article  for:  (a) the  remainder of the original
warranty  period;  or (b)  ninety  (90) days  after the  applicable  Product  or
Software  is  returned to Harris,  whichever  is later  (based upon the date the
repair or replacement is completed and accepted by Harris).

18.7 REPAIR INFORMATION: Products or Software repaired by Statmon shall have the
repair  completion date stenciled or otherwise  identified in a permanent manner
at a readily visible location on the Products and the repaired Products shall be
returned with a tag or other papers describing the repairs which have been made.

         ARTICLE 19 - REPAIRS OR REPLACEMENT NOT COVERED UNDER WARRANTY

19.1 REPAIRS:  In addition to "in warranty"  repairs,  Statmon agrees to provide
repair or replacement  service for all Products and Software  ordered during the
Term for a period of two (2) years after such  Products  or  Software  have been
discontinued by Statmon,  pursuant to notice by Statmon of such  discontinuance.
Statmon agrees to provide such warranty  repairs or replacement  (other than "in
warranty"  repairs or  replacement)  at the repair or  replacement  charges then
generally  charged  by Statmon  for such  repairs  or  replacements  or, if such
repairs or  replacements  are not then being  performed by Statmon at reasonable
rates.

19.2 REPAIR OR REPLACEMENT: Defective Products or Software, out-of-warranty, may
be  returned to Statmon  for repair or  replacement.  If any Product or Software
returned  to Statmon  for repair is  reasonably  determined  to be  irreparable,
Statmon shall  promptly  notify Harris.  Statmon shall then, at Harris'  option,
sell to Harris a replacement  Product or Software,  if available,  at the prices
set forth pursuant to this  Agreement or, if this Agreement is then  terminated,
at the then current price for such Product.  During the Term of this  Agreement,
Statmon shall continue to provide  replacement  Products  and/or  Software for a
period of two (2) years after such Products or Software has been discontinued by
Statmon.

19.3 COMPLETION  OF REPAIRS  SHIPMENT OF  REPLACEMENT:  Statmon  shall  complete
repairs and ship the repaired or replaced  Product or Software or, as authorized
by Harris in an  equipment  repair or  replacement  order  replacement  Product,
within thirty (30) days of Statmon's receipt of the defective  Product.  Statmon
shall bear the risk of loss or damage  during  transit of the  Product and shall
prepay and bear the cost of  transportation  charges for  shipment to Statmon of
the Product or Software to be repaired or replaced.  For return  shipments  from
Statmon to Harris,  Statmon shall bear the risk of loss or damage during transit
and  Statmon  shall  prepay  and  bear the cost of  transportation  charges  for
shipment of the Product or Software that has been repaired or replaced.

19.4 WARRANTY:  Any  Product or Software  repaired or replaced  pursuant to this
Article  (i.e.,  out of  warranty),  shall be  warranted  for a ninety  (90) day
warranty period.

19.5 NO EXCLUSIVE PRIVILEGE: This Agreement does not grant Statmon any exclusive
privilege  to repair any or all  Products or Software  delivered to Harris under
this  Agreement  and Statmon  acknowledges  that Hams may perform any repairs or
contract with others for repairs.

19.6 REPAIR  INFORMATION:  Products and Software  repaired by Statmon shall have
the repair  competition  date  stenciled or otherwise  identified in a permanent
manner at a readily visible  location on the Products and the repaired  Products
or Software shall be returned with a tag or other papers  describing the repairs
which have been made.

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<PAGE>

                          ARTICLE 20 - INDEMNIFICATION

20.1 Statmon will  indemnify and save  harmless  Harris from any loss or damages
(including reasonable attorneys' fees and legal costs) awarded against Harris by
final judgment (or by settlement approved by Statmon) because of claims,  suits,
or demands of third parties for personal injury or tangible  property damage (as
limited  below) to the extent  such loss or damage is caused by or results  from
the negligent  acts or omissions of Statmon or its employees or agents  provided
1) Hams  promptly  notifies  Statmon in writing of any suits,  claims or demands
against Harris for which Statmon is responsible  under this  indemnity,  2) Hams
gives Statmon full  opportunity  and authority to assume the sole defense of and
settle  such  suits  and 3) Harris  furnishes  to  Statmon,  upon  request,  all
information  and reasonable  assistance  available to Harris for defense against
any such  suit,  claim or demand.  Statmon's  liability  under  this  indemnity,
however,  shall  in no  event  exceed  $250,000  for  any one  occurrence.  This
indemnity is in lieu of all other obligations of Statmon, express or implied, in
law or in equity,  to indemnify  Harris (except pursuant to the Article entitled
"INFRINGEMENT").

20.2 Harris will  indemnify and save  harmless  Statmon from any loss or damages
(including reasonable attorneys' fees) awarded against Statmon by final judgment
(or by settlement  approved by Harris)  because of claims,  suits, or demands of
third parties for personal injury or tangible property damage (as limited below)
to the  extent  such loss or damage is caused by or results  from the  negligent
acts or  omissions  of Harris or its  employees  or agents  provided  1) Statmon
promptly  notifies  Harris in writing of any  suits,  claims or demands  against
Statmon for which Harris is responsible  under this indemnity,  2) Statmon gives
Harris full  opportunity  and authority to assume the sole defense of and settle
such suits and 3) Statmon  furnishes to Harris upon request all  information and
reasonable  assistance  available to Statmon for defense  against any such suit,
claim or demand.  Harris' liability under this indemnity,  however,  shall in no
event exceed $250,000 for any one  occurrence.  This indemnity is in lieu of all
other  obligations  of Harris,  express  or  implied,  in law or in  equity,  to
indemnify Statmon (except pursuant to the Article entitled "INFRINGEMENT").

                           ARTICLE 21 - INFRINGEMENT

21.1 In the event of any  claim,  action,  proceeding  or suit by a third  party
against  Harris  or any  End  User  alleging  an  infringement  of  any  patent,
copyright,  or  trademark,  or a violation  of any trade  secret or  proprietary
rights by reason of Harris'  sale or  End-User's  use,  in  accordance  with the
Specifications,  of any Product,  Licensed  Material or other item  furnished by
Statmon to Harris under this Agreement, Statmon, at its expense, will defend and
hold harmless  Harris and/or any  End-User,  as the case may be,  subject to the
conditions and exceptions  stated below.  Statmon will reimburse  Harris and any
End-User for any cost,  expense and attorney's fees,  reasonably  incurred,  and
will  indemnify  Harris  against any liability  assessed  against  Harris and/or
End-User by final judgment (or by settlement  approved by Statmon) on account of
such infringement or violation arising out of such use.

21.2 If Harris' or an End-User's  use shall be enjoined or in Statmon's  opinion
is likely to be enjoined, Statmon will, at its expense and at its option, either
(a) replace the affected  Product,  Licensed  Material,  or other item furnished
pursuant to this  Agreement with a suitable  substitute of equivalent  form, fit
and function free of any  infringement  or  violation,  (b) modify it so that it
will be free of the  infringement  or violation and of equivalent  form, fit and
function,  or (c) procure for Harris a license or other right to use it. If none
of the foregoing options is not achieved after commercially  reasonable efforts,
Statmon will remove the enjoined Product,  Licensed Material,  or other item and
refund to Harris any amounts paid to Statmon.

                                       13
<PAGE>

21.3 Harris or End-User (as the case may be) shall give Statmon  prompt  written
notice of all such claims,  actions,  proceedings or suits alleging infringement
or  violation  and  Statmon  shall have full and  complete  authority  and shall
assume, at Statmon's expense,  the sole defense thereof,  including appeals, and
to  settle  same.  Harris or  End-User  shall,  upon  Statmon's  request  and at
Statmon's expense,  furnish all information and reasonable  assistance available
to Harris or End-User and cooperate in every  reasonable  way to facilitate  the
defense and/or settlement of any such claim, action, proceeding or suit.

21.4 No undertaking of Statmon under this Article 21 - Infringement shall extend
to any such alleged  infringement or violation to the extent that it: (a) arises
from adherence to design  modifications,  specifications,  drawings,  or written
instructions  which  Statmon is directed  by Harris to follow,  but only if such
alleged  infringement or violation does not reside in  corresponding  commercial
Product or Licensed  Material of Statmon's  design or  selection;  or (b) arises
from adherence to instructions to apply Harris's trademark, trade name, or other
company  identification;  or (c) resides in a Product or Licensed Material which
is not of  Statmon's  origin and which is furnished by Harris to Statmon for use
under this Agreement; or (d) arises from use of Products,  Licensed Materials or
other items provided by Statmon in combinations  with other  Products,  Licensed
Materials  or  other  items,  furnished  either  by  Statmon  or  others,  which
combination was not installed,  recommended,  intended or otherwise  approved by
Statmon. In the foregoing cases numbered (a) through (d), Harris will defend and
save Statmon  harmless,  subject to the same terms and conditions and exceptions
stated above with respect to Statmon's rights and obligations under this clause.

21.5 THE  LIABILITY  OF STATMON AND HARRIS  WITH  RESPECT TO ANY AND ALL CLAIMS,
ACTIONS,  PROCEEDINGS,  OR SUITS  BY  THIRD  PARTIES  ALLEGING  INFRINGEMENT  OF
PATENTS,  TRADEMARKS, OR COPYRIGHTS OR VIOLATION OF TRADE SECRETS OR PROPRIETARY
RIGHTS BECAUSE OF, OR IN CONNECTION  WITH, ANY ITEMS FURNISHED  PURSUANT TO THIS
AGREEMENT  SHALL BE  LIMITED  TO THE  SPECIFIC  UNDERTAKINGS  CONTAINED  IN THIS
ARTICLE.

                   ARTICLE 22 - TRADEMARKS AND OTHER INDICIA

22.1 The exterior of all Exclusive Products to be provided by Statmon under this
Agreement, together with the related documentation, manuals and software screens
shall be  privately  labeled,  with the trade name and/or trade dress of Statmon
and Harris,  respectively,  in  accordance  with Appendix B. Harris will provide
Statmon with written instructions and Harris will bear all costs associated with
applying Harris' trademarks and logo to Exclusive  Products.  With the exception
of the  labeling  activity  described  herein and as set forth in Section  22.3,
Statmon  shall  have no right or  license  to use any  Harris  trademark,  logo,
derivatives or variants thereof.

22.2 Unless Harris specifically requests labeling in accordance with Appendix B,
the exterior of all Non-exclusive  Products to be provided by Statmon under this
Agreement  shall be  provided  with  Statmon's  trade name  and/or  trade  dress
("Statmon  Marks")  pursuant to the provisions of this Article  whereby  Statmon
expressly  authorizes  Harris to use Statmon Marks (as  hereinafter  defined) in
connection  with the  marketing,  sale,  or  license  by Harris of  Products  or
Licensed  Materials in accordance with the terms of this Agreement.  All uses of
Statmon Marks by Harris shall be subject to  prepublication or preuse review and
approval by Statmon  which will not be  unreasonably  withheld  or  delayed.  If
Statmon grants Harris  permission to use its Statmon Marks in Harris'  marketing
and advertising of, and in Harris'  publicity  relating to Products and Licensed
Materials,  such use shall conform to Statmon's written standards and guidelines
relating  thereto,  which may be revised by Statmon from time to time.  Such use
shall  inure to the benefit of Statmon and shall not invest in Harris any rights
in or to the Statmon Marks.  If at any time, in Statmon's  judgment,  any use of
Statmon Marks by Harris is deemed  detrimental to the Statmon Marks or Statmon's
reputation,  or is deemed otherwise  undesirable,  Statmon may, upon thirty (30)
days prior written notice to Harris,  withdraw such permission without liability
as a result thereof  unless within such notice period Statmon  determines in its
sole  discretion  that  Harris  has  modified  the use of the  Statmon  Marks to

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<PAGE>

Statmon's  satisfaction.  Harris  shall not  conduct  business  under any of the
Statmon  Marks or  derivatives  or  variations  thereof,  and  Harris  shall not
directly or indirectly  hold itself out as having any relation to Statmon or its
affiliates other than as approved by Statmon as set forth herein.

22.3 Harris  expressly  authorizes  Statmon to use Harris Marks (as  hereinafter
defined) in connection with website marketing and other  advertising  literature
and marketing pieces in accordance with the terms of this Agreement. All uses of
Harris Marks by Statmon shall be subject to prepublication or pre-use review and
approval by Harris which will not be unreasonably withheld or delayed. If Harris
grants  Statmon  permission  to use  Harris  Marks in  Statmon's  marketing  and
advertising  of, and in  Statmon's  publicity  relating to Products and Licensed
Materials,  such use shall conform to Harris'  written  standards and guidelines
relating  thereto,  which may be revised by Harris  from time to time.  Such use
shall  insure to the sole  benefit of Harris and shall not invest in Statmon any
rights in or to the Harris Marks. If at any time, in Harris'  judgment,  any use
of Harris Marks by Statmon is deemed  detrimental to the Harris Marks or Harris'
reputation, or is deemed otherwise undesirable, Harris may upon thirty (30) days
prior written notice to Statmon, withdraw such permission without liability as a
result  thereof  unless within such notice period Harris  determines in its sole
discretion  that  Statmon has  modified  the use of the Harris  Marks to Harris'
satisfaction.  Statmon shall not conduct  business under any of the Harris Marks
or  derivatives  or  variations  thereof,  and  Statmon  shall not  directly  or
indirectly  hold itself out as having any  relation to Harris or its  affiliates
other than as approved by Harris as set forth herein.

                        ARTICLE 23 - USE OF INFORMATION

23.1 All other technical and business information in whatever form which bears a
legend or notice  restricting its use,  copying or  dissemination  or, if not in
tangible form, is described as being  proprietary or confidential at the time of
disclosure and is subsequently  summarized in writing so marked and delivered to
the receiving party within thirty (30) days of disclosure to the receiving party
(all  hereinafter  designated  "Information")  shall  remain the property of the
furnishing party. All Software shall be deemed to be confidential or proprietary
regardless of how labeled and use thereof shall be in accordance with Article 17
.. The  furnishing  party  grants  the  receiving  party  the  right  to use such
Information  only as follows:  Such  Information  (a) shall not be reproduced or
copied, in whole or part, except as authorized in this Agreement; and (b) shall,
together with any full or partial copies thereof,  be returned or destroyed when
no longer  needed.  Statmon  shall use such  Information  from Harris solely for
performance under this Agreement. Harris shall use such Information from Statmon
only (a) to order, (b) to evaluate Statmon's Products,  Licensed  Materials,  or
other items, or (c) to install,  operate,  and maintain the particular Products,
Licensed Materials, or other items for which it was originally furnished. Unless
the furnishing  party  consents in writing,  such  Information  shall be held in
confidence by the receiving  party,  except for that part, if any,  which a) was
known to the receiving  party at the time it was  submitted,  b) is, or becomes,
publicly known through no wrongful act of the receiving party, c) is received by
the receiving party from a third party without similar  restrictions and without
breach of this  Agreement  or other  applicable  agreements,  d) is approved for
release by written  authorization  of the disclosing  party, e) is independently
developed by the receiving  party without the use of the  Information  disclosed
hereunder,  f) is furnished by the  disclosing  party to a third party without a
similar  restriction  on the third  party's  rights  of g) except to the  extent
disclosure may be required by applicable  laws or  regulations,  in which latter
case, the party required to make such disclosure shall promptly inform the other
prior to such  disclosure in sufficient  time to enable such other party to make
known any objections it may have to such disclosure (the disclosing  party shall
take all reasonable  steps to secure a protective order or otherwise assure that
such Information  will be withheld from the public record).  The receiving party
may disclose such Information o other persons, upon the furnishing party's prior
written  authorization,  but solely to enable such third  party to perform  acts
which this clause expressly authorizes the receiving party to perform itself and
further  provided  such other person  agrees in writing (a copy of which writing
will be provided to the furnishing  party at its request) to the same conditions
respecting  use of  Information  contained  in  this  clause  and  to any  other
reasonable  conditions  requested by the furnishing  party.  The obligations and
restrictions  placed upon the  receiving  party under this section  shall expire
five (5) years after the Effective Date.

                                       15
<PAGE>

23.2 Each  Party  agrees to  execute  and be bound by the  terms and  conditions
contained  in the  Confidentiality  Agreement  attached  hereto  as  Exhibit  G.
Furthermore,  each Party agrees: (a) to obtain,  from any individual not subject
to confidentially obligations at least as restrictive as in Section 23.1 who are
in need to know of, and receive,  any part of the  Information,  a commitment of
confidentiality  and restrictive use in the form attached hereto as Appendix G -
Confidentiality Agreement; (b) to enforce by all means such commitments,  and to
assist actively  furnishing  party in the protection of the Information  against
any wrongful act or  negligence  by third  parties and (c) to abide by the terms
and conditions of the  Confidentiality  Agreement  attached  hereto as Exhibit G
which is incorporated by reference hereunto and made a part of this Agreement.

                            ARTICLE 24 - TERMINATION

24.1 TERMINATION UPON CERTAIN EVENTS: Either party may terminate this Agreement,
effective  immediately,  without  liability for such  termination,  upon written
notice to the other party, if any of the following events occur:

     (a)  The other party files a voluntary petition in bankruptcy

     (b)  The other party is adjudged bankrupt;

     (c)  A court assumes  jurisdiction of the assets of the other party under a
          federal reorganization act;

     (d)  A trustee or receiver is appointed by a court for all or a substantial
          portion of the assets of the other party;

     (e)  The other party becomes insolvent or suspends its business; or

     (f)  The other party makes an  assignment  of its assets for the benefit of
          its creditors except as required in the ordinary course of business

24.2 TERMINATION UPON MATERIAL BREACH: Either party may terminate this Agreement
upon  written  notice  to the  other  party  if the  non-terminating  party  has
committed a material  breach of its  obligations  under this  Agreement  and has
failed to cure such  breach  within  thirty  (30) days from  receipt  of written
notice of such breach.  Such  termination  shall be  effective  thirty (30) days
after written notice by the terminating party unless the  non-terminating  party
has cured such breach.

24.3 TERMINATION  BY  HARRIS:  After  June 30,  2003 or after  the time the firm
commitment  for the  118  units,  as  described  in  Appendix  D,  is  exhausted
(whichever is earlier),  Harris may terminate this Agreement  without cause upon
written 90 days notice to Statmon.

24.4 EFFECT  OF  TERMINATION:   Upon  the  termination  or  expiration  of  this
Agreement,  Statmon  shall  continue to fill any Orders placed by Harris and all
outstanding Harris  quotation(s) to End User(s) for a period of ninety (90) days
from the date of termination or expiration.

                        ARTICLE 25 - AGREEMENT EXTENSION

After the initial Term of this Agreement and other subsequent  expirations;  and
if this Agreement has not been terminated pursuant to Article 24, this Agreement
will  automatically  renew  for two (2)  year  extensions  unless  either  party
provides  written  notice of its intention not to renew this  Agreement at least
six (6) months prior to the end of the then effective Term.

                                       16
<PAGE>

                      ARTICLE 26 - LIMITATION OF LIABILITY

26.1 NOTWITHSTANDING  ANY OTHER  PROVISION OF THIS AGREEMENT  STATMON AND HARRIS
AND THEIR  AFFILIATES AND THEIR EMPLOYEES AND AGENTS SHALL NOT BE LIABLE FOR ANY
INCIDENTAL,  INDIRECT,  SPECIAL,  RELIANCE,  OR  CONSEQUENTIAL  DAMAGE  OR  LOST
PROFITS,  REVENUES  OR  SAVINGS  ARISING  OUT OF THIS  AGREEMENT,  OR THE USE OR
PERFORMANCE  OF ANY  PRODUCT,  LICENSED  MATERIALS,  OTHER  ITEMS,  OR SERVICES,
WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT,  TORT,  INCLUDING
NEGLIGENCE AND NEGLIGENCE  INDEMNITY,  OR STRICT  LIABILITY.  THIS SECTION SHALL
SURVIVE  FAILURE OF AN  EXCLUSIVE  OR LIMITED  REMEDY.  IN NO EVENT WILL  EITHER
PARTY'S  LIABILITY TO EACH OTHER FOR DIRECT  DAMAGES  EXCEED THE AGGREGATE  SALE
PRICE OF THE PRODUCTS DELIVERED HEREUNDER.

                            ARTICLE 27 - ASSIGNMENT

     Except as  provided  in this  Article,  neither  party  shall  assign  this
Agreement or any right or interest under this  Agreement,  nor delegate any work
or obligation to be performed under this Agreement,  (an  "Assignment")  without
the other party's prior written consent.  Notwithstanding the foregoing, nothing
herein shall preclude an Assignment by either party to an Affiliate  without the
consent of the other  party  provided in each case,  however,  that a) the party
seeking an Assignment is not in material breach or default of this Agreement and
b) any  Assignment  shall not include an Assignment by either party to any party
or entity who 1) in the  reasonable  opinion  of the  non-assigning  party,  has
insufficient credit limits, 2) is a manufacturer of telecommunications  products
or  services  in  competition  with  Harris,  or 3) is a party to a contract  or
agreement with Harris whereby Hams has agreed to supply the Products or Licensed
Materials available for procurement by Hams under this Agreement.  Assignment of
this Agreement  shall not relieve the assigning  party of any of its obligations
hereunder unless otherwise agreed to in writing by the nonassigning party.

                           ARTICLE 28 - FORCE MAJEURE

     Neither  party  shall  be held  responsible  for any  delay or  failure  in
performance of any part of this Agreement to the extent such delay or failure is
caused by fire, flood, earthquake,  explosion, war, terrorism,  strike, embargo,
governmental  action  or  failure  to act,  the  act of any  civil  or  military
authority,  act of God, or by any other causes beyond its control whether or not
similar to the foregoing.

                             ARTICLE 29 - NONWAIVER

     No course of dealing or failure of either  party to  strictly  enforce  any
term,  right or condition of this Agreement shall be construed as a modification
or waiver of such term, right or condition. No waiver of breach of any provision
of this Agreement shall be construed to be a waiver of any subsequent  breach of
the same or other provision.

                           ARTICLE 30 -RELEASES VOID

     Neither party shall require waivers or releases of any personal rights from
representatives  of the other party in  connection  with visits to its premises,
and both parties agree that no such releases or waivers shall be pleaded by them
or by third persons in any action or proceeding.

                           ARTICLE 31 - SEVERABILITY

     If  any   provision  or  part  hereof  shall  be  held  to  be  invalid  or
unenforceable for any reason,  then the meaning of such provision or part hereof
shall be construed so as to render it enforceable to the extent feasible.  If no
feasible  interpretation  would save such provision or part hereof,  it shall be
severed,  herefrom,  but  without in any way  affecting  the  remainder  of such
provision or any other provision  contained herein,  all of which shall continue
in full force and effect unless such severance effects such a material change as
to render the Agreement unreasonable.

                                       17
<PAGE>

                           ARTICLE 32 - CHOICE OF LAW

     The construction and  interpretation  of, and the rights and obligations of
the  parties  pursuant to this  Agreement,  shall be governed by the laws of the
State of California,  without regard to its conflict of laws provisions.

                             ARTICLE 33 - NO AGENCY

     Neither  Harris nor Statmon shall be considered  the agent of the other for
any purpose or authorized to bind the other in anyway. The relationship  between
Harris and Statmon is that of Buyer and Seller.  Neither  party is authorized to
incur any expenses,  chargeable  to the other or represent  itself as having any
relationship  with the  other  party  except as  specifically  set forth in this
Agreement.

                             ARTICLE 34 - HEADINGS

     The article and paragraph  headings  contained  herein are for  convenience
only and are not  intended  to affect  the  meaning  or  interpretation  of this
Agreement.

                              ARTICLE 35 - NOTICES

     Any notice,  demand or other communication  (other than an Order) required,
or which may be given, under this Agreement shall, unless specifically otherwise
provided in this  Agreement,  be in writing  and shall be given or made  through
nationally  recognized  overnight  courier  service,   confirmed  facsimile,  or
certified  mail,  return  receipt  requested  and  shall  be  addressed  to  the
respective parties as follows:

a) To Harris:

     Harris Corporation, Broadcast Division
     4393 Digital Way
     Mason, Ohio 45040
     Attn: Mr. John Delay
     Director DTV Products

b) To Statmon:

     Statmon Technologies Corp.
     345 N. Maple Drive, Suite 120
     Beverly Hills, CA 90210
     Attention: Geoffrey P. Talbot, President

     Either  party may change its address for  receiving  notices  upon  written
notice to the other party.  Written electronic notices transmitted to an address
designated for such purpose by the intended  receiving  party shall be effective
when  received  and may be  deemed  received  not later  than the day  following
transmittal.

                ARTICLE 36 - SURVIVAL OF RIGHTS AND OBLIGATIONS

     The rights and obligations of both parties hereunder, which by their nature
would continue beyond the termination,  cancellation or expiration hereof, shall
survive  such  termination,   cancellation  or  expiration  including  Statmon's
obligations under Article 9, 11, 17, 19, 38, 41 and 42.

                                       18
<PAGE>

                             ARTICLE 37 - PUBLICITY

     Neither  party  shall  make or  cause to be made  any  public  announcement
regarding  the  relationship  of the parties  hereunder or the existence of this
Agreement  or any of its terms  without the prior  written  consent of the other
party,  such  consent  not to be  unreasonably  withheld.  Except  as  otherwise
provided in this  Agreement,  each party shall submit to the other proposed copy
of all advertising wherein the name, trademark,  code,  specification or service
mark of the other party or its Subsidiaries or Affiliates is mentioned.  Neither
party shall  publish or use such  advertising  without the other's prior written
approval.

                   ARTICLE 38- ESCROW, RELEASES and LICENSES

38.1 Information,  documentation  and materials  relating to the Software and to
the  manufacturing and test procedures used by Statmon for the Products shall be
deposited in escrow  ("Deposit  Materials")  by Statmon at no cost to Harris and
maintained  current  in  accordance  with  the  terms of the  Escrow  Agreement,
Appendix  D. The  Deposit  Materials  shall  include,  but not be limited to the
Licensed Materials, a master copy of the Software on CD in compiled form, Source
Code, program listings, tools, data files, manuals and flow charts sufficient to
compile and to maintain and enhance the  Software,  together  with any revisions
and modifications for fixes;  documentation  reasonably sufficient for Harris to
manufacture,  test and maintain  the  Products,  including,  but not limited to,
specifications,  manufacturing  procedures,  parts  lists,  vendor  lists,  test
procedures,  quality control processes and maintenance  information  relating to
the Products.

38.2 For the purposes of "Release  Conditions"  under  Article 4.1 of the Escrow
Agreement,  any of the following shall be deemed to be a "Depositor's failure to
carry out obligations imposed pursuant to the Purchase and Sale Agreement":

     (a)  If Statmon fails to meet delivery  schedules for the Software  portion
          of any Exclusive Product, as evidenced by delivery delays of more than
          thirty  (30)  days,  the  master  copy  of the  Software  or CD in its
          compiled  form shall be released  from  escrow to Harris,  and Statmon
          shall  provide  access  to an  internet  ftp site  allowing  Harris to
          download copies of the Software as needed, and the licenses granted in
          Art, 17 shall apply to such  Software and copies for use with existing
          and  prospective  Broadcast  Customers.  If and when Statmon cures the
          delivery  delays,  Harris shall be  obligated to redeposit  the master
          copy of the  Software,  unless  Harris has  terminated  the  Agreement
          pursuant to Section 24.2 hereof.

     (b)  If Statmon fails to meet delivery  schedules for the Hardware  portion
          of any Exclusive Product, as evidenced by delivery delays of more than
          thirty (30) days from date of a firm order from  Harris,  and provided
          such delay is not caused by a shortage of parts  beyond the control of
          Statmon or the  manufacturer,  the related  manufacturing  and testing
          documentation  held in escrow by Statmon shall be released from escrow
          to  Harris  and  Harris  shall  have the  right to  contract  directly
          (without   interference  from  Statmon)  with  the  manufacturers  and
          suppliers of the Hardware portions of the Product. In the event of the
          demise of Statmon's  manufacturer and Statmon's inability to provide a
          replacement  source  acceptable  to Harris,  Statmon  hereby grants to
          Harris the non-exclusive,  worldwide, irrevocable,  perpetual, royalty
          free license to use such  documentation and practice under any related
          intellectual  property rights of Statmon to make, have made, use, sell
          and lease such  Exclusive  Products,  effective  upon  release of such
          documentation from escrow.

                                       19
<PAGE>

     (c)  If Statmon:  i) discontinues making any Exclusive Product available to
          Harris,  as evidenced by written  notice by Statmon of its intent,  or
          delays delivery of any Exclusive  Product for any reason for more than
          90 days;  or ii) fails to support,  repair or replace any  Software as
          required under the terms of this Agreement  after being given afforded
          a  reasonable  opportunity  to do so,  which such time period being no
          less than ninety (90) days; or (iii) ceases to exist as a legal entity
          in its  current  form  excluding  any name  change or merger  then all
          Deposit  Materials  relative  to the  Exclusive  Product(s)  shall  be
          released from escrow to Harris,  and Statmon hereby grants to Harris a
          non-exclusive, worldwide, irrevocable, perpetual, royalty free license
          to  use  the  Deposit   Materials  and  practice   under  the  related
          intellectual  property  rights of  Statmon to make,  have  made,  use,
          improve and enhance the related  Exclusive  Products  for the existing
          Broadcast Customers. In addition,  Harris shall have: a) the option to
          purchase the Statmon's  intellectual  property  rights in the Software
          (including  Source  Code) at a  price  equal  to  the  amount  of  the
          forecasted sales remaining for the Term of the Agreement, or b) in the
          event Statmon receives a bonafide offer form a third party to purchase
          Statmon's  intellectual property rights in the Software,  Harris shall
          have a right of first refusal to purchase such at the price offered by
          the third party,

                         ARTICLE 39 - ENTIRE AGREEMENT

39.1 This  Agreement,   which  includes  any  exhibits  or  attachments  hereto,
represents the entire  Agreement and  understanding  between the parties and all
prior discussions and arrangements between the parties, whether oral or written,
are  merged  into  this  Agreement  and  there  are  no  other  representations,
understandings,  arrangements  or  agreements  between  the  parties,  except as
expressly  set forth  herein.  Neither  party shall be bound by any  conditions,
definitions, warranties,  understandings, or representations with respect to the
subject matter hereof other than as expressly provided in this Agreement.

39.2 This  Agreement  may be modified  only by written  amendment  and signed by
authorized  representatives  of the  parties.  No course of  dealing or usage of
trade shall be invoked to modify the terms or conditions of the Agreement.

                        ARTICLE 40 - DISPUTE RESOLUTION

     If a dispute  arises out of, or relates to, this  Agreement  or the subject
matter of this  Agreement  other  than  with  respect  to a claim for  equitable
relief,  either party may submit the dispute to a sole mediator  selected by the
parties or, at any time prior to selection of a sole  mediator,  to mediation by
the American Arbitration  Association ("AAA"). If not thus resolved, it shall be
referred to a sole arbitrator selected by the parties or to AAA arbitration. The
arbitration shall be governed by the United States  Arbitration Act and judgment
on the award may be entered by any court  having  jurisdiction.  The  arbitrator
shall have the authority to award injunctive and other emergency  relief,  which
shall be  enforceable  by either the  arbitrator or any court with  jurisdiction
over the enjoined party or its assets.  The arbitrator  shall not have authority
to award punitive or  consequential  damages.  The  arbitrator  shall not limit,
expand  or modify  the terms of the  Agreement  nor award  damages  in excess of
compensatory  damages, and each party waives any claim to such excess damages. A
request by a party to a court for  interim  protection  shall not affect  either
party's  obligation  here under to mediate and arbitrate.  Each party shall bear
its own expenses and an equal share of all cost and fees of the mediation and/or
arbitration.  Any  arbitrator  selected  shall be  competent  in the  legal  and
technical  aspects of the  subject  matter of this  Agreement.  The  content and
result  of  mediation  and/or  arbitration  shall be held in  confidence  by all
participants,  each of whom  will be  bound  by an  appropriate  confidentiality
agreement.

                                       20
<PAGE>

                         ARTICLE 41- ASSUMPTION OF RISK

     Each party hereto acknowledges (i) the risks of its undertakings hereunder,
(ii) the  uncertainty of the benefits and obligations  hereunder,  and (iii) its
assumption of such risks and  uncertainty.  Each party has conducted its own due
diligence and requested and reviewed any contracts,  business  plans,  financial
documents  and other  written  material as in such party's  opinion shall be the
basis of the party's decision to enter into this Agreement.

              ARTICLE 42 - RELIANCE ON COUNSEL AND OTHER ADVISORS

     Each party has consulted such legal,  financial,  technical or other expert
it deems necessary or desirable before entering into this Agreement.  Each party
represents and warrants that it has read, knows, understands and agrees with the
terms of  conditions of this  Agreement.  Neither party has relied upon any oral
representation  of  the  other  party  in  entering  into  this  Agreement.  All
discussions,  estimates or projections developed by a party during the course of
negotiating   the  terms  and  conditions  of  this  Agreement  are  by  way  of
illustration only, and, unless  specifically  contained in this Agreement or one
of its Appendixes, are not binding or enforceable against the other party in law
or in equity.

     IN WITNESS WHEREOF, the parties have caused this Agreement for Purchase and
Sale  of  Remote  Monitoring   Products  to  be  executed  by  their  respective
representatives on the date(s) indicated,

                                             STATMON TECHNOLOGIES

                                             By: /s/ Geoffrey P. Talbot
                                               ---------------------------------
                                               Name:  Geoffrey P. Talbot
                                               Title: CEO
                                               Date:  2-25-2003

                                             HARRIS CORPORATION

                                             By: /s/ Haldale S. Wilson
                                               ---------------------------------
                                               Name:  Haldale S. Wilson
                                               Title: Vice President Studio
                                                      Products & Systems
                                               Date:  2-26-2003

                                       21Exhibit 10.8

        THIS  LEASE,  dated  December  3 , 2001,  (which  date is to be used for
reference  purposes  only) is made and entered into by and between  Maple Plaza,
Ltd.,  a  California  limited  partnership,  having an  office  at c/o  Realtech
Development  &  Construction  Company,  2080 Century Park East,  Penthouse,  Los
Angeles,  California  90067,  ("Landlord")  and STATMON  TECHNOLOGIES  CORP.,  a
Delaware corporation______________________("Tenant").

                                    ARTICLE 1
                             SUMMARY OF BASIC TERMS

        1.01  PURPOSE.  This Article  defines  certain terms used in this Lease,
subject, however, to qualifications and exceptions set forth elsewhere herein.

        1.02 LAND.  The term "Land" means that certain real property in the City
of Beverly  Hills,  County of Los  Angeles,  State of  California,  owned by the
Landlord.

        1.03 BUILDING.  The term  "Building"  means that certain office building
complex constructed on the Land and having the name of Maple Plaza (a portion of
which  has  the  street  address  of  345  North  Maple  Drive,  Beverly  Hills,
California),  including all parking  garages,  outside plazas,  atria,  lobbies,
office and commercial  spaces,  landscaping,  water  elements,  fine art and the
Land.

        1.04 PREMISES.  The term  "Premises"  means the space on floor(s) 1st of
the Building,  known as Suite(s) 120 and located  substantially  as shown on the
floor  plan(s)  attached  hereto as Exhibit A,  subject to  relocation  to other
floor(s) pursuant to Article 22 (if applicable).

        1.05 LEASE TERM.  The phrase  "Lease Term" means the term of this Lease,
which shall be (i) a period of 3 years and -0- months commencing as set forth in
Subsection 2.02(a),  plus a stub period of a partial month as necessary in order
for the Lease Term to end on the last day of a month (the "Initial Term"),  plus
(ii) the period(s) of any renewal option(s) which Tenant duly exercises,  unless
the Lease Term is earlier  terminated  pursuant to any of the provisions of this
Lease or law.

        1.06 INITIAL BASIC RENT.  The phrase  "Initial Basic Rent" means the sum
of $77,583.00 per annum, as described more fully in Article 3.

        1.07  TENANT'S  SHARE.  The  phrase  "Tenant's  Share"  shall  mean .837
percent.

        1.08 SECURITY  DEPOSIT.  The phrase "Security  Deposit" means a security
deposit in the amount of $6,465.25,  to be held and used by Landlord as provided
in Article 5.

        1.09  TENANT'S  PARKING.   The  phrase  "Tenant's   Parking"   signifies
nonexclusive  parking for 7 automobiles in the parking garage of the Building as
provided in Section 25.01.

        1.10 TENANT'S BROKER.  The phrase "Tenant's Broker" means First Property
Realty Corportion, whose address and telephone number are:

               Address:    1930 Century Park West, Third Floor
                           Los Angeles, California 90067

               Telephone:  (310) 208-4400

        1.11 PRIOR ADDRESS. The address of Tenant prior to the Commencement Date
(as hereinafter defined) is:

               Address:    114 N. Doheny Drive #201
                           Los Angeles, CA 90048

               Telephone:  (310) 278-8585

<PAGE>

        1.12   TENANT'S IDENTITY. Tenant is

               [X] a corporation incorporated in the State of Delaware

        1.13 PERMITTED USE. The phrase  "Permitted Use" means General Office and
related  business  purposes of the original  Tenant named herein in keeping with
the class and character of the Building as a first class office building.

        1.14  RENTABLE AREA OF THE PREMISES.  The phrase  "Rentable  Area of the
Premises"  means  2,351  square  feet.  Excepting  only those  adjustments  made
pursuant to Subsection 2.01(b).

        1.15 RENT COMMENCEMENT  DATE. The phrase "Rent  Commencement Date" shall
mean: December 10, 2001.

        1.16 LEASE DATE. The phrase "Lease Date" shall mean that date upon which
this Lease is fully executed by both Landlord and Tenant.

                                    ARTICLE 2
                           DEMISE, TERM AND OCCUPANCY

2.01    DEMISE.

        (a) Demise and  Reservation.  Landlord  hereby  leases the  Premises  to
Tenant, and Tenant hereby hires the Premises from Landlord, reserving however to
Landlord all of the rights, interests and estates in the Premises, Building, and
Land not granted to Tenant by this Lease.

        (b) Determination of Rentable Area of the Premises. The number of square
feet set forth in Section  1.14 for the Rentable  Area of the Premises  shall be
conformed to that determined by Landlord's  space planner as soon as practicable
after  receipt from  Landlord of the final floor plan for the  Premises.  If the
Rentable  Area of the Premises is so determined to be other than as set forth in
Section 1.14, or if there occurs a change in the size of the Premises,  then all
amounts,  sums and/or  percentages  based upon the Rentable Area of the Premises
shall be equitably prorated in accordance therewith.  After the Rentable Area of
the Premises has been determined as provided  herein,  the parties shall execute
an addendum to this Lease setting  forth the Rentable Area of the Premises,  and
the amounts,  suns and/or  percentages  based  thereon and adjusted as set forth
above. The failure of either party to execute such addendum shall not affect the
validity  or  enforceability  of this Lease nor  excuse the  payment of Rents by
Tenant. The number of square feet of Rentable Area of the Premises as determined
by Landlord's space planner shall for all purposes of this Lease conclusively be
deemed to be the Rentable Area of the Premises,  and Tenant shall be responsible
for  payment  of all Rents and  performance  of all  obligations  based  upon or
calculated from the Rentable Area of the Premises as so determined.

2.02    COMMENCEMENT.

        (a) Lease  Term.  The lease  Term (i)  shall  commence  on the date (the
"Commencement  Date") that is the earlier to occur of (A) the Rent  Commencement
Date (if  Subsection  2.03(b)  applies to this Lease) or the Occupancy  Date (if
Subsection  2.03(c)  applies  to this  Lease),  and (B) the  date  Tenant  first
occupies any part of the Premises,  with Landlord's consent, for the purpose, of
commencing  business,  and (ii) shall end at noon on the earlier of the last day
of the Lease Term (the  "Expiration  Date") or such earlier  termination of this
Lease.  After the  Commencement  Date,  upon  Landlord's  request,  Tenant shall
promptly complete and execute a copy of the form attached hereto as Exhibit B.

        (b) Obliqations and Duties. Tenant shall be bound, as of the Lease Date,
by all obligations and duties under this Lease, except as otherwise specifically
provided  herein.  Failure of Tenant to fulfill any such obligation  and/or duty
before any other such  obligation  and duty becomes  binding  shall not preclude
Landlord from obtaining any remedy available hereunder, at law, or in equity.

2.03    PREPARATION OF PREMISES.

        (a)  Preparation  Work.  The  Premises  shall be prepared  for  Tenant's
occupancy in accordance  with the Work Letter for Tenant  Improvements  attached
hereto as Exhibit C (the "Work Letter").

        (b) Tenant Constructs Improvements. This Subsection 2.03(b) shall form a
part of this Lease only if Tenant is to construct the tenant  improvements under
the Work Letter. If so, the Occupancy Date shall be the date that is the earlier
to occur of (i) the Rent  Commencement  Date, or (ii) the date Tenant, or anyone
claiming under or through Tenant, first occupies any part of the Premises,  with
Landlord's  consent,  for the purpose of  constructing  the tenant  improvements
under the Work  Letter,  notwithstanding  that  minor  incorrect  or  incomplete
details of construction or mechanical  adjustments,  pertaining only to the Base
Building Work (as defined in the Work Letter), which do not materially interfere
with  Tenant's  performance  of Tenant's  Work (as  defined in the Work  Letter)
remain  to be  performed  (such  details  and  adjustments  are  referred  to as
"Punch-List Items"). Tenant shall be deemed to have accepted the Premises and to
have  found them to be in  satisfactory  condition,  except  for any  Punch-List
Items,  on the Occupancy  Date. On or before the  Occupancy  Date,  Tenant shall
submit a punch list to Landlord, describing the Punch-List Items with reasonable
specificity  and detail,  and Landlord shall provide Tenant with  reasonable and
timely  access to the  Premises to allow  Tenant to so perform.  Landlord  shall
correct  all  Punch-List  Items on the punch list of which it is  reasonable  to
require  correction by Landlord and shall do so with  reasonable  diligence in a
manner consistent with Tenant's  construction of the tenant  improvements  under
the Work Letter.

        (c) Landlord Constructs Improvements. This Subsection 2.03(c) shall form
a part of this Lease only if Landlord is to  construct  the tenant  improvements
under the Work Letter.  If so, the Occupancy Date shall be the date on which (i)
Landlord  has  substantially  completed  the  work it is  obligated  to  perform
pursuant  to the  Work  Letter;  and the  same  shall  be  deemed  substantially
completed  notwithstanding the fact that certain items, such as minor details of
construction,

                                      -2-
<PAGE>

mechanical  adjustment or  decoration,  which do not  materially  interfere with
Tenant's  use of the  Premises  (i.e.,  the  "Punch-List  Items"),  remain to be
performed,  and (ii) access to the Premises is available to Tenant.  However, if
completion of either of the above  requirements  for  establishing the Occupancy
Date is  delayed  due to  (iii)  any act or  omission  of  Tenant  or any of its
employees,  agents or contractors,  including, but not limited to, delays due to
changes in or  additions  to  Landlord's  Work (as  defined in the Work  Letter)
requested by Tenant or delays by Tenant in the  submission  of plans,  drawings,
specifications  or other  information,  the  approval  of  working  drawings  or
estimates,  or the giving of necessary  authorizations  or  approvals  regarding
tenant  improvements,  or (iv) the inclusion in Landlord's  Work of any Tenant's
Work (as  defined  in the Work  Letter),  or a  shortage  or  unavailability  of
materials required for Tenant's Work, then the Occupancy Date shall be deemed to
have been the date that said two requirements  would have been completed but for
such delay.  Landlord  shall give Tenant at least 15 days'  notice in advance of
Landlord's  estimate of the  Occupancy  Date.  Any variance  between the date so
estimated and the actual Occupancy Date shall be of no consequence, and Landlord
shall not incur any  liability  on account  of such  variance.  Tenant  shall be
deemed  to  have  accepted  the  Premises  and  to  have  found  them  to  be in
satisfactory condition,  except for any Punch-List Items, on the Occupancy Date.
Within 10 days after the  Occupancy  Date,  Tenant  shall submit a punch list to
Landlord,  describing  the  Punch-List  Items with  reasonable  specificity  and
detail.  Landlord shall correct all Punch-List  Items on the punch list of which
it is reasonable to require correction by Landlord.

                                    ARTICLE 3
                                      RENT

3.01 RENTS.  Commencing on the Commencement Date and thereafter during the Lease
Term,  Tenant shall pay to Landlord the  following  rents for the Premises  (the
"Rents"):  (a) a basic  rent per annum (the  "Basic  Rent") in the amount of the
Initial Basic Rent,  adjusted  periodically as set forth in Section 3.04,  which
shall be due and payable in equal monthly  installments  in advance on the first
day of each and every  calendar  month during the Lease Term, and (b) additional
charges ("Additional  Charges") consisting of all other sums of money payable by
Tenant under the provisions of this Lease.  The first  installment of Basic Rent
shall be due and payable upon execution of this Lease.

3.02 PAYMENT. Tenant shall pay the Rents when due, without notice or demand, and
without any  abatement,  deduction or setoff,  except for  abatements  expressly
provided for elsewhere in this Lease. Tenant shall pay the Rents in lawful money
of the United States, to Landlord at its office in the Building or to such other
person or place as  Landlord  may  designate  from time to time.  If Tenant pays
Rents by chock, the checks must clear within five business days.

3.03  PRORATION.  Any Rents,  the amount of which is  determined  in part by the
length of a period of time,  shall be  prorated as and when  appropriate  on the
basis of a 30-day month or a 360-day year.

3.04 ADJUSTMENTS OF BASIC RENT.

        (a) Specific Adjustments. During the Lease Term, the Basic Rent shall be
adjusted as follows:

                (i)   Effective  as  of  the  13th  month   following  the  Rent
Commencement  Date  and  continuing  until  the  2nd  anniversary  of  the  Rent
Commencement Date, the Basic Rent shall be $84,636.00 per annum.

                (ii)   Effective  as  of  the  2nd   anniversary   of  the  Rent
Commencement  Date  and  continuing  until  the  3rd  anniversary  of  the  Rent
Commencement Date, the Basic Rent shall be $91,689.00 per annum.

In addition to the adjusted Basic Rent,  Tenant shall continue to pay Additional
Charges  on  account  of all other  sums of money  payable  by Tenant  under the
provisions  of this Lease,  including but not limited to sums payable on account
of Taxes and Costs of Operation as provided for in Section 4.02 hereof.

3.05 PARTIAL PAYMENT.  No payment by Tenant or receipt or acceptance by Landlord
of a lesser amount than the correct  Basic Rent or Additional  Charges due shall
be deemed to be other than a payment on account,  nor shall any  endorsement  or
statement on any check or any letter accompanying any check or payment be deemed
an accord and  satisfaction,  and  Landlord  may accept  such check or  payment,
irrespective  of  any  such  endorsement  or  statement,  without  prejudice  to
Landlord's right to recover the balance, treat such partial payment as a default
or pursue any other remedy provided in this Lease or at law.

3.06 LATE CHARGE. Tenant hereby acknowledges that the late payment of Rents will
cause Landlord to incur damages,

                                      -3-
<PAGE>

including  administrative  costs,  loss of use of the  overdue  funds  and other
costs, the exact amount of which would be impractical and extremely difficult to
ascertain. Landlord and Tenant therefore agree that if Landlord does not receive
a payment of Rents within ten (10) days after the date that such payment is due,
Tenant shall pay to Landlord,  as Additional Charges, a late charge of ten cents
for each dollar so overdue.  Acceptance of the late charge by Landlord shall not
cure or waive Tenant's default, nor prevent Landlord from exercising,  before or
after such acceptance,  any of the rights and remedies for a default provided by
this Lease or at law. Payment of the late charge is not an alternative  means of
performance of Tenant's  obligation to pay Rents at the times  specified in this
Lease.

                                    ARTICLE 4
                          OPERATING EXPENSE ADJUSTMENTS

4.01  OPERATING  EXPENSE  DEFINITIONS.  For the  purpose  of this  Article,  the
following terms shall have the meanings herein ascribed to them:

        (a) Costs of Operation.  "Costs of  Operation"  shall mean, in any Lease
Year,  and  subject  to the  adjustment  set forth in  Subsection  4.01(c),  all
expenses,  costs and  disbursements of every kind and nature paid or incurred by
or on behalf of Landlord with respect to or for the operation,  maintenance  and
management  of the Building.  Without in any way limiting the  generality of the
foregoing, Costs of Operation shall include the following:

                (i) Wages,  including  all fringe  benefits of every  nature and
kind, Workers'  Compensation,  and payroll taxes of employees of Landlord at the
level of building  manager and below engaged in the operation,  maintenance  and
management of the Building;

                (ii) Costs of goods,  tools,  supplies and services  supplied or
used in or with respect to the  operation,  maintenance  and  management  of the
Building, including without limitation the cost of insurance premiums; cleaning,
painting,  janitorial,  trash  removal,  security  and  other  services;  legal,
accounting  and other  consultants'  fees;  operation of elevators  and security
systems; heating, cooling, air conditioning and ventilating; hot and cold water,
gas, electricity,  sewer and other utilities;  maintenance of and repairs to the
Building,  and  to  any  equipment,  machinery  or  apparatus,  therein;  window
cleaning;  service agreements on equipment;  licenses,  permits and inspections;
depreciation  on personal  property,  toots and moveable  equipment used in the
repair,  maintenance  or operation of the Building;  contesting  the validity or
applicability  of  any  law  if a  successful  contest  would  reduce  Costs  of
Operation;  maintenance  and  repairs  of the  structural  components,  building
systems, and finish work relating to the parking garage; and of the landscaping,
signs, plazas, furnishings,  water elements,  sidewalks, streets and walkways in
or adjacent to the Building;

                (iii)  Management  fees and  other  costs and  expenses  paid to
Landlord's  managing agent; or, if Landlord acts as the managing agent, a sum in
lieu thereof which does not exceed the then-prevailing rates for management fees
for other first-class office buildings in Beverly Hills;

                (iv) Costs of capital  improvements and  replacements  which are
intended to reduce Costs of  Operations  or which are required by law, and which
are made after  completion of the Building shell and amortized (with interest at
prevailing rates) over the useful life of such improvements;

                (v)  Rentals  paid  by  Landlord   with  respect  to  machinery,
equipment,  tools,  materials,  facilities or systems for the normal management,
maintenance or operation of the Building;

                (vi) All expenses and costs  incurred by Landlord as a result of
or in order to comply,with laws, including without limitation laws pertaining to
energy or natural  resource  conservation or environmental  protection,  and all
charges, taxes,  surcharges,  assessments or penalties imposed by any government
agency or public utility as a means of conserving or controlling the consumption
of water, gas,  electricity,  energy,  natural  resources,  or other products or
services; and

                (vii) All of the following:  (A) all taxes,  general and special
assessments,   duties,   charges,  and  levies  of  every  kind,  character  and
description whatsoever,  levied, imposed or charged upon or against the Building
or any part hereof or the various estates in the Building or any part thereof or
upon Landlord with respect thereto, except as set forth in Section 9.05; (B) all
taxes  levied,  imposed  or charged on real and  personal  property  used in the
operation,  maintenance  or management  of the  Building;  (C) all taxes levied,
imposed or  charged  against or  measured  by or based upon the rent  payable by
lessees and  occupants  of the Building or the value of the Building or any part
thereof;  (D) all taxes imposed or charged in the future in lieu there of or for
which Landlord is liable with respect to the Building;  (E) all sales,' use, and
utility  taxes and other  similar  amounts  which are  expensed  by  Landlord in
connection with the Building; and (F) costs and expenses incurred by Landlord in
contesting the amount,  validity or applicability  of any of the foregoing;  but
not including Landlord's income, franchise, gift, estate, inheritance, transfer,
excise or  excess-profits  taxes to the extent that any such income,  franchise,
gift,  estate,  inheritance,  transfer,  excise or excess-profits  taxes are not
levied in whole or partial substitution for any other taxes;  recoveries through
protest,  appeals or other  actions  taken by Landlord,  after  deduction of all
costs and expenses, including legal and other professional fees and costs, shall
be deducted for the year of receipt.

        (b) Costs of Operation -- Exclusions.  Costs of Operation  shall exclude
the following:

                (i)  Costs  incurred  by  Landlord  with  respect  to goods  and
services  supplied to lessees and  occupants  of the Building to the extent that
such lessees and occupants directly reimburse Landlord for such costs other than
as provided in this Article 4;

                (ii) Costs  incurred by Landlord for the repair of damage to the
Building to the extent that Landlord is reimbursed by insurance proceeds;

                (iii)  Costs   incurred  by   Landlord   with   respect  to  the
installation of tenant improvements made for tenants in the Building;

                (iv) Depreciation  (other than on personal  property,  tools and
moveable  equipment as described in Clause (ii) of  Subsection  4.01(a)  above),
interest and principal on mortgages encumbering the Building or the Land;

                (v)  Landlord's  direct   out-of-pocket   costs  for  labor  and
materials for the operation of the parking garage:

                (vi) Costs  incurred in connection  with the leasing of space in
the  Building  and the  renewal or  enforcement  of existing  leases,  including
leasing  commissions and brokerage fees, legal fees, tenant  improvements  costs
and allowances and advertising expenses,  except advertising expenses related to
public relations or community activities;

                (vii) Costs of purchasing  line art works (except that graphics,
signs and conventional decoration shall not be excluded); and

                (viii)  Costs  and  expenses  otherwise  includable  in Costs of
Operation,  to the extent  that the  Landlord is  reimbursed  or paid from other
sources for such costs and expense.

        (c) Costs of Operation - Adjustments. If more or less than 95 percent of
the  Rentable  Area of the Building is occupied  and fully  serviced  during any
period in a Lease Year, then the Costs of Operation for such Lease Year shall be
adjusted  to what the Costs of  Operation  would  have been if 95 percent of the
Rentable  Area of the Building had been occupied and fully  serviced  throughout
such Lease Year.

        (d) Lease Year.  "Lease Year" shall mean any calendar year that overlaps
the Lease Term as to any period.

4.02 ADJUSTMENT OF RENTS.

        (a) Costs of  Operation.  Tenant shall pay, as  Additional  Charges,  an
amount  equal to the amount,  if any, by which the product of Costs of Operation
multiplied by Tenant's  Share  exceeds the Costs if Operation  for 2002.  Tenant
shall pay such  Additional  Charges in the  following  manner:  commencing as of
January I of the Lease Year, on or before the first day of each calendar  month.
Tenant shall pay  Landlord  one-twelfth  (1/12) of the amount of the  Additional
Charges, as reasonably estimated by Landlord, due from Tenant for the Lease Year
pursuant to Subsection  4.02(a), as shown by a statement provided by Landlord to
Tenant ("Landlord's statement"). There shall be a final adjustment at the end of
each Lease Year, to reflect actual Costs of Operation for said Lease Year.

                                      -4-
<PAGE>

        (b) Revised Estimates.  Quarterly during the Lease Year, if Landlord has
received  evidence  indicating  an increase in Costs of Operation  over that set
forth in  Landlord's  statement,  Landlord may revise its  estimates of Costs of
Operation for the Lease Year.  The amounts of  Additional  Charges on account of
Costs of Operation,  and the installment  payments with respect  thereto,  shall
then be adjusted as  necessary to assure  that,  as nearly as  possible,  Tenant
shall  have paid  Tenant's  Share of  Additional  Charges on account of Costs of
Operation, based on the revised estimates, by the end of the Lease Year.

        (c) Final Statement.  As soon as practicable after the end of each Lease
Year,  Landlord shall present Tenant with a final statement  ("Landlord's  final
statement")  of actual Costs of Operation for such Lease Year.  Within five days
of presentation of Landlord's  final  statement,  Tenant shall pay Landlord,  as
Additional Charges, any amount due for Tenant's Share of Costs of Operation. Any
credit due Tenant for  overpayment of Tenant's Share of Costs of Operation shall
be  credited  against  the  monthly  installments  of Basic Rent next coming due
(except that  Landlord  shall refund to Tenant the amount of any such credit for
the final  Lease  Year in the  Lease  Term).  Tenant  shall  have 30 days  after
presentation of Landlord's  final statement within which to object in writing to
the accuracy of  Landlord's  final  statement;  after  expiration of said 30-day
period,  Landlord's  final  statement shall be conclusive and binding on Tenant.
Until resolution thereof, objection by Tenant shall not excuse or abate Tenant's
obligation to make the payments required by this Section 4.02.

                                    ARTICLE 5
                                SECURITY DEPOSIT

5.01  SECURITY  DEPOSIT.  Concurrently  with  Tenant's  execution of this Lease,
Tenant shall deposit the Security Deposit with Landlord.  Said sum shall be held
by Landlord as security for the faithful performance by Tenant of all the terms,
covenants,  and  conditions  of this  Lease to be kept and  performed  by Tenant
hereunder.  If Tenant  defaults  with  respect to any  provision  of this Lease,
including,  but not limited to the provisions  relating to the payment of Rents,
Landlord  may (but shall not be required  to) use,  apply,  or retain all or any
part of this  security  deposit for the payment of any Rents in default,  or for
the payment of any amount which Landlord may spend or become  obligated to spend
by reason of Tenant's default,  or to compensate  Landlord for any other loss or
damage,  direct or  indirect,  which  Landlord  may suffer by reason of Tenant's
default.  It any  portion of said  deposit is so used or  applied,  then  Tenant
shall,  within five (5) days after written  demand  therefor,  deposit cash with
Landlord in an amount sufficient to restore the security deposit to its original
amount,  and  Tenant's  failure to do so shall be a default  under  this  Lease.
Landlord shall not be required to keep this security  deposit  separate from its
general funds, and Tenant shall not be entitled to interest on such deposit.  If
Tenant shall fully and  faithfully  perform every  provision of this Lease to be
performed by it, the security  deposit or any balance  thereof shall be returned
to Tenant (or, at Landlord's  option,  to the last assignee of Tenant's interest
hereunder) within thirty (30) days following  expiration of the Lease Term. If a
termination  of Landlord's  interest in this Lease occurs,  then Landlord  shall
transfer said deposit to Landlord's successor in interest.

                                    ARTICLE 6
                           USE AND COMPLIANCE WITH LAW

6.01 USE. Tenant shall use and occupy the Premises for the Permitted Use and for
no other  purpose  whatsoever,  and shall  obtain and  maintain all licenses and
permits required therefor by law.

6.02  PROHIBITED  USES.  Tenant shall not at any time use or occupy or allow any
person to use or occupy the  Premises,  or do or permit  anything  to be done or
kept in the  Premises,  in any manner  which (a)  violates  any  certificate  of
occupancy in force of the Premises or for the Building;  (b) causes or is likely
to cause damage to the Building,  the Premises or any  equipment,  facilities or
other  systems  therein;  (c)  constitutes a violation of any law,  license,  or
permit,  or is  considered a hazardous or toxic  substance,  material,  or waste
under  California or federal law; (d) violates a requirement or condition of the
standard  fire  insurance  policy  issued  for office  buildings  in the City of
Beverly Hills; (e) impairs the character, reputation, image or appearance of the
Building as a first-class  office building;  (f) impairs the proper and economic
maintenance,  operation and repair of the Building or its equipment,  facilities
or systems;  (g)  constitutes a nuisance,  annoyance or  inconvenience  to other
lessees or occupants of the Building,  or interferes with or disrupts the use or
occupancy of any area of the Building (other than the Premises) by other lessees
or occupants;  (h) interferes  with the  transmission or reception of microwave,
television,  radio or other  communications  signals by antennae  located on the
roof of the Building or elsewhere in the Building;  (i) constitutes an unlawful,
immoral or  objectionable  occurrence or  condition;  or (j) results in repeated
demonstrations,  bomb threats or other events which  require  evacuation  of the
Building or  otherwise  disrupt the use,  occupancy  or quiet  enjoyment  of the
Building by other lessees and  occupants.  Tenant shall not use or allow another
person to use any part of the  Premises  for a  restaurant  or bar; the storage,
manufacture  or sale of food,  beverages,  liquor,  tobacco in any form or drugs
(except that Tenant may maintain  vending  machines for the use of its officers,
employees and invitees and except that Tenant's officers and employees may bring
food,  beverages,  tobacco and medicine onto the Premises for their personal and
lawful consumption); the business of photocopying or offset printing (but Tenant
may use part of the Premises for  photocopying  or offset printing in connection
with its own business);  medical or dental offices or laboratories;  a typing or
stenography  business; a barber, beauty or manicure shop; a school or classroom;
the  manufacture,  retail sale or auction of merchandise,  goods, or property of
any kind;  cooking  (except that Tenant may maintain one or more coffee or lunch
rooms and/or kitchens for the exclusive use of Tenant's officers,  employees and
invitees);  lodging or sleeping; or for immoral purposes.  No noise,  vibration,
smoke, gasses or odor shall be permitted to escape from the Premises.

6.03 COMPLIANCE BY TENANT.  Tenant shall, at Tenant's  expense,  comply with all
laws that impose any  obligation,  order or duty on Landlord or Tenant,  arising
from or related to (a) Tenant's use of the  Premises;  (b) the manner of conduct
of Tenant's  business or  operation  of its  installations,  equipment  or other
property  therein;  (c) any cause or condition  created by or at the instance of
Tenant; or (d) breach of any Tenant's  obligations  hereunder;  and Tenant shall
pay all the costs, expenses, fines, penalties and damages,  including attorneys'
fees and costs,  which may be imposed upon  Landlord by reason of or arising out
of Tenant's failure to fully and promptly comply with and observe the provisions
of  this  Section.  Where  Tenant's  compliance  as  required  by  this  Section
necessitates  actions  by  Tenant  for which  another  provision  of this  Lease
requires Landlord's consent,  Tenant shall obtain Landlord's consent pursuant to
such other provision before taking such actions.

                                    ARTICLE 7
                                    INSURANCE

7.01 USE OF PREMISES.  Tenant shall not violate, or permit the violation of, any
condition,  standard  for use in  California,  imposed by any  insurance  policy
covering or relating to the Building, and shall not do, or permit anything to be
done,  or keep or permit  anything  to be kept in the  Promises  (a) which might
subject Landlord to any liability or responsibility for personal injury or death
or property damage,  or (b) which might increase any insurance rate with respect
to the Building over the rate which would  otherwise  then be in effect,  or (c)
which might result in insurance  companies of good  standing  refusing to insure
the Building in amounts  satisfactory to Landlord,  or (d) which might result in
the  cancellation  of any policy  covering or  relating  to the  Building or the
assertion  of any defense by the insurer in whole or in part to claims under any
such policy.

7.02 CASUALTY INSURANCE. During the Lease Term, Landlord shall maintain All Risk
Coverage  insurance,  covering  the  Building  and  insuring the Building in the
amount  of its full  replacement  value,  with loss of rents  coverage,  and the
amount of any  deductible  shall be  determined by Landlord but shall not exceed
that which is commercially reasonable for a first-class office building.  During
the Lease Term, Tenant shall maintain,  at Tenant's  expense,  All Risk Coverage
insurance  covering  Tenant's  Property,  and insuring  Tenant's Property in the
amount of its full replacement value.

7.03 LIABILITY INSURANCE.  During the Lease Term. Landlord shall maintain public
liability  insurance  covering the Building and insuring against all hazards and
risks  customarily  insured  against by  persons  operating  first-class  office
buildings. Tenant, at its expense, shall maintain at all times during the

                                      -5-
<PAGE>

Lease Term public  liability  insurance with respect to the Premises,  their use
and occupancy by Tenant and the conduct or operation of business  therein,  with
combined  single-limit  coverage of not less than $2,000,000.  Landlord may from
time to time  increase the policy  amount to be  maintained by Tenant under this
Section as Landlord  deems  necessary  in order to maintain  adequate  liability
coverage.

7.04 WAIVER OF SUBROGATION. Landlord and Tenant shall each secure an appropriate
clause in, or an  endorsement  upon,  each  insurance  policy  required  by this
Article,  pursuant to which the insurance company waives  subrogation or permits
the insured,  prior to any loss,  to agree with a third party to waive any claim
it might have against said third party without  invalidating  the coverage under
the  insurance  policy.  On  Tenant's  policies,  the waiver of  subrogation  or
permission  for  waiver  of any  claim  shall  extend  to  Landlord,  Landlord's
Affiliates and its and their agents and employees.  On Landlord's policies,  the
waiver of  subrogation  or  permission  for waiver of any claim shall  extend to
Tenant and its agents and employees.  Each party hereby releases the above-named
persons with respect to any claim  (including a claim for  negligence)  which it
might  otherwise  have  against  them for injury,  loss,  damage or  destruction
occurring  during the Lease Term and covered by the policies  required of Tenant
or Landlord under this Article.

7.05 POLICY  REQUIREMENTS.  Landlord,  Landlord's  Affiliates  and its and their
agents and employees,  and any lessor or mortgagee  whose name and address shall
have been furnished to Tenant shall be designated as additional  insured parties
on any  insurance  policy  required by this  Article.  Tenant  shall  deliver to
Landlord fully paid-for  policies or certificates of insurance for the insurance
coverage required by this Article,  in form satisfactory to Landlord,  issued by
the  insurance  company or its  authorized  agent,  at least 20 days  before the
Commencement  Date.  All policies shall provide that they cannot be cancelled or
modified unless Landlord,  and any other additional  insured party, are given at
least 30 days' prior written notice of such cancellation or modification.

7.06  PREMIUM  INCREASE.  If, by reason of any action or  omission  by Tenant in
default of any of its  obligations  under this Lease, or by reason of any Tenant
Work  installed in the  Premises,  the premiums on  Landlord's  insurance on the
Building  are  higher  than they  otherwise  would be,  Tenant  shall  reimburse
Landlord,  on  demand,  as  Additional  Charges,  for that part of the  premiums
attributable to the default by Tenant or the Tenant Work.

                                    ARTICLE 8
                                   ALTERATIONS

8.01 CONDITIONS. With Landlord's prior approval, which shall not be unreasonably
withheld.  Tenant may from time to time, at its expense,  make such  alterations
("Alterations")  in  and to the  Premises  as  Tenant  may  reasonably  consider
necessary  or as may be required by law,  license,  or permit for the conduct of
its  business in the  Premises,  provided and upon the  conditions  that (a) the
Alterations  do  not  affect  the  outside  appearance  of the  Building  or the
appearance  of the common  areas of the  Building  and are not visible  from the
outside  of the  Building  or from the  common  areas of the  Building;  (b) the
Alterations are  non-structural  and do not impair the strength of the Building;
(c) the  Alterations  are to the  interior of the Premises and do not affect any
part of the Building outside of the Premises;  (d) the Alterations do not affect
the proper functioning of the mechanical, electrical, sanitary and other service
systems of the  Building,  or increase the usage of such systems by Tenant;  (e)
before  proceeding  with any  Alteration,  Tenant shall submit to Landlord,  for
Landlord's  approval,  plans  and  specifications  for the work to be done,  and
Tenant  shall not proceed with such work until it obtains  Landlord's  approval,
which shall not be unreasonably  withheld; (f) Tenant shall pay to Landlord upon
demand the reasonable direct, out-of-pocket costs and expenses actually incurred
by Landlord in. reviewing  Tenant's plans and  specifications and inspecting the
Alterations to determine whether they are being performed in accordance with the
approved plans and specifications and in compliance with law, including, without
limitation, the fees of any architect, engineer or attorney employed by Landlord
for such purpose;  (g) before proceeding with any Alteration which is reasonably
estimated  to  cost  more  than  $10,000   (exclusive  of  the  costs  of  items
constituting  Tenant's  Property,  as defined  in Section  9.02),  Tenant  shall
comply with the  requirements  of Section 8.04;  (h) not less than 15 days,  nor
more than 20 days prior to commencement of the Alterations,  Tenant shall notify
Landlord of the work commencement  date, in order that Landlord may post notices
of  nonresponsibility  about the Premises;  (i) Tenant shall obtain and maintain
such insurance therefor as is acceptable to Landlord; and (j) Tenant shall fully
and promptly  comply with and observe the rules and regulations of Landlord then
in force with respect to the making of Alterations.

8.02  PERFORMANCE.  Tenant shall obtain all necessary  governmental  permits and
certificates,  at Tenant's  sole  cost and  expense,  for the  commencement  and
prosecution  of  Alterations  and for final  approval  of the  Alterations  upon
completion.  If Landlord does not perform the Alterations as contractor.  Tenant
shall  retain  at  its  sole  expense  a  reputable  contractor,  selected  from
Landlord's  list of acceptable  contractors and then  independently  approved by
Landlord for the specific Alterations,  to perform the Alterations in compliance
with the permits and  certificates  and  applicable  law.  Alterations  shall be
diligently  performed in a good and workmanlike manner,  using new materials and
equipment at least equal in quality and class to the better of '(i) the original
installations  of the  Building,  or  (ii)  the  prevailing  Building  standards
established  by  Landlord.  Any  Alterations  in  the  mechanical,   electrical,
sanitary,  heating,  ventilating,  air-conditioning  or  other  systems  of  the
Building  shall  be  performed  only  by  contractors  designated  by  Landlord.
Alterations  shall be performed in a manner that does not interfere with, delay,
or impose  additional  expense on  Landlord  in the  construction,  maintenance,
repair or operation of the Building;  and if any additional  expense is incurred
by Landlord as a result of Alterations,  Tenant shall reimburse Landlord for the
additional expense upon demand, as Additional Charges.

8.03 LIENS.  Tenant shall keep the Premises and the Building free from any liens
arising out of any work performed.  materials furnished, or obligations incurred
by or on behalf of Tenant. Landlord may require, at Landlord's sole option, that
Tenant shall provide to Landlord,  at Tenant's sole cost and expense, a lien and
completion  bond in an  amount  equal  to one and  one-half  (1-1/2)  times  the
estimated cost of any  improvements,  additions,  or alterations in the Premises
which  Tenant  desires to make to insure  Landlord  against  any  liability  for
mechanics' and materialmen's liens and to insure completion of the work.

8.04  SECURITY FOR  PERFORMANCE.  When  required by Section 8.01 and/or  Section
10.02,  Tenant  shall  obtain and deliver to Landlord a  performance  bond and a
labor and  materials  payment  bond  for the  benefit of  Landlord,  issued by a
corporate surety licensed to do business in California,  each in an amount equal
to 125 percent of the estimated cost of the Alterations and in form satisfactory
to Landlord.

8.05  MISCELLANEOUS.  Landlord  reserves the right to perform the Alterations as
contractor.  In that event,  Tenant need not comply with Subsection  8.01(g) and
Landlord shall perform the Alterations for the price plus contractor's  overhead
and profit set forth in the  contractor's  bid which Tenant would have accepted,
and Tenant shall pay to Landlord the amount of the Bid Price as and when the Bid
Price is required to be paid under the bid.  Any bid  obtained by Tenant and the
contractor making the bid shall satisfy the criteria  specified in Sections 6.06
and 8.02.  Tenant  agrees  that the review and  approval by Landlord of Tenant's
plans and  specifications  for  Alterations  are solely for Landlord's  benefit.
Landlord shall have no duty toward Tenant,  nor shall Landlord be deemed to have
made any  representation  or  warranty  to Tenant  with  respect to the  safety,
adequacy,  correctness,  efficiency  or  compliance  with law of the  plans  and
specifications,  the Alterations or their design,  or any other matter regarding
the Alterations.

                                    ARTICLE 9
                         LANDLORD'S AND TENANTS PROPERTY

9.01 FIXTURES.  All fixtures,  equipment (other than  communications  and office
equipment   referred  to  in  Section  9.02),   improvements  and  appurtenances
("Fixtures")  attached to or built into the Premises at the Commencement Date or
during the Lease Term, including Alterations,  shall become and remain a part of
the Premises and the  property of Landlord,  regardless  of whether the Fixtures
were  installed  by Tenant or at Tenant's  expense,  and shall not be removed by
Tenant.

9.02 TENANT'S PROPERTY. All communications and office equipment,  whether or not
attached to or built into the  Premises,  which are installed in the Premises by
or for the  account of Tenant,  without  expense to  Landlord,  and which can be
removed without substantial damage to the Premises or the

                                      -6-
<PAGE>

Building, and all furniture,  furnishings and other articles of movable personal
property owned by Tenant (or leased from any person except Landlord) and located
in the Premises  shall remain the property of Tenant  ("Tenant's  Property") and
may be removed  by Tenant at any time  during the Lease Term if Tenant is not in
default under this Lease at the time of removal.  If any of Tenant's Property is
installed,  relocated, or removed, Tenant shall repair, at its sole expense, any
damage to the  Premises  or to the  Building  resulting  from the  installation,
relocation, or removal of Tenant's Property.

9.03  REMOVAL  AT  TERMINATION.  Prior  to the  expiration  of the  Lease  Term,
or immediately  upon any  earlier  termination  of this  Lease,  Tenant,  at its
expense,  shall remove from the Premises all of Tenant's  Property  (except such
items  thereof  which are the property of Landlord or as Landlord has  expressly
permitted to remain,  which shall become the property of  Landlord),  and Tenant
shall  repair any damage to the  Premises  or the  Building  resulting  from the
installation, relocation, or removal of Tenant's Property.

9.04  ABANDONMENT.  Landlord,  at its  option,  may  consider  items of Tenant's
Property that remain in the Premises  after the expiration of the Lease Term, or
any earlier termination of this Lease, to have been abandoned, and in that event
such items may be  retained  by  Landlord  as its  property  or  disposed  of by
Landlord,  without  accountability,  in such manner as Landlord shall determine,
and at Tenant's expense.

9.05 TAXES ON TENANT'S PROPERTY AND NON-STANDARD TENANT IMPROVEMENTS.

        (a) TENANT'S  PROPERTY.  At least 10 days prior to  delinquency,  Tenant
shall pay all taxes levied or assessed upon Tenant's  Property.  If the assessed
value of the Building, the Premises, or property of Landlord is increased by the
inclusion  of a  value  placed  upon  Tenant's  Property,  Tenant  shall  pay to
Landlord,  upon demand as Additional Charges,  the taxes levied against Landlord
on account of the included value of Tenant's Property.

        (b)  TENANT'S  WORK.  Tenant  shall pay to  Landlord,  upon  demand,  as
Additional  Charges,  such  portion of all real estate  taxes levied or assessed
against  Landlord which are  attributable to that portion of the value of tenant
improvements  installed  in the Premises in excess of an amount equal to that of
Building  standard  improvements.  For the  purposes of  calculating  the amount
payable  by Tenant  pursuant  to this  Subsection  9.05(b),  the value of tenant
improvements  installed in the Premises  shall be deemed to be equal to the cost
of such tenant  improvements,  including any fees paid to Landlord in connection
therewith, and including any Alterations performed pursuant to Section 8.01.

                                   ARTICLE 10
                             REPAIRS AND MAINTENANCE

10.01  LANDLORD'S  OBLIGATIONS.  Landlord shall keep and maintain the Building's
exterior  walls,  glass,  roof and  foundation  and the public  portions  of the
Building and the Building  systems and  facilities  serving the Premises and the
Base Building Work (as defined in the Work Letter)  located in the Premises and,
if  Tenant  constructed  the  tenant  improvements  under the Work  Letter,  the
improvements  and fixtures  described in Paragraphs 3.3. 3.4 and 3.5 of the Work
Letter, in proper working order, condition and repair, unless provided otherwise
herein. However, Landlord shall have no obligation to perform any repairs unless
Landlord has knowledge of the need for such repairs or until Tenant has notified
Landlord in writing of the need for such repairs,  describing the needed repairs
in reasonable detail.

10.02  TENANT'S  OBLIGATIONS.  Tenant  shall,  at  its  sole  cost  and  expense
throughout  the Lease Term,  take good care of the  Premises,  the  Fixtures and
Tenant's  Property  except as provided  otherwise  in Sections  10.01 and 13.01.
Tenant shall be  responsible  for all repairs,  maintenance  and  replacement of
doors,  interior  glass,  and wall  and  floor  coverings  in the  Premises  and
improvements  in the  Premises  described  as  Tenant's  Work in the Work Letter
(excluding,  if Tenant  constructed the tenant  improvements,  the HVAC and life
safety system  described in Paragraphs 3.3, 3.4 and 3.5 of the Work Letter,  and
excluding  the extent to which  such  responsibility  is  covered  by  insurance
proceeds received by Landlord under policies held by Landlord in accordance with
Section 7.02) and for the repair and maintenance of all water  fountains,  sinks
and sanitary and electrical fixtures and equipment in the Premises.

Tenant  shall be  responsible  for all  maintenance  and  repairs,  interior and
exterior,  structural  and  nonstructural,  ordinary and  extraordinary,  of the
Premises,   the  Building  and  the  Building's  facilities  and  systems,  made
necessary,  in whole or in part, by (a) the performance or existence of Tenant's
Work (as defined in the Work Letter) or Alterations;  (b) the installation,  use
or operation of Tenant's  Property in the  Premises;  (c) the moving of Tenant's
Property in or out of the Building; or (d) any act, omission,  misuse or neglect
by Tenant or its officers, partners, employees, agents, contractors or invitees.
All Tenant  repair work shall be subject to all of the  provisions  of Article 8
regarding  Alterations.  Landlord  shall  perform or cause to be  performed,  at
Tenant's  expense,  any other  repairs of the  Building and its  facilities  and
systems for which  Tenant is  responsible.  Tenant shall  reimburse  Landlord on
demand, as Additional Charges, for the costs of such repairs.

10.03  EXCULPATION  OF  LANDLORD  FOR  REPAIRS.  Except as  otherwise  expressly
provided in this Lease, Landlord shall have no liability to Tenant, and Tenant's
covenants and obligations under this Lease shall not be reduced or abated in any
manner  whatsoever by reason of any  inconvenience,  annoyance,  interruption or
injury to  business  arising  from  Landlord  making any  maintenance,  repairs,
alterations,  additions or  improvements in or to any portion of the Building or
the  Premises  or in or to  the  fixtures,  equipment  or  appurtenances  of the
Building or the  Premises,  which  Landlord is required or  permitted to make by
this Lease,  or which are required by law, or which Landlord deems  appropriate,
excepting any direct (but not consequential) damages to the extent caused by the
negligence or willful  misconduct of Landlord or its  employees.  Landlord shall
have the right to erect  scaffolding  and  barricades  in the  Premises  and the
Building for purposes of such  repairs,  provided  that such  structures  do not
unreasonably impair access to the Premises. Tenant waives any rights it may have
under  California Civil Code Sections 1941 and 1942, and any other provisions of
law now or hereafter in force, regarding the duties of a lessor to repair leased
premises or the rights of lessees to make repairs if the lessor fails to do so.

10.04 NOTICES. Tenant shall give prompt notice to Landlord of (a) any occurrence
in or about the Premises  for which  Landlord  might be liable;  (b) any fire or
other  casualty in the  Premises;  (c) any damage to or defect in the  Premises,
including the Fixtures,  for the repair of which Landlord might be  responsible;
and (d) any damage to or defect in any part or  appurtenance  of the  Building's
sanitary, electrical, heating, ventilating, air-conditioning,  elevator or other
systems located in or passing through the Premises.

                                   ARTICLE 11
                             UTILITIES AND SERVICES

11.01 BASIC  UTILITIES  AND  SERVICES.  Landlord  shall  furnish to the Premises
during  "Business  Hours,"  which are the  periods  from 8:00 a.m.  to 6:00 p.m.
Monday through Friday and 9:00 a.m. to 2:00 p.m. Saturday, except for New Year's
Day, Presidents' Day, Memorial Day,  Independence Day, Labor Day,  Thanksgiving,
Christmas,  and such other  holidays  as are  generally  observed in the City of
Beverly  Hills by the  closing  of  businesses,  and  subject  to the  rules and
regulations  from  time  to time  established  by  Landlord,  (a)  heating,  air
conditioning  and  ventilation  in amounts  reasonably  required for the use and
occupancy of the  Premises;  (b) freight and  passenger  elevator  service;  (c)
electricity in amounts  required for normal lighting by the Building's  standard
overhead fluorescent fixtures,  and for normal office machines;  and (d) hot and
cold water in amounts  required  for normal  lavatory,  coffee room and drinking
purposes.  Subject to the  provisions  of Section  11.02  regarding  charges for
additional  use,  passenger  elevator  service,  electricity  and water  will be
available 24 hours a day, every day of the year. Landlord shall provide heating,
air  conditioning,  ventilation,  and  freight  elevator  service  at other than
Business Hours by arrangement  with Tenant,  provided that Tenant is not then in
default of this Lease and provided that Tenant pays Landlord's usual charges for
such overtime use.  Landlord  shall provide  janitorial  service  Monday through
Friday,  except for the holidays  listed above,  generally  consistent with that
furnished in other  first-class  office  buildings in Beverly Hills,  and window
washing at intervals determined by Landlord.  Tenant shall neither contract for,
nor employ any labor in  connection  with,  the  maintenance,  cleaning or other
servicing of the Premises without the prior written consent of Landlord.

                                      -7-
<PAGE>

11.02  ADDITIONAL  TENANT USE. At the  Commencement  Date, and from time to time
thereafter,  Landlord may impose a reasonable charge, as Additional Charges, and
establish reasonable rules and regulations for (a) the use by Tenant of heating,
air  conditioning,  ventilation,  or  freight  elevators  at any time other than
during  Business  Hours;  (b) the use by Tenant of  heating,  air  conditioning,
ventilation,  water or electricity in amounts exceeding the amounts Landlord has
undertaken  to provide in Section  11.01;  and (c) the use of any  additional or
unusual  janitorial or cleaning  services  required  because of any non-building
standard improvements in the Premises (including glass or fragile surfaces), the
carelessness of Tenant, the nature of Tenant's business (including the operation
of Tenant's  business (other than during Business Hours),  or for the removal of
any refuse and  rubbish  unusual in kind or amount.  If Tenant  consumes  excess
electricity.  Landlord, or its electrical  consultant,  may install, at Tenant's
expense, a meter to measure the electricity consumed on the Premises.

11.03 TEMPERATURE MAINTENANCE.  Landlord makes no representation with respect to
the adequacy or fitness of the air-conditioning or ventilation  equipment in the
Building to maintain  temperatures which may be required for, or because of, any
condition other than normal office equipment, normal electrical loads, or normal
occupancy  of the  Premises,  and Landlord  shall have no liability  for loss or
damage in connection therewith.

11.04  EXCULPATION OF LANDLORD FOR  UTILITIES.  Landlord shall not be liable for
any failure to furnish any services or utilities  when such failure is caused by
acts of God, war, civil disobedience,  vandalism,  accidents, breakage, repairs,
strikes,  lockouts,  other labor  disputes,  alterations or  improvements to the
Premises or the Building,  the  inability to obtain an adequate  supply of fuel,
water,  electricity,  labor or other supplies, or for any other condition beyond
Landlord's reasonable control,  including,  without limitation, any governmental
energy conservation program, and Tenant shall not be entitled to any damages nor
shall such  failure  abate or suspend  Tenant's  obligation  to pay the Rents or
constitute  or be  construed  as a  constructive  or other  eviction  of Tenant.
Neither  Landlord's  actions nor its failure to act shall entitle  Tenant to any
damages, abate or suspend Tenant's obligation to pay the Rents, or constitute or
be construed as a constructive or other eviction of Tenant.

11.05 SECURITY.  Landlord shall institute  reasonable  security measures for the
Building, but Landlord makes no warranty,  representation, or guaranty that such
measures will adequately protect persons or property from loss or injury.

11.06 ACCESS.  Landlord,  the cleaning contractor and their employees shall have
access to the  Premises  after 5:30 p.m. and before 8:00 a.m. and shall have the
right to use,  without  charge  therefor,  all  light,  power  and  water in the
Premises reasonably required to clean the Premises.

11.07 DIRECTORY LISTING.  Landlord, at Tenant's request, shall maintain listings
of the name of Tenant (and the names of any of Tenant's  officers and employees)
on the Building  directory located in the ground floor lobby,  provided that the
names so listed  shall not use more than two lines of such  directory  for every
1,000 square feet of Rentable Area of the Premises  (rounded to the nearest full
line). The reasonable  charge of Landlord for any changes in such listings shall
be paid by Tenant to Landlord as Additional Charges.

                                   ARTICLE 12
                               RIGHTS OF LANDLORD

12.01 RESERVATION FROM PREMISES. Except for the space within the inside surfaces
of all walls,  hung ceilings,  floors,  windows and doors bounding the Premises,
Landlord  reserves  from the Premises all of the  Building,  including,  without
limitation,  the roof,  exterior Buildings walls, core corridor walls and doors,
any terraces or roofs adjacent to the Premises,  the space between hung ceilings
and the slab above and any space in or adjacent to the Premises used for shafts,
stacks,  pipes,  conduits,  fan  rooms,  ducts,  electric,  telephonic  or other
utilities,  sinks or other Building facilities,  and the use thereof, as well as
access thereto through the Premises for the purposes of operation,  maintenance,
decoration  and repair of the Premises or the  Building.  Landlord  reserves the
right,  and Tenant shall permit  Landlord,  to install,  erect, use and maintain
pipes, ducts and conduits in and through the Premises;  provided,  that Landlord
shall disguise, conceal or camouflage the pipes, ducts and conduits.

12.02 ENTRY BY  LANDLORD.  Landlord and its agents shall have the right to enter
or pass through the Premises at reasonable times (a) to examine the Premises and
to show them to actual and  prospective  lenders,  mortgagees,  purchasers,  and
lessees of the  Building and (b) to make  repairs,  alterations,  additions  and
improvements in the Premises, the Building or Building facilities and equipment.
Any entry by Landlord shall be made on reasonable advance oral notice, except in
emergency  situations.  In exercising  its rights under this  Section,  Landlord
shall take reasonable mleasures to avoid unnecessary  interference with Tenant's
use  and  occupancy  of the  Premises.  Landlord  shall  have a pass  key to the
Premises and shall be allowed to bring materials and equipment into the Premises
as required in connection with repairs, alterations, additions and improvements,
without any liability to Tenant and without any reduction of Tenant's  covenants
and  obligations,  and may do so (but  shall  not be  obligated  to do so) on an
overtime basis.

12.03  TEMPORARY  OBSTRUCTIONS  OF LIGHT OR VIEW;  CLOSURES.  If at any time any
windows of the Premises are temporarily  darkened or the light or view therefrom
obstructed by reason of any repairs, improvements, maintenance or cleaning in or
about the Building, or if any part of the Building,  other than the Premises, is
temporarily  or  permanently  closed or  inoperable,  the same  shall be without
liability  to Landlord  and  without any  reduction  or  diminution  of Tenant's
obligations under this Lease.

12.04  EXHIBITING  THE  PREMISES.  During a  period  of 18  months  prior to the
expiration  of the Lease Term,  Landlord and its agents may exhibit the Premises
to  prospective  tenants during normal  business  hours,  on reasonable  advance
written or oral notice to Tenant.

12.05 ENTRY PRIOR TO END OF TERM.  If,  during the last month of the Lease Term,
Tenant has  removed  all or  substantially  all of  Tenant's  Property  from the
Premises, Landlord may, without notice to Tenant, immediately enter the Premises
and alter,  renovate  and  decorate  the same,  without  liability to Tenant and
without  reducing or otherwise  affecting  Tenant's  covenants  and  obligations
hereunder.

12.06  BUILDING  NAME AND  ADDRESS.  Landlord  reserves  the  right at any time,
without notice or liability to Tenant, to change the Building's name or address.

12.07 ALTERATIONS OF BUILDING. Landlord reserves the right, at any time, without
incurring any liability to Tenant therefor and without affecting or reducing any
of  Tenant's  covenants  and  obligations  hereunder,   to  make  such  changes,
alterations,  additions and  improvements  in or to the Building and its systems
and equipment,  as well as in or to street entrances,  doors,  halls,  passages,
elevators,  escalators and stairways, and other public parts of the Building, as
Landlord  shall  deem  necessary  or  desirable.  However,  Landlord  shall  not
materially interfere with Tenant's use of the Premises.

12.08 OTHER  RIGHTS.  The  enumeration  of rights of Landlord in this Article is
(not all-inclusive, and shall not be construed to preclude or limit other rights
reserved to Landlord by this Lease or by law.

                                   ARTICLE 13
                              DAMAGE OR DESTRUCTION

13.01 ABATEMENT.  If the Premises are damaged by fire or other perils covered by
extended  coverage  insurance,  but subject to  Landlord's  rights under Section
13.02,  Landlord  agrees to  forthwith  repair  same to the extent of  insurance
proceeds  actually  received by  Landlord,  and this Lease shall  remain in full
force and  effect,  except that  Tenant  shall be  entitled  to a  proportionate
reduction  of the Basic Rent from the date of damage and while such  repairs are
being made,  such  proportionate  reduction to be based upon the extent to which
the  damage and  making of such  repairs  shall  materially  interfere  with the
conduct of Tenant's  business  within the Premises.  If the damage is due to the
fault or  neglect  of  Tenant  or any  officer,  agent,  employee,  invitee,  or
principal of Tenant, there shall be no such abatement.  Tenant, for all purposes
under this Lease,  hereby waives the provisions of California  Civil Code ss.ss.
1932 and 1933 and those of any law of similar import now or hereafter enacted.

13.02  RECONSTRUCTION.  If the  Premises  are  damaged  by fire or other  perils
covered by fire and extended  coverage  insurance  and such is not the result of
the act or omission of Tenant or any officer,  agent, employee,  guest, invitee,
or principal of Tenant,  then Landlord shall forthwith repair the same, provided
the extent of the  destruction  be less than ten percent  (10%) of the then full
replacement cost of the Promises. If such

                                      -8-
<PAGE>

destruction  of the Premises is to an extent of ten percent (10%) or more of the
full  replacement  cost,  then Landlord shall have the option:  (a) to repair or
restore such damage,  in which case this Lease shall  continue in full force and
effect,  but the Basic  Rent  shall be  proportionately  reduced as set forth in
Section  13.01;  or (b) to give notice to Tenant at any time  within  sixty (60)
days after such damage,  in which case this Lease shall terminate as of the date
specified  in such  notice,  which date shall be no more than  thirty  (30) days
after the giving of such  notice,  and all  interest  of Tenant in the  Premises
shall terminate on said date, and all Rents shall be paid up to the date of said
such termination.

                                   ARTICLE 14
                                 EMINENT DOMAIN

14.01 TAKING. If more than twenty-five percent (25%) of the Premises is taken or
appropriated by any public or quasi-public  authority under the power of eminent
domain,  either party hereto shall have the right,  at its option,  within sixty
(60) days after said  taking,  to  terminate  this Lease upon  thirty  (30) days
written notice. If any portion of the Premises is taken and neither party elects
to terminate as herein provided, then the Basic Rent thereafter to be paid shall
be  equitably  reduced.  If any  material  part of the  Building  other than the
Premises is taken or  appropriated,  then within sixty (60) days of said taking,
Landlord may terminate this Lease upon written  notice to Tenant.  If any taking
or appropriation  whatsoever occurs,  then Landlord shall be entitled to any and
all awards and/or settlements which may be given, and Tenant shall have no claim
against  Landlord  for the  value  of any  unexpired  term of this  Lease or any
portion of Tenant's leasehold estate.

                                   ARTICLE 15
                              SURRENDER OF PREMISES

15.01  SURRENDER.  On the  last  day of the  Lease  Term,  or upon  any  earlier
termination  of this Lease,  or upon any re-entry by Landlord upon the Premises.
Tenant shall quit and  surrender the Premises to Landlord  "broom-clean"  and in
good order,  condition  and repair,  ordinary  wear and tear  excepted  and also
excepting  any  damage or  destruction  caused by fire or other  casualty  which
Tenant is not  obligated by this Lease to repair.  Upon  expiration of the Lease
Term or earlier  termination  of this Lease,  all of Tenant's  right,  title and
interest in the Premises or the  Building,  including any  possessory  interest,
shall cease.

15.02 ACCEPTANCE OF SURRENDER.  Prior to expiration of the Lease Term or earlier
termination of this Lease,  no act or thing done by Landlord or its agents shall
be deemed an acceptance of surrender of the Premises, and no agreement to accept
such surrender shall be valid unless in writing and signed by Landlord.

15.03 NO MERGER.  The  surrender of this Lease by Tenant or the  termination  of
this Lease prior to expiration of the Lease Term shall not  constitute a merger,
and, at the option of Landlord,  shall  operate as an  assignment to Landlord of
any subleases of the Premises.

15.04 NO HOLDING OVER. There shall be no holding over by Tenant after expiration
of  the  Lease  Term,  and the  failure by Tenant to deliver  possession  of the
Premises to Landlord shall be an unlawful detainer.

                                   ARTICLE 16
                                DEFAULT BY TENANT

16.01  DEFAULT.  The  occurrence  of any of the  following  shall  constitute  a
material default and breach of this Lease by Tenant:

        (a) Tenant's failure to pay Basic Rent or Additional Charges when due;

        (b) Tenant's  failure to take  possession of the Premises within 15 days
after tendered by Landlord, or Tenant's abandonment or vacation of the Premises;

        (c) Tenant's failure to observe and perform any other provisions of this
Lease to be observed or performed by Tenant, where such failure continues for 15
days after written notice thereof by Landlord to Tenant; provided, however, that
if the nature of such failure is such that it cannot  reasonably be cured within
such  15-day  period,  Tenant  shall not be deemed to be in  default  under this
Subsection  16.01(c) if Tenant commences to cure such failure within that period
and thereafter diligently proceeds to completion;

        (d) Tenant's making any general assignment for the benefit of creditors;
the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt
or of a petition for  reorganization  or  arrangement  under any law relating to
bankruptcy  (unless, in the case of a petition filed against Tenant, the same is
dismissed  within 60 days);  the  appointment  of a trustee or  receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's  interest in this Lease,  where  possession  is not  restored to Tenant
within 30 days;  or the  attachment,  execution  or other  judicial  seizure  of
substantially  all of Tenant's  assets  located at the  Premises or of  Tenant's
interest in this Lease, where such seizure is not discharged within 30 days;

        (e) Tenant's  failure to observe or perform  according to the provisions
of Article 8 or Section 6.03 where such failure continues for more than 24 hours
after notice from Landlord;

        (f) The committing of waste on the Premises; or

        (g) The  hypothecation  or assignment of this Lease or subletting of the
Premises, or attempts at such actions, in violation of Article 19.

        (h)  Tenant's  failure to supply any  estoppel  certificate  required of
Tenant under this Lease.

16.02  TERMINATION  OF LEASE.  If any such  default  by Tenant  occurs,  then in
addition  to any other  remedies  available  to  Landlord  at law or in  equity,
Landlord shall have the immediate  option to terminate this Lease and all rights
of Tenant  hereunder by giving  Tenant a notice of  termination.  It Landlord so
terminates this Lease, then Landlord may recover from Tenant:

        (a) The  worth at the time of award of any  unpaid  rent  which had been
earned at the time of such termination; plus

        (b) The worth at the time of award of the  amount  by which  the  unpaid
rent which  would have been  earned  after  termination  until the time of award
exceeds the amount of such rental loss Tenant proves could have been  reasonably
avoided; plus

        (c) The worth at the time of award of the  amount  by which  the  unpaid
rent for the balance of the terms after the time of award  exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus

        (d) Any other amount necessary to compensate  Landlord for the detriment
proximately  caused by Tenant's  failure to perform its  obligations  under this
Lease or which in the  ordinary  course  of  things  would be  likely  to result
therefrom; plus

        (e) Such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable California law.

As used in subparagraphs  (a) and (b) above, the "worth at the time of award" is
computed by allowing  interest  from the date of  termination  until the time of
award at the maximum rate  allowable  under state or federal law, or, if no such
maximum  rate  applies,  at the  rate  of 18  percent  per  annum.  As  used  in
subparagraph  (c)  above,  the  "worth  at the time of  award"  is  computed  by
discounting  such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

16.03 REENTRY BY LANDLORD. If any such default by Tenant occurs,  Landlord shall
also have the right,  with or without  terminating  this  Lease,  to reenter the
Premises and remove all persons and property; the removed property may be stored
in a public warehouse or elsewhere at the cost of and for the account of Tenant.

16.04 ELECTION TO TERMINATE.  No reentry or taking possession of the Premises by
Landlord  pursuant  to  Section  16.03  shall be  construed  as an  election  to
terminate  this  Lease  unless a written  notice of such  intention  be given to
Tenant or unless the  termination  thereof  be  decreed by a court of  competent
jurisdiction.

 16.05 REDEMPTION  RIGHTS.  Tenant,  on behalf of itself and any and all persons
claiming through or under  Tenant, hereby  waives and  surrenders  all right and
privilege which it might have,  under any law, to redeem the Premises or to have
a continuance of this Lease after being dispossessed or ejected

                                      -9-
<PAGE>

from the  Premises  by  process of law or under the terms of this Lease or after
the termination of this Lease.

16.06  APPLICATION OF RENT  PAYMENTS.  Tenant waives all rights that it may have
under present or future law to designate the items to which any payments made by
Tenant are to be credited.  Tenant  agrees that  Landlord may apply any payments
made by  Tenant  to  such  items  as  Landlord  sees  fit,  irrespective  of any
designation  or request by Tenant as to the items to which such payments  should
be credited.

16.07 COUNTERCLAIMS.  Tenant shall not interpose any counterclaim of any kind in
any action or  proceeding  commenced  by Landlord to recover  possession  of the
Premises except those that would be waived by law due to Tenant's  failure to so
interpose.   Tenant  may  assert  any  counterclaim  in  a  separate  action  or
proceeding.

16.08 PERFORMANCE BY LANDLORD. If Tenant shall default in the performance of any
of Tenant's  obligations under this Lease, and the default continues for 15 days
after Landlord gives Tenant notice of the default,  and Tenant has not commenced
diligently to cure such default,  Landlord,  without  thereby  waiving or curing
such  default,  may (but  shall  not be  obligated  to)  perform  the  defaulted
obligation  for the account and at the expense of Tenant.  Landlord  may perform
Tenant's  defaulted  obligation  without notice in a case of emergency,  also at
Tenant's sole cost and expense.

16.09  PAYMENT OF  LANDLORD'S  EXPENSE.  Any  expenses  incurred  by Landlord in
connection  with any  performance  by it for the account of Tenant under Section
16.08, and all costs and expenses, including reasonable attorneys' fees (whether
or not legal  proceedings  are  instituted),  involved  in  collecting  Rents or
enforcing  the  obligations  of Tenant under this Lease,  including the cost and
expense  of  instituting  and  prosecuting   legal   proceedings  or  recovering
possession of the Premises after default by Tenant or upon  expiration or sooner
termination  of this  Lease,  shall be due and  payable by Tenant as  Additional
Charges.

16.10  POST-JUDGMENT  INTEREST.  The amount of any judgment obtained by Landlord
against Tenant in any legal proceeding  arising out of a default by Tenant under
this Lease shall bear  interest  until paid at the maximum  rate allowed by law,
or, if no such  maximum  rate  prevails,  at the rate of 18  percent  per annum.
Notwithstanding  California Civil Code ss. 3287 to the contrary,  if any damages
were certain or  ascertainable  by calculation,  then such interest shall accrue
from the day that the right to such damages vested in Landlord, and if any claim
is unliquidated, such interest shall accrue from the day such claim arose.

16.11  NO  WAIVERS.  The  failure  of  Landlord  to  insist,  in any one or more
instances,  upon the strict performance by Tenant of any of Tenant's obligations
under this  Lease,  or to exercise  any right or remedy  given  Landlord  upon a
default by Tenant,  shall not be construed as a waiver or relinquishment for the
future,  and the obligations of Tenant and Landlord's rights and remedies upon a
default  shall  continue and remain in full force and effect with respect to any
subsequent  breach,  act or  omission.  The  receipt by  Landlord  of Rents with
knowledge  of a breach by Tenant of any  obligaiton  of this Lease  shall not be
deemed a waiver of such breach.

16.12  REMEDIES NOT EXCLUSIVE.  The rights and remedies  provided to Landlord in
this  Article are not  exclusive,  and  Landlord may exercise any other right or
remedy it may have pursuant to this Lease, at law or in equity.

16.13 QUARTERLY PAYMENTS.  Landlord reserves the right to collect,  quarterly in
advance,  any and all amounts  owed by Tenant  under this Lease after Tenant has
defaulted  hereunder,  as  defined  in  this  Article  and  notwithstanding  the
subsequent  cure of any or all of such  defaults,  three  or more  times  in any
consecutive  twelve month period.  Tenant shall begin such payments on the first
day of the calendar  month  immediately  following  notice from  Landlord of the
exercise of such right. Tenant shall pay all intra-quarterly  upward adjustments
within  ten days of notice of same from  Landlord,  and  Landlord  shall  credit
Tenant's next quarterly payment with all intra-quarterly  downward  adjustments.
Such right may be exercised by Landlord in Landlord's absolute  discretion,  and
shall not be construed as an  obligation of Landlord.

                                   ARTICLE 17
                          SUBORDINATION AND ATTORNMENT

17.01 OPERATION. Upon request of Landlord, Tenant shall subordinate, in writing,
its rights hereunder to the lien of any mortgage or deed of trust,  given to any
person,  now or hereafter in force against the Building or the Premises,  and to
all advances  made or hereafter  to be made upon the  security  thereof.  If any
proceedings  are  brought  for  foreclosure,  or if the power of sale  under any
mortgage or deed of trust made by Landlord covering the Building or the Premises
is  exercised,  then  Tenant  shall  attorn  to  the  purchaser  upon  any  such
foreclosure  or sale and recognize  such purchaser as Landlord under this Lease.
The provisions of this Article 17 to the contrary  notwithstanding,  and so long
as Tenant is not in default hereunder, this Lease shall remain in full force and
effect for the full term hereof.

                                   ARTICLE 18
                                 QUIET ENJOYMENT

18.01 QUIET ENJOYMENT.  So long as Tenant timely pays all the Rents and performs
all of Tenant's other  obligations  hereunder within the time periods  permitted
under this Lease,  Tenant shall  peaceably and quietly have,  hold and enjoy the
Premises  during the Lease Term without  hindrance,  ejection or  molestation by
Landlord or any person lawfully  claiming  through or under  Landlord,  subject,
nevertheless,  to the  provisions  of  this  Lease  and to any  mortgages.  This
covenant is a covenant running with the land, and is not a personal  covenant of
Landlord.

                                   ARTICLE 19
                            ASSIGNMENTS AND SUBLEASES

19.01  CONSENT.  Tenant shall not assign or sublease  the  Premises  without the
prior  written  consent of Landlord,  which  consent  shall not be  unreasonably
withheld,  except that Landlord shall have the unfettered right to withhold such
approval of any proposed assignee or sublessee (the "Proposed Assignee"), (a) on
the basis of the Proposed  Assignee's  character and/or  reputation,  (b) if the
Proposed Assignee has negotiated with Landlord or Landlord's agent for a tenancy
in the Building within the previous six months, (c) if the Proposed Assignee (or
an affiliate  thereof) is then a tenant of the Building,  or (d) if the Proposed
Assignee's  proposed use of the Premises is not  consistent  with the  Permitted
Use. If the Proposed Assignee is approved by Landlord,  any amounts collected by
Tenant in excess of all Rents otherwise owed under this Lease (but not including
amounts  equal to the fair market value of personal  property  sold or leased by
Tenant to the Proposed  Assignee in connection with the  assignment/sublease  of
the Premises) shall be paid to Landlord as Additional Charges. Landlord reserves
the  right to  collect  rent  directly  from  the  Proposed  Assignee,  and such
collection  shall not waive  any  obligation  of Tenant  under  this  Lease.  No
assignment  or sublease  of this Lease  shall  serve to release  Tenant from any
obligation under this Lease.

19.02 OFFER TO  LANDLORD.  Notwithstanding  Section  19.01 to the  contrary,  if
Tenant desires to assign or sublease the Premises,  Tenant shall first offer the
Premises  to  Landlord  under  terms and  conditions  at least as  favorable  to
Landlord as those that would be offered to the Proposed Assignee. Landlord shall
have not less than 60 days in which to accept  said offer.  If Landlord  accepts
said offer, Landlord and Tenant shall promptly execute documentation, acceptable
to Landlord, to effect an  assignment/sublease of the Premises to Landlord under
said terms and conditions.  If Landlord does not accept said offer,  then Tenant
shall have the  rights  described  in  Section  19.01.  Any  proposal  made to a
Proposed Assignee that is (a) materially more favorable to the Proposed Assignee
than that offered  Landlord,  or (b) that is accepted by the  Proposed  Assignee
more than 60 days after the earlier of (i) Landlord's  rejection of the offer to
Landlord,  and (ii) Landlord's  60-day  acceptance  period  described above, (c)
shall be null and void and shall require a new offer to Landlord under the terms
set forth in this Section 19.02.

19.03 CONSTRUCTIVE ASSIGNMENT. Any dissolution of Tenant, and any transaction or
group  of  transactions  that  causes  one  or  more  persons,   not  previously
controlling  Tenant,  to control Tenant (either alone or with other  controlling
persons),  is hereby  deemed to be an  assignment  of this  Lease,  and shall be
subject  to the  terms  of  this  Article  19.  In the  case  of a  partnership,
controlling  persons are deemed to be each general partner  thereof,  and in the
case of a corporation.

                                      -10-
<PAGE>

controlling  persons are deemed to be each shareholder of the corporation owning
shares sufficient in number to impose said shareholder's will over that of other
shareholders of the corporation.

                                   ARTICLE 20
                                    NOTICES

20.01  NOTICES.  All  notices  and  demands  which may or are to be  required or
permitted  to be  given  by  either  party to the  other  hereunder  shall be in
writing.  All notices and demands  shall be  sufficient if sent by United States
Mail,  postage prepaid,  addressed to the party to be notified at its address at
the Building (except that prior to the Commencement  Date,  Tenant's address for
such purposes shall be as set forth in Section 1.11), or to such other person or
place as such party may from time to time designate by notice to the other.

                                   ARTICLE 21
                              ESTOPPEL CERTIFICATES

21.01  ESTOPPEL  CERTIFICATES.  Within 10 days  after a request by  Landlord  or
Tenant,  the  other  party  shall  execute  an  estoppel  certificate,  in  form
satisfactory to the requesting party, and shall deliver such certificate to whom
the  requesting  party or any mortgagee  shall direct,  which (a) certifies that
this  Lease is  unmodified  and in full  force and effect (or if there have been
modifications,  that the same is in full  force  and  effect  as  modified,  and
slating the modifications); (b) states the expiration date of the Lease Term and
that there are no  agreements to extend or renew the Lease Term or to permit any
holding over (or if there are any such agreements,  describes them and specifies
the periods of extension or renewal);  (c)  certifies  the dates  through  which
Rents have been paid;  (d) states whether or not, to the knowledge and belief of
the certifying  party,  the requesting party is in default in performance of any
of its obligations  under this Lease, and specifies each default of which it has
knowledge; (e) states whether or not, to the knowledge and belief of Tenant, any
event has occurred which, with the giving of notice or passage of time, or both,
would  constitute  a default by  Landlord  and,  if such an event has  occurred,
specifies each such event; (f) states whether Tenant is entitled to any credits,
offsets,  defenses or deductions against payment of Rents, and, if so, describes
them; and (g) states such other information as Landlord and/or a mortgagee shall
reasonably request.

                                   ARTICLE 22
                             RELOCATION OF PREMISES

22.01  BUILDING  PLANNING.   If  Landlord  requires  the  Premises  for  use  in
conjunction  with  another  suite or for any other  reasons  connected  with the
Building planning  program,  Landlord,  upon notifying Tenant in writing,  shall
have the right to move Tenant to another  space in the  Building,  at Landlord's
sole cost and expense,  and the terms and  conditions of this Lease shall remain
in full force and effect,  except that the Premises  shall be in a new location.
If the new  space  does not meet with  Tenant's  reasonable  approval,  however,
Tenant may cancel  this Lease upon  giving  Landlord  thirty  (30) days'  notice
within ten (10) days after receipt of Landlord's notification. If Tenant refuses
to permit  Landlord to so move Tenant to such new location,  then Landlord shall
have the right to cancel and terminate this Lease effective immediately.

                                   ARTICLE 23
                                     BROKER

23.01 BROKER.  Tenant  covenants,  warrants and represents that no broker except
Tenant's Broker was  instrumental  in bringing about or consummating  this Lease
and that Tenant had no  conversations  or  negotiations  with any broker  except
Tenant's  Broker  concerning  the  leasing  of the  Premises.  Tenant  agrees to
indemnify, defend and hold Landlord harmless against and from any claims for any
brokerage  commissions  or finder's fees by persons other than Tenant's  Broker,
and all costs, expenses and liabilities incurred in connection with such claims,
including attorneys' fees.

                                   ARTICLE 24
                         EXCULPATION AND INDEMNIFICATION

24.01 EXCULPATION. Neither Landlord, nor Landlord's Affiliates, nor any partner,
director,  officer, agent or employee of Landlord or Landlord's Affiliates,  nor
mortgagee or any director,  officer,  other agent or employee of such mortgagee,
shall be liable to Tenant or its  partners,  directors,  officers,  contractors,
agents, employees,  invitees,  sublessees or licensees (collectively,  "Tenant's
Agents"), for any loss, injury or damage to Tenant or to any other person, or to
its or their property, irrespective of the cause of such injury, damage or loss,
except to the  extent  caused by or  resulting  from the  negligence  or willful
misconduct of Landlord or its employees in the operation or  maintenance  of the
Premises or the Building.  Further, neither Landlord, nor Landlord's Affiliates,
nor any partner, director,  officer, agent or employee of Landlord or Landlord's
Affiliates,  nor mortgagee or any director,  officer, other agent or employee of
such mortgagee,  shall be liable (a) for any such damage caused by other lessees
or persons in or about the Building,  or caused by operations in construction of
any private,  public or  quasi-public  work,  or (b) for  consequential  damages
arising  out of  any  loss  of the  use of  the  Premises  or any  equipment  or
facilities therein by Tenant or any person claiming through or under Tenant.

24.02  INDEMNITY.  Tenant shall defend,  indemnify  and hold harmless  Landlord,
Landlord's  Affiliates,  all mortgagees,  and its and their respective partners,
directors,  officers,  agents and employees  from and against any and all direct
and/or  consequential  claims,  demands,  liability,  loss,  damage,  costs  and
expenses  arising from or in connection  with:  (a) the conduct or management of
the  Premises or of Tenant's  business  therein,  or any work or act  whatsoever
done,  or any  condition  created by Tenant or  Tenant's  Agents in or about the
Premises or the Building  during the Lease Term or during the period of time, if
any,  prior to the  Commencement  Date that Tenant may have been given access to
the Premises;  (b) any act, omission or negligence of Tenant or Tenant's Agents;
(c) any accident,  injury or damage  whatsoever  (except to the extent caused by
Landlord's negligence or willful misconduct) occurring in or about the Premises;
and (d) any  breach or  default  by Tenant in the full and  prompt  payment  and
performance of Tenant's  obligations under this Lease;  together with all costs,
expenses  and  liabilities  incurred in  connection  with each claim,  action or
proceeding  brought  thereon,  including,  without  limitation,  all  reasonable
attorneys'  fees and  expenses.  Upon  Landlord's  demand  before  or after  the
expiration or earlier  termination of the Lease Term,  Tenant shall perform such
acts, and shall execute such agreements,  as are reasonably  necessary to assure
Landlord  (and such other  persons as  Landlord  deems  necessary)  of  Tenant's
obligation  to abide by the  provisions of this Section 24.02 and Article 15. If
an action or proceeding is brought against any of the persons  indemnified under
this Section for a matter covered by this  indemnity,  Tenant,  upon notice from
the  indemnified  person,  shall  defend  such action or  proceeding  by counsel
reasonably satisfactory to Landlord and the indemnified person.

24.03 SATISFACTION OF REMEDIES. Neither Landlord, nor Landlord's Affiliates, nor
any successor to Landlord's interest, including any Successor Landlord, shall be
personally  liable for the  performance  of  Landlord's  obligations  under this
Lease.  Tenant shall took only to Landlord's estate and property in the Land and
the Building (or the proceeds  thereof),  and to no other  property or assets of
Landlord or Landlord's  Affiliates,  for the  satisfaction of Tenant's  remedies
under  this  Lease,  or for the  collection  of a  judgment  (or other  judicial
process)  requiring the payment of money by Landlord or  Landlord's  Affiliates.
The  covenants  and  agreements   contained  in  this  Section  24.03  shall  be
enforceable by Landlord,  Landlord's  Affiliates,  and its and their  respective
successors and assigns.

24.04 TRANSFERS OF LANDLORD'S INTEREST. The covenants and agreements of Landlord
under this Lease  shall not be  binding  on any person at any time  holding  the
interest of Landlord  (including the original named Landlord)  subsequent to the
transfer  of that  person's  interest  in the  Building.  In the event of such a
transfer,  the covenants and agreements of Landlord shall  thereafter be binding
upon the  transferee  of  Landlord's  interest.  If  Landlord's  interest in the
Building or the Land shall be sold,  assigned or  otherwise  transferred  to any
person,  including  any transfer  upon the exercise of any remedy  provided in a
mortgage or at law or equity, that person, and each person thereafter succeeding
to its interest in the Building or the Land, shall not be (a) liable for any act
or  omission  of  Landlord  under  this  Lease  occurring  prior  to such  sale,
assignment or other transfer; (b) subject to any offset, defense or counterclaim
accruing  prior to such sale,  assignment  or other  transfer;  (c) bound by any
payment  prior to such  sale,  assignment  or other  transfer  of Basic  Rent or
Additional  Charges for more than one month in  advance;  and (d) liable for the
return of the Security  Deposit  except to the extent that the Security  Deposit
has been paid over to such person.

                                      -11-
<PAGE>

                                   ARTICLE 25
                                     PARKING

25.01 TENANT'S PARKING.  Tenant shall have the right to use Tenant's Parking for
the unreserved and  unassigned  parking of standard size or smaller  automobiles
used by  Tenant,  its  officers  and  employees.  Such  right is  subject to (a)
Tenant's  notice to  Landlord,  on or before the first  anniversary  of the Rent
Commencement  Date, of Tenant's election to so use a number of parking spaces up
to that  amount  allotted to Tenant in Section  1.09,  and (b)  Tenant's  timely
payment to  Landlord  or the  operator  of the  Building  parking  garage of the
prevailing fee for parking charged to lessees and occupants of the Building.  To
the extent that  Tenant  fails to so elect or to so pay,  Landlord  shall not be
obligated to allot parking  spaces to Tenant as Tenant's  Parking.  Landlord may
designate the location of Tenant's  Parking,  and may from time to time relocate
all or any portion of Tenant's  Parking.  The use of Tenant's  Parking  shall be
governed by the rules and  regulations  adopted from time to time by Landlord or
the operator of the parking garage.  Tenant's  business  visitors shall have the
right to park in the parking  garage only to the extent  that  parking  space is
available and subject to the payment of the prevailing  fee for parking  charged
to visitors to the Building.

                                   ARTICLE 26
                                  MISCELLANEOUS

26.01 MEMORANDUM OF LEASE.  Tenant shall not record this Lease.  However, at the
request of Landlord,  Tenant shall promptly execute,  acknowledge and deliver to
Landlord a  memorandum  of lease  with  respect  to this  Lease  sufficient  for
recording.

26.02  ENTIRE  AGREEMENT.   This  Lease  contains  all  of  the  agreements  and
understandings  related  to the  leasing  of the  Premises  and  the  respective
obligations  of Landlord and Tenant in  connection  therewith.  Landlord has not
made and is not making,  and Tenant,  in executing and delivering this Lease, is
not relying  upon,  any  warranties,  representations,  promises or  statements,
except those that are  expressly  set forth in this Lease,  including any riders
and all exhibits  hereto.  All prior agreements and  understandings  between the
parties have merged into this Lease, which alone fully and completely  expresses
the agreement of the parties.

26.03  AMENDMENTS.  No agreement  shall be effective to amend,  change,  modify,
waive, release, discharge,  terminate or effect an abandonment of this Lease, in
whole or in part, unless such agreement is in writing,  refers expressly to this
Lease and is signed by Landlord and Tenant. Material modifications to this Lease
must also be approved by any mortgagee who has such right under its mortgage.

26.04 SUCCESSORS. Except as otherwise expressly provided herein, the obligations
of this Lease shall bind and benefit the  successors  and assigns of the parties
hereto;  provided,  however,  that no assignment,  sublease or other transfer in
violation of the  provisions  of Article 19 shall  operate to vest any rights in
any putative assignee, sublessee or transferee of Tenant.

26.05  FORCE  MAJEURE.  Neither  Landlord  nor Tenant  shall have any  liability
whatsoever to the other on account of (a) the inability to fulfill,  or delay in
fulfilling,  any of its  obligations  under this  Lease by reason of war,  civil
disobedience, strike, other labor trouble, governmental preemption of priorities
or other controls in connection  with a national or other public  emergency,  or
shortages of fuel,  supplies or labor resulting  therefrom,  or any other cause,
whether similar or dissimilar to the above,  beyond its reasonable  control;  or
(b) any failure or defect in the supply, quantity or character of electricity or
water furnished to the Premises,  by reason of any requirement,  act or omission
of the public  utility or others  furnishing  the Building with  electricity  or
water,  or for any other  reason,  whether  similar or  dissimilar to the above,
beyond Landlord's  reasonable control. If this Lease specifies a time period for
performance of an  obligation,  that time period shall be extended by the period
of any delay in such  performance  caused by any of the events of force  majeure
described above.

26.06  POST-TERMINATION  OBLIGATIONS.  Upon the  expiration of the Lease Term or
earlier  termination  of this  Lease,  neither  party  shall  have  any  further
obligation or liability to the other except as otherwise  expressly  provided in
this  Lease,  and except for such  obligations  as by their  nature or under the
circumstances  can  only  be,  or,  by the  provisions  of this  Lease,  may be,
performed after such expiration or earlier  termination.  However, any liability
for a payment of Rents shall survive the  expiration or earlier  termination  of
this Lease.

26.07  EXCAVATIONS.  If an excavation is made upon land adjacent to or under the
Building, or is authorized to be made, then, at the request of Landlord,  Tenant
shall afford persons  performing the excavation and shoring license to enter the
Premises for the purpose of doing such work as those persons may deem  necessary
or desirable  to preserve and protect the Building  from injury or damage and to
support  the  Building.  Tenant  shall have no claim for  damages  or  liability
against  Landlord or such  persons,  and Tenant's  obligations  under this Lease
shall not be reduced or otherwise affected.

26.08  Definitions.  For the purposes of this Lease,  the following  terms shall
have the following meanings:

        (a) Including.  "Including"  and  "include"  shall be interpreted in the
merely descriptive and non-exclusive sense unless the contrary is explicitly set
forth thereat.

        (b)  Landlord.  "Landlord"  shall mean the Landlord  herein named or any
successor  in  interest,  but only for the time  that any such  person  owns the
Building  or a lease of the  Building  in  accordance  with and  subject  to the
provisions of Section 24.04.

        (c)  Landlord's  Affiliates.  "Landlord's  Affiliates"  shall mean BHAM,
Ltd., Fortune Funding Company, Housing Affiliates, Inc., HAI Corp., and Realtech
Leasing and Management Co.

        (d) Laws. "Laws," "provisions of law," and words of similar import shall
mean laws, statutes,  ordinances,  building and fire codes, rules,  regulations,
judgments, rulings, decrees, orders and directives of any or all of the federal,
state, county and city governments and all departments,  subdivisions,  bureaus,
courts,  agencies or offices thereof,  and of any other governmental,  public or
quasi-public  authorities having jurisdiction over the Building or the Premises,
and  the  direction  of any  public  officer  pursuant  to law,  whether  now or
hereafter in force.  References to specific statutes include successor  statutes
of similar purpose and import.

        (e)  Mortgaqe.  "Mortgage"  shall  include a mortgage,  a deed to secure
debt, or a deed of trust,  and "holder of a mortgage" or "mortgagee" or words of
similar  import shall include a mortgagee of a mortgage,  a grantee of a deed to
secure debt, or a beneficiary of a deed of trust.

        (f)  Person.  "Person"  shall  mean any  natural  person  or  persons, a
partnership, a corporation,  and any other form of business or legal association
or entity.

        (g) Rentable Area of the Building. "Rentable Area of the Building" shall
mean 280,867 square feet.

        (h) Tenant.  "Tenant" shall mean the Tenant herein named or any assignee
or other successor in interest (immediate or remote) of the Tenant herein named,
who at the time in question  is the owner of the  Tenant's  estate and  interest
granted by this Lease;  but the  foregoing  shall not be construed to permit any
sublease or  assignment  of this Lease in violation of Article 19, or to relieve
the Tenant herein named or any assignee or other successor in interest  (whether
immediate  or  remote)  of the  Tenant  herein  named  from the full and  prompt
payment, performance and observance of the covenants, obligations and conditions
to be paid, performed and observed by Tenant under this Lease. The Tenant herein
named and all assignees and other successors in interest shall remain liable for
all  such  covenants,  obligations  and  conditions  as  principals  and  not as
guarantors.

26.09 LIGHT AND AIR. No diminution or shutting off of light,  air or view by any
structure  that may be erected on lands in the vicinity of the Building shall in
any manner affect this Lease or the obligations of Tenant  hereunder,  or impose
any liability on Landlord.

26.10 GOVERNING LAW. This Lease shall be governed by and construed in accordance
with the laws of the State of California.

26.11 INVALIDITY.  If any provision of this Lease or the application  thereof to
any person or circumstance  shall, for any reason and to any extent,  be invalid
or  unenforceable,  the remainder of this Lease shall not be affected,  and said
provision  and  the   application   of  said   provision  to  other  persons  or
circumstances shall be enforced to the greatest extent permitted by law.

                                      -12-
<PAGE>

26.12  CAPTIONS.  The  captions,  headings  and title of this Lease,  along with
tables of  contents  or  indexes  of  defined  terms,  if any,  are  solely  for
convenience of reference and shall not affect the interpretation of this Lease.

26.13  PRESUMPTIONS.  This  Lease  shall  be  construed  without  regard  to any
presumption  or other rule requiring  construction  against the party drafting a
document.  It shall be construed neither for nor against Landlord or Tenant, but
shall be given a reasonable  interpretation in accordance with the plain meaning
of its terms and the intent of the parties.

26.14  INDEPENDENT  COVENANTS.  Each  covenant,  agreement,  obligation or other
provision  of this Lease on Tenant's  part to be  performed  shall be deemed and
construed as a separate and independent covenant of Tenant, not dependent on any
other provision of this Lease.

26.15 NUMBER AND GENDER.  All terms and words used in this Lease,  regardless of
the  number of gender in which  they are used,  shall be deemed to  include  any
other number and any other gender as the context may require.

26.16 TIME IS OF THE  ESSENCE.  Time is of the essence of this Lease and of each
provision hereof in which a time of performance is established.

26.17 JOINT AND SEVERAL LIABILITY. If, at any time during the Lease Term, Tenant
comprises more than one person,  all such persons shall be jointly and severally
liable for payment of Rents and for  performance  of every  obligation of Tenant
under this Lease.

26.18  EXHIBITS.  All  exhibits  and  any  riders  appended  to this  Lease  are
incorporated herein and by this reference made a part hereof.

26.19 SUBMISSION OF LEASE. The submission of this Lease to Tenant or its broker,
agent or attorney for review or signature does not constitute an offer to Tenant
to lease the  Premises or the  granting  of an option to do so. This  instrument
shall have no binding  force or effect until its  execution and delivery by both
Landlord and Tenant.

26.20 LABOR  HARMONY.  Tenant shall not use (and upon notice from Landlord shall
cease using) contractors, services, workmen, labor, materials or equipment that,
in  Landlord's  reasonable  judgment,  would  disturb  labor  harmony  with  the
workforce or trades  engaged in performing  other work,  labor or services in or
about the Building.

26.21 RULES AND REGULATIONS.  Tenant shall observe and comply with the Rules and
Regulations  for the Building set forth in Exhibit D hereto,  and any reasonable
amendments and additions thereto as Landlord may adopt from time to time for the
management,  safety,  security, care, cleanliness and good order of the Building
(the "Rules and  Regulations").  Landlord  shall not be responsible or liable to
Tenant  for  violations  of the  Rules  and  Regulations  by other  lessees  and
occupants of the Building.

26.22 INSOLVENCY. At any time during the Lease Term that (a) Landlord reasonably
believes that Tenant is insolvent,  is not generally discharging its liabilities
as they become due or is (or will be) otherwise unable to pay the full amount of
Rents as said Rents become due hereunder, and (b) Tenant (i) is not obligated to
pay the full  amount of Basic Rent as set forth in Section  3.01,  which lack of
obligation is permitted by an abatement  clause of this Lease or other agreement
between  Landlord  and  Tenant,  and/or  (ii) is  entitled  to the benefit of an
allowance from Landlord for the purpose of constructing  tenant  improvements in
the Premises,  then  Landlord  may, but is not obligated to, (c) terminate  this
Lease upon thirty days' notice thereof to Tenant,  (d) demand, by notice thereof
to Tenant,  that  Tenant pay the full  amount of Basic Rent as  provided in this
Lease  irrespective of any abatement  clause hereof or other  agreement  between
Landlord and Tenant,  (e) terminate,  by notice thereof to Tenant, the continued
and future  benefit to Tenant of any  allowance for the  construction  of tenant
improvements  in the  Premises,  thereby  obligating  Tenant  to  complete  said
improvements  at its sole cost and expense,  or (f) exercise any  combination of
the rights  permitted  to Landlord in this Section  26.22 as may be  appropriate
under the circumstances.  Notwithstanding  the foregoing,  if Landlord exercises
any of the rights  permitted  to it in this  Section  26.22  (except if Landlord
terminates this Lease pursuant thereto) and Tenant thereafter fully performs all
of its obligations under this Lease (as modified by the exercise of such rights)
throughout the twelve months following  Landlord's exercise of such rights, then
Landlord shall refund to Tenant the benefit that would have inured to Tenant but
for  this  Section  26.22.  Such  refund  shall be made  over a  period  of time
equivalent  in length to that over which Tenant would have received such benefit
but for this  Section  26.22,  and equal to the  dollar  amount of such  benefit
without regard for interest or the time-value of money.

26.23  TERMINATION.  No  termination  or expiration of this Lease shall serve to
release Tenant from any obligation  that relates to one or more periods prior to
such  termination  or  expiration,  or from any  obligation  that by its nature,
arises on or after such termination or expiration.

                                   ARTICLE 27
                                      RIDER

27.01  RIDER TO LEASE.  This Lease is  modified  and amended by the terms of the
Rider attached hereto. In the event that the printed terms of the Rider conflict
with the  printed  terms of this  Lease,  the  printed  terms of the Rider shall
prevail.  Typewritten and handwritten  modifications and amendments to the Rider
and to this Lease,  when initialled by Landlord and by Tenant,  shall prevail in
any conflict with printed terms, whether in the Rider or in this Lease.

IN WITNESS WHEREOF,  Landlord and Tenant have duly executed this Lease as of the
date first above written.

TENANT:

STATMON TECHNOIOGIES CORP.,
a Delaware corporation

By  /s/ Geoffrey Talbot
    -----------------------------------------
    Its CEO
        -------------------------------------

By
   ------------------------------------------
   Its
       --------------------------------------

  DATED:                            , 19
         --------------------------      ----

LANDLORD:

MAPLE PLAZA, LTD., a California limited partnership

By BHAM, Ltd., a California limited partnership,
General Partner

By Housing Affiliates, Inc., a California corporation,
General Partner

By  /s/ [ILLEGIBLE]
    -----------------------------------------
    Its CFO
        -------------------------------------
DATED:  December 4, 2001
        -------------------------------------

                                      -13-
<PAGE>

                                    EXHIBIT B
                        MEMORANDUM OF LEASE COMMENCEMENT

         This  Memorandum of Lease  Commencement is made as of December 20, 2001
by MAPLE PLAZA, LTD. a California limited  partnership  ("Landlord"),  having an
office at c/o Realtech  Development &  Construction  Company,  2080 Century Park
East,  Penthouse,  Los Angeles,  California  and Statmon  Technologies  Corp., a
Delaware  corporation  ("Tenant"),  having an office at 345 North  Maple  Drive,
Suite  120,  Beverly  Hills,  California.  Landlord  and  Tenant  agree  to  and
acknowledge the following matters:

         1.  Landlord  and Tenant have entered into a lease dated as of December
3, 2001 (the "Lease"),  covering office space in Suite 120, located at 345 North
Maple Drive, Beverly Hills,  California 90210, as more particularly described in
the Lease.

         2. All terms defined in the Lease shall have the same meaning when used
in this Memorandum of Lease Commencement.

         3. The  Commencement  Date of the Lease is  December  10,  2001 and the
Expiration Date of the Lease is December 31, 2004.

         IN WITNESS  WHEREOF,  Landlord and Tenant have executed this Memorandum
of Lease Commencement as of the day and year first above written.

TENANT:                                       LANDLORD:

Statmon Technologies Corp.                    MAPLE PLAZA, LTD.,
a Delaware corporation                        a California limited partnership

                                              By BHAM, Ltd.,
                                              a California limited partnership,
                                              General Partner

By /s/ Geoffrey Talbot                        By Housing Affiliates, Inc.,
   ---------------------------------          a California corporation,
   Its CEO                                    General Partner
       -----------------------------

                                              By /s/ [ILLEGIBLE]
                                                 -------------------------------
                                                 Its Pres.
                                                     ---------------------------

                                      B-1                              Exhibit B

<PAGE>

                                  RIDER TO LEASE

                                     BETWEEN

                          MAPLE PLAZA, LTD. (LANDLORD)

                                       AND

                       STATMON TECHNOLOGIES CORP. (TENANT)

RENTAL ABATEMENT. Section 3.07 is hereby added to the Lease.

      3.07 RENTAL ABATEMENT.  Notwithstanding  anything in this Article 3 to the
contrary,  Tenant shall receive a rental  abatement of Nineteen  Thousand  Three
Hundred  Ninety-Five  and 75/100  Dollars  ($19,395.75)  which  shall be applied
against first rents due.  Tenant shall pay all other amounts due under the Lease
in full.

ARTICLE 17 -  SUBORDINATION  AND  ATTORNMENT.  Article 17 of the Lease is hereby
amended to read in its entirety as follows:

      17.01  SUBORDINATION.  This Lease,  and all rights of Tenant under it, are
subordinate  to all present and future leases of all or any part of the Building
or the Land (except for leases of office or commercial  space by other occupants
of the  Building);  existing and future  mortgages (as  "mortgage" is defined in
Section  26.08)  encumbering  the  Building,  the  Land or any of  such  leases,
including  mortgages  also  covering  other real  property;  all past and future
advances made under such mortgages,  all renewals,  modifications,  replacements
and   extensions   of  such  leases  and  such   mortgages   and  spreaders  and
consolidations  of such mortgages;  unless the mortgagee under any such mortgage
elects that this Lease shall be  superior  to his  mortgage  pursuant to Section
17.02.  Notwithstanding the foregoing to the contrary,  no such subordination to
any future mortgage shall occur hereunder until such future mortgagee delivers a
reasonably acceptable non-disturbance agreement to Tenant. This Section shall be
self-operative and no further instrument of subordination shall be required.  In
confirmation  of   subordination,   however,   Tenant  shall  promptly  execute,
acknowledge  and  deliver to  Landlord a any  instrument  that  Landlord  or the
mortgagee  under any such  mortgage  or any of their  respective  successors  in
interest may reasonably request to evidence such subordination.  If Tenant fails
to execute,  acknowledge or deliver any such instrument  within 10 business days
after  request  therefor,  such failure  shall  constitute a default  under this
Lease. Tenant hereby irrevocably appoints Landlord as tenant's attorney-in-fact,
coupled  with  an  interest,  to  execute,  acknowledge  and  deliver  any  such
instrument for and on behalf of Tenant in the event of such a default by Tenant,
but exercise by Landlord of such power-of-attorney shall not cure the default.

<PAGE>

      17.02 ELECTION TO SUBORDINATE.  By written notice to Tenant, any mortgagee
may elect to subordinate its mortgage to this Lease.

      17.03  NOTICE AND CURE OF  LANDLORD'S  DEFAULT.  If any act or omission of
Landlord would give Tenant the right,  immediately or after lapse of a period of
time,  to  cancel  or  terminate  this  Lease,  or to claim a  partial  or total
eviction,  Tenant shall not exercise  such right (a) until it has given  written
notice of the act or omission to Landlord,  and any mortgagee which has provided
its address to Tenant  which  notice  shall  specifically  refer to this Section
17.03 and shall describe Landlord's default, if any, with reasonable specificity
and  detail,  specifying  the  section of this Lease as to which  Landlord is in
default,  and (b) until a  reasonable,  period for remedying the act or omission
shall have elapsed  following  the giving of such notice and  following the time
during which each  mortgagee  would be entitled under its mortgage to remedy the
act or omission (which  reasonable  period shall in no event be shorter than the
period during which  Landlord  would be entitled  under this Lease or otherwise,
after similar notice, to effect such remedy). If, within said reasonable period,
such  mortgagee  gives  Tenant  notice of its  intention  to  remedy  the act or
omission,  and thereafter  diligently commences the required remedial action and
pursues it to completion,  Tenant shall have no right to terminate this Lease on
account of the act or omission of Landlord.

      17.04  ATTORNMENT.  Any  mortgagee  who succeeds to the rights of landlord
under this  Lease,  whether  through  exercise  of  remedies in a mortgage or by
operation of law, is in this Section  called a  "Successor  Landlord."  Upon the
Successor  Landlord's  request  and after  delivery of a  reasonably  acceptable
nondisturbance  agreement to Tenant,  Tenant shall attorn to and  recognize  the
Successor  Landlord as  Tenant's  landlord  under this Lease and shall  promptly
execute and deliver any instrument  that such Successor  Landlord may reasonably
request to evidence the attornment.  Tenant hereby irrevocably appoints Landlord
or  the  Successor  Landlord  as  Tenant's  attorney-in-fact,  coupled  with  an
interest,  to execute,  acknowledge  and deliver the instrument of attornment on
behalf of Tenant.  Upon attornment,  this Lease shall continue in full force and
effect and as a direct lease between the Successor Landlord and Tenant, upon all
of the terms,  conditions and covenants as are set forth in this Lease,  subject
to the provisions of Section 24.04.

      17.05 REQUIREMENTS OF MORTGAGEE. If any mortgagee requires modification of
this Lease, Tenant shall, at Landlord's request, promptly execute and deliver to
Landlord  instruments  effecting the modifications  that the mortgage  requires,
provided that such  modifications  do not adversely affect in a material respect
any of Tenant's rights under this Lease or materially and adversely increase any
of Tenant's obligations under this Lease or increase any monetary obligations of
Tenant.

<PAGE>

EXHIBIT  C.  WORK  LETTER  FOR  TENANT  IMPROVEMENTS.   With  regard  to  tenant
improvements, Landlord agrees to provide, at Landlord's expense, a general suite
clean-up  to  include  new  "building  standard"  paint,  carpet  and base.  Any
additional  tenant  improvement cost shall be the  responsibility  of and at the
sole cost of the Tenant.

CALIFORNIA  CIVIL CODE SECTION 1951.4.  "The lessor has the remedy  described in
California  Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee's  breach and  abandonment  and recover rent as it becomes due, if lessee
has right to sublet or assign, subject only to reasonable limitations)."

In the event that the  printed  terms of this Rider  conflict  with the  printed
terms of the Lease, the printed terms of this Rider shall prevail.

TENANT:    STATMON TECHNOLOGIES CORP.,
           a Delaware corporation

By: /s/ Geoffrey Talbot
    -----------------------------------
    Its: CEO
         ------------------------------

Dated: 12/4/01
       --------------------------------

LANDLORD:  MAPLE PLAZA, LTD.,
           A California limited partnership
           By BHAM, LTD., a California limited partnership,
           General Partner
           By Housing Affiliates, Inc., a California corporation,
           General Partner

By: /s/ ILLEGIBLE
    -----------------------------------
    Its: CFO
         ------------------------------

Dated: 12/4/01
       --------------------------------

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