Document:

<PAGE>

Exhibit 10.1

                                                                  EXECUTION COPY

                    AMENDED & RESTATED MANAGEMENT AGREEMENT

                                 by and between

                        CRONOS CONTAINERS (CAYMAN) LTD.

                                      and

                                CF LEASING LTD.

                           Dated as of June 15, 2004

ALL RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT ON THE PART OF CF LEASING
LTD HAVE BEEN ASSIGNED TO AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF
FORTIS BANK (NEDERLAND) N.V., AS AGENT, UNDER A

                                                                              E1
<PAGE>

Exhibit 10.1

SECURITY AGREEMENT, DATED AS OF SEPTEMBER 18, 2002, FOR THE BENEFIT OF THE
LENDERS AND THE OTHER PERSONS REFERRED TO THEREIN.

                                                                              E2
<PAGE>

Exhibit 10.1

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
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<S>                                                                                 <C>
SECTION

1.    DEFINITIONS...............................................................      4
2.    APPOINTMENT/AGENCY........................................................     12
3.    DUTIES/RIGHTS OF MANAGER..................................................     13
4.    AUTHORITY/CONSENTS........................................................     15
5.    REMUNERATION..............................................................     15
6.    PAYMENTS TO/FROM BORROWER.................................................     16
7.    COVENANTS OF MANAGER......................................................     17
8.    WARRANTY..................................................................     21
9.    INSURANCE.................................................................     21
10.   TERM; RESIGNATION BY MANAGER..............................................     22
11.   MANAGER DEFAULT...........................................................     23
12.   NON-EXCLUSIVITY...........................................................     27
13.   SUB-CONTRACTORS AND AGENTS................................................     27
14.   LIENS.....................................................................     28
15.   NO PARTNERSHIP............................................................     28
16.   FORCE MAJEURE.............................................................     28
17.   CURRENCY/BUSINESS DAY.....................................................     28
18.   INDEMNIFICATION...........................................................     28
19.   NO BANKRUPTCY PETITION AGAINST BORROWER...................................     29
20.   REPRESENTATIONS AND WARRANTIES............................................     30
21.   GENERAL...................................................................     32
</TABLE>

Exhibit A    Form of Manager Report
Exhibit B    Form of Asset Base Certificate
Exhibit C    Copy of Lease Agent Agreement

                                                                              E3
<PAGE>

Exhibit 10.1

                   AMENDED AND RESTATED MANAGEMENT AGREEMENT

      THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (as amended, modified and
supplemented from time to time in accordance with the terms hereof, this
"Agreement") is dated as of June 15, 2004 between CF LEASING LTD., a company
with limited liability organized and existing under the laws of Bermuda whose
registered office is located at Clarendon House, Church Street, Hamilton HM 11,
Bermuda (the "Borrower") and CRONOS CONTAINERS (CAYMAN) LTD., a corporation
organized and existing under the laws of the Cayman Islands whose office is
located at Queensgate House, P.O. Box 30464 SMB, George Town Grand Cayman,
Cayman Islands ("Cronos" or the "Manager").

                                    RECITALS

      WHEREAS, the Borrower is the owner of the Managed Containers (as defined
herein); and

      WHEREAS, the Manager is in the business of managing Containers (as defined
herein) on behalf of owners of containers, and is experienced in administration
of companies that own and operate containers;

      NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:

1.    DEFINITIONS

      Capitalized terms used in this Agreement shall have the following
meanings, and the definitions of such terms shall be equally applicable to the
singular and plural forms of such terms:

      "ACQUISITION AGREEMENT" shall have the meaning set forth in Section 3.3
hereof.

      "ACQUISITION AGENT" means Cronos.

      "ACQUISITION FEE" shall have the meaning set forth in Section 5.2(a)
hereof.

      "ADMINISTRATIVE FUNCTION" shall have the meaning set forth in Section 2.1
hereof.

      "AFFILIATE" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "AGENT" means the Person fulfilling the role of the Agent under the Loan
Agreement; Fortis will be the initial Agent.

      "AGREEMENT TERMINATION DATE" means the date on which the Manager receives
notice that Manager has been terminated as the manager of the Managed Containers
pursuant to the provisions of Section 11.2 hereof.

                                                                              E4
<PAGE>

Exhibit 10.1

      "APPLICABLE LAW" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "ASSET BASE" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "ASSET BASE CERTIFICATE" means an Asset Base Certificate substantially in
the form attached hereto as Exhibit B.

      "BACK-UP MANAGER" means Fortis or any of its Affiliates.

      "BOARD MAJORITY" means, with respect to an action to be approved by the
Board of Directors of the Borrower, approval of such action by Directors
representing seventy percent (70%) or more of the total number of Directors then
constituting the Board of Directors of the Borrower.

      "BORROWER" shall have the meaning set forth in the preamble hereof.

      "BORROWER EXPENSES" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "BUSINESS DAY" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "CASUALTY LOSS" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "CASUALTY PROCEEDS" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "CHANGE OF CONTROL" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "COLLATERAL" shall have the meaning set forth in Section 1 of the Security
Agreement.

      "COLLECTION PERIOD" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "CONSOLIDATED TANGIBLE NET WORTH" shall have the meaning set forth in
Section 101 of the Loan Agreement.

      "CONSOLIDATED TANGIBLE NET WORTH LEVERAGE RATIO" means, for The Cronos
Group, the ratio of (i) Total Liabilities to (ii) Consolidated Tangible Net
Worth.

      "CONTAINER" or "CONTAINER" shall have the meaning set forth in Section 101
of the Loan Agreement.

      "CONTAINER IDENTIFICATION NUMBER" means the unique reference number
assigned to a Container which is painted on or affixed to such Container.

      "CRONOS" shall have the meaning set forth in the preamble hereof.

                                                                              E5
<PAGE>

Exhibit 10.1

      "DEBT SERVICE COVERAGE" means, at the end of each of the four (4)
immediately preceding fiscal quarters, the ratio of (i) the sum of (a) the
consolidated net earnings for the three (3) month period immediately preceding
each such quarter end date and (b) depreciation and amortization for the three
(3) month period immediately preceding each such quarter end date and (c)
non-cash charges (including, but not limited to, deferred taxes) for the three
(3) month period immediately preceding each such quarter end date less (d)
non-cash income for the three (3) month period immediately preceding each such
quarter end date, divided by (ii) the aggregate principal portion of interest
bearing consolidated fund indebtedness of such Person due within the following
twelve (12) months, in each case as determined in accordance with GAAP and as
reported on the most recently available quarterly financial statements of The
Cronos Group.

      "DETERMINATION DATE" shall have the meaning set forth in Section 101 of
the Loan Agreement.

      "DIRECT OPERATING EXPENSE PAYMENTS" for any measurement period means all
fixed or variable operating costs and expenses to the extent actually paid by
Manager in connection with the use and/or operation of the Managed Containers
during such Collection Period but only to the extent not otherwise payable by
the relevant user of such Managed Container and net of any rebate, discount or
other reduction relating to the relevant cost or expense, including without
limitation all of the following:

            (i) expenses of maintaining, repairing, refurbishing, storing,
positioning, transporting and handling of the Managed Containers (in each case
in accordance with the provisions of this Agreement),

            (ii) the proportion of the fees and expenses of agents used by
Manager in the ordinary course of its business that relate to the leasing of
Containers (such proportion calculated on a pro-rata basis according to the
proportion that the TEU of the Managed Containers bears to the TEU of the
Containers in the Container Fleet, including the Managed Containers), depot
charges applicable to the Managed Containers (to the extent not charged as a
storage expense referred to in subparagraph 1 above) and insurance premiums (as
provided for pursuant to Section 7 hereof) including premiums paid by, or to
Affiliates of, Manager,

            (ii) legal fees and expenses incurred by Manager in connection with
the Managed Containers and the collection of amounts payable by container users
pursuant to Leases relating to the Managed Containers,

            (iv) charges, assessments, levies or duties of whatever kind or
nature imposed upon or against the Managed Containers,

            (v) ad valorem, gross receipts, property or other taxes levied
against or upon the Managed Containers or the amounts payable in respect of the
leasing thereof,

            (vi) the costs of any examination, investigation or other
proceedings conducted by any regulatory body relating to operation of the
Managed Containers, and

            (vii) the cost of any capital improvement with respect to a Managed
Container payable by Manager in respect of such measurement period; and

                                                                              E6
<PAGE>

Exhibit 10.1

Notwithstanding the above, Direct Operating Expense Payments do not include (x)
any Borrower Expenses or (y) marketing, general and administrative expenses of
Manager or its Affiliates, whether or not allocable in part or in whole to the
Managed Containers.

      "DIRECT OPERATING EXPENSES" for any measurement period means all fixed or
variable operating costs and expenses to the extent incurred by Manager in
connection with the use and/or operation of the Managed Containers during such
Collection Period but only to the extent not otherwise payable by the relevant
user of such Managed Container and net of any rebate, discount or other
reduction relating to the relevant cost or expense, including without limitation
all of the following:

            (i) expenses of maintaining, repairing, refurbishing, storing,
positioning, transporting and handling of the Managed Containers (in each case
in accordance with the provisions of this Agreement),

            (ii) the proportion of the fees and expenses of agents used by
Manager in the ordinary course of its business that relate to the leasing of
Containers (such proportion calculated on a pro-rata basis according to the
proportion that the TEU of the Managed Containers bears to the TEU of the
Containers in the Container Fleet, including the Managed Containers), depot
charges applicable to the Managed Containers (to the extent not charged as a
storage expense referred to in subparagraph 1 above) and insurance premiums (as
provided for pursuant to Section 7 hereof) including premiums paid by, or to
Affiliates of, Manager,

            (ii) legal fees and expenses incurred by Manager in connection with
the Managed Containers and the collection of amounts payable by container users
pursuant to Leases relating to the Managed Containers,

            (iv) charges, assessments, levies or duties of whatever kind or
nature imposed upon or against the Managed Containers,

            (v) ad valorem, gross receipts, property or other taxes levied
against or upon the Managed Containers or the amounts payable in respect of the
leasing thereof,

            (vi) the costs of any examination, investigation or other
proceedings conducted by any regulatory body relating to operation of the
Managed Containers, and

            (vii) the cost of any capital improvement with respect to a Managed
Container payable by Manager in respect of such measurement period; and

Notwithstanding the above, Direct Operating Expenses do not include (x) any
Borrower Expenses or (y) marketing, general and administrative expenses of
Manager or its Affiliates, whether or not allocable in part or in whole to the
Managed Containers.

      "DISPOSITION FEES" shall have the meaning set forth in Section 5.3 hereof.

      "DOLLARS" or "$" shall have the meaning set forth in Section 101 of the
Loan Agreement.

                                                                              E7
<PAGE>

Exhibit 10.1

      "EARLY AMORTIZATION EVENT" shall have the meaning set forth in Section 101
of the Loan Agreement.

      "EBIT RATIO" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "ELIGIBLE INVESTMENTS" shall have the meaning set forth in Section 101 of
the Loan Agreement.

      "EVENT OF DEFAULT" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "FLEET" means, as of any date of determination, the entire fleet of
Containers (including the Managed Containers) then owned or managed by the
Manager.

      "FORTIS" means Fortis Bank (Nederland) N.V., a Naamloze Vennootschap, its
successors and assigns.

      "GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall have the
meaning set forth in Section 101 of the Loan Agreement.

      "GOVERNMENTAL AUTHORITY" shall have the meaning set forth in Section 101
of the Loan Agreement.

      "GROSS CONTAINER REVENUE RECEIPTS" means for any measurement period:

            1. the gross amounts actually received by Manager during such
      measurement period from the leasing of the Managed Containers pursuant to
      Leases, including, without limitation, amounts in respect of per diem
      charges, pick-up and turn-in charges, charges for early termination,
      transportation charges, realized exchange differences, pre-trip inspection
      charges, direct interchange charges, handling and repair charges, off-hire
      service charges, damage protection premiums and other charges relating to
      or arising from the Managed Containers, and

            2. all other amounts actually received by Manager which are
      attributable to the Managed Containers, including but not limited to (i)
      amounts received from the manufacturers or sellers of the Managed
      Containers for breach of sale warranties relating thereto or in settlement
      or satisfaction of any other claims, losses, disputes or proceedings
      relating to the Managed Containers, (ii) amounts received from any other
      Person in settlement of any claims, losses, disputes or proceedings
      relating to the Managed Containers, including insurance proceeds relating
      thereto, (iii) amounts representing insurance proceeds for lost lease
      revenues and (iv) any insurance premiums relating to the Managed
      Containers which have been refunded by the insurer.

Notwithstanding the above, Gross Container Revenue Receipts do not include Sales
Proceeds.

         "GROSS CONTAINER REVENUES" means for any measurement period:

                                                                              E8
<PAGE>

Exhibit 10.1

            1. the gross amounts actually earned by Manager during such
      measurement period from the leasing of the Managed Containers pursuant to
      Leases, including, without limitation, amounts in respect of per diem
      charges, pick-up and turn-in charges, charges for early termination,
      transportation charges, realized exchange differences, pre-trip inspection
      charges, direct interchange charges, handling and repair charges, off-hire
      service charges, damage protection premiums and other charges relating to
      or arising from the Managed Containers, and

            2. all other amounts actually earned by Manager which are
      attributable to the Managed Containers, including but not limited to (i)
      amounts earned from the manufacturers or sellers of the Managed Containers
      for breach of sale warranties relating thereto or in settlement or
      satisfaction of any other claims, losses, disputes or proceedings relating
      to the Managed Containers, (ii) amounts earned from any other Person in
      settlement of any claims, losses, disputes or proceedings relating to the
      Managed Containers, including insurance proceeds relating thereto, (iii)
      amounts representing insurance proceeds for lost lease revenues and (iv)
      any insurance premiums relating to the Managed Containers which have been
      refunded by the insurer.

Notwithstanding the above, Gross Container Revenues do not include Sales
Proceeds.

      "INDEBTEDNESS" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "INSOLVENCY PROCEEDING" means a proceeding under the United States
Bankruptcy Code or the Bermuda Companies Act 1981 or similar applicable law in
any other applicable jurisdiction.

      "INTEREST EXPENSE" means for any period, the aggregate amount of interest
expense as shown for such period on the income statement of the Manager or the
Borrower, as applicable.

      "INTEREST RATE HEDGE AGREEMENT" shall have the meaning set forth in
Section 101 of the Loan Agreement.

      "INTEREST RATE HEDGE PROVIDER" shall have the meaning set forth in Section
101 of the Loan Agreement.

      "LEASE" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "LENDER" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "LESSEE" means any Person to whom the Manager (in its capacity as lessor)
leases one or more containers.

      "LIEN" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "LIST OF CONTAINERS" shall have the meaning set forth in Section 101 of
the Loan Agreement.

                                                                              E9
<PAGE>

Exhibit 10.1

      "LOAN AGREEMENT" means the Amended and Restated Loan Agreement, dated as
of March 7, 2003, by and among the Borrower, the Agent and the Lenders from time
to time party thereto, as such agreement may be amended, modified or
supplemented from time to time in accordance with its terms.

      "MANAGED CONTAINERS" means all of the containers owned by Borrower from
time to time, including, without limitation, any Containers acquired by the
Borrower in accordance with the provisions of Section 3.3 hereof.

      "MANAGEMENT FEE" shall have the meaning set forth in Section 5.1 hereof.

      "MANAGEMENT FUNCTIONS" shall have the meaning set forth in Section 2.1
hereof.

      "MANAGER" shall have the meaning set forth in the preamble hereof.

      "MANAGER DEFAULT" shall mean the existence of any of the events or
conditions set forth in Section 11.1 hereof beyond any applicable grace or cure
period set forth therein.

      "MANAGER REPORT" means a written completed informational statement by
Manager in the form attached hereto as Exhibit A to be provided by Manager in
accordance with the terms of this Agreement.

      "MEMBERS AGREEMENT" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "NET BOOK VALUE" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "NET CONTAINER REVENUE RECEIPTS" means, for any period of measurement, the
excess (if any) of (x) the Gross Container Revenue Receipts for such period,
over (y) the Direct Operating Expense Payments for such period.

      "NET CONTAINER REVENUES" means, for any period of measurement, the excess
(if any) of (x) the Gross Container Revenues for such period, over (y) the
Direct Operating Expenses for such period.

      "NET INCOME" means the net income of the Borrower as determined in
accordance with GAAP.

      "NOTE" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "OPINION OF COUNSEL" shall have the meaning set forth in Section 101 of
the Loan Agreement.

      "OUTSTANDING" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "OUTSTANDING OBLIGATIONS" shall have the meaning set forth in Section 101
of the Loan Agreement.

                                                                             E10

<PAGE>

Exhibit 10.1

      "PAYMENT DATE" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "PERMITTED LIENS" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "PERSON" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "PURCHASE AGREEMENT" means the Purchase Agreement, dated as of September
18, 2002, between the Borrower and Cronos Equipment (Bermuda) Ltd., as such
agreement may be amended, modified or supplemented from time to time in
accordance with its terms.

      "PURCHASE PARAMETERS" shall have the meaning set forth in Section 1.1 of
the Members Agreement.

      "RESTRICTED CASH ACCOUNT" shall have the meaning set forth in Section 101
of the Loan Agreement.

      "SALES PROCEEDS" means, with respect to any Managed Container, the gross
proceeds of the sale or other disposition of such Managed Container and
insurance proceeds, if any, received by Manager in respect of a Casualty Loss
affecting such Managed Container, less:

            1. any commission, administrative fee or other amount of cash paid,
      or to be paid, in connection with such sale or other disposition (which
      shall include all handling charges incurred in connection with the
      delivery of such Managed Container to the point of sale and any cash paid,
      or to be paid, in connection with repairs in respect of damage to such
      Managed Container, as determined in the sole discretion of Manager), but
      excluding the Disposition Fee;

            2. the amount considered appropriate by Manager to provide reserves
      for the payment of taxes, insurance, repairs or other costs and expenses
      of Manager attributable to such Managed Container sold or otherwise
      disposed of; and

            3. all costs, expenses and fees paid by Manager in order to ensure
      that such Managed Container sold or otherwise disposed of satisfies
      applicable import, customs, tax and other requirements and restrictions
      and that all required permits and licenses have been obtained and all
      applicable fees paid;

provided, however, that all of the amounts referred to in subparagraphs 1, 2,
and 3 of this definition shall not include (i) any applicable rebate, (ii) any
amount described therein which is charged as a Direct Operating Expense, (iii)
any amount by which the reserves set aside under subparagraph 2 above exceed the
costs and expenses actually incurred by Manager for which such reserves were set
aside and (iv) any payment received by Manager or any Affiliate thereof from the
purchaser of the relevant Managed Container or any other Person in partial or
full payment of such amounts (and to the extent that no such netting occurs, the
amount of any such rebate or payment shall form part of the Sales Proceeds of
the relevant Managed Container).

      "SECURITY AGREEMENT" means the Security Agreement, dated as of September
18, 2002, by Borrower in favor of the Agent.

                                                                             E11
<PAGE>

Exhibit 10.1

      "STRUCTURING/ARRANGEMENT AGENT" means Fortis.

      "STRUCTURING/ARRANGEMENT FEE" shall have the meaning set forth in Section
5.2(B) hereof.

      "SUBSIDIARY" shall have the meaning set forth in Section 101 of the Loan
Agreement.

      "TERMINATED MANAGED CONTAINER" means any Managed Container which is
subject to the terms of this Agreement on the Agreement Termination Date.

      "TEU" means twenty (20) foot equivalent units, a standard measure of the
size of a Container.

      "TRANSACTION DOCUMENTS" shall have the meaning set forth in Section 101 of
the Loan Agreement.

      "TRUST ACCOUNT" shall have the meaning set forth in Section 101 of the
Loan Agreement.

      "WARRANTY PURCHASE AMOUNT" shall have the meaning set forth in Section 1.1
of the Purchase Agreement.

Other capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Loan Agreement or, if not defined therein, as defined
in the Security Agreement.

2.    APPOINTMENT/AGENCY.

      2.1 Upon the terms and conditions hereinafter provided, Borrower hereby
      appoints Cronos Containers (Cayman) Ltd. for the term set forth in Section
      10 hereof to (A) administer the Borrower's business, including performance
      of all of Borrower's duties and observance of all of Borrower's
      obligations under this Agreement, the Loan Agreement and the Security
      Agreement (the functions described in this Section (A) collectively, the
      "Administrative Functions") and (B) operate, lease and manage the Managed
      Containers on behalf of Borrower (the functions described in this Section
      (B) collectively, the "Management Functions"). In furtherance of the
      foregoing, the Borrower hereby grants to Manager the authority to enter
      into, administer and terminate Leases, to sell, transfer or otherwise
      dispose of the Managed Containers, to collect monies and make
      disbursements on behalf of Borrower, and to manage its finances. By
      executing this Agreement, Cronos Containers (Cayman) Ltd. hereby accepts
      such appointment and agrees to perform the Management Functions and the
      Administrative Functions upon the terms and conditions herein.

      2.2 The Borrower shall at all times retain full legal and equitable title
      to the Managed Containers, notwithstanding the management thereof by
      Manager hereunder. Manager shall not make reference to or otherwise deal
      with or treat the Managed Containers in any manner except in conformity
      with this Section 2.2.

                                                                             E12
<PAGE>

Exhibit 10.1

      2.3 Manager shall ensure that the Managed Containers shall carry livery
      and other such markings as may be required for their operation in the
      marine shipping service including, for each Managed Container, the
      Container Identification Number of that Managed Container.

3.    DUTIES/RIGHTS OF MANAGER.

      3.1   (a) Manager shall operate, manage, lease and administer the Managed
      Containers as part of its Fleet and shall perform all managerial and
      administrative functions and provide or arrange for the provision of all
      services of any nature which it considers necessary or desirable to
      fulfill the Management Functions. Without prejudice to the generality of
      the foregoing, Manager shall:

                  (i) seek Lessees, arrange for the leasing and enter into
                  Leases as lessor in its capacity of the agent of the Borrower,
                  and decide the identity of each Lessee, the period of each
                  Lease, the rental or other sums payable thereunder, and the
                  form and content of each Lease;

                  (ii) perform on behalf of Borrower the obligations of the
                  lessor under the Leases;

                  (iii) exercise all rights of the lessor under the Leases,
                  including, without limitation, in the name of Manager, the
                  invoicing and collection of rental and other payments due from
                  Lessees;

                  (iv) take any actions Manager deems necessary to ensure
                  compliance by Lessees with the terms of their Leases;

                  (v) log interchanges of the Managed Containers including the
                  return and re-lease of Managed Containers from depots;

                  (vi) inspect, repair, maintain, service and store the Managed
                  Containers to the extent Manager deems necessary for the
                  purposes of this Agreement, to comply with the Leases and in
                  accordance with Manager's maintenance and repair standards for
                  its Fleet;

                  (vii) sell (either outright or through lease/purchase
                  arrangements) Managed Containers in the ordinary course of its
                  business, including the Manager's sell/repair decision-making
                  procedures that are from time to time in effect; provided
                  that, after giving effect to sale no Asset Base Deficiency
                  would then result;

                  (viii) obtain insurance in accordance with the provisions of
                  Section 9 hereof and in respect of any matters which Manager
                  considers necessary or prudent, including, without limitation,
                  public liability insurance;

                  (ix) follow such credit policies with respect to the leasing
                  of the Managed Containers as it follows from time to time with
                  respect to its

                                                                             E13
<PAGE>

Exhibit 10.1

                  Fleet and, subject to such credit policies, Manager may, in
                  its sole discretion, (a) determine and approve the
                  creditworthiness of any Lessee (but Manager makes no
                  representation and warranty to Borrower as to the solvency or
                  financial stability of any Lessee), (b) determine that any
                  amount due from any Lessee is not collectible, (c) institute
                  and prosecute legal proceedings against a Lessee as permitted
                  by applicable law, (d) terminate or cancel any Lease, (e)
                  recover possession of Managed Containers from any Lessee, (f)
                  settle, compromise or release any proceeding or claim against
                  a Lessee in the name of Manager or, if appropriate, in the
                  name of Borrower, or (g) reinstate any Lease; provided,
                  however, that the Manager shall not materially modify its
                  credit policies with respect to the leasing of the Managed
                  Containers without the prior written consent of the Agent and
                  each Lender in each instance;

                  (x) ensure that each Managed Container carries its Container
                  Identification Number and other markings as may be required
                  for its operation in marine and intermodal shipping;

                  (xi) institute and prosecute claims against the manufacturers
                  of the Managed Containers as Manager may consider advisable
                  for breach of warranty, any defect in condition, design,
                  operation or fitness or any other non-conformity with the
                  terms of manufacture and/or the related sale agreement; and

                  (xii) prepare and deliver the reports required pursuant to
                  Section 7 hereof.

            (b) In discharging the Administrative Functions, Manager shall
            perform the following tasks:

                  (i) contract for the services included in the definition of
                  the term "Borrower Expenses" and arrange for the Borrower to
                  pay such amounts in accordance with the terms of the Loan
                  Agreement;

                  (ii) prepare and file all tax returns required to be filed by
                  Borrower, and arrange for the payment by the Borrower of all
                  taxes incurred by Borrower as a Borrower Expense;

                  (iii) in its sole discretion and in accordance with its normal
                  business practices, direct the Agent, in accordance with the
                  terms of the Loan Agreement, as to which Eligible Investments
                  it shall invest funds held in the Trust Account and the
                  Restricted Cash Account;

                  (iv) enter into Interest Rate Hedge Agreements on Borrower's
                  behalf from time to time in accordance with the provisions of
                  the Loan Agreement;

                                                                             E14
<PAGE>

Exhibit 10.1

                  (v) maintain Borrower's financial books and records and
                  prepare Borrower's financial statements;

                  (vi) notify each Lender and the Agent of any change in the
                  location of Borrower's books and records; and

                  (vii) arrange for such secretarial, accounting,
                  administrative, financial, technical, research, consulting and
                  legal services (other than legal services which would be a
                  Direct Operating Expense) as the Borrower may require from
                  time to time (it being understood that such consulting and
                  legal services constitute Borrower Expenses).

      Nothing contained in this Section 3.1(b) shall be construed as an
      obligation of the Manager to pay Borrower Expenses from its own funds.

      3.2 In performing its Management Functions pursuant to this Agreement,
      Manager shall operate the Fleet in accordance with its reasonable business
      practice and without preference to ownership thereof, and no preference
      will be afforded for or against the Managed Containers. Subject to the
      provisions of this Section 3.2 and the express terms of the Transaction
      Documents, Manager shall have absolute discretion as to the manner of
      performance of its duties and the exercise of its rights under this
      Agreement.

      3.3 [Reserved].

4.    AUTHORITY/CONSENTS.

      Borrower confers on Manager all such authorities and grants all such
consents as may be necessary for Manager's performance of its duties under this
Agreement, and will, at the request of Manager, confirm any such authorities and
consents to any third parties, execute such other documents and do such other
things as Manager may reasonably request for the purpose of giving full effect
to this Agreement and enabling Manager to carry out its duties hereunder.

5.    REMUNERATION.

      5.1 In consideration of Manager providing the Management Functions and the
      Administrative Functions, the Borrower shall pay to Manager on each
      Payment Date for the immediately preceding Collection Period a fee (the
      "Management Fee") in an amount equal to the sum of (A) the product of (i)
      the aggregate Net Container Revenues for such Collection Period,
      multiplied by (ii) eight percent (8.0%) and (B) the product of (x) the net
      Sales Proceeds of each Container for such Collection Period, multiplied by
      (y) five percent (5%). The Management Fee shall be payable from amounts on
      deposit in the Trust Account in accordance with the terms and conditions
      of Section 302 of the Loan Agreement.

      5.2 In connection with each acquisition of a container by the Borrower
      pursuant to the provisions of Section 3.3 herein, the Borrower shall pay
      to the Person(s) set forth below on the date of such acquisition:

                                                                             E15
<PAGE>

Exhibit 10.1

                  (A) to the Acquisition Agent, a fee (the "Acquisition Fee") in
            an amount equal to the product of (x) one and one quarter percent
            (1.25%) and (y) the sum of the vendor's or manufacturer's invoice
            price of such Container and all reasonable and customary inspection,
            transport, and initial positioning costs necessary to put such
            container in service; and

                  (B) to the Structuring/Arrangement Agent, a fee (the
            "Structuring/Arrangement Fee") in an amount equal to the product of
            (x) one and one quarter percent (1.25%) and (y) the sum of the
            vendor's or manufacturer's invoice price of such Container and all
            reasonable and customary inspection, transport, and initial
            positioning costs necessary to put such container in service.

Each of the Acquisition Fee and the Structuring/Arrangement Fee shall be added
to the purchase price of the related Containers and shall be paid by the
Borrower on the date on which such Container is acquired by the Borrower.

      5.3 In connection with each sale or other disposition of a Managed
      Container by the Borrower, the Borrower shall pay to the Manager on each
      Payment Date a fee (the "Disposition Fee") that is equal to the product of
      (x) five percent (5%) and (y) the Sales Proceeds (exclusive of any repair
      allowances) with respect to each sale of a Managed Container in the
      immediately preceding Collection Period provided that such Sales Proceeds
      exceeds the Net Book Value of the related Managed Container on the date of
      disposition thereof. All such Disposition Fees earned in any Collection
      Period shall be payable on the immediately succeeding Payment Date from
      amounts on deposit in the Trust Account in accordance with the provisions
      of Section 302 of the Loan Agreement.

6.    PAYMENTS TO/FROM BORROWER.

      6.1 The Manager shall remit to the Trust Account on a weekly basis all Net
      Container Revenue Receipts and all Sales Proceeds (less any related
      Disposition Fees) actually received for the immediately preceding calendar
      week.

      6.2 Manager's obligation under this Agreement to deposit Net Container
      Revenue Receipts and all Sales Proceeds (less any related Disposition
      Fees) to the Trust Account in accordance with the provisions of Section
      6.1 shall be absolute and unconditional and all payments thereof shall be
      made free and clear of and without any deduction for or on account of any
      set-off or counterclaim or any circumstance, recoupment, defense or other
      right which Manager may have against Borrower or any other Person for any
      reason whatsoever (whether in connection with the transactions
      contemplated hereby or any other transactions), including, without
      limitation, (i) any defect in title, condition, design or fitness for use
      of, or any damage to or loss or destruction of, any Managed Container,
      (ii) any insolvency, bankruptcy, moratorium, reorganization or similar
      proceeding by or against Manager or any other Person or (iii) any other
      circumstance, happening or event whatsoever, whether or not unforeseen or
      similar to any of the foregoing.

      6.3 All payments hereunder shall be made in United States Dollars by wire
      transfer of immediately available funds prior to 3:00 P.M., London time,
      on the date of payment.

                                                                             E16
<PAGE>

Exhibit 10.1

7.    COVENANTS OF MANAGER.

      7.1 On or prior to each Determination Date, Manager shall deliver to the
      Borrower, the Agent and each Lender, in the format which Manager uses for
      its Fleet, a report as to the Managed Containers reporting: (a)
      utilization rates; (b) average lease rates; (c) receivables aging; and (d)
      the collections (such report, a "Monthly Lease Report").

      7.2 On or prior to each Determination Date, Manager will deliver a Manager
      Report to each of the Borrower, the Agent and each Lender.

      7.3 On or prior to (i) each Determination Date and (ii) any date on which
      an Advance is made to Borrower under the Loan Agreement, Manager will
      deliver to Borrower, the Agent and each Lender an Asset Base Certificate,
      calculated using the data available to Manager (x) with respect to the
      Asset Base Certificate delivered on each Determination Date, as of the end
      of the immediately preceding Collection Period, and (y) with respect to
      the Asset Base Certificate delivered on each advance date, as of the date
      of such Asset Base Certificate and after giving effect to such advance.

      7.4 Manager shall provide to each of the Borrower, the Agent and each
      Lender an annual confirmation of the renewal of insurance required by
      Section 9.2 hereof within forty-five (45) days of each such renewal.

      7.5 Manager shall provide, in the form which Manager uses for its own
      operations, any other reports and information available with respect to
      the Managed Containers reasonably requested by the Borrower, the Agent or
      any Lender.

      7.6 Manager shall maintain, at the office of its Affiliate, Cronos
      Containers Limited, located at The Ice House, Dean Street, Marlow,
      Buckinghamshire SL7 3AB, England, such books and records (including
      computer records) with respect to the Managed Containers as it maintains
      for the Fleet and the leasing thereof, including a computer database
      including the Managed Containers (containing sufficient information to
      generate the List of Containers and the reports required to be delivered
      pursuant to this Agreement), any Leases relating thereto, the Lessees (if
      on-hire) or location (if off-hire), and their Net Book Value. Manager
      shall notify the Borrower, the Agent and each Lender of any change in the
      location of Manager's books and records.

      7.7 Upon reasonable request, Manager shall make available (and cause any
      of its Affiliates engaged in the management of the Managed Containers to
      be made available) to Borrower, the Agent and each Lender, for inspection
      and copying, its books, records and reports relating to the Managed
      Containers and copies of all Leases or other documents relating thereto,
      all in the format which Manager uses for the Fleet. Such inspections shall
      be conducted during normal business hours and shall not unreasonably
      disrupt Manager's business. Manager shall grant the Agent, the Borrower
      and each Lender access to Manager's computer systems and data contained
      therein, but not copies of the software itself. The Borrower, the Agent
      and each Lender shall have the right, upon reasonable request, to inspect
      the Managed Containers at any time, upon reasonable notice and to the
      extent Manager has access thereto, subject to the Leases, and provided

                                                                             E17
<PAGE>

Exhibit 10.1

      such inspection does not interfere with utilization of the Managed
      Containers in the ordinary course of business. The Manager shall reimburse
      the Borrower, the Agent and each Lender, as the case may be, for all
      reasonable out-of-pocket costs and expenses of such party for any
      inspections occurring during the continuance of a Manager Default.

      7.8 The Manager shall provide to the Borrower, each Lender promptly after
      each shall become available, all of the following: (i) written notice of
      any material change in the Manager's credit and collection policy (which
      determination shall be made in the reasonable discretion of the Manager),
      and (ii) summaries of all management letter comments relating to the
      Borrower or Manager issued by the independent accountants of the Borrower
      or Manager (as the case may be) to the board of the directors of the
      Borrower or Manager (as the case may be) or any of its committees that the
      Borrower or the Manager, in its sole discretion, deems material.

      7.9 The Manager will deliver to the Borrower, the Agent and each Lender:

            (i) Immediately upon becoming aware of the existence of any
            condition or event which constitutes a Manager Default or which,
            with notice and lapse of time, would become a Manager Default, a
            written notice describing its nature and period of existence and
            what action the Manager is taking or proposes to take with respect
            thereto;

            (ii) As applicable and promptly upon their becoming available, one
            copy of each report (including reports on Form 8-K, 10-K and 10-Q),
            definitive proxy statement, registration statement (upon it becoming
            effective), definitive prospectus and notices that the Manager for
            and on behalf of Borrower, filed with or delivered to any securities
            exchange or the Securities and Exchange Commission or any successor
            agency; and

            (iii) Promptly upon the Manager's becoming aware of:

                  (x) any threatened or pending investigation of it by any
            Governmental Authority or agency, or

                  (y) any threatened or pending court or administrative
            Proceeding which individually or in the aggregate involves the
            possibility of materially and adversely affecting a material portion
            of the Managed Containers or the business or financial conditions of
            the Manager,

      a written notice specifying the nature of such investigation or proceeding
      and what action the Manager is taking or proposes to take with respect
      thereto and evaluating its merits.

      7.10 The Manager shall furnish or cause to be furnished to each Person who
      is identified by the Agent to the Manager as a Person who was a Lender at
      any time during such year and to the Agent, within a reasonable time after
      the end of each calendar year, a report setting forth the amount of
      principal and interest paid on each Note during such year and such other
      customary factual information as any Lender reasonably requests from time
      to time, to enable Lenders to prepare their tax returns. In addition, if
      any class

                                                                             E18
<PAGE>

Exhibit 10.1

      of Notes are issued with original issue discount, the Manager shall
      provide or cause to be provided to the IRS and the Lenders information
      statements with respect to original issue discount as required by the Code
      or as such Lenders may reasonably request from time to time.

      7.11 The Manager shall provide to each of the Members (as defined in the
      Members Agreement) each of the financial reports required pursuant to the
      Members Agreement.

      7.12 The Manager shall deliver to the Agent and each Lender:

            (i) Annual Statements -- within 120 days after the end of each
            fiscal year of each of the Borrower and The Cronos Group, one copy
            of:

                  (a) the balance sheet of the Borrower and the consolidated
                  balance sheet of The Cronos Group and its consolidated
                  subsidiaries, at the end of such fiscal year; and

                  (b) statements of income, retained earnings and cash flows of
                  the Borrower and the consolidated statements of income,
                  retained earnings and cash flows of The Cronos Group and its
                  consolidated subsidiaries for the fiscal year then ended,

      setting forth in each case in comparative form the figures for the
      previous fiscal year, all in reasonable detail and, in the case of The
      Cronos Group, accompanied by an opinion of a firm of independent certified
      public accountants of recognized national standing, stating that such
      financial statements present fairly in all material respects the financial
      condition of The Cronos Group and its consolidated subsidiaries and have
      been prepared in accordance with generally accepted accounting principles
      consistently applied (except for changes in application in which such
      accountants concur and footnote), and that the examination of such
      accountants in connection with such financial statements has been made in
      accordance with generally accepted auditing standards;

            (ii) Quarterly Statements -- within 60 days after the end of each
            fiscal quarter of each of the Borrower and The Cronos Group, one
            copy of:

                  (a) the balance sheets of the Borrower and the consolidated
                  balance sheets of The Cronos Group and its consolidated
                  subsidiaries, at the end of such fiscal quarter; and

                  (b) the statements of income, retained earnings and cash flows
                  of the Borrower and the consolidated statements of income,
                  retained earnings and cash flows of The Cronos Group and its
                  consolidated subsidiaries for the fiscal quarter and that
                  portion of the fiscal year then ended, setting forth in each
                  case in comparative form the figures for the equivalent
                  timeframe for the previous year;

            (iii) SEC and Other Reports -- promptly upon their becoming
            available, one copy of each report (if any), definitive proxy
            statement, registration statement

                                                                             E19
<PAGE>

Exhibit 10.1

            (upon it becoming effective) and definitive prospectus filed by The
            Cronos Group or the Borrower with or delivered to any securities
            exchange or the Securities and Exchange Commission or any successor
            agency; and

            (iv) Requested Information -- with reasonable promptness, but in any
            event within two calendar weeks of the date requested, (A) any data
            and information so requested and (B) any other publicly available
            information with respect to The Cronos Group, in each case as may be
            requested from time to time by the Agent or any Lender.

      7.13 The Manager shall deliver to each of the Borrower, the Agent and each
      Lender, within sixty (60) days after the end of each fiscal quarter, one
      copy of:

            (i) a certificate setting forth the calculation of EBIT Ratio of the
            Borrower as of such quarter end;

            (ii) a certificate setting forth the financial calculations for The
            Cronos Group set forth in Section 11.1(p) and 11.1(r) hereof as of
            such quarter end; and

            (iii) certificate setting forth the Weighted Average Age of the
            Managed Containers as of such quarter end.

      7.14 Manager shall not, without the prior written consent of the Agent
      amend, modify or terminate the lease agent agreement between the Manager
      and Cronos Containers Limited that is in effect on the Closing Date;
      provided, however, that the Manager and Cronos Containers Limited may
      modify the fee arrangements set forth in the lease agent agreement without
      the prior written consent of the Agent.

      7.15 The Manager shall at all times comply with the Purchase Parameters,
      as such Purchase Parameters may be amended or otherwise modified from time
      to time. The Borrower shall provide the Manager with a copy of the
      Purchase Parameters as in effect on the date hereof and shall promptly
      provide to the Manager a copy of all amendments thereto, together with
      evidence satisfactory to the Manager as to the approval by the board of
      directors of the Borrower of each such amendment.

      7.16 The Manager shall, at the Borrower's sole cost and expense and solely
      to the extent that the Agent has not made such filings, execute and file
      UCC financing statements, short form grants, charges and other documents,
      and take such other action, in such manner and in such places as may be
      required pursuant to Applicable Law or as may be reasonably requested by
      the Agent, or any Lender to preserve, maintain, perfect, continue and
      protect the first priority perfected security interest of the Agent, on
      behalf of the Lenders, in the Collateral. The Manager or an Affiliate
      thereof is holding the Leases (to the extent, but only to the extent that,
      such Leases relate to the Managed Containers) on behalf of, and for the
      benefit of, the Agent, on behalf of the Lenders. None of such Leases shall
      have any marks or notations indicating that they have been pledged
      assigned or otherwise conveyed to any Person other than the Agent, on
      behalf of the Lenders.

                                                                             E20
<PAGE>

Exhibit 10.1

      7.17 The Manager will comply, in all material respects, with all acts,
      rules, regulations, orders, decrees and directions of any Governmental
      Authority applicable to the Collateral or any part thereof; provided,
      however, that the Manager may contest any act, regulation, order, decree
      or direction in any reasonable manner which shall not materially and
      adversely affect the rights of the Borrower, the Agent or any Lenders in
      the Collateral, provided further that, with respect to any statutes
      administered and the regulations promulgated by the U.S. Treasury
      Department's Office of Foreign Assets Control, the Manager shall comply
      with such statutes and regulations as if the Borrower were subject to the
      laws of the United States.

8.    WARRANTY.

      8.1 THE MANAGED CONTAINERS ARE BEING DELIVERED BY BORROWER TO MANAGER "AS
      IS". BORROWER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
      WITH RESPECT TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR ANY
      PARTICULAR PURPOSE OF THE MANAGED CONTAINERS, THE ABSENCE OF LATENT OR
      OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, THE ABSENCE OF OBLIGATIONS
      BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY
      WHATSOEVER, EXPRESS OR IMPLIED.

      8.2 MANAGER WARRANTS THAT IT WILL CARRY OUT ITS SERVICES WITH REASONABLE
      CARE AND SKILL. THIS EXPRESS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
      WHETHER EXPRESS OR IMPLIED. UNDER NO CIRCUMSTANCES SHALL MANAGER HAVE ANY
      LIABILITY TO BORROWER FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.

9.    INSURANCE.

      9.1 Manager shall require each Lessee of a Managed Container and depot
      owners in which a Managed Container is stored to place and maintain a
      primary insurance policy covering the Managed Containers against all
      normally insurable risks (including, but not limited to, liability and
      property casualty insurance) in amounts and on terms agreed to by Manager.
      The amount of insurance coverage maintained by each Lessee shall be in the
      sole discretion of Manager; provided, however, that the amount and terms
      and conditions of such insurance shall be no less than that required
      generally by Manager with respect to other Containers in the Fleet of a
      similar type used in a similar manner by similar Lessees.

      9.2 Manager shall place and maintain secondary insurance covering physical
      loss, damage and liability coverage to the Managed Containers in addition
      to and payable only upon the failure of the primary coverage (as referred
      to in Section 9.1 hereof) upon such terms and in such amounts, and with
      such deductibles, as shall be determined by Manager in its sole
      discretion; provided, however, that the amount and terms and conditions of
      such insurance shall be no less than that required generally by Manager
      with respect to other Containers in the Fleet of a similar type used in a
      similar manner by similar Lessees. Such insurance shall cover physical
      damage to the Managed Containers while

                                                                             E21
<PAGE>

Exhibit 10.1

      on land, afloat, in transit or at rest anywhere in the world and liability
      for damage to person or property for limits of at least $2 million per
      occurrence and $20 million in aggregate. Any such casualty insurance shall
      be endorsed with a loss payable clause in favor of Agent with respect to
      the Managed Containers, and any such liability insurance shall name the
      Agent and each Lender as an additional insured. As soon as practicable and
      in any event not later than 30 days following the lapse or loss of
      coverage provided by such secondary insurance, Manager shall give notice
      to Borrower and the Agent that such secondary insurance is no longer in
      place with respect to the Managed Containers. Notwithstanding the
      foregoing, Manager shall not be required to maintain such secondary
      insurance unless such insurance is available in the London commercial
      insurance market on terms and at premium levels that are considered
      commercially reasonable by owners or operators of containers in the marine
      cargo container industry.

      9.3 Manager or its Affiliates may include the insurance required hereunder
      in policies covering the entire Fleet, in which event the cost thereof
      shall be apportioned between Borrower and the other container owners on a
      pro rata basis according to proportion that the TEU of the Managed
      Containers bears to the TEU of the total Containers in the Fleet. All
      insurance premiums, including any premiums paid to Affiliates of Manager,
      payable under such policies in the event of any loss shall be included in
      Direct Operating Expense Payments on such basis.

      9.4 Borrower hereby irrevocably appoints Manager as the agent of Borrower
      for the purpose of receiving all monies payable under such policy or
      policies of insurance as described in Sections 9.1 and 9.2 hereof, whether
      effected by Manager, depots or Lessees, and Manager may give a good
      discharge therefor to the insurance company for all such monies.

10.   TERM; RESIGNATION BY MANAGER.

      10.1 This Agreement shall come into force on the date hereof and, subject
      to the provisions of Section 11 hereof, shall continue in force with
      respect to a Managed Container until the earliest to occur of (i) the
      receipt by the Manager of casualty loss or insurance proceeds (if any)
      with respect to such Managed Container following the destruction or loss
      of such Managed Container by its Lessee or other third party, (ii) the
      sale or other disposition of such Managed Container by Manager pursuant to
      the terms of this Agreement, (iii) the date on which such Managed
      Container is repurchased or replaced pursuant to the terms of the Purchase
      Agreement, and (iv) the Agreement Termination Date.

      10.2 The Manager may not resign from its obligations and duties as Manager
      hereunder, except (i) with the prior written consent of the Borrower, the
      Agent and the Majority Lenders or (ii) upon a determination by the Manager
      that the performance by Manager of its duties under this Agreement is no
      longer permissible under applicable law, which determination shall be
      evidenced by an Opinion of Counsel, in form and substance reasonably
      satisfactory to the Borrower and the Agent, to such effect delivered to
      the Agent and each Lender. No such resignation shall, to the extent
      consistent with Applicable Law, become effective until the Back-up Manager
      has assumed the

                                                                             E22
<PAGE>

Exhibit 10.1

      responsibilities of the resigning Manager in accordance with the terms of
      this Agreement and the other Transaction Documents.

11.   MANAGER DEFAULT.

      11.1 The existence of any of the following events or conditions beyond any
      applicable grace and/or cure period shall constitute a Manager Default:

            (a) Manager shall fail to (i) make any deposit to the Trust Account
            within three (3) Business Days after the due date thereof, or (ii)
            deliver a Manager Report or an Asset Base Certificate within three
            (3) Business Days after the due date thereof or (iii) deliver any of
            the financial statements set forth in Section 7.12 hereof within
            fifteen (15) days after the required timeframes specified therein;

            (b) Manager shall fail to carry and maintain (or cause to be carried
            and maintained) liability insurance and, to the extent such
            insurance is available on commercially reasonable terms, physical
            loss and damage insurance with respect to the Managed Containers in
            accordance with the requirements of Section 9 hereof for a period of
            more than thirty (30) days from the earlier to occur of (A) an
            officer of Manager obtaining actual knowledge of such failure and
            (B) receipt of written notice by an officer of Manager of such
            failure;

            (c) Manager shall consent to the appointment of or taking possession
            of all or a substantial part of its property by a receiver,
            encumbrancer, liquidator or similar official, or shall admit in
            writing its inability to pay its debts generally as they become due,
            or shall make a general assignment for the benefit of, or a
            composition with, all or some of its creditors, or shall voluntarily
            commence any proceeding seeking liquidation, reorganisation or other
            relief with respect to itself or its debts under any bankruptcy,
            insolvency or other similar law, or being unable to pay its debts as
            they fall due shall commence negotiations with any one or more of
            its creditors with a view to the general readjustment or
            rescheduling of its indebtedness;

            (d) any covenant (to the extent not otherwise addressed in this
            Section 11), agreement or statement made by Manager in this
            Agreement or in any notice or other document, certificate or
            statement delivered by it pursuant hereto (including any Manager
            Report or Asset Base Certificate) or in connection herewith or
            therewith the breach or non-performance of which is reasonably
            likely have a material and adverse effect on the Borrower, Agent or
            any Lender and (where capable of remedy) such defect has not been
            remedied within 30 days of the earlier to occur of (A) an officer of
            Manager obtaining actual knowledge of such failure and (B) receipt
            of written notice by Manager of such failure;

            (e) any representation or warranty made by Manager in this Agreement
            or in any notice or other document, certificate or statement
            delivered by it pursuant hereto (including any Manager Report or
            Asset Base Certificate) or in connection herewith or therewith the
            breach or non-performance of which is reasonably

                                                                             E23
<PAGE>

Exhibit 10.1

            likely to have a material and adverse effect on the Borrower, Agent
            or any Lender and (where capable of remedy) such defect has not been
            remedied within 30 days of the earlier to occur of (A) an officer of
            Manager obtaining actual knowledge of such failure and (B) receipt
            of written notice by Manager of such failure;

            (f) a receiver, receiver and manager, liquidator, provisional
            liquidator, administrator or other similar person shall be appointed
            for Manager or a substantial part of its assets or any resolution of
            the directors or shareholders of Manager shall be passed or a
            petition shall be lodged for the purpose of such appointment which
            shall not be revoked or set aside within 60 days of being passed or
            lodged;

            (g) Manager shall be insolvent or unable to pay its debts when they
            fall due, or Manager shall stop, suspend or threaten to stop or
            suspend payment of all or a material part of its debts or a
            moratorium is agreed or declared in respect of or affecting all or a
            material part of (or a particular type of) Manager's debts;

            (h) a distress, attachment, execution or other legal process shall
            be levied or enforced against the assets of Manager that has a
            material adverse effect on the Borrower, Agent or Noteholders, such
            determination to be made in the sole discretion of the Noteholders,
            which shall not be revoked or set aside within 60 days of being
            passed or lodged;

            (i) a person entitled to the benefit of any mortgage, charge or
            other encumbrance shall take possession of all or a material part of
            the assets of Manager;

            (j) the Independent Accountant of The Cronos Group shall resign or
            otherwise be replaced and shall not have been replaced by a
            replacement independent accountant within sixty (60) days after the
            date of resignation or replacement;

            (k) judgments are rendered against The Cronos Group which
            individually or in the aggregate exceed the amount of $3,000,000
            accrued for litigation contingencies by The Cronos Group in its
            annual report on Form 10-K filed with the Securities and Exchange
            Commission for the fiscal year ended December 31, 2003 by more than
            $1,000,000, and which judgment(s) remains (i) unpaid and (ii) are
            not stayed by notice of filing of an appeal, the posting of a bond,
            or by agreement with the judgment creditor(s), for a period of sixty
            (60) days after the entry thereof;;

            (l) the institution of any legal proceeding against the Manager or
            any Affiliate, which, if determined adversely, would in the
            reasonable judgment of the Agent (after consultation with counsel,
            including counsel for the Manager) is reasonably likely to have a
            material adverse effect on the ability of the Manager to perform its
            obligations hereunder;

                                                                             E24
<PAGE>

Exhibit 10.1

            (m) the return of Stefan M. Palatin in a management position with
            the Manager or any of its Affiliates;

            (n) except as permitted by Sections 13 and 21.5 hereof, Manager
            assigns its interest under this Agreement;

            (o) the occurrence of an Event of Default under the Loan Agreement;

            (p) the Consolidated Tangible Net Worth of The Cronos Group (as
            reflected in the most recently available financial statements of The
            Cronos Group delivered pursuant to Section 7.12 hereof) shall be
            less than an amount equal to the sum of (i) Forty-Five Million
            Dollars ($45,000,000) and (ii) the product of (x) fifty percent
            (50%) and (y) all consolidated net income (but not reduced for net
            losses), determined in accordance with GAAP, of The Cronos Group and
            its consolidated Subsidiaries for all periods commencing after
            December 31, 2002;

            (q) a Change of Control shall occur with respect to The Cronos
            Group, unless all of the following conditions are satisfied after
            giving effect to such Change of Control: (A) The Cronos Group is the
            surviving entity of such sale, conveyance, contribution, transfer or
            lease of all, or substantially all, of its assets to any Person, (B)
            no Manager Default (or event or condition which with the giving of
            notice or the passage of time or both would become a Manager
            Default) would occur after giving effect to such Change of Control
            and (c) after giving effect to such Change of Control, The Cronos
            Group has a Consolidated Tangible Net Worth greater than or equal to
            its Consolidated Tangible Net Worth at the end of the fiscal quarter
            immediately preceding such Change of Control;

            (r) the EBIT Ratio (measured on a consolidated basis) of The Cronos
            Group shall be less than 1.10:1.0, as calculated on a rolling
            six-quarter basis, as of the end of any fiscal quarter;

            (s) a default by The Cronos Group or any Subsidiary of The Cronos
            Group in the payment of any principal or interest on any
            Indebtedness for borrowed money which, individually or in the
            aggregate, exceeds Two Million Dollars ($2,000,000) beyond the
            period of grace, if any, specified therefor in the applicable
            instrument evidencing such Indebtedness; or the occurrence of any
            event or the existence of any condition, the effect of which is to
            cause or permit holders of debt more than Two Million Dollars
            ($2,000,000), individually or in the aggregate, of Indebtedness for
            borrowed money of The Cronos Group or any Subsidiary thereof to
            become due before its (or their) stated maturity date(s) or
            regularly scheduled dates of payments and such event or condition
            remains unremedied for more than sixty (60) days; or

            (t) The Cronos Group shall fail to maintain either of the following
            financial covenants as of the end of any fiscal quarter: (i) a
            minimum Debt Service Coverage of 1.25 to 1.00 and (ii) a maximum
            Consolidated Tangible Net Worth Leverage Ratio of 4.50 to 1.00.

                                                                             E25
<PAGE>

Exhibit 10.1

      11.2 If a Manager Default shall have occurred and be continuing, the Agent
      (if any amounts owing pursuant to the Loan Agreement are still
      outstanding) or, in all other cases, the Borrower, shall have the right in
      its discretion, in addition to any other rights or remedies that it may
      have under any Applicable Law or in equity, (i) to immediately terminate
      this Agreement with respect to all Managed Containers then subject to the
      terms of this Agreement, (ii) subject to any right of quiet enjoyment of a
      Lessee under any Managed Container then on lease, to repossess the Managed
      Containers wherever located (at Borrower's sole cost and expense unless
      more than 5% of the Managed Containers are located at a single depot in
      which case Manager shall bear the cost and expense of the repossession of
      such Managed Containers that exceed 5% of the total number of Managed
      Containers in the Fleet), and (iii) to take any other such action as the
      Borrower or the Agent, as the case may be, deems appropriate under the
      circumstances, including assigning this Agreement to the Back-up Manager
      or any other Person designated by the Agent with the written approval of
      the Majority Lenders. Notwithstanding such termination pursuant to the
      provisions of this Section 11.2, Borrower shall continue to receive from
      the terminated Manager all Net Container Revenue Receipts due hereunder
      until such repossession is effected and the Lessees make payments with
      respect to the Managed Containers to the Back-up Manager.

      11.3 Upon any termination of this Agreement as aforesaid, Manager shall
      cooperate with Borrower in transferring management of the Managed
      Containers to the Back-up Manager or any other Person designated by the
      Agent with the written approval of the Majority Lenders. Such cooperation
      shall include, without limitation, making available books and records
      (including computer records) pertaining to Manager's activities hereunder
      (including the status and location of each Managed Container), promptly
      notifying Lessees of the repossession of the Managed Containers by
      Borrower and/or the Back-up Manager, transferring funds belonging to
      Borrower to such accounts as are designated by Borrower and/or the Back-up
      Manager and taking any other action as may be reasonably requested by
      Borrower and/or the Back-up Manager to ensure the orderly transfer and
      repossession of the Managed Containers to Borrower or its designee. The
      Manager shall promptly remit to the Back-up Manager or such other Person
      as the Agent shall designate all payments received from the Lessees with
      respect to the Managed Containers after the Agreement Termination Date.
      The Manager hereby agrees to transfer to the Back-up Manager copies of its
      electronic records and all other records, correspondence and documents
      relating to the Managed Containers in the manner and at such times as the
      Back-up Manager shall reasonably request and do any and all other acts or
      things necessary or appropriate to effect the purposes of termination.

      11.4 During the period commencing on the date on which the Borrower acting
      at the direction of the Agent have terminated this Agreement, a firm of
      Independent Accountants reasonably satisfactory to the Borrower, acting at
      the direction of the Agent, will review for each month the Manager's
      calculation of the Net Container Revenue Receipts. The reasonable expense
      of such accountants shall be for the account of the replaced Manager. Such
      Independent Accountants will provide a report to the Agent, each Lender,
      the Manager and the Borrower, coincident with the delivery of each Manager
      Report, as to the conformity of such calculations with the terms of the
      Manager Report.

                                                                             E26
<PAGE>

Exhibit 10.1

      11.5 Manager, irrevocably and by way of security to Borrower for the
      obligations of Manager herein, appoints Agent to be its attorney-in-fact
      in the event that Manager Default shall have occurred and be continuing
      (with full power to appoint substitutes and to delegate, including power
      to authorize the Person so appointed to make further appointments) on
      behalf of Manager and in its name or otherwise to execute any document,
      with power to date the same, and to give any notice and to do any act or
      thing which Manager is obliged to execute or do, under this Agreement or
      otherwise, and which Manager fails to do after reasonable request therefor
      by Borrower or Agent; and any person appointed as the substitute or
      delegate of Agent shall, in connection with the exercise of the said power
      of attorney, be the agent of Manager. Manager hereby ratifies and confirms
      and agrees to ratify and confirm whatever any such attorney shall do or
      propose to do in the exercise or purported exercise of all or any of the
      powers, authorities and discretion referred to in this paragraph.

      11.6 Upon the occurrence of a Manager Default, Manager and Borrower shall
      take reasonable direction in accordance with this Agreement from, and
      fully cooperate with, Agent. The prior written consent of the Agent must
      be obtained in order to waive any Manager Default or any or all of its
      consequences. Upon any such waiver of a past default, such default shall
      cease to exist, and any default arising therefrom shall be deemed to have
      been remedied for every purpose of this Agreement. No such waiver shall
      extend to any subsequent or other default or impair any right consequent
      thereon except to the extent expressly so waived.

      11.7 In no event shall Manager be required to act in any manner
      inconsistent with the rights of Lessees under any Leases related to the
      Managed Containers.

      11.8 Termination of this Agreement shall be without prejudice to the
      rights and obligations of the parties which have accrued prior to such
      termination; provided, however, that any amount then due to Manager shall
      be reduced by the reasonable and necessary out-of-pocket costs incurred by
      Borrower, the Agent and the Back-up Manager in connection with the removal
      and replacement of Manager.

12.   NON-EXCLUSIVITY.

      During the term of this Agreement, Manager may provide services (similar
or dissimilar) directly or indirectly to any other Person or on behalf of any
other Person.

13.   SUB-CONTRACTORS AND AGENTS.

      Borrower hereby consents to and agrees that, in performing its duties
hereunder, Manager may further contract with its Affiliates or Subsidiaries to
provide any or all services to be provided by Manager, provided that Manager
shall remain primarily liable for all services which its Affiliates have
contracted to perform. Borrower further consents to and agrees that Manager
shall be entitled to appoint subcontractors or agents who are not its Affiliates
or Subsidiaries to carry out any portion of its duties hereunder; provided,
however, that (i) Manager shall remain primarily liable for all such services
and (ii) the Agent shall have given its prior written consent to each such
appointment.

                                                                             E27
<PAGE>

Exhibit 10.1

14.   LIENS.

      Manager agrees not to create, incur, assume or grant, or suffer to exist,
directly or indirectly, any lien, security interest, pledge or hypothecation of
any kind on or concerning the Managed Containers, title thereto or any interest
therein or in this Agreement to any Person other than Borrower, except (i) liens
for taxes not yet due or being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of any Managed Container, (ii) materialmen's,
mechanics', workmen's, repairmen's or other similar liens arising in the
ordinary course of business (including those arising under maintenance
agreements entered into in the ordinary course of business) securing obligations
that are not overdue or are being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of any Managed Container and (iii) the Liens
created pursuant to the Transaction Documents. Manager will promptly, at its
expense, take or cause to be taken such actions as may be necessary duly to
discharge any such lien not excepted above if the same shall arise at any time.

15.   NO PARTNERSHIP.

      Nothing in this Agreement shall be deemed to constitute a partnership
between the parties hereto.

16.   FORCE MAJEURE.

      Neither party shall be deemed to be in breach of its obligations hereunder
nor shall it be liable to the other for any loss or damage which may be suffered
as a direct or indirect result of the performance of any of their respective
obligations being prevented, hindered or delayed by reason of any Force Majeure
circumstances. "Force Majeure circumstances" shall mean any act of God, war,
riot, civil commotion, strike, lock-out, trade dispute or labor disturbance,
accident, breakdown of plant or machinery, explosion, fire, flood, difficulty in
obtaining workmen, materials or transport, government action, epidemic,
difficulty or impossibility in obtaining access to any of the Managed
Containers, or other circumstances whatsoever outside the control of such party
affecting the performance of such party's duties hereunder.

17.   CURRENCY/BUSINESS DAY.

      17.1 All sums payable under this Agreement shall be paid in U.S. Dollars.

      17.2 Notwithstanding anything to the contrary contained herein, if any
      date on which a payment becomes due hereunder is not a Business Day, then
      such payment may be made on the next succeeding Business Day with the same
      force and effect as if made on such scheduled date.

18.   INDEMNIFICATION.

      18.1 Borrower shall defend, indemnify and hold Manager and its Affiliates
      and their respective shareholders, officers, directors, agents and
      employees (collectively, "Manager Indemnified Parties") harmless from and
      against any Claims or Losses (defined as including all claims, actions,
      damages, expenses, losses or liabilities, including, without

                                                                             E28
<PAGE>

Exhibit 10.1

      limitation, reasonable attorneys' fees and other out-of-pocket expenses,
      incurred in defending against such Claims or Losses) asserted against, or
      incurred by, any Manager Indemnified Party and arising with respect to the
      Managed Containers or the services rendered by the Manager to the Borrower
      (including Administrative Functions and Management Functions) pursuant to
      the terms of this Agreement; provided, however, that the foregoing
      indemnity shall not apply to any Claims or Losses to the extent caused by,
      or arising from, (i) the gross negligence or the willful misconduct of the
      Manager in the case of the Administrative Functions, (ii) the negligence,
      gross negligence or willful misconduct of Manager in the case of the
      Management Functions, (iii) a breach by the Manager of its contractual
      obligations hereunder (other than with respect to the Administrative
      Functions) or (iv) any material misrepresentation made by the Manager
      herein. Manager hereby subordinates its claims under this Section 18.1 to
      all claims which have priority in payment under Section 302 of the Loan
      Agreement, and further agrees that any such claims shall only be payable
      at the times and in the amounts for which funds are available for such
      purpose pursuant to Section 302 of the Loan Agreement; provided, however,
      that no such subordination of the Manager shall apply to any amounts that
      would otherwise be included in the definition of Direct Operating Expense
      Payments set forth herein.

      18.2 Cronos Containers (Cayman) Ltd., in its capacity as the initial
      Manager, agrees to, and hereby does, indemnify and hold harmless the
      Borrower, its assignees and their respective officers, directors,
      employees and agents (each of the foregoing, an "Indemnified Party")
      against any and all liabilities, losses, damages, penalties, costs and
      expenses (including costs of defense and legal fees and expenses) which
      may be incurred or suffered by any Indemnified Party (except to the extent
      caused by the negligence or willful misconduct of any Indemnified Party)
      as a result of claims, actions, suits or judgments asserted or imposed
      against an Indemnified Party and arising out of (i) breach by the Manager
      of its covenants and obligations hereunder related to the Management
      Functions or (ii) a material breach by the Manager of its representations
      and warranties set forth in this Agreement; provided, however, that the
      indemnity obligation of Cronos Containers (Cayman) Ltd. pursuant to this
      Section 18.2 shall not extend to any consequential, indirect or special
      damages incurred by any Indemnified Party except for losses incurred by
      the Lenders under the Loan Agreement as a result of the conditions or
      events described in Sections (i) and (ii) of this Section 18.2. The
      parties hereto hereby agree that (i) nothing contained in this Section
      18.2 shall be interpreted as an implicit or explicit guarantee by Cronos
      Containers (Cayman) Ltd. of the payment of the principal balance of, or
      accrued interest on, the Notes and (ii) losses on the Notes may occur for
      various reasons including, but not limited to, the financial inability of
      the Lessee to make rental payments and/or the inability of the Manager to
      re-lease containers in sufficient amounts or at sufficient rates to repay
      the Notes.

      18.3 The obligations of the Borrower and the Manager under Sections 18.1
      and 18.2 hereof, respectively, shall survive the termination of this
      Agreement.

19.   NO BANKRUPTCY PETITION AGAINST BORROWER.

                                                                             E29
<PAGE>

Exhibit 10.1

      Manager will not, prior to the date that is one (1) year and one (1) day
after the payment in full of the aggregate Outstanding Obligations, institute
against Borrower, or join any other Person in instituting against Borrower, an
Insolvency Proceeding. This Section 19 shall survive the termination of this
Agreement.

20.   REPRESENTATIONS AND WARRANTIES.

      20.1 Manager represents and warrants to Borrower that:

            (a) The Manager is a corporation duly organized and validly existing
            and in compliance under the laws of the Cayman Islands;

            (b) The Manager has the requisite power and authority to enter into
            and perform its obligations under this Agreement, and all requisite
            corporate authorizations have been given for it to enter into this
            Agreement and to perform all the matters envisaged hereby. Upon due
            execution and delivery hereof this Agreement will constitute the
            valid, legally binding and enforceable obligation of Manager,
            subject to bankruptcy, insolvency, moratorium, reorganization and
            other laws of general applicability relating to or affecting
            creditors' rights and to general equity principles;

            (c) The Manager has not breached its memorandum and articles of
            association or any other agreement to which it is a party or by
            which it is bound in the course of conduct of its business and
            corporate affairs or any applicable laws and regulations of the
            Cayman Islands in such manner as would in any such case have a
            materially adverse effect on its ability to perform its obligations
            under this Agreement;

            (d) The consummation of the transactions contemplated by and the
            fulfillment of the terms of this Agreement will not conflict with,
            result in any breach of any of the terms and provisions of, or
            constitute (with or without notice or lapse of time or both) a
            default under, the memorandum and articles of association of
            Manager, or any material term of any indenture, agreement, mortgage,
            deed of trust, or other instrument to which Manager is a party or by
            which it is bound, or result in the creation or imposition of any
            Lien upon any of its properties pursuant to the terms of any such
            indenture, agreement, mortgage, deed of trust, or other instrument,
            or violate any law or any order, rule, or regulation applicable to
            Manager of any court or of any federal or state regulatory body,
            administrative agency, or other Governmental Authority having
            jurisdiction over Manager or any of its properties; and

            (e) There are (i) no proceedings or investigations pending, or, to
            the knowledge of Manager, threatened, before any court, regulatory
            body, administrative agency, or other tribunal or Governmental
            Authority (A) asserting the invalidity of this Agreement, (B)
            seeking to prevent the consummation of any of the transactions
            contemplated by this Agreement, or (C) seeking any determination or
            ruling that might materially and adversely affect the performance

                                                                             E30
<PAGE>

Exhibit 10.1

            by Manager of its obligations under, or the validity or
            enforceability of, this Agreement; and (ii) no injunctions, writs,
            restraining orders or other orders in effect against Manager that
            would adversely affect its ability to perform under this Agreement.

            (f) A true, complete and correct copy of the Lease Agent Agreement
            between the Manager and Cronos Company Limited is attached as
            Exhibit C hereto.

      20.2 Borrower represents and warrants to Manager that:

            (a) Borrower is a limited liability company duly organized, validly
            existing and in compliance under the laws of Bermuda;

            (b) Borrower has the requisite power and authority to enter into and
            perform its obligations under this Agreement, and all requisite
            corporate authorizations have been given for it to enter into this
            Agreement and to perform all the matters envisaged hereby. Upon due
            execution and delivery hereof this Agreement will constitute the
            valid, legally binding and enforceable obligation of Borrower,
            subject to bankruptcy, insolvency, moratorium, reorganization and
            other laws of general applicability relating to or affecting
            creditors' rights and to general equity principles;

            (c) Borrower has not breached its memorandum of association or
            bye-laws or any other agreement to which it is a party or by which
            it is bound in the course of conduct of its business and corporate
            affairs or any applicable laws and regulations of Bermuda in such
            manner as would in any such case have a materially adverse effect on
            its ability to perform its obligations under this Agreement;

            (d) The consummation of the transactions contemplated by and the
            fulfillment of the terms of this Agreement will not conflict with,
            result in any breach of any of the terms and provisions of, or
            constitute (with or without notice or lapse of time or both) a
            default under, the memorandum of association or bye-laws of
            Borrower, or any material term of any indenture, agreement,
            mortgage, deed of trust, or other instrument to which Borrower is a
            party or by which it is bound, or result in the creation or
            imposition of any Lien upon any of its properties pursuant to the
            terms of any such indenture, agreement, mortgage, deed of trust, or
            other instrument, or violate any law or any order, rule, or
            regulation applicable to Borrower of any court or of any federal or
            state regulatory body, administrative agency, or other Governmental
            Authority having jurisdiction over Borrower or any of its
            properties; and

            (e) There are (i) no proceedings or investigations pending, or, to
            the knowledge of Borrower, threatened, before any court, regulatory
            body, administrative agency, or other tribunal or Governmental
            Authority (A) asserting the invalidity of this Agreement, (B)
            seeking to prevent the consummation of any

                                                                             E31
<PAGE>

Exhibit 10.1

            of the transactions contemplated by this Agreement, or (C) seeking
            any determination or ruling that might materially and adversely
            affect the performance by Borrower of its obligations under, or the
            validity or enforceability of, this Agreement, and (ii) no
            injunctions, writs, restraining orders or other orders in effect
            against Borrower that would adversely affect its ability to perform
            under this Agreement.

21.   GENERAL.

      21.1 All notices, demands or requests given pursuant to this Agreement
      shall be in writing, sent by internationally-recognized, overnight courier
      service or by telefax or hand delivery to the following addresses:

      To Manager:             Cronos Containers (Cayman) Ltd.
                              P.O. Box 30464 SMB
                              Queensgate House
                              George Town Grand Cayman
                              Cayman Islands
                              Telephone:
                              Telefax:
                              Attention:

                              with a copy to:

                              Cronos Containers Limited
                              The Ice House
                              Dean Street
                              Marlow
                              Buckinghamshire SL7 3AB
                              England
                              Telephone: 44 1628.405580
                              Telefax: 44 1628.405648
                              Attention: Peter J. Younger

      To Borrower:            CF Leasing Ltd.
                              Clarendon House
                              Church Street
                              Hamilton HM 11, Bermuda
                              Telephone: 441 295-1422
                              Fax: 441 292-4720
                              Attention: Secretary

      To the Agent:           Fortis Bank (Nederland) N.V.
                              Coolsingel 93/1
                              P.O. Box 749
                              3000 AS Rotterdam
                              The Netherlands

                                                                             E32
<PAGE>

Exhibit 10.1

                              Telephone: 31-10-401-6014
                              Telefax: 31 10 401 63 43
                              Attention: Menno Van Lacum

      To any Lender:          At its address as set forth in the Loan Agreement.

      Notice shall be effective and deemed received (a) two (2) days after being
      delivered to the courier service, if sent by courier, (b) upon receipt of
      confirmation of transmission, if sent by telecopy, or (c) when delivered,
      if delivered by hand.

      21.2 If any proceeding is brought for enforcement of this Agreement or
      because of an alleged dispute, breach, default, in connection with any
      provision of this Agreement, the prevailing party shall be entitled to
      recover, in addition to other relief to which it may be entitled,
      reasonable attorney fees and other costs incurred in connection therewith.

      21.3 Borrower and Manager shall each perform such further acts and execute
      such further documents as may be necessary to implement the intent of, and
      consummate the transactions contemplated by, this Agreement.

      21.4 If any term or provision of this Agreement or the performance thereof
      shall to any extent be or become invalid or unenforceable, such invalidity
      or unenforceability shall not affect or render invalid or unenforceable
      any other provision of this Agreement and this Agreement shall continue to
      be valid and enforceable to the fullest extent permitted by law.

      21.5 This Agreement shall be binding upon and inure to the benefit of, and
      be enforceable by, Borrower and Manager, and their respective successors
      in interest or permitted assigns; provided, however, that this Agreement
      and the rights and duties of Manager hereunder may not be assigned by
      Manager to any other Person, other than an Affiliate or Subsidiary of
      Manager, without obtaining the prior written consent of Borrower and the
      Agent (acting at the direction of the Lenders). The Manager hereby
      acknowledges and agrees that Borrower shall assign all of its rights,
      title and interest under this Agreement to the Agent on behalf of the
      Lenders. Manager hereby consents to such assignment and agrees that the
      Agent may enforce the rights and remedies of the Borrower hereunder.

      21.6 Waiver of any term or condition of this Agreement (including any
      extension of time required for performance) shall be effective only if in
      a written instrument signed by each of the Manager, the Borrower and the
      Agent at the direction of the Majority Lenders and shall not be construed
      as a waiver of any subsequent breach or waiver of the same term or
      condition or a waiver of any other term or condition of this Agreement. No
      delay on the part of any party in exercising any right, power or privilege
      hereunder shall operate as a waiver hereof.

      21.7 The headings contained in this Agreement are for reference purposes
      only and shall not affect in any way the meaning or interpretation of this
      Agreement.

                                                                             E33
<PAGE>

Exhibit 10.1

      21.8 This Agreement represents the entire agreement between the parties
      with respect to the subject matter hereof. The terms of this Agreement may
      be amended, modified or waived only by a written instrument signed by the
      Manager, the Borrower and the Agent. The Borrower shall forward copies of
      any amendment to this Agreement to the Agent and each Lender.

      21.9 This Agreement may be signed in two or more counterparts each of
      which shall constitute an original instrument, but all of which together
      shall constitute but one and the same instrument.

      21.10 Any signature required with respect to this Agreement may be
      provided via facsimile or by electronic means and shall in either case be
      equally effective as the delivery of an originally executed counterpart.

      21.11 This Agreement shall be governed by and construed in accordance with
      the substantive laws of the State of New York of the United States of
      America (without regard to choice of law principles) applicable to
      agreements made and to be performed therein and the obligations, rights,
      and remedies of the parties under this Agreement shall be determined in
      accordance with such laws. Any legal suit, action or proceeding against
      Borrower or Manager arising out of or relating to this Agreement, or any
      transaction contemplated hereby, may, be instituted in any federal or
      state court in the City of New York, State of New York, and each of the
      Borrower and the Manager hereby waive any objection which it may now or
      hereafter have to the laying of venue of any such suit, action or
      proceeding, and, solely for the purposes of enforcing this Agreement,
      Borrower and Manager each hereby irrevocably submits to the jurisdiction
      of any such court in any such suit, action or proceeding. Each of Borrower
      and Manager hereby irrevocably appoints and designates CT Corporation
      System, having an address at 111 Eighth Avenue, New York, New York, 10011,
      its true and duly authorized agent for the limited purpose of receiving
      and forwarding legal process in any such suit, action or proceeding, and
      each of Borrower and Manager agrees that service of process upon such
      party shall constitute personal service of such process on such Person.
      Each of Borrower and Manager shall maintain the designation and
      appointment of such authorized agent until the termination of this
      Agreement; provided, however, if such agent shall cease to so act, each of
      Borrower and Manager shall immediately designate and appoint another such
      agent and each shall promptly deliver to the other evidence in writing of
      such other agent's acceptance of such appointment.

      21.12 The parties hereto acknowledge that the Agent, its successors and
      assigns are each an express third party beneficiary of this Agreement.

                           [Signature page follows.]

                                                                             E34
<PAGE>

Exhibit 10.1

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                         CF LEASING  LTD.

                                         By: /s/ DENNIS J TIETZ

                                         Title Director

                                         Date: _________________________________

                                         CRONOS CONTAINERS (CAYMAN) LTD.

                                         By: /s/ PETER J YOUNGER

                                         Title Director

                                         Date: _________________________________

                                                                             E35
<PAGE>

Exhibit 10.1

                                         FORTIS BANK (NEDERLAND) N.V., as Agent

                                         By: /s/ M.A.N. VAN LACUM
                                         Title _________________________________

                                         Date: _________________________________

                                         By: /s/ P.R.G.ZAMAN

                                         Title _________________________________

                                         Date: _________________________________

                                                                             E36
<PAGE>

Exhibit 10.1

                                   EXHIBIT A

                             FORM OF MANAGER REPORT

      CF LEASING LTD. ("BORROWER")

      FORM OF MANAGEMENT REPORT BY CRONOS CONTAINERS CAYMAN LTD ("MANAGER")

      FOR THE COLLECTION PERIOD ENDED JULY 31, 2004.

<TABLE>
<S>                                                                                      <C>
      SECTION 1: NET LEASE REVENUE AND AVAILABLE FUNDS                                                   US$
                                                                                         -------------------
1     Gross Lease Revenue for Period
2     Direct Finance Lease Income for Period
3     Less: Direct Operating Expenses
4     Net Container Revenue & Direct Finance Lease Income (Line 1 plus line 2
      less line 3):
                                                                                         -------------------
5     Management Fee for Period = 8% of Line 4:                                                            0
                                                                                         -------------------

                                                                                         -------------------
6     Amount available in Trust Account:
                                                                                         -------------------
7     Amount available in Restricted Cash Account:
                                                                                         -------------------

      SECTION 2: DETAIL OF DIRECT OPERATING EXPENSES

8     Direct Operating Expenses (Line 2):
9     Maintenance and Repair Expense
10    Storage Expense
11    Repositioning Expense
12    Handling Expense
13    Capital Improvements
14    Other Expenses
15    Total Operating Expenses (as reported above in Line 3 & 7):

      SECTION 3: NORMAL DISTRIBUTION AT PAYMENT DATE

      Providing none of the answers in Section 4 is Y                                                   US $
                                                                                         -------------------

16    To Manager: Management Fee
17    To Hedge Providers: payments other than hedge termination payments
18    To Agent: fees and expenses
19    To Persons: Borrower Expenses & DOC
20    To Class A Note Lenders: Interest and Commitment Fees
21    To Class B Note Lenders: Interest and Commitment Fees
22    To Restricted Cash Account: any amount to restore the Restricted Cash
      Requirement
23    To Class A Note Lenders: Principal payment
24    To Class B Note Lenders: Principal payment (only if there is no Aggregate
      Class A Principal Balance outstanding)
25    To each Lender: Overdue Interest
26    To Hedge Providers: hedge termination payments
27    To Manager: Disposition Fees and Indemnification Payments
28    To Borrower or designee: remaining Distributable Cashflow
</TABLE>

                                                                             E37
<PAGE>

Exhibit 10.1

<TABLE>
<S>                                                                                                       <C>
      SECTION 4: EVENT OF DEFAULT CHECKLIST                                                               Y/N

29    Is the principal balance of the Notes outstanding larger than the Asset Base?                        N
30    Did Manager fail to make a deposit to the Trust Account within a particular week?                    N
31    Did Manager fail to deliver Distribution Report,  or Asset Base
      Certificate with 3 days after the related Determination Date?                                        N
32    Did Manager fail to deliver Financial Statements within 10 days of required timeframe?               N
33    Did Manager fail to carry/maintain insurance?                                                        N
34    Has Manager appointed receiver, or similar?                                                          N
35    Is Manager in breach of any covenant?                                                                N
36    Is Manager in breach of any representation or Warranty?                                              N
37    Has Manager had a receiver or similar appointed?                                                     N
38    Is Manager insolvent?                                                                                N
39    Has a distress, attachment, execution or other legal process been levied against the
      assets of Manager?                                                                                   N
40    Has a person entitled to the benefit of any mortgage charge or other encumbrance
      taken possession of all/material part of the assets of Manager?                                      N
41    Have the auditors of The Cronos Group resigned and no replacement been found within
      60 days?                                                                                             N
42    Are there any judgments rendered against The Cronos Group in the aggregate exceeding
      $1,000,000                                                                                           N
43    Has Stefan M. Palatin returned in a management position within The Cronos Group?                     N
44    Has The Cronos Group, the Manager or any subsidiary defaulted on payment of any
      principal or interest on any indebtedness for borrowed money in excess of $2,000,000?                N
45    Is there an Event of Default under the Loan Agreement or any of the other related
      documents?                                                                                           N
46    Has The Cronos Group failed to deliver its Financial statements within 10 days of the
      required timeframe?                                                                                  N
47    Has there been an event causing any acceleration of debt of more than $2,000,000?                    N
48    Have any of the officers/directors activities violated securities law?                               N
49    Is the EBIT Ratio of Borrower less than 1.1:1.0 on a 6 quarter rolling basis?                        N
50    Is the EBIT Ratio of The Cronos Group less than 1.1 : 1.0 on a 6 quarter rolling basis?              N
51    Is the Tangible Net Worth of The Cronos Group less than $45 million and 50% of the
      retained earnings after December 31, 2002?                                                           N
52    Have Borrower, The Cronos Group or the Manager failed to comply with any covenant?                   N
53    Is the Weighted Average age of the Equipment greater than 6 years?                                   N
54    Is there any legal proceeding against the manager or any affiliates which will have an
      adverse effect on their ability to perform their obligations                                         N
55    Has Borrower filed voluntary liquidation?                                                            N
56    Is the balance on the Restricted Cash Account less than required?                                    N
57    Has a Change of Control occurred with respect to The Cronos Group, whereby it is not
      the surviving entity?                                                                                N
</TABLE>

                                                                             E38
<PAGE>

Exhibit 10.1

                                   EXHIBIT B

                         FORM OF ASSET BASE CERTIFICATE

      CF LEASING LIMITED
      ASSET BASE CERTIFICATE (NO )

      AS AT [ ], 200[ ]

<TABLE>
<CAPTION>
                                                                                                          US$
                                                                                                          ---
<S>                                                                                                       <C>
1     COST

1.1   Opening Total Cost of Container Equipment at Closing
                                                                                              --------------
1.2   Cost of Additions since Closing
                                                                                              --------------
1.3   Cost of Retirements of Container Equipment since Closing
                                                                                              --------------
1.4   Closing Total Cost of Container Equipment per above date (lines 1.1 + 1.2 - 1.3)                     0
                                                                                              --------------

2     DEPRECIATION

2.1   Opening Total Depreciation of Container Equipment at Closing
                                                                                              --------------
2.2   Depreciation of Container Equipment Since Closing                                                    0
                                                                                              --------------
2.3   Depreciation on Retirements of Container Equipment net of reinstatements
                                                                                              --------------
2.4   Closing Total Depreciation of Container Equipment per above date (lines 2.1 + 2.2 -
      2.3)                                                                                                 0
                                                                                              --------------
3     NET BOOK VALUE

3.1   Net Book Value of Container Equipment at Closing (lines 1.1 - 2.1)                                   0
3.2   Net Book Value of Container Equipment as per above date (lines 1.4 - 2.4)                            0
                                                                                              --------------
3.2.1 Net Book Value of CPC containers as per above date (CJ2)
                                                                                              --------------
3.2.2 Net Book Value of Tank containers as per above date (TJ1, TJ2)
                                                                                              --------------
3.2.3 Net Book Value of General Purpose Equipment as per above date (DJ1,DJ2)
                                                                                              --------------
3.2.4 Net Book Value of Refrigerated Equipment as per above date (RJ1,RJ2)
                                                                                              --------------
3.2.5 Net Book Value of Open Top Equipment as per above date (OJ2)
                                                                                              --------------
3.3   NET BOOK VALUE OF CONTAINER EQUIPMENT AS PER ABOVE DATE (AS PER LINE 3.2)                            0
                                                                                              --------------

4     RESTRICTED CASH ACCOUNT
                                                                                              --------------
4.1   Restricted Cash Account Balance as per Determination Date
                                                                                              --------------
4.2   Restricted Cash Account Requirement as per Payment Date                                              0
                                                                                              --------------
4.3   EXCESS (DEFICIT) ON RESTRICTED CASH ACCOUNT AS PER PAYMENT DATE (4.1-4.2)                            0
                                                                                              --------------
5     TRUST ACCOUNT

5.1   Trust Account Balance as per Determination Date
                                                                                              --------------
5.2   Principal Class A Notes due as per Payment Date
                                                                                              --------------
5.3   Interest Class A Notes due as per Payment Date
                                                                                              --------------
5.4   Principal Class B Notes due as per Payment Date
                                                                                              --------------
5.5   Interest Class B Notes due as per Payment Date
                                                                                              --------------
5.6   Total Class A and Class B Note obligation as per Payment Date (5.2+5.3+5.4+5.5)                      0
                                                                                              --------------
5.7   To Persons: Borrower Expenses & DOC
                                                                                              --------------
5.8   To Agent: fees and expenses
                                                                                              --------------
5.9   Cash to be transferred to the Restricted Cash Account
                                                                                              --------------
5.10  Expected debt service obligation for the NEXT Payment Date
                                                                                              --------------
5.11  Management Fee - Other
                                                                                              --------------
5.12  EXCESS (DEFICIT) ON TRUST ACCOUNT AS PER PAYMENT DATE (5.1-5.9)                                      0
                                                                                              --------------
 6    OTHER ASSETS
</TABLE>

                                                                             E39
<PAGE>

Exhibit 10.1

<TABLE>
<S>                                                                                                       <C>
                                                                                              --------------
6.1   Finance Lease Receivable
                                                                                              --------------

7     AGGREGATE ASSET BASE
7.2.1 80 % of line 3.2.1                                                                                   0
7.2.2 70 % of line 3.2.2                                                                                   0
7.2.3 80 % of line 3.2.3                                                                                   0
7.2.4 80 % of line 3.2.4                                                                                   0
7.2.5 100% of line 4.1                                                                                     0
7.2.6 100% of line 5.12                                                                                    0
7.2.7 80% of line 6.1                                                                                      0
                                                                                              --------------
7.3   AGGREGATE ASSET BASE (LINE 7.2)                                                                      0
                                                                                              --------------

8     CLASS A AND B NOTE OUTSTANDING
                                                                                              --------------
8.1   Class A Note outstanding as per Determination Date
                                                                                              --------------
8.2   Class B Note outstanding as per Determination Date
                                                                                              --------------
8.3   Class A and B Note outstanding as per Determination Date                                             0
                                                                                              --------------
8.4   Class A Note drawdown (reduction) as per Payment Date
                                                                                              --------------
8.5   Class B Note drawdown (reduction) as per Payment Date
                                                                                              --------------
8.6   Class A Note outstanding as per Payment Date                                                         0
                                                                                              --------------
8.7   Class B Note outstanding as per Payment Date                                                         0
                                                                                              --------------
8.8   CLASS A AND B NOTE OUTSTANDING AS PER PAYMENT DATE                                                   0
                                                                                              --------------

9     CLASS A NOTE ASSET BASE AND AVAILABILITY
9.1   Maximum availability
9.2   Asset Base (Aggregate Asset Base less Note B Principal Balance)                                      0
9.3   Outstanding as per Payment Date (line 8.6)                                                           0
9.4   Asset base availability (deficit) as per Payment Date                                                0
9.5   Maximum loan availability (9.1-9.3)                                                                  0
                                                                                              --------------
9.6   FUNDS AVAILABLE FOR DRAWING (LESSER OF 9.4 AND 9.5)                                                  0
                                                                                              --------------

10   CLASS B NOTE AND AVAILABILITY
10.1  Maximum availability
10.2  Outstanding as per Payment Date (line 8.7)                                                           0
10.3  Maximum loan availability                                                                            0
                                                                                              --------------
10.4  FUNDS AVAILABLE FOR DRAWING                                                                          0
                                                                                              --------------

11    MANDATORY PREPAYMENT SUMMARY
11.1  Trust Account Deficit (incl.deficit on Restricted Cash Account if any)                               0
11.2  Note A Asset Base Deficit                                                                            0
11.3  Note B Asset Base Deficit                                                                            0

 12   ADVANCE RATES

12.1  Note A advance rate on NBV of assets in Asset Base as per Payment Date
12.2  Note A and B advance rate on NBV of assets in Asset Base as per Payment Date
</TABLE>

      The undersigned, an Authorized Signatory, hereby certifies that to the
      best of his knowledge and belief the Asset Base Certificate has been
      compiled in keeping with the requirements of the Loan Agreement.

      AUTHORIZED SIGNATORY

                                                                             E40
<PAGE>

Exhibit 10.1

                                   EXHIBIT C

                         COPY OF LEASE AGENT AGREEMENT

                                                       [LOGO]

                             LEASING AGENT AGREEMENT

                       CRONOS CONTAINERS (CAYMAN) LIMITED

                                       AND

                            CRONOS CONTAINERS LIMITED

THIS LEASING AGENT AGREEMENT (the "Agreement") is entered into as of this 1st
day of January 2002, by and between Cronos Containers (Cayman) Limited, a
compnay incorporated under the laws of the Cayman Islands (hereinafter, "CAY")
and Cronos Containers Limited, an English corporation (hereinafter, the "Leasing
Agent"). This agreement supersedes and replaces all prior agreements concerning
the subject matter hereof between the parties.

                                    RECITALS

WHEREAS, CAY and the Leasing Agent are both wholly owned subsidiaries of The
Cronos Group, a Luxembourg corporation.

WHEREAS, CAY is in the business of managing marine cargo containers on behalf of
owners of containers.

WHEREAS, the Leasing Agent has previously contracted with CAY to provide
container leasing services to CAY and the owners for whom it manages containers.

WHEREAS, CAY has determined that, although it will manage containers for owners
of such containers, it will not perform all functions required to lease the
containers in the container leasing business. The Leasing Agent has agreed to be
responsible for container leasing on behalf of CAY and for the Cronos Group and
the owners of the containers when required.

                                    AGREEMENT

NOW, THEREFORE, in consideration of the mutual provisions contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

1.    DEFINITIONS

      As used in this Agreement, the following terms shall have the respective
      meanings set forth:

                                                                             E41
<PAGE>

Exhibit 10.1

      "BANKRUPTCY" as used in Section 11(c) of this Agreement refers to the
      following events: (i) an order for relief entered against any party under
      any applicable bankruptcy or insolvency law, or (ii) any party (A) making
      a general assignment for the benefit of creditors; (B) filing a voluntary
      petition under any applicable bankruptcy or insolvency law; (C) filing a
      petition or answer seeking reorganisation, arrangement, composition,
      readjustment, liquidation, dissolution or similar relief under any
      statute, law or regulation; (D) filing an answer or other pleading
      admitting or failing to contest the material allegations of a petition
      filed against it in any proceeding of said nature; or (E) seeking,
      consenting to, or acquiescing in the appointment of a trustee, receiver,
      or liquidator of all or any substantial part of its assets and properties.

      "CAPITAL IMPROVEMENTS" mean any structural changes required to be made to
      the containers so as to conform with applicable governmental or industrial
      standards.

      "CONTAINERS" refers to marine dry cargo containers and special purpose
      containers (including, but not limited to, refrigerated containers, open
      top containers, tank containers, bulk containers, cellular palletwide
      containers, rolltrailers and flat rack containers) owned or leased or
      managed by CAY on its own behalf or on behalf of the Cronos Group or any
      third party container owner, now or at any time in the future.

      "CONTAINER OWNERS" refers to the beneficial owners of the containers,
      including subsidiaries or affiliates of CAY and of the Leasing Agent.

      "DELIVERY CHARGES" means the costs incurred in transporting containers
      from the Manufacturers' production facility to the point of the first
      lease-out.

      "EFFECTIVE DATE" means the 1st day of January 2002.

      "GROSS LEASE REVENUE" refers to the gross revenues accrued by CAY or the
      Leasing Agent for and on behalf of the container owners from the leasing
      of the containers (prior to the deduction of any expenses incurred in
      connection therewith), but shall not include proceeds from the sale of
      containers. Such Gross Lease Revenue for a given period of time shall
      include all proceeds accrued from operations related to the containers
      during such period, including, but not limited to, per diem charges,
      pick-up and turn-in charges, penalties for each termination,
      transportation, realised exchange differences, pre-trip inspection, direct
      interchange charges, handling and repair charges, off-hire service charges
      and other charges relating to or arising from the leasing of the
      containers. Gross Lease Revenue also includes all other revenue
      attributable to the containers, including funds received from
      manufacturers or others in settlement of claims, losses, disputes or
      proceedings relating to or arising out of the leasing of the containers,
      bankruptcy or retrieval insurance proceeds for lost lease revenues, and
      returned insurance premiums.

      "PERSON" means an individual, partnership, corporation, trust, or other
      entity.

      "MANAGEMENT AGREEMENTS" collectively refers to all the management
      agreements under which CAY contracts with the container owners to manage
      the containers.

      "NET LEASE REVENUE" for a given period of time shall mean Gross Lease
      Revenues less Direct Operating Expenses.

      "DIRECT OPERATING EXPENSES" shall include:

      1) all uncollectible accounts receivable from lessees, including any
         reasonable reserve for bad debts.

      2) all fixed and variable operating expenses and costs related to the
         operation and management of all the containers managed, operated or
         leased by the Leasing Agent. Such fixed and variable operating expenses
         and costs include, but are not limited to, all expenses of maintaining,
         repairing, refurbishing, storing, positioning and handling the
         containers, agent expense reimbursement and commissions, legal fees,
         spare parts, charges, assessments or levies of whatever kind or nature
         imposed upon or against the containers, ad valorem, gross receipts and
         other property taxes or other taxes which are levied against the
         containers or the gross rental therefrom, legal and accounting fees
         relating to operation of the containers, and the cost of any
         examination, investigation or other proceedings conducted by any
         regulatory body relating to operation of the containers.
         Notwithstanding the above, these fixed and

                                                                             E42
<PAGE>

Exhibit 10.1

         variable operating costs and expenses shall not include marketing,
         general, and administrative expenses of the Leasing Agent or any charge
         or expense paid by a third party lessee or other person not a container
         owner and not reimbursable to such lessee or other person.

      "SALE" means any sale, exchange or other disposition of containers, any
      recovery of damage or insurance proceeds (other than business or rental
      interruption proceeds), or any debt refinancing.

2.    EMPLOYMENT AS LEASING AGENT

      Cronos Containers (Cayman) Limited hereby retains the Leasing Agent to
      provide for the leasing and management of the containers, pursuant to the
      terms and conditions of this Agreement, and the Leasing Agent hereby
      agrees to provide such leasing and management services and hereby accepts
      the terms, conditions, covenants and agreements contained herein.

3.    LEASING AGENT'S DUTIES

      Subject to the direction and supervision of CAY, the Leasing Agent shall
      provide the following services, including the taking of all actions and
      the hiring of all personnel necessary or appropriate to perform such
      services:

      A. LEASE INITIATION

               1) From and after the Effective Date, the Leasing Agent shall
                  provide or arrange for the provision of all lease initiation
                  and maintenance services required to operate and lease the
                  containers. The services shall include developing
                  opportunities for, and negotiating leases providing for the
                  lease of containers worldwide, to shipping lines as well as
                  other customers or potential customers.

               2) The leases of the containers entered into by the Leasing Agent
                  may include short or long-term, one way or round trip,
                  operating service, or master leases, financial leverage leases
                  or lease purchases. The leases shall be at such lease or
                  rental rates and upon such terms and provisions as determined
                  by and in the discretion of the Leasing Agent.

               3) The Leasing Agent shall execute any and all agreements,
                  contracts, leases, certificates, instruments or other
                  documents necessary or desirable in connection with the lease
                  of the containers.

      B. LEASE MANAGEMENT

              1)  The Leasing Agent shall perform all managerial and
                  administrative functions necessary for the continued operation
                  and leasing of the containers, including, but not limited to,
                  arranging for periodic inspection, maintenance and repair of
                  the containers and keeping records of the location and
                  operation of the containers.

              2)   The Leasing Agent shall bill all lessees for lease payments
                   due under the leases, and collect all amounts due pursuant to
                   the terms of the leases. The Leasing Agent shall transmit to
                   CAY, for deposit in such account or accounts designated by
                   CAY weekly, or at more frequent intervals as the Leasing
                   Agent is instructed by CAY. The Leasing Agent acknowledges
                   that all revenues collected by it from the lease of
                   containers for and on behalf of CAY are for the exclusive
                   benefit of CAY. The Leasing Agent shall follow such credit
                   policies with respect to the lease of containers, as it shall
                   establish from time to time.

              3)  In performing its managerial and administrative functions
                  pursuant to this Agreement, the Leasing Agent shall manage and
                  lease containers on behalf of the container owners without
                  preference to the ownership thereof. The primary factor that
                  the Leasing Agent will take into account in leasing containers
                  in times of low demand and excess supply will be the locations
                  and availability for lease of equipment relative to the demand
                  therefore.

                                                                             E43
<PAGE>

Exhibit 10.1

      C. PURCHASE OF CONTAINERS TECHNICAL AID

              1)  When requested by and on behalf of CAY, the Leasing Agent
                  shall negotiate agreements with manufacturers for the purchase
                  of containers on behalf of the container owners, and develop,
                  discuss and agree with manufacturers on the technical design
                  specifications for the containers or container parts.

              2)  The Leasing Agent shall, upon request, inspect such newly
                  built containers for compliance with the technical
                  specifications agreed with the manufacturers, and determine
                  that the containers carry the standard Cronos markings.

              3)  CAY shall have the right to approve the terms and conditions
                  of all contracts to be entered into with manufacturers for and
                  on behalf of the container owners, but may delegate authority
                  to execute all such contracts to the Leasing Agent at its
                  discretion.

              4)  The Leasing Agent shall provide technical advice and support
                  concerning the containers, and, as requested, shall consult
                  with and advise third party lessees in the repair, maintenance
                  or purchase of containers. The Leasing Agent shall keep CAY
                  informed as to market developments and new issues concerning
                  technical design of containers, including any and all
                  environmental issues affecting or impacting the design of
                  containers or container parts.

      D. EQUIPMENT SALES/REMARKETING

              1)  The Leasing Agent shall provide equipment sales and
                  remarketing support as requested by CAY. The Leasing Agent
                  shall use its best efforts to develop opportunities to sell or
                  remarket containers and to negotiate the terms of such sales
                  and remarketing agreements.

              2)  The Leasing Agent shall be responsible for ensuring that all
                  containers sold or leased satisfy all applicable import,
                  customs, tax and other requirements and restrictions, and that
                  all required permits and licenses have been obtained and all
                  fees have been paid. The Leasing Agent shall bill CAY, or the
                  container owners or the Pools in which it manages such
                  containers, for reimbursement of all such costs, expenses and
                  fees paid by the Leasing Agent.

4.    PERSONNEL

      The Leasing Agent shall be responsible for employing all personnel
      necessary for it to render and fulfil the services and carry out the
      duties required of it pursuant to this Agreement, including all required
      commercial, administrative, technical, legal or accounting personnel;
      provided, however, that nothing herein shall prohibit Cronos Containers
      (Cayman) Limited from hiring its own personnel, or from contracting with
      other third parties, for the provision of any or all such services.

5.    UTILISATION

      The Leasing Agent agrees to use the containers in accordance with the
      standards accepted in the marine container leasing industry. CAY retains
      the right, on behalf of itself and the container owners; to have the
      containers inspected at any time, so long as such inspection does not
      interfere with normal utilisation of the containers. The Leasing Agent
      agrees not to grant a lien, security interest, pledge or hypothecation of
      any kind on or concerning the containers to any person.

6.    INSURANCE

      The Leasing Agent shall insure the containers for such amounts, on such
      terms and against such liability or loss as it insures containers that are
      owned by the Cronos Group. All insurance premiums for such insurance and
      any deductibles payable under such policies shall be borne by the
      container owners.

                                                                             E44
<PAGE>

Exhibit 10.1

7.    BOOKS AND RECORDS

      The Leasing Agent shall maintain such books and records as are customary
      in the marine container leasing industry with respect to the containers
      and the leasing thereof. The Leasing Agent shall provide CAY, upon
      request, within three (3) business days of any such request, with copies
      of all leasing contracts, agent agreements, depot agreements, and all
      agreements or documents relevant thereto with respect to the containers.
      CAY shall have access to the books and records maintained by the Leasing
      Agent hereunder at any and all reasonable times, and shall have the right
      to make extracts or copies thereof. In addition, the Leasing Agent shall
      provide CAY with such information and at such times as requested by CAY to
      enable it to prepare and file any reports required to be sent to the
      container owners.

      The Leasing Agent shall maintain such records as are necessary in order to
      perform the calculation of Net Lease Revenue between CAY and the container
      owners in accordance with the Management Agreements.

8.    AUTHORITY OF THE LEASING AGENT

      The Leasing Agent's activities taken on behalf of CAY will be taken as
      agent for CAY, severally and individually, as well as other owners on
      containers. The parties hereto expressly recognise and acknowledge that
      this Agreement is not intended to create a partnership, joint venture, or
      other entity among CAY, the Leasing Agent, or the container owners.

9.    TERM AND EXPIRATION DATE

      (a) This Agreement shall be for a term commencing on the Effective Date
          and, unless terminated pursuant to Section 9(c) below, shall remain in
          effect for a term of twelve (12) months. The term of this Agreement
          shall be automatically renewed from year to year thereafter, unless
          one party gives ninety (90) days' prior written notice to the other of
          its election to terminate this Agreement.

      (b) Upon any termination of this Agreement as aforesaid, the Leasing Agent
          shall fully and completely cooperate with CAY in transferring
          management of the containers to CAY or its designee. Such co-operation
          shall include, without limitation, turning over all books and records
          pertaining to the Leasing Agent's activities hereunder, promptly
          notifying lessees of the change in the Leasing Agent of the
          containers, and transferring the funds maintained on its behalf to
          such accounts as are designated by CAY

      (c) This Leasing Agent Agreement shall terminate with respect to any
          container which is sold, otherwise disposed of, lost, rendered unfit
          in the Leasing Agent's good faith judgement, declared a total loss or
          destroyed, as of the date that such sale or other disposition is
          consummated or such unfitness determined. In the event, this Agreement
          terminates as to any container pursuant to this Section 9 by reason of
          destruction, unfitness or loss, the Leasing Agent shall use its best
          efforts to sell such container without further authorisation of CAY

10.   COMPENSATION TO THE LEASING AGENT

      As compensation for its services rendered hereunder, CAY agrees to pay to
      the Leasing Agent the following:

              (a) In consideration of the Leasing Agent's services in managing
                  and leasing the containers, CAY shall pay to the Leasing Agent
                  a management fee equal to 90% of the management fee that CAY
                  earns from managing containers on behalf of affiliated
                  companies and third party container owners. The management fee
                  shall be payable to the Leasing Agent monthly, based upon the
                  Gross Lease Revenues and Operating Expenses for the prior
                  month.

                                                                             E45
<PAGE>

Exhibit 10.1

              (b) In addition to the management fees payable as permitted by
                  paragraph (a) above, CAY shall pay directly, or reimburse the
                  Leasing Agent for the payment of, the following costs and
                  expenses properly incurred by the Leasing Agent in the
                  management and leasing of the containers: (i) agent fees and
                  expenses; (ii) depot expenses of inspection, handling and
                  storage; (iii) maintenance and repair costs not paid for by
                  container lessees; (iv) bad debt expenses; (v) insurance
                  premiums and the deductible under any insurance policy
                  covering the containers and any costs of uninsured or excluded
                  risks; (vi) charges, assessments, or levies imposed on the
                  containers of whatever kind or nature; (vii) ad valorem, gross
                  receipts, and other property taxes which are levied against
                  the containers or the gross rentals therefrom; and (viii) the
                  cost of preparation and dissemination of material and
                  documentation relating to any sale of containers. The payment
                  of the foregoing expenses to the Leasing Agent shall be
                  conditional upon the review and approval by CAY.

              (c) Upon the termination of this agreement as referred to in
                  Section 9(c) above, CAY will pay or cause to be paid to the
                  Leasing Agent, 90% of any fee earned by CAY in respect of such
                  termination.

              (d) CAY hereby agrees to reimburse the Leasing Agent for all
                  out-of-pocket and/or extraordinary expenses, costs, charges
                  and disbursements made or incurred by the Leasing Agent in
                  connection with its duties and responsibilities hereunder. All
                  such out-of-pocket and extraordinary expenses, costs, charges
                  and disbursements made or incurred by the Leasing Agent shall
                  be reimbursed at the actual cost to the Leasing Agent plus a
                  10% processing fee.

              (e) All compensation payable to the Leasing Agent hereunder shall
                  be paid in United States Dollars.

11.   EVENTS OF DEFAULT

      The occurrence of any one of the following events shall be an Event of
      Default:

              (a) The failure of either party to pay to the other party any net
                  amounts when due and payable pursuant to the terms of this
                  Agreement.

              (b) The breach by either party of any material term of this
                  Agreement, which breach is not cured or waived within thirty
                  (30) days after written notice of such breach is given by the
                  non-breaching party to the breaching party.

              (c) The Bankruptcy or voluntary dissolution of either party.

              (d) The appointment of a receiver, custodian, or trustee to take
                  possession of all or substantially all of the property or
                  assets of either party or unless said petition or appointment
                  is set aside within thirty (30) days from the date of said
                  filing or appointment.

      Upon the occurrence of an event of default hereunder, the non-breaching
      party may, at its option, terminate this Agreement upon thirty (30) days
      prior written notice to the breaching party, together with any other
      rights or remedies that the non-breaching party may have under any
      applicable law or in equity.

12.   CAPITAL IMPROVEMENTS

        (a)  The Leasing Agent may make any capital improvements to a container,
             if it is necessary in the Leasing Agent's opinion to make such
             capital improvements.

                                                                             E46
<PAGE>

Exhibit 10.1

        (b)  The cost of any capital improvement made to any container is
             acknowledged to be the responsibility of the container owner owing
             such container. In connection therewith, any payments, including,
             without limitation, insurance proceeds or indemnity payments from
             lessees received to cover any of the foregoing shall be first used
             to pay for any of the foregoing. The Leasing Agent shall have the
             right to require CAY to pay the Leasing Agent upon fifteen (15)
             days' prior notice and demand the cost as invoiced for any capital
             improvement not otherwise paid for, as aforesaid, and the Leasing
             Agent shall apply such payments to accomplish the same.

13.   NON-EXCLUSIVE AGREEMENT

      During the terms of this Agreement, and subject to the provisions of
      Section 8 hereof, the Leasing Agent may provide container management,
      sales or remarketing services directly or indirectly to any other company
      or on behalf of any other entity.

14.   CONFIDENTIAL INFORMATION

      The Leasing Agent agrees to hold in strict confidence all documents and
      information obtained with respect to CAY or the container owners and not
      to divulge any proprietary information of or concerning either of the
      same, to any other person, entity, corporation or association, and not to
      convey or disclose any such information or documents, without the prior
      consent of CAY

5.    ASSIGNMENT

      This Agreement, and the rights and duties hereunder, may not be assigned
      by the Leasing Agent to any other person, entity, company, or association
      without the prior written consent of CAY

16.   ARBITRATION

      Any controversy, claim or dispute arising out of or relating to this
      Agreement or the breach thereof shall be settled by arbitration. The
      arbitration shall be held in London, England, and shall be conducted in
      English. All arbitrations shall be conducted according to the rules of
      commercial arbitration of the International Arbitration Association or
      similar organisation.

17.   MISCELLANEOUS

      (a) NOTICES. All notices, demands or requests given pursuant to this
          Agreement shall be written, sent by first class mail, postage prepaid,
          or by courier, telecopy or fax, to the following addresses:

       TO LEASING AGENT:            Cronos Containers Limited
                                    Orchard Lea
                                    Winkfield Lane
                                    Winkfield
                                    Windsor
                                    Berkshire SL4 4RU
                                    United Kingdom

                                    Telephone: (44) 1344 891111
                                    Telefax: (44) 1344 894100

       TO CAY:                      Cronos Containers (Cayman) Limited

                                    Telephone:
                                    Telefax:

                                                                             E47
<PAGE>

Exhibit 10.1

          Notice shall be deemed effective upon personal delivery, upon
          confirmation of receipt of the applicable telecopy followed by
          confirmation telephone call, or three (3) business days after the date
          on which the same is deposited in the mail or with any reputable
          overnight courier.

      (b) GOVERNING LAW. This Agreement shall be governed by, and construed in
          accordance with, the laws of England.

      (c) SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
          shall incure to the benefit of and be binding upon the successors and
          assigns of the parties hereto; provided, however, that assignment by
          the Leasing Agent is restricted by the provisions of paragraph 15
          above.

      (d) SEVERABILITY. If any terms or provision of this Agreement or the
          performance thereof shall to any extent be invalid or unenforceable,
          such invalidity or unenforceability shall not affect or render invalid
          or unenforceable any other provision of this Agreement, and this
          Agreement shall be valid and enforced to the fullest extent permitted
          by law.

      (e) ENTIRE AGREEMENT; MODIFICATION. This Agreement represents the entire
          agreement between the parties, and may not be amended, modified or
          revised except upon a written document signed by each of the parties
          hereto.

IN WITNESS WHEREOF, this Agreement has been duly authorised and executed by the
undersigned as of the _________ day of_____________________, __________.

CRONOS CONTAINERS LIMITED                     CRONOS CONTAINERS (CAYMAN) LIMITED

BY: /S/ FRANK VAUGHAN                         BY: /S/ JAN HELLSTROM

ITS: Director                                 ITS: Director

                                                                             E48<PAGE>
                                                                    EXHIBIT 10.1

                         AGREEMENT OF PURCHASE AND SALE

                               301 INDUSTRIAL WAY
                                 SAN CARLOS, CA

                                 By and Between

              COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
                             a Delaware corporation
                                   ("SELLER")

                                       and

                          PALO ALTO MEDICAL FOUNDATION,
                a California nonprofit public benefit corporation
                                    ("BUYER")

                             Dated: February 7, 2003
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE 1.  BACKGROUND AND GENERAL......................................      1

      1.01  Land.  .....................................................      1

      1.02  Purchase Property.  ........................................      1

      1.03  Purpose.  ..................................................      1

      1.04  Definitions; Index..........................................      1

      1.05  Effective Date..............................................      1

      1.06  Earlier Agreement...........................................      1

ARTICLE 2.  PURCHASE AND SALE...........................................      2

      2.01  Purchase and Sale...........................................      2

      2.02  Purchase Price..............................................      2

      2.03  Payment.....................................................      2

            2.03.A Deposit..............................................      2

            2.03.B Balance of Purchase Price............................      3

      2.04  Liquidated Damages..........................................      3

      2.05  Memorandum of Agreement.....................................      4

      2.06  Tax-Deferred Exchange.......................................      4

      2.07  Buyer's Remedies............................................      5

ARTICLE 3.  ESCROW......................................................      5

      3.01  Opening.....................................................      5

      3.02  Instructions................................................      5

      3.03  Close of Escrow; Buyer's Termination Notice.................      5

            3.03.A Generally............................................      5

            3.03.B Seller's Right to Extend.............................      5

            3.03.C Seller's Failure to Comply...........................      5
</TABLE>
<PAGE>
<TABLE>
<S>                                                                         <C>
            3.03.D Buyer's Obligations on Full Satisfaction of
                   Note.................................................      6

      3.04  Costs.......................................................      6

            3.04.A Seller's Costs.......................................      6

            3.04.B Buyer's Costs........................................      6

            3.04.C Miscellaneous Costs..................................      6

      3.05  Prorations and Adjustments..................................      6

      3.06  Deliveries to Escrow by Seller..............................      7

            3.06.A Grant Deed...........................................      7

            3.06.B Nonforeign Certification.............................      7

            3.06.C California Franchise Tax Withholding.................      7

            3.06.D Miscellaneous........................................      7

      3.07  Deliveries to Escrow by Buyer...............................      7

            3.07.A Closing Payments.....................................      7

            3.07.B Miscellaneous........................................      7

ARTICLE 4.  CONDITIONS TO CLOSE OF ESCROW...............................      7

      4.01  Buyer's Conditions to Close of Escrow.......................      7

            4.01.A Feasibility..........................................      8

            4.01.B Title; Title Policy..................................     11

            4.01.C Additional Agreements................................     12

            4.01.D Varian...............................................     12

            4.01.E Altair Technologies Lease............................     12

            4.01.F Consents/Compliance..................................     12

            4.01.G Sutter Health Approval...............................     13

            4.01.H Seller's Performance.................................     13

            4.01.I Representations and Warranties True..................     13

      4.02  Seller's Conditions to Close of Escrow......................     13
</TABLE>
<PAGE>
<TABLE>
<S>                                                                         <C>
            4.02.A Buyer's Performance..................................     13

            4.02.B Additional Agreements................................     13

            4.02.C Varian...............................................     13

            4.02.D Altair Technologies Lease............................     14

            4.02.E Consents/Compliance..................................     14

            4.02.F Representations and Warranties True..................     14

ARTICLE 5.  DISCLOSURES, DISCLAIMERS, REPRESENTATIONS AND
            WARRANTIES..................................................     14

      5.01  Natural Hazard Report.......................................     14

      5.02  Representations and Warranties in General...................     14

            5.02.A Knowledge Representations............................     14

            5.02.B Restatement..........................................     14

      5.03  Representations and Warranties by Seller....................     14

            5.03.A Organization.........................................     15

            5.03.B Owner/Authority......................................     15

            5.03.C Parties in Possession................................     15

            5.03.D Hazardous Materials..................................     15

            5.03.E No Default...........................................     15

            5.03.F No Condemnation......................................     16

      5.04  Buyer's Representations and Warranties......................     16

            5.04.A Organization.........................................     16

            5.04.B Authority............................................     16

            5.04.C Financing............................................     16

            5.04.D As-Is................................................     16

      5.05  Discovery of Inaccuracy.....................................     18

            5.05.A Notice...............................................     18
</TABLE>
<PAGE>
<TABLE>
<S>                                                                         <C>
            5.05.B Right to Terminate...................................     18

            5.05.C Other Rights.........................................     18

            5.05.D After Closing........................................     18

ARTICLE 6.  COOPERATION; CASUALTY/CONDEMNATION..........................     18

      6.01  Seller's Cooperation........................................     18

      6.02  Casualty/Condemnation.......................................     19

ARTICLE 7.  HAZARDOUS MATERIALS REMEDIATION AND DEMOLITION..............     19

      7.01  Hazardous Materials Remediation.............................     19

            7.01.A Remediation Plan.....................................     19

            7.01.B Remediation..........................................     19

            7.01.C Termination on Determination of Seller's
                   Inability to Complete Remediation....................     20

      7.02  Demolition and Removal of Improvements......................     20

      7.03  Hazardous Materials Indemnification.........................     20

ARTICLE 8.  MISCELLANEOUS...............................................     21

      8.01  Brokers; Commissions........................................     21

            8.01.A Brokers..............................................     21

            8.01.B Representations; Indemnity.  ........................     21

      8.02  Notices.  ..................................................     21

      8.03  Legal; Interpretation.......................................     22

      8.04  Successors Bound............................................     22

      8.05  Resolution of Disputes......................................     22

            8.05.A Negotiation..........................................     23

            8.05.B Provisional Remedies.................................     23

            8.05.C ARBITRATION OF DISPUTES..............................     23

      8.06  Time of Essence.............................................     25
</TABLE>
<PAGE>
<TABLE>
<S>                                                                         <C>
      8.07  Attorneys' Fees.............................................     25

      8.08  Integration.................................................     26

      8.09  Dependency and Survival of Provisions.......................     26

      8.10  Risk of Loss; Possession....................................     26

      8.11  Counterparts; Facsimile Signatures..........................     26

      8.12  Force Majeure...............................................     26

      8.13  Title Claims................................................     27

      8.14  Assignment..................................................     27

            8.14.A By Buyer.............................................     27

            8.14.B By Seller............................................     27

      8.15  Confidentiality.............................................     27

      8.16  No Obligations to Third Parties.............................     28
</TABLE>
<PAGE>
                         AGREEMENT OF PURCHASE AND SALE
                         301 INDUSTRIAL WAY, SAN CARLOS

      THIS AGREEMENT OF PURCHASE AND SALE ("AGREEMENT") is made by and between
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation
("SELLER"), and PALO ALTO MEDICAL FOUNDATION, a California nonprofit public
benefit corporation ("BUYER"), of which Sutter Health, a California nonprofit
public benefit corporation ("SUTTER HEALTH"), is the sole member, who agree as
follows:

ARTICLE 1.    BACKGROUND AND GENERAL.

            1.01 Land. Seller is the owner of that certain real property located
in the City of San Carlos (the "CITY"), County of San Mateo (the "COUNTY"),
State of California (the "STATE"), commonly known as 301 Industrial Way,
designated San Mateo County Assessor's Parcel No. 046-051-020 and 046-051-070
(the "LAND"). The Land contains approximately 18.092 acres of land, zoned for
industrial uses, currently improved with one or more industrial buildings.

            1.02 Purchase Property. For purposes of this Agreement, the
"PURCHASE PROPERTY" means the Land and all improvements, if any, thereon,
subject to Seller's obligation to remove certain improvements, and all of
Seller's interest in all easements, rights-of-way, transferable permits,
approvals, privileges and entitlements appurtenant thereto.

            1.03    Purpose.  The purpose of this Agreement is to set
forth the terms and conditions of the purchase and sale of the Purchase
Property.

            1.04 Definitions; Index. Capitalized terms used in this Agreement
shall have the meanings ascribed to them by the section in which such term is
first defined. An index listing the page numbers for such definitions is
attached to this Agreement. This "AGREEMENT" includes all exhibits, schedules
and other attachments hereto.

            1.05 Effective Date. The "EFFECTIVE DATE" of this Agreement shall be
the date on which two originals of this Agreement have been fully signed by both
Buyer and Seller and with the liquidated damages provision and arbitration
provision initialled by both Buyer and Seller, has been delivered to First
American Title ("ESCROW HOLDER") at 1737 North First Street, San Jose, CA 95122,
Attn: Dian Blair. Upon such receipt, Escrow Holder shall execute and deliver to
Buyer and Seller the Acceptance by Escrow Holder in the form attached hereto.

            1.06 Earlier Agreement. Buyer and Seller have previously entered
into an agreement regarding due diligence matters (the "DUE DILIGENCE
AGREEMENT"). The terms of this Agreement shall supercede and replace the
provisions of the Due Diligence Agreement, except that Buyer and Seller shall
remain liable under the Due Diligence Agreement for all matters arising
thereunder prior to the Effective Date.

                                      -1-
<PAGE>
ARTICLE 2.    PURCHASE AND SALE.

            2.01 Purchase and Sale. Seller shall sell the Purchase Property to
Buyer, and Buyer shall purchase the Purchase Property from Seller on the terms
and conditions specified in this Agreement.

            2.02 Purchase Price. The purchase price ("PURCHASE PRICE") for the
Purchase Property shall be $30,000,000.

            2.03 Payment. The Purchase Price shall be paid as follows:

                  2.03.A Deposit. Buyer shall deposit the sums set forth below
 during the course of this Agreement. Escrow Holder shall notify both parties in
 writing immediately after receipt of any of such sums.

                        (1)   Initial Deposit.  Within three business days
following the Effective Date, Buyer shall deposit with Escrow Holder the sum of
$200,000, which Escrow Holder shall deposit into an interest-bearing account
pending Escrow Holder's receipt of the Buyer Approval Notice described below, or
termination of this Agreement. This deposit, and all interest earned thereon, is
hereinafter called the "INITIAL DEPOSIT". If the Initial Deposit is not
deposited with Escrow Holder within such three business days, Seller's
obligations under this Agreement shall terminate.

                        (2)   Additional Deposit.  In the event Buyer
elects to proceed with this transaction and sends the "Buyer Approval Notice"
required by Section 4.01.A, prior to the end of the "Feasibility Period" (as
described therein) and Seller has delivered the Seller Approval Notice described
in Section 4.02, Buyer shall deposit sufficient additional funds (the
"ADDITIONAL DEPOSIT") to bring the funds in Escrow to a total of $17,500,000.

                        (3)   Deposit Note and Deed of Trust.  Immediately
after Buyer's deposit of the Additional Deposit, Seller shall deliver to Escrow
Holder a promissory note in the form attached as EXHIBIT A (the "DEPOSIT NOTE")
signed by Seller and a deed of trust encumbering the Purchase Property (the
"DEPOSIT DEED OF TRUST") in a form to be agreed to by the parties, in their sole
discretion, during the Feasibility Period and once approved, initialed by the
parties and attached to this Agreement as EXHIBIT D, signed by Seller and
notarized. The Deposit Note shall bear interest at the Deposit Interest Rate as
defined below and shall be payable, if at all, to Buyer within 150 days after
delivery of Buyer's Termination Notice, as defined below. The Deposit Note and
Deposit Deed of Trust are intended to secure Seller's obligation to return the
Full Deposit to Buyer if and when required to do so as set forth in Section
3.03.C.

                        (4)   Satisfaction and Reconveyance.  Buyer shall
deposit with Escrow Holder concurrently with the Additional Deposit: (a) a fully
executed and notarized Substitution of Trustee and Full Reconveyance (the "FULL
RECONVEYANCE") with respect to the Deposit Deed of Trust; (b) the fully executed
and notarized Termination of Buyer's Rights described below; and (c)
instructions to Escrow Holder to record the Full Reconveyance and Termination of
Buyer's Rights after Seller's delivery of funds to Escrow Holder with
appropriate instructions to pay Buyer in full under the Deposit Note when

                                      -2-
<PAGE>
Escrow Holder is prepared to release such funds to Buyer, and to return the
Deposit Note to Seller marked "Paid in Full".

                        (5)   Disbursement of Full Deposit; Recordation of
Deposit Deed of Trust. Escrow Holder shall immediately: (a) use the Initial
Deposit and the Additional Deposit (collectively, the "FULL Deposit") to fully
satisfy the existing loan secured by a first deed of trust (the "EXISTING FIRST
DEED OF TRUST") on the Purchase Property, (b) retain the Deposit Note and (c)
record the Deposit Deed of Trust. If the Full Deposit is insufficient to satisfy
the Existing First Deed of Trust, Seller shall deposit any required additional
funds to satisfy the Existing First Deed of Trust. If the Full Deposit is more
than is required, then the remainder of the Full Deposit shall be released to
Seller.

                        (6)   Nonrefundable; Applicable.  Once deposited
with Escrow Holder, the Full Deposit shall become nonrefundable, except as
otherwise provided in this Agreement. The Full Deposit shall earn interest from
the time the Additional Deposit is deposited with Escrow Holder at a rate equal
to the prime interest rate in effect (as published in the Western Edition of the
Wall Street Journal) at the time the Additional Deposit is deposited into Escrow
(the "DEPOSIT INTEREST Rate"). If the Escrow closes, the Full Deposit and
accrued interest shall be allocated to and applied to the Purchase Price as set
forth below.

                  2.03.B Balance of Purchase Price. Buyer shall pay the balance
 of the Purchase Price in full, by Federal wire transfer, at the Close of
 Escrow. Funds must arrive in time to permit recording and delivery of funds to
 Seller on the Close of Escrow.

            2.04 LIQUIDATED DAMAGES. BY INITIALLING THIS SECTION 2.04 IN THE
SPACE PROVIDED BELOW, BUYER AND SELLER AGREE THAT IF THE CLOSING FAILS TO OCCUR
BY REASON OF THE DEFAULT OF BUYER, THE FULL DEPOSIT, INCLUDING INTEREST THEREON
AT THE RATE SET FORTH IN THE DEPOSIT NOTE, SHALL BE DEEMED LIQUIDATED DAMAGES
FOR BUYER'S NON-PERFORMANCE AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER
FOR SUCH DEFAULT. ACCORDINGLY, SELLER SHALL HAVE NO FURTHER OBLIGATION UNDER THE
DEPOSIT NOTE (WHICH SHALL BE DEEMED SATISFIED) OR DEPOSIT DEED OF TRUST, WHICH
SHALL BE RECONVEYED. BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND
EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES RESULTING FROM SUCH DEFAULT, DUE TO
THE NATURE OF THIS TRANSACTION AND THE UNIQUE NATURE OF THE PURCHASE PROPERTY,
AND THAT A REASONABLE ESTIMATE OF SELLER'S DAMAGES IN SUCH EVENT IS THE FULL
DEPOSIT ($17,500,000.00), INCLUDING INTEREST THEREON AT THE RATE SET FORTH IN
THE DEPOSIT NOTE, IN VIEW OF, AMONG OTHER THINGS, THE OBLIGATIONS IMPOSED ON
SELLER UNDER THIS AGREEMENT, THE AMOUNT OF THE DEBT SECURED BY THE PURCHASE
PROPERTY, AND SELLER'S AGREEMENT TO ACCEPT A LIQUIDATED SUM IN LIEU OF ITS
REMEDY OF SPECIFIC PERFORMANCE. BUYER AND SELLER AGREE THAT LIQUIDATED DAMAGES
ARE PARTICULARLY APPROPRIATE FOR THIS TRANSACTION AND AGREE THAT SAID LIQUIDATED
DAMAGES SHALL BE PAID IN THE EVENT OF

                                      -3-
<PAGE>
BUYER'S BREACH OF ITS OBLIGATION TO PURCHASE THE PURCHASE PROPERTY,
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT. THE PAYMENT OF SUCH AMOUNT
AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OF PENALTY WITHIN THE
MEANING OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER UNDER CALIFORNIA CIVIL CODE SECTIONS
1671, 1676 AND 1677. NOTHING IN THIS PROVISION SHALL, HOWEVER, BE DEEMED TO
LIMIT BUYER'S LIABILITY TO SELLER FOR DAMAGES OR INJUNCTIVE RELIEF FOR BREACH OF
BUYER'S OBLIGATIONS UNDER SECTION 4.01.A (INDEMNITY RE: BUYER'S ACTIVITIES AT
THE PROPERTY), SECTION 8.15 (CONFIDENTIALITY) OR SECTION 8.07 (ATTORNEYS' FEES).
IN THE EVENT ANY PORTION OF THE FULL DEPOSIT REMAINS IN ESCROW AT THE TIME OF
BUYER'S DEFAULT, BUYER AND SELLER HEREBY INSTRUCT AND AUTHORIZE ESCROW HOLDER TO
RELEASE SUCH PORTION TO SELLER. FURTHER, BUYER AND SELLER HEREBY INSTRUCT AND
AUTHORIZE ESCROW HOLDER TO RETURN TO SELLER THE DEPOSIT NOTE MARKED "SATISFIED"
AND RECORD THE FULL RECONVEYANCE AND THE TERMINATION OF BUYER'S RIGHTS, WHICH
ARE BEING HELD BY ESCROW HOLDER.

         ------------------------------         -----------------------------
                  BUYER                               SELLER

            2.05 Memorandum of Agreement. If Buyer delivers the Additional
Deposit, prior to the release of the Full Deposit, (i) Buyer and Seller shall
execute a Memorandum of this Agreement which shall be recorded concurrently with
the recordation of the Deposit Deed of Trust, and (ii) Buyer shall execute (in
recordable form) a Termination of Buyer's Rights under this Agreement
("TERMINATION OF BUYER'S RIGHTS") to be held by Escrow Holder and recorded in
the event this Agreement is terminated and the Deposit Note is fully satisfied,
either by repayment or as Seller's liquidated damages as provided in Section
2.04.

            2.06 Tax-Deferred Exchange. If either Seller or Buyer wishes to
enter into a tax-deferred exchange for the Purchase Property, then each of the
parties hereto agrees to cooperate reasonably with the other in connection with
such exchange, including, without limitation, the execution of such documents as
may reasonably be necessary to effectuate the same. Such obligations shall,
however, be subject to the following conditions: (a) the party not initiating
the exchange shall not be obligated to delay the Close of Escrow; (b) all
additional costs in connection with the exchange shall be borne by the party
initiating the exchange; (c) the party not initiating the exchange shall not be
obligated to take title to any property in connection with any such exchange
(other than the Purchase Property, as provided for in this Agreement) or to
incur any liability whatsoever in connection therewith by way of note, contract
or otherwise; and (d) the party initiating the exchange shall defend, indemnify
and hold the other party harmless from and against any and all claims, demands,
liabilities, costs, expenses, damages and losses (including, without limitation,
attorneys' fees and costs) which, in any way, arise out of or relate to the
indemnified party's participation in such actual or proposed exchange.

                                      -4-
<PAGE>
            2.07 Buyer's Remedies. Except as provided in Section 5.05.C, Section
5.05.D, the Deposit Note and the Deposit Deed of Trust, in the event of Seller's
default under this Agreement, Buyer's sole and exclusive remedy shall be to
terminate its obligation to purchase the Purchase Property and, only if provided
for elsewhere in this Agreement, to receive the return of the Full Deposit
within 150 days from notice of Buyer's election to terminate. Nothing herein
shall be deemed to give Buyer a right to terminate this Agreement or to the
return of the Full Deposit, unless such right is expressly set forth elsewhere
in this Agreement.

ARTICLE 3.    ESCROW.

            3.01 Opening. The purchase and sale of the Purchase Property shall
be consummated through an escrow (the "ESCROW") opened with Escrow Holder by
depositing this Agreement in accordance with Section 1.05.

            3.02 Instructions. This Agreement constitutes escrow instructions to
Escrow Holder. Any supplemental escrow instructions given to Escrow Holder shall
be consistent with the terms of this Agreement and shall provide that, as
between the parties, the terms of this Agreement shall prevail if there is any
inconsistency.

            3.03  Close of Escrow; Buyer's Termination Notice.

                  3.03.A Generally. "CLOSING" or the "CLOSE OF ESCROW" shall
 mean the date upon which the deed to the Purchase Property is recorded with the
 San Mateo County Recorder. Closing shall occur on or before the date 15 days
 after the date Seller gives Buyer Notice that Seller has complied with all of
 Seller's obligations which are to be complied with prior to the Close of Escrow
 under Sections 7.01 and 7.02, but no later than September 30, 2004 (the
 "OUTSIDE CLOSING DATE"), as may be extended under this Agreement. Within one
 business day after receiving Seller's notice, Buyer shall notify Seller and
 Escrow Holder of the actual day for Close of Escrow. Notwithstanding any other
 provision of this Agreement, in conjunction with the negotiation of the
 Remediation Plan (described in Section 7.01), Buyer and Seller may agree to
 extend the Outside Closing Date prior to the end of the Feasibility Period.

                  3.03.B Seller's Right to Extend. By written notice to Buyer,
 Seller may extend the Outside Closing Date by no more than three 90-day periods
 (each a "CLOSING EXTENSION PERIOD"). The first two Closing Extension Periods
 may be exercised if Seller has been unable to vacate the Purchase Property or
 complete Seller's other obligations under this Agreement prior to the Outside
 Closing Date, and the third Closing Extension Period may be exercised only if
 Seller has been unable to vacate the Purchase Property and complete the
 Demolition as described in Section 7.02 prior to the Outside Closing Date, as
 previously extended.

                  3.03.C Seller's Failure to Comply. If, as of the Outside
 Closing Date or, if Seller has extended, the end of the relevant Closing
 Extension Period, an uncured Repayment Event, as defined below, has occurred,
 then provided Buyer is not in material default of this Agreement, Buyer may
 notify Seller in writing that Buyer has elected to terminate this Agreement (a
 "BUYER'S TERMINATION NOTICE"). Seller shall return

                                      -5-
<PAGE>
 the Full Deposit to Buyer within 150 days after delivery of Buyer's Termination
 Notice, in accordance with the terms of the Deposit Note. A "REPAYMENT EVENT"
 shall mean only the following: (i) Seller has failed to complete the
 Remediation as required by the Remediation Plan or otherwise comply in all
 material respects with the material terms of the Remediation Plan pursuant to
 Section 7.01; (ii) Seller's and Buyer's environmental consultants have, or if
 they cannot agree, an independent professional environmental consultant
 selected by Seller and Buyer, has concluded that Seller will be unable to
 complete the Remediation as provided in Section 7.01.C; (iii) Seller has failed
 to complete the Demolition as required by the Demolition Plan pursuant to
 Section 7.02; or (iv) Seller has failed to vacate the Purchase Property and
 deliver the Grant Deed in accordance with this Agreement. Notwithstanding
 anything in this Agreement to the contrary, however, Buyer shall not have the
 right to terminate this Agreement, or the right to the return of the Full
 Deposit in the event that Escrow fails to close as the result of the breach by
 Buyer of a material obligation under this Agreement. In the event Buyer's
 Termination Notice is given pursuant to this Section 3.03.C, Escrow Holder
 shall deliver the Deposit Note to Buyer.

                  3.03.D Buyer's Obligations on Full Satisfaction of Note. If
 the Deposit Note is repaid by Seller or otherwise satisfied pursuant to Section
 2.04 whereby Seller retains the Full Deposit as liquidated damages for Buyer's
 non-performance, Buyer shall, or cause Escrow Holder to, deliver the original
 Deposit Note to Seller, and record the Full Reconveyance and the Termination of
 Buyer's Rights.

            3.04  Costs.  Charges and expenses incurred in the Escrow are
to be borne by the parties as follows:

                  3.04.A Seller's Costs. Seller shall bear the following costs:
 the CLTA portion of the title insurance premium attributable to the title
 policy issued at the Close of Escrow; the cost of any title endorsements, if
 any, agreed to by Seller in response to objections to title made by Buyer; all
 County documentary transfer taxes; and one-half of the Escrow fees and other
 related closing costs. If the City should adopt a documentary transfer tax,
 Buyer and Seller will bear the cost of such tax equally.

                  3.04.B Buyer's Costs. Buyer shall bear the following costs:
 the incremental title insurance premium for any ALTA Owner's Extended Coverage
 desired by Buyer; the cost of all title policy endorsements other than those,
 if any, agreed to by Seller under Section 3.04.A; the cost of all lender's
 title insurance coverage; and, the remaining one-half of the Escrow fees,
 recording fees and other related closing costs.

                  3.04.C Miscellaneous Costs. All other fees and miscellaneous
 costs not specifically allocated above, other than fees and costs related to a
 tax-deferred exchange which shall be allocated in accordance with Section 2.06,
 shall be borne in accordance with the custom in the County, as determined by
 Escrow Holder.

            3.05 Prorations and Adjustments. Real property taxes shall be
prorated as of the Close of Escrow, based upon the latest available tax bills.
With respect to any prorations based on estimates rather than bills for the
period covered by the proration, if and when the actual bill for the tax,
assessment or other charge related thereto is finally issued by the appropriate
agency, the parties shall adjust said proration, as necessary, within 30

                                      -6-
<PAGE>
days of such bill becoming available, based on such final billing. The party
owing reimbursement following any such adjustment shall make full payment within
30 days following the date written notice containing the basis for the
adjustment and the amount due is sent by the other party. If the party owing
reimbursement fails to make such payment within such period, the amount unpaid
shall bear interest at 10% per annum from the date of such written notice.
Notwithstanding the foregoing, Seller shall retain the right to pursue a
property tax refund and/or reassessment for any period prior to the Close of
Escrow and Buyer agrees to cooperate with Seller in its pursuit of any such
refund and/or reassessment. Any refund relating to the period prior to Close of
Escrow shall belong exclusively to Seller.

            3.06 Deliveries to Escrow by Seller. Prior to Closing, Seller shall
deliver into Escrow the following items to be delivered and/or recorded at
Closing:

                  3.06.A Grant Deed. A duly executed and acknowledged grant deed
 for the Purchase Property. The grant deed shall not show the amount of transfer
 tax paid or any other indication of the Purchase Price. The amount of transfer
 tax paid shall instead be shown by off-record affidavit.

                  3.06.B Nonforeign Certification. A sworn Affidavit stating
 under penalty of perjury that Seller is not a "foreign person" as such term is
 defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended
 (the "CODE"), or such other evidence as Buyer and Escrow Holder may require
 showing that Buyer is not required to withhold taxes from the Purchase Price
 under Section 1445(a) of the Code.

                  3.06.C California Franchise Tax Withholding. Evidence
 reasonably satisfactory to Buyer and Escrow Holder that Seller is exempt from
 the provisions of Section 18662 of the California Revenue and Taxation Code and
 that neither Buyer nor Escrow Holder is required to withhold any amounts from
 the Purchase Price pursuant thereto.

                  3.06.D Miscellaneous. Such other documents and instructions as
 may be reasonably required by the Escrow Holder in order to close Escrow in
 accordance with the terms of this Agreement.

            3.07 Deliveries to Escrow by Buyer. Prior to Closing, Buyer shall
deliver into Escrow the following items to be delivered and/or recorded at
Closing:

                  3.07.A Closing Payments. The balance of the Purchase Price,
 and Buyer's share, if any, of any then-known prorations, fees and costs, in
 immediately available funds.

                  3.07.B Miscellaneous. Such other documents and instructions as
 may be reasonably required by the Escrow Holder in order to close Escrow in
 accordance with the terms of this Agreement.

ARTICLE 4.    CONDITIONS TO CLOSE OF ESCROW.

            4.01 Buyer's Conditions to Close of Escrow. Buyer's obligation to
purchase the Purchase Property and close Escrow is subject to the fulfillment of
each and

                                      -7-
<PAGE>
every one of the conditions in this Section 4.01. Except where a different time
period is specifically set forth, satisfaction of each condition shall occur no
later than the Close of Escrow. If any of the conditions to be satisfied prior
to the end of the Feasibility Period are not satisfied or waived by Buyer by the
date for satisfaction, then Buyer shall have the right to terminate this
Agreement and receive back the Initial Deposit in accordance with the terms of
this Agreement, by giving timely written notice to Seller and Escrow Holder, in
which case the parties shall have no further obligation hereunder to each other
except for Buyer's obligations under Sections 4.01.A and 8.15.

                  4.01.A Feasibility. During the Feasibility Period, as defined
 below, Buyer shall have the right to conduct such investigations, studies and
 examinations with respect to the Purchase Property and such other matters
 related to the Purchase Property as Buyer, in its sole and absolute discretion,
 deems appropriate. Feasibility issues shall include all issues which Buyer, in
 its sole and absolute discretion, determines to be relevant and material to its
 determination to purchase the Purchase Property, including, without limitation,
 political, planning, zoning and entitlement matters, geology, environmental,
 economic and marketing issues, wetlands and protected species matters, and
 eventual utility access.

                        (1)   Feasibility Period.  Buyer shall have until
5:00 p.m. Pacific Time on the date 120 days after the Effective Date (the
"FEASIBILITY PERIOD" or "END OF FEASIBILITY"), to give written notice ("BUYER
APPROVAL NOTICE") that Buyer has approved its feasibility review and elected to
proceed with this transaction. Should Buyer fail to deliver the Buyer Approval
Notice to Escrow Holder and Seller prior to the End of Feasibility in accordance
with Section 8.02, this Agreement shall automatically terminate, the Initial
Deposit shall be returned to Buyer, and the parties shall have no further
obligation to each other hereunder except for Buyer's obligations under Sections
4.01.A and 8.15. The parties may, in their discretion, agree to extend the
Feasibility Period by providing a written notice of the extended expiration date
of the Feasibility Period executed by Seller and Buyer to Escrow Holder prior to
the end of the Feasibility Period. In the event of an extension of the
Feasibility Period, the Outside Closing Date specified in Section 3.03.A shall
be extended by a corresponding period of time.

                        (2)   Documents and Materials.  Within 5 business
days following the Effective Date, Seller shall furnish Buyer with copies of all
reports listed on EXHIBIT B and Buyer may, upon 5 business days' prior notice,
inspect Seller's files described on Exhibit B. The reports and other materials
described on Exhibit B are collectively referred to as the "DOCUMENTS AND
MATERIALS". In addition, within 5 business days of a reasonable specific request
from Buyer, Seller shall make available to Buyer at the Purchase Property
address all other documents and materials (other than (i) attorney-client
privileged information and (ii) information which Seller is required by a third
party to maintain as confidential) which are within Seller's possession or
control relating to the Purchase Property. The Documents and Materials consist
of: (a) copies of any approvals, entitlements, permits or applications relating
to the future development of the Land; (b) copies of soils, environmental/toxic,
geological, and engineering studies and reports relating to the Purchase
Property; and (c) copies of surveys, maps and plans of the Purchase Property in
Seller's possession. Buyer and Seller agree that by Seller providing the
foregoing information, Seller does not intend and shall not be deemed to waive
its attorney-client

                                      -8-
<PAGE>
privilege or any attorney work product privilege, other than with respect to
Buyer and the actual document provided.

                        (3)   Right of Entry.  Seller hereby grants to
Buyer a license to enter upon the Purchase Property from the Effective Date
through the Close of Escrow or sooner termination of this Agreement for the
purpose of conducting engineering surveys, investigations, soil tests and other
studies, provided that Buyer provides two (or in the case of proposed intrusive
testing, seven) business day's prior notice to Seller of its entry upon the
Purchase Property. Such entry shall be subject to the following covenants of
Buyer.

                              (a) Buyer shall bear the entire cost of all tests,
 investigations, surveys and studies performed by Buyer or at Buyer's direction.

                              (b) Buyer shall use (and cause its contractors to
 use) all due care and consideration, including, without limitation, attention
 to safety of persons and property, in connection with all of its inspections or
 tests and those on its behalf and shall in all instances comply and cause
 others to comply with all applicable laws and rights of and obligations owed to
 third parties and shall not interfere with Seller's or any tenant's use and
 occupancy of the Purchase Property. Any intrusive or invasive testing by Buyer
 shall be subject to Seller's prior written approval, which approval, among
 other things, shall be subject to Seller satisfying its obligations to obtain
 prior approval of Varian Associates, Inc. ("VARIAN") pursuant to that certain
 Stock Sale Agreement, as amended ("VARIAN STOCK SALE AGREEMENT"), and the Site
 Access Agreement, as amended (if amended) ("VARIAN SITE ACCESS AGREEMENT"),
 each between Varian and Communications & Power Holding Corporation and/or its
 affiliate. Prior to conducting any intrusive or invasive testing or
 inspections, Buyer shall obtain any and all permits and approvals required for
 such testing and inspections, and shall notify all required agencies,
 utilities, service providers and holders of easements, leases and licenses
 affecting the Purchase Property which may be impacted as a result of such tests
 or inspections. Buyer shall promptly restore the Purchase Property to its
 condition prior to any intrusive or invasive tests and/or inspections.

                              (c) Buyer shall not enter the Purchase Property
 nor permit any contractor to enter the Purchase Property until it (and such
 contractor) has obtained a liability insurance policy covering liability to
 persons or property for the activities contemplated hereunder in an amount of
 not less than $1,000,000.00 per injury or occurrence and worker's compensation
 and employer's liability insurance in accordance with California law. Any
 contractor performing any intrusive testing shall maintain pollution liability
 insurance in an amount of not less than $3,000,000.00 per injury or occurrence.
 Prior to entering the Purchase Property, Buyer shall provide Seller with a
 current certificate of such insurance, and in the case of a contractor's
 insurance, the certificate shall name Seller and Varian Medical Systems, an
 affiliate of Varian, as additional insureds on the liability coverage.

                              (d) Buyer agrees to indemnify, defend (with
 counsel selected by Buyer and reasonably acceptable to Seller) and hold Seller
 and its affiliated entities, and all of Seller's and such affiliated entities'
 respective shareholders, members, managers, officers, directors, employees and
 agents and the Purchase Property

                                      -9-
<PAGE>
 harmless from any and all liability, claims, damage and expense (including but
 not limited to attorney's fees) caused by or resulting from Buyer's and its
 consultants' activities on or in connection with the Purchase Property.
 Notwithstanding the foregoing, however, Buyer shall not be obligated to defend
 or indemnify Seller, nor to repair any damage resulting from any one or more of
 the following: (1) the discovery of Hazardous Materials (as defined in Section
 5.03.D) on the Purchase Property; (2) the discovery of a pre-existing latent
 defect in the Purchase Property; (3) the spread of Hazardous Materials already
 present on the Purchase Property despite the use of reasonable care consistent
 with the standard of care used by competent environmental professionals; or (4)
 the act or omission of Seller or its agents.

                              (e)   Buyer shall promptly pay and discharge
 all demands for payment relating to work performed on the Purchase Property by
 Buyer or at Buyer's direction, including without limitation, work relating to
 Buyer's investigation of the Purchase Property and take all other steps to
 avoid the assertion of claims or liens against the Purchase Property. In the
 event a claim or lien is recorded with respect to any such work on the Purchase
 Property, Buyer, within two days of Buyer's receipt of notice of such
 recordation shall either: (a) pay such claim or lien in full or (b) record or
 deliver a surety bond sufficient to release such claim or lien in accordance
 with applicable law.

                        (4)   Governmental Inquiries.  Buyer shall not
begin any zoning or other approval process without Seller's prior written
approval. Buyer shall advise Seller in advance of any proposed formal meeting
with the City of San Carlos or any other local governmental or
quasi-governmental agency regarding the change of use or redevelopment of the
Purchase Property. Seller may, at its option, be present at any such meeting
through its designated representative.

                        (5)   Reports.  Prior to Close of Escrow, Buyer
agrees to provide Seller (within two business days of Buyer's receipt or
generation of such information or the occurrence of the subject meeting, as the
case may be) with copies of all applications, permits, environmental surveys,
surveys, soil tests, engineering reports, resolutions and similar third party
documents prepared, obtained, or developed in connection with the Purchase
Property, including summaries of meetings with the City of San Carlos and local
governmental and quasi-governmental agencies, without cost or expense to Seller.
Buyer acknowledges that Seller may disclose such information to Varian.

                        (6)   Status Reports to Seller.  Every two weeks
during the Feasibility Period and monthly thereafter until Close of Escrow,
Buyer shall submit to Seller a written status report regarding Buyer's due
diligence investigation and pursuit of entitlements, including without
limitation its inquiries with local governmental and quasi-governmental
agencies, together with a list of Buyer's consultants. Buyer and Seller agree to
meet at least every two weeks or more often as necessary to discuss the status
of Buyer's investigation and progress with respect to the City of San Carlos. On
May 1, 2003, Buyer shall provide Seller with a written notice ("FEASIBILITY
STATUS NOTICE") (i) identifying any matters which remain to be resolved to
Buyer's satisfaction prior to Buyer giving the Buyer Approval Notice, and (ii)
indicating whether Buyer desires an extension of the Feasibility Period. The
Feasibility Status Notice shall be for the purpose of informing Seller of the
status of Buyer's investigations and shall not bind Buyer. If Buyer requests an
extension of

                                      -10-
<PAGE>
the Feasibility Period to complete its investigations (it being acknowledged
that Seller is not obligated to agree to such an extension), Buyer shall
increase the Initial Deposit to $500,000 and authorize Escrow Holder to release
up to all of the Initial Deposit for Seller's benefit to the holder of the
Existing First Deed of Trust in the amount of the consideration required for an
extension of the due date (currently on or about June 1, 2003) of the note
secured by the Existing First Deed of Trust, upon receipt by Escrow Holder of a
promissory note from Seller to Buyer in such amount.

      Buyer's liability under this Section 4.01.A shall survive the termination
of this Agreement.

                  4.01.B Title; Title Policy. At Close of Escrow, Seller shall
 convey the Purchase Property to Buyer by grant deed, subject only to the
 "PERMITTED EXCEPTIONS" defined below, and, at the Close of Escrow, shall cause
 the Escrow Holder's underwriter to issue the "Buyer's Title Policy" described
 below.

                        (1) Preliminary Report; Buyer's Title Notice. Seller has
provided Buyer an amended preliminary title report covering the Purchase
Property, and legible copies of all documents referred to therein (collectively,
the "PRELIMINARY REPORT"). Buyer shall have until the 30th day following the
Effective Date (the "INITIAL TITLE REVIEW DATE"), to give Seller written notice
("BUYER'S TITLE NOTICE") of Buyer's approval or disapproval of each and every
item or exception set forth in the Preliminary Report. Buyer's failure to give
the Buyer's Title Notice by the Initial Title Review Date shall be deemed to be
Buyer's disapproval of title to the Purchase Property and this Agreement shall
terminate, Buyer shall receive back the Initial Deposit and the parties shall
have no further obligation hereunder to each other except for Buyer's
obligations under Sections 4.01.A and 8.15.

                        (2) Seller's Title Notice. In the event that the Buyer's
Title Notice disapproves any exception, Seller shall have until 5:00 p.m. on the
10th day following the Initial Title Review Date (the ("SELLER'S TITLE RESPONSE
DATE") to give Buyer written notice ("SELLER'S TITLE NOTICE") of those
disapproved title matters, if any, which Seller is willing to remove or cause to
be insured over. If Seller fails to deliver Seller's Title Notice, Seller shall
be deemed to have refused to remove all disapproved title matters. If Seller's
Title Notice refuses to remove any items disapproved by Buyer, Buyer shall have
until 5:00 p.m. on the 10th day following Seller's Title Response Date to give
Seller written notice ("BUYER'S TITLE WAIVER NOTICE") that Buyer waives its
prior disapproval with respect to all items which Seller has refused (or is
deemed to have refused) to remove. If Seller has not received Buyer's Title
Waiver Notice by 5:00 p.m. on the last date for Buyer to give Buyer's Title
Waiver Notice under this subsection 4.01.B(2), this Agreement shall terminate,
Buyer shall receive back the Initial Deposit, and the parties shall have no
further obligations hereunder to each other except for Buyer's obligations under
Sections 4.01.A and 8.15. Seller shall have until the end of the Feasibility
Period to remove those exceptions which Seller agrees to remove.

                        (3) Permitted Exceptions. (i) a lien to secure payment
of taxes, not delinquent, (ii) the Title Company's standard and customary
exceptions set forth in Buyer's Title Policy, (iii) matters affecting the
condition of title created by or with the consent of Buyer or as a result of
Buyer's (or any party on behalf of Buyer) acts or omissions, (iv) matters
identified on the Preliminary Report and approved or deemed

                                      -11-
<PAGE>
approved by Buyer hereunder, (v) matters which would be reflected on a current
ALTA survey, (vi) matters which would be disclosed by physical inspection of the
Property, (vii) planning, zoning, land use and subdivision laws, ordinances,
regulations and requirements, (viii) the Deposit Deed of Trust, and (ix)
Varian's access rights pursuant to the Varian Stock Sale Agreement and Varian
Site Access Agreement (all of the foregoing in clauses (i) through (ix) herein
referred to as the "PERMITTED EXCEPTIONS").

                        (4) Buyer's Title Policy. The title insurance policy
issued at Close of Escrow (the "BUYER'S TITLE POLICY") shall be a CLTA Owner's
policy of title insurance, with liability in the amount of the Purchase Price
insuring title in Buyer to the Purchase Property, subject only to: (a) the
Permitted Exceptions; (b) the printed exceptions and exclusions common to CLTA
policies; and (c) the other matters affecting title provided for elsewhere in
this Agreement. Additionally, Buyer, at Buyer's cost, may obtain an ALTA
Lender's policy of title insurance, with liability in the amount of the Deposit
Note, insuring the priority of the Deposit Deed of Trust, subject only to the
same matters.

                        (5) ALTA Policy. Notwithstanding the foregoing, at
Buyer's election to be made as part of Buyer's Title Notice, the Buyer's Title
Policy shall be an ALTA Extended Coverage Owner's policy, so long as Buyer
furnishes any ALTA Survey required by Escrow Holder as set forth below (or, at
Buyer's election, agrees to accept the survey exception required by the title
insurer), and so long as the issuance of such coverage does not delay Buyer's
Title Notice or the Close of Escrow. If Buyer does elect to obtain an ALTA
Extended Coverage Owner's title policy, the printed exceptions and exclusions to
the Buyer's Title Policy would be those common to ALTA Extended Coverage
policies.

                  4.01.C Additional Agreements. Prior to the end of the
 Feasibility Period, Buyer and Seller, in their discretion, shall have agreed on
 the form of the Remediation Plan in accordance with Section 7.01 and the
 Demolition Plan in accordance with Section 7.02.

                  4.01.D Varian. Prior to the end of the Feasibility Period, and
 thereafter, as applicable, Varian, to Seller's reasonable satisfaction, shall
 have approved all testing and remediation activities to be undertaken pursuant
 to Section 7.01 and all demolition activities to be undertaken pursuant to
 Section 7.02. Prior to Close of Escrow, Varian shall have released, to Seller's
 reasonable satisfaction, Seller, its successors and the Purchase Property from
 all development, use, remediation, access, testing and other obligations and
 restrictions set forth in the Varian Stock Sale Agreement and Varian Site
 Access Agreement, and from any claims for a breach of such agreements or
 otherwise arising under applicable law related to Hazardous Materials.

                  4.01.E Altair Technologies Lease. Prior to the end of the
 Feasibility Period, Seller shall have entered into an amendment to the lease
 with Altair Technologies described on EXHIBIT C to provide for a right of the
 lessor to terminate such lease on or before the Close of Escrow.

                  4.01.F Consents/Compliance. Seller shall have received any
 consents and/or opinions required by, and otherwise have complied with, on
 terms acceptable to Seller in its discretion, all loan agreements, indentures
 and certificate of

                                      -12-
<PAGE>
 incorporation provisions regarding preferred stock of Seller or its affiliates,
 as they may relate to the transactions which are the subject of this Agreement,
 including without limitation the Deposit Note and Deposit Deed of Trust, the
 sale of the Purchase Property and the termination of the master lease with
 Seller's affiliate described on Exhibit C.

                  4.01.G Sutter Health Approval. Prior to the end of the
 Feasibility Period, Buyer shall have obtained the approval of the boards of
 directors of Buyer and Sutter Health regarding all feasibility issues.

                  4.01.H  Seller's Performance.  A Repayment Event which
 remains uncured shall not exist as of the Close of Escrow.

                  4.01.I Representations and Warranties True. Each and every one
 of Seller's representations and warranties contained in Section 5.03 shall be
 true and correct in every material respect, subject to the provisions of
 Section 5.05.

            4.02 Seller's Conditions to Close of Escrow. Seller's obligation to
sell the Purchase Property and to close Escrow is subject to the fulfillment of
each and every one of the conditions in this Section 4.02. Buyer and Seller each
covenants to use good faith efforts to cause the conditions in this Section 4.02
to be satisfied. Except where a different time period is specifically set forth,
satisfaction of each condition shall occur no later than the Close of Escrow. If
any of such conditions are not satisfied or waived by Seller by the date for
satisfaction, then Seller shall have the right to terminate this Agreement, by
giving written notice to Buyer, whereupon the parties shall have no further
obligation to each other except for Buyer's obligations under Sections 4.01.A
and 8.15. If Seller terminates this Agreement at a time when Buyer is not in
default under this Agreement, Buyer shall be entitled to the return of the Full
Deposit. Seller shall not have the right to terminate this Agreement, however,
where the failure of a condition resulted from the breach by Seller of an
obligation under this Agreement. Provided that the conditions in favor of Seller
that are to be satisfied prior to the end of the Feasibility Period have been
satisfied or waived by Seller, Seller shall deliver to Buyer and Escrow Holder a
notice that such Seller's conditions have been satisfied or waived ("SELLER'S
APPROVAL NOTICE"). If Seller fails to deliver Seller's Approval Notice on the
later of the end of the Feasibility Period or within five days after a request
from Buyer, this Agreement shall terminate, the Initial Deposit shall be
returned to Buyer and the parties shall have no further obligation hereunder to
each other except Buyer's obligations under Sections 4.01.A and 8.15.

                  4.02.A Buyer's Performance. Buyer shall have timely performed
 all of its material obligations under this Agreement.

                  4.02.B Additional Agreements. Prior to the end of the
 Feasibility Period, Buyer and Seller, in their discretion, shall have agreed on
 the form of the Remediation Plan in accordance with Section 7.01 and the
 Demolition Plan in accordance with Section 7.02.

                  4.02.C Varian. Prior to the end of the Feasibility Period, and
 thereafter, as applicable, Varian, to Seller's reasonable satisfaction, shall
 have approved all testing and remediation activities to be undertaken pursuant
 to Section 7.01 and all

                                      -13-
<PAGE>
 demolition activities to be undertaken pursuant to Section 7.01. Prior to Close
 of Escrow, Varian shall have released, to Seller's reasonable satisfaction,
 Seller, its successors and the Purchase Property from all development, use,
 remediation, access testing and other obligations and restrictions set forth in
 the Varian Stock Sale Agreement and Varian Site Access Agreement, and from any
 claims for a breach of such agreements or otherwise arising under applicable
 law related to Hazardous Materials.

                  4.02.D Altair Technologies Lease. Prior to the end of the
 Feasibility Period, Seller shall have entered into an amendment to the lease
 with Altair Technologies described on Exhibit C to provide for a right of the
 lessor to terminate such lease on or before the Close of Escrow.

                  4.02.E Consents/Compliance. Seller shall have received any
 consents and/or opinions required by, and otherwise have complied with, on
 terms acceptable to Seller in its discretion, all loan agreements, indentures
 and certificate of incorporation provisions regarding preferred stock of Seller
 or its affiliates, as they may relate to the transactions which are the subject
 of this Agreement, including without limitation the Deposit Note and Deposit
 Deed of Trust, the sale of the Purchase Property and the termination of the
 master lease with Seller's affiliate described on Exhibit C.

                  4.02.F Representations and Warranties True. Each and every one
 of Buyer's representations and warranties contained in this Agreement shall be
 true and correct in every material respect.

ARTICLE 5.    DISCLOSURES, DISCLAIMERS, REPRESENTATIONS AND WARRANTIES.

            5.01  Natural Hazard Report.  Seller shall cause Escrow Holder
to deliver to Buyer a Natural Hazard Report within 15 days after the
Effective Date.

            5.02  Representations and Warranties in General.

                  5.02.A Knowledge Representations. Whenever the words "BEST OF
 SELLER'S KNOWLEDGE", "SELLER'S KNOWLEDGE," "SELLER'S BEST KNOWLEDGE" or words
 of similar import are used in this Agreement, they shall mean the knowledge of
 Mike Cheng (Eimac Division President), Jack Wnorowski (Facilities Manager), Joe
 Caldarelli (Chief Executive Officer) and Joel Littman (Chief Financial Officer)
 who are the employees, officers and agents of Seller who have participated in
 the management or operation of the Purchase Property after inquiry of each of
 them which was undertaken for the purpose of confirming the accuracy of the
 representations and warranties of Seller contained in this Agreement.

                  5.02.B Restatement. Except as otherwise provided in Sections
 5.03 and 5.05, the representations made by Seller in Section 5.03 shall be
 deemed to be restated by Seller immediately prior to Close of Escrow. The
 representations made by Buyer in Section 5.04 shall likewise be deemed to be
 restated by Buyer immediately prior to Close of Escrow.

            5.03 Representations and Warranties by Seller. Seller acknowledges
that the execution of this Agreement by Buyer is made in material reliance by
Buyer on each and

                                      -14-
<PAGE>
every one of the representations and warranties made by Seller in this Section
5.03. Except as set forth on Exhibit C, Seller hereby represents and warrants to
Buyer that:

                  5.03.A Organization. Seller has been duly organized and is
 validly existing as a Delaware corporation, in good standing and fully
 qualified to do business in the State of California.

                  5.03.B Owner/Authority. Seller is the owner of the Purchase
 Property. Seller has the right, power and authority to enter into this
 Agreement and to perform its obligations subject to the terms and conditions
 hereunder, and the person(s) executing this Agreement on behalf of Seller have
 the right, power and authority to do so. This Agreement constitutes the legal,
 valid and binding obligation of Seller enforceable against Seller in accordance
 with its terms. As of the end of the Feasibility Period, this Agreement will
 not violate any provision of any other agreement or document which affects the
 Purchase Property to which Seller is a party or to which Seller is bound.

                  5.03.C Parties in Possession. To the best of Seller's
 knowledge, as of the Effective Date, no party has any interest in the Purchase
 Property or any portion thereof, except as disclosed by the Preliminary Report
 and on Exhibit C.

                  5.03.D Hazardous Materials. Seller has delivered or will
 deliver to Buyer within five business days after the Effective Date final Phase
 I and Phase II environmental assessment reports respecting Hazardous Materials,
 as defined below, concerning the Purchase Property in Seller's possession. To
 the best of Seller's knowledge, other than as set forth in the Reports
 identified on Exhibit B or in any other writing delivered to Buyer, Seller has
 no knowledge respecting the general nature of Hazardous Materials located on,
 in or adjacent to the Purchase Property, it being understood that the
 individuals identified in Section 5.02.A are not environmental professionals
 familiar with all Hazardous Materials present at the Purchase Property or their
 distribution in soil or ground water. For purposes of this Agreement,
 "HAZARDOUS MATERIALS" means any flammable materials, explosive, hazardous or
 toxic substances, or related materials defined in the Comprehensive
 Environmental Response, Compensation and Liability Act of 1980, as now or
 hereafter amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials
 Transportation Act, as now or hereafter amended (49 U.S.C. Sections 1801, et
 seq.), the Resource Conservation and Recovery Act, as now or hereafter amended
 (42 U.S.C. Sections 9601, et seq.), and in the regulations promulgated pursuant
 thereto, or any other federal, state or local governmental law, ordinance, rule
 or regulation, petroleum and petroleum products (collectively, "ENVIRONMENTAL
 LAWS"), and such other substances, chemicals and materials which are or may be
 deleterious to human health or the environment.

                  5.03.E No Default. Except as disclosed on Exhibit B or Exhibit
 C, Seller has received no written notice of a default under any contract,
 agreement, covenant, restriction, easement or encumbrance pertaining to the
 Purchase Property, which default would adversely affect Buyer's use of the
 Purchase Property, and which is not cured prior to or as of the Closing.

                                      -15-
<PAGE>
                  5.03.F No Condemnation. To the best knowledge of Seller, there
 are no pending condemnation proceedings against the Purchase Property and
 Seller has received no notice of any such proceedings.

            5.04 Buyer's Representations and Warranties. Buyer acknowledges that
the execution of this Agreement by Seller is made in material reliance by Seller
on each and every one of the representations and warranties made by Buyer in
this Section 5.04. Buyer hereby represents and warrants to Seller that:

                  5.04.A Organization. Buyer has been duly organized and is
 validly existing as a California nonprofit public benefit corporation, in good
 standing and fully qualified to do business in the State of California.

                  5.04.B Authority. Buyer has the right, power and authority to
 enter into this Agreement and to perform its obligations hereunder, and the
 person(s) executing this Agreement on behalf of Buyer have the right, power and
 authority to do so. This Agreement constitutes the legal, valid and binding
 obligation of Buyer enforceable against Buyer in accordance with its terms.
 This Agreement does not violate any provision of any other agreement or
 document to which Buyer is a party or to which Buyer is bound.

                  5.04.C Financing. Buyer has the funds necessary to consummate
 this transaction and financing is not a condition to Buyer's obligation to
 deliver the Additional Deposit or consummate the purchase of the Purchase
 Property.

                  5.04.D As-Is. As a material inducement to the execution and
 delivery of this Agreement by Seller and the performance by Seller of its
 duties and obligations hereunder, Buyer does hereby acknowledge, represent,
 warrant and agree, to and with Seller, that, except as otherwise expressly
 provided for in Sections 5.03, 7.01, 7.02 and 7.03, (i) Seller makes no
 representation or warranty of any kind whatsoever, express or implied, with
 respect to the Purchase Property or this transaction and, in furtherance of
 (and not in limitation of) the foregoing, it is expressly acknowledged and
 agreed that Seller makes no representation or warranty respecting the quality,
 quantity, value, condition, habitability or suitability of the Purchase
 Property for any intended use; marketability of the Purchase Property or any
 governmental requirements or restrictions with respect to the use, improvement
 or sale of the Purchase Property; the size, dimensions or physical condition of
 the Purchase Property; the land, topography, climate, air, water, water rights,
 utilities, air rights, present or future planning or zoning restriction or
 requirements, soils, sub-soil, drainage, compaction, subsidence, access to
 public roads, proposed routes of roads or extensions thereof, concerning the
 Purchase Property; parking ordinances, regulations and requirements; the
 condition of title to the Purchase Property; the presence of any endangered or
 protected plant, animal, insect or organism or habitat for such endangered or
 protected plant, animal, insect or organism; the presence of any item or matter
 of archeological significance; or the historical significance of the Purchase
 Property; the availability of utilities (water, sewer, gas, electricity,
 telecommunication, cable, etc.) to the Purchase Property or the cost thereof;
 (ii) except as set forth in Sections 5.03.D, 7.01, and 7.03, Seller makes no
 representation or warranty regarding, and hereby expressly disclaims any
 responsibility for any loss, claim, cost or liability with respect to the
 presence, release, handling, use, generation, processing, production,
 packaging, treatment, storage, emission,

                                      -16-
<PAGE>
 discharge, investigation, removal or remediation of any Hazardous Materials in,
 on or in the vicinity of the Purchase Property; (iii) Buyer has fully
 investigated the Purchase Property, its applicable zoning and its prospects;
 (iv) Buyer is purchasing the Purchase Property in an "AS IS, WHERE IS and WITH
 ALL FAULTS" condition as of the date of the Close of Escrow with respect to any
 facts, circumstances, conditions and defects, including, without limitation,
 any matters disclosed by Seller to Buyer herein; (v) Seller has no obligation
 to repair or correct any such facts, circumstances, conditions or defects or
 compensate Buyer for same; (vi) Seller has no liability for any information
 made available to Buyer by Varian Associates, Inc. or any of its successors or
 affiliates; (vii) in acquiring the Purchase Property, Buyer will be relying
 strictly and solely upon its own investigations, inspections and examinations
 as to all matters relating in any manner to the Purchase Property or any
 interest therein, including, without limitation, the items listed above and the
 advice and counsel of its own agents (but not Seller's agents or any other
 person or party affiliated with Seller) and Buyer is and will be fully
 satisfied that the Purchase Price is fair and adequate consideration for the
 Purchase Property; and (viii) by reason of all of the foregoing, Buyer hereby
 assumes the full risk of and does hereby fully release Seller and its
 affiliated entities and Seller's and such affiliated entities' shareholders,
 officers, members, managers, employees, directors, attorneys and agents from
 and against any loss, damage, claims, liabilities, costs, expenses or judgments
 of any kind, whether known or unknown, suspected or unsuspected, occasioned by
 any fact, circumstance, matter, condition or defect (patent or latent)
 pertaining to the Purchase Property (and including without limitation, matters
 relating to Hazardous Materials in, on or in the vicinity of the Purchase
 Property) but excluding any claims based upon a breach by Seller of a
 representation, warranty or indemnity expressly set forth in this Agreement.
 All materials, including but not limited to the Documents and Materials
 prepared by third parties and delivered or made available to Buyer by Seller or
 any other person acting for or on behalf of Seller, whether in the form of
 maps, surveys, reports, plans, studies or otherwise, have been furnished by
 Seller to Buyer solely as a courtesy, without warranty or representation, and
 neither Seller nor its agents has verified the accuracy of such information or
 the qualifications of the persons preparing such information.

Buyer hereby acknowledges that it has read and is familiar with the provisions
of California Civil Code Section 1542 ("SECTION 1542"), which is set forth
below.

      "A general release does not extend to claims which the creditor does not
      know or expect to exist in his favor at the time of executing the release,
      which if known by him must have materially affected his settlement with
      the debtor."

Buyer hereby WAIVES the benefit of the provisions of Section 1542, and of any
statute, principle of common law or case law which would limit the scope of the
foregoing waiver and release, in connection with matters which are the subject
of the foregoing waiver and release.

The provisions of this Section 5.04 shall survive the Close of Escrow and any
termination of this Agreement.

                                      -17-
<PAGE>
            5.05  Discovery of Inaccuracy.

                  5.05.A Notice. If, after the date of this Agreement and prior
 to Closing, either party discovers any inaccuracy in any representation or
 warranty of Seller under Section 5.03, the discovering party shall promptly
 notify the other party in a written notice setting forth the particular
 representation or warranty which is inaccurate, and the nature of the
 inaccuracy discovered. Buyer's sole remedies for such inaccuracy are set forth
 in Sections 5.05.B and 5.05.C below.

                  5.05.B Right to Terminate. If (i) the inaccuracy was unknown
 to Buyer prior to the delivery of the Additional Deposit, (ii) Seller does not
 agree to cure or correct any material adverse affect on the Purchase Property
 arising from such inaccuracy prior to or as of Close of Escrow, and (iii) the
 inaccuracy materially adversely affects the value of the Purchase Property
 (collectively, a "MATERIAL Inaccuracy"), then Buyer, provided Buyer is not in
 material default of this Agreement, shall have the right to terminate this
 Agreement, within 10 calendar days of learning of such inaccuracy by giving
 Buyer's Termination Notice. Failure of Buyer to terminate this Agreement within
 such 10-day period shall be deemed a waiver of the right to terminate and a
 waiver of and release of Seller for any claim arising out of the inaccuracy. If
 Seller had no knowledge of the inaccuracy on the date of Seller's execution of
 this Agreement, then Buyer's sole remedy shall be to terminate this Agreement
 as aforesaid, and if Buyer does terminate this Agreement, the Full Deposit
 shall be returned to Buyer within 150 days after delivery of Buyer's
 Termination Notice in accordance with the terms of the Deposit Note, and the
 parties shall have no further obligation hereunder to each other except for
 Buyer's obligations under Section 4.01.A and 8.15.

                  5.05.C Other Rights. If the inaccuracy is a Material
 Inaccuracy and Seller did have knowledge of the inaccuracy on the date of
 Seller's execution of this Agreement, then Buyer shall also have all other
 rights and remedies afforded by law and equity.

                  5.05.D After Closing. If the inaccuracy is discovered after
 Closing and is not a Material Inaccuracy, Buyer shall have no right or remedy
 against Seller for such inaccuracy. If the inaccuracy is discovered by Buyer
 within six months after Closing and is a Material Inaccuracy, Buyer shall have
 all of its rights and remedies against Seller as provided in and subject to the
 terms and conditions of this Agreement, other than a right of rescission.

ARTICLE 6.    COOPERATION; CASUALTY/CONDEMNATION.

            6.01 Seller's Cooperation. If requested to do so, prior to the Close
of Escrow, Seller shall reasonably cooperate with Buyer (but at no cost, expense
or liability to Seller or the Land and improvements thereon) in connection with
Buyer's inquiries of local governmental or quasi-governmental agencies with
respect to the Land and the Purchase Property, and with respect to Buyer's
efforts to obtain further entitlements for the Purchase Property.
Notwithstanding the foregoing, prior to the deposit of the Additional Deposit,
Seller shall have the right, in its discretion, to approve any proposed
application, permit, condition, dedication or exaction. Following the deposit of
the Additional Deposit, Seller

                                      -18-
<PAGE>
agrees not to unreasonably withhold its approval of any application or any
proposed permit, condition, dedication or exaction, provided that no condition,
dedication, covenant or exaction shall become final or binding prior to the
Close of Escrow.

            6.02 Casualty/Condemnation. Seller shall promptly notify Buyer of
any casualty to the Land or any condemnation proceeding commenced prior to the
Close of Escrow. If any damage caused by such casualty is material or such
condemnation proceeding relates to or may result in the loss of any material
portion of the Land, Buyer shall, within 10 calendar days after receipt of such
notification, elect in writing either (a) provided Buyer is not in material
default of this Agreement, to terminate this Agreement (Buyer's Termination
Notice), in which event the Full Deposit shall become due to Buyer within 150
days after delivery of Buyer's Termination Notice in accordance with the terms
of the Deposit Note, each party shall bear one-half of the Escrow costs incurred
to date and neither party shall have any further rights or obligations
hereunder, except for those obligations expressly stated as surviving
termination of this Agreement, or (b) to continue to proceed under this
Agreement to Closing without adjustment to the Purchase Price, in which event
upon the Close of Escrow, Seller shall assign to Buyer any insurance proceeds,
compensation, award or other payments or relief resulting from such casualty or
condemnation proceedings to the extent applicable to the Land. In the event
Buyer fails to deliver either such election in writing prior to the expiration
of the 10-day period, Buyer shall be deemed to have elected to continue with the
Closing under clause (b) immediately preceding. For purposes of this Section
6.02, "material" shall mean in the case of (1) damage to the Land, damage which
would require additional repair in connection with Buyer's development of the
Land, which cost to repair would be in excess of Buyer's development costs
without such damage by at least $3,000,000; and (2) the portion of the Land
affected by the condemnation proceeding, 10% of the Land. Notwithstanding
anything herein, in the event of damage to the Land, if Buyer elects to
terminate the Agreement as provided hereinabove, Seller may elect within 10
calendar days to repair such damage prior to Closing or agree to a credit
against the Purchase Price for the cost of repair, in which case Buyer's
Termination Notice shall be of no effect and the parties shall proceed to
Closing.

ARTICLE 7.    HAZARDOUS MATERIALS REMEDIATION AND DEMOLITION.

            7.01  Hazardous Materials Remediation.

                  7.01.A Remediation Plan. During the Feasibility Period, Buyer
 and Seller shall negotiate the terms of a plan (the "REMEDIATION PLAN") for the
 remediation of contamination of the Purchase Property by Hazardous Materials as
 identified in investigations conducted by Buyer or Seller and disclosed to the
 other (the "REMEDIATION"). After approval by both parties in their sole
 discretion, and to Seller's reasonable satisfaction by Varian, the Remediation
 Plan shall be initialed by the parties, attached to this Agreement as EXHIBIT E
 and incorporated herein as though set forth in full.

                  7.01.B Remediation. Seller shall cause completion of the
 Remediation in accordance with the terms of the Remediation Plan prior to the
 Outside Closing Date, as may be extended as provided herein.

                                      -19-
<PAGE>
                  7.01.C Termination on Determination of Seller's Inability to
 Complete Remediation. If Buyer determines no earlier than 60 days prior to the
 Outside Closing Date that Seller will be unable to complete the Remediation
 prior to the Outside Closing Date as extended by any permitted extensions,
 Buyer shall give Seller notice of such determination (the "COMPLETION NOTICE").
 Unless Seller provides Buyer, within 30 days after receiving the Completion
 Notice, with adequate assurances of Seller's ability to timely complete the
 Remediation, Buyer may obtain a signed statement from Northgate Environmental
 Management, Inc., Buyer's environmental consultant, and from Treadwell & Rollo,
 Seller's environmental consultant, stating that the Remediation cannot be
 timely completed (including any permitted extensions) and such delays are not a
 result of force majeure events. If such statement cannot be obtained because
 such consultants do not agree, then a statement to the same effect from an
 independent professional environmental consultant selected by Buyer and Seller
 may be substituted by Buyer. If Buyer desires to terminate its obligations
 under this Agreement in reliance on such third party statement(s), provided
 Buyer is not in material default of this Agreement, such statement(s) shall be
 attached to a Buyer's Termination Notice and delivered to Seller, in which
 event the Full Deposit shall be returned to Buyer within 150 days of delivery
 of such Buyer's Termination Notice, as provided in the Deposit Note. In
 addition to the foregoing, Buyer and Seller may agree, in their discretion, to
 invoke the provisions of this Section 7.01.C prior to the 60th day prior to the
 Outside Closing Date.

            7.02 Demolition and Removal of Improvements. Prior to the end of the
Feasibility Period, Buyer and Seller shall negotiate the terms of a plan for the
demolition ("DEMOLITION") of all buildings and some or all improvements on the
Purchase Property (the "DEMOLITION PLAN"). After approval by both parties, in
their sole discretion, and to Seller's reasonable satisfaction by Varian, the
Demolition Plan shall be initialed by the parties, attached as EXHIBIT F to this
Agreement and incorporated herein as though set forth in full. Prior to the
Close of Escrow, Seller shall cause the completion of the Demolition in
accordance with the terms of the Demolition Plan.

            7.03 Hazardous Materials Indemnification. Seller's obligations
pursuant to this Section 7.03 shall be effective only during the three year
period that commences upon the Close of Escrow and that terminates upon the date
that is three years after the Close of Escrow. During this period of time only,
Seller, at its sole cost and expense, hereby agrees to indemnify, defend (with
counsel reasonably acceptable to Buyer), protect and hold harmless Buyer and any
successors to Buyer's interest in the Purchase Property (excluding Varian
Associates, Inc., Varian Medical Systems, Varian Semiconductor Equipment
Associates, Inc. or their successors, and each of them) and their respective
directors, officers, employees and agents from and against any and all claims,
demands, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action and compliance
requirements, enforcement and clean-up actions of any kind, and all costs and
expenses incurred in connection therewith, including, without limitation,
reasonable attorneys' fees and costs of defense and reasonable costs and
expenses of experts and consultants, arising from claims asserted by any
governmental authority or any third party, but only to the extent such claims
relate to the presence of Hazardous Materials on, in or under the Purchase
Property which Hazardous Materials were to have been removed or remediated by
Seller pursuant to the Remediation Plan described in

                                      -20-
<PAGE>
Section 7.01.A or to the failure to properly dispose of such Hazardous Materials
in accordance with such Remediation Plan.

ARTICLE 8.    MISCELLANEOUS.

            8.01  Brokers; Commissions.

                  8.01.A Brokers. Seller is represented in this transaction by
 Chris Hunt of Eastdil ("SELLER'S BROKER"). Buyer is represented in this
 transaction by BT Commercial Real Estate ("BUYER'S BROKER"). If, but only if
 Escrow closes, Seller shall pay Seller's Broker a commission at the Close of
 Escrow in the amount set forth in their separate written agreement. If, but
 only if Escrow closes, Buyer shall pay Buyer's Broker a commission at the Close
 of Escrow in the amount set forth in their separate written agreement.

                  8.01.B Representations; Indemnity. Each party represents to
 the other that the representing party has not had any contact or dealings
 regarding the subject matter of this transaction through any other licensed
 real estate broker or other person who can claim a commission or finder's fee
 as a procuring cause of the sale contemplated herein. The representing party
 agrees to defend and indemnify the other party against any claim for commission
 or other compensation based upon dealings between the representing party and
 the broker or other person making such claim.

            8.02 Notices. Any notices, requests, demands or other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service if served
personally (FedEx and similar services shall be considered to be personal
service) or by telephone facsimile or other electronic transmission (provided
that the sender of a telephone facsimile or other electronic transmission has
received a return receipt signed by the party so notified, or has other written
evidence of receipt), and upon the fourth business day after mailing, if mailed
to the party to whom notice is to be given, by first-class mail, registered or
certified, postage prepaid, return receipt requested, and properly addressed as
follows:

      SELLER:     Communications & Power Industries
                       Holding Corporation.
                  Attn:  Joel Littman
                  811 Hansen Way,
                  Palo Alto, CA 94303
                  Telephone: (650) 846-3096
                  Facsimile: (650) 846-3276
                  e-mail: joel.littman@cpii.com

with a copy to:   Wendy Glenn, Esq.
                  Irell & Manella LLP
                  1800 Avenue Of The Stars, Ste. 900
                  Los Angeles, CA 90067-4276
                  Telephone: (310) 203-7677
                  Facsimile: (310) 203-7199
                  e-mail: wglenn@irell.com

                                      -21-
<PAGE>
      BUYER:      Palo Alto Medical Foundation
                  Attn: David Jury
                  300 Homer Avenue
                  Palo Alto, CA 94301
                  Telephone: (650) 853-4918
                  Facsimile: (650) 853-4980
                  e-mail: juryd@pamf.org

with a copy to:   Patricia D. Elliott, Esq.
                  McDonough, Holland & Allen
                  555 Capitol Mall, 9th Floor
                  Sacramento, CA 95814
                  Telephone: (916) 444-3900
                  Facsimile: (916) 444-5918
                  e-mail: pelliott@mhalaw.com

ESCROW HOLDER:    First American Title
                  Attn: Dian Blair
                  1737 North First Street
                  San Jose, CA 95122
                  Escrow No. NCS-11665-SM
                  Telephone: (408) 451-7828
                  Facsimile: (408) 451-7836
                  e-mail: dblair@firstam.com

Any party may change its address or the person designated to receive notice for
purposes of this section by giving the other party written notice of the new
information in the manner set forth above. E-mail addresses are given for
purposes of convenience only, and shall not be used for purposes of notice under
this Agreement.

            8.03 Legal; Interpretation. This Agreement shall be governed by the
laws of the State of California and venue for any dispute arising hereunder
shall be Santa Clara County, California. The headings and captions of articles
and sections used in this Agreement are for convenience only, and this Agreement
shall be interpreted without reference to any headings or captions. Similarly,
the presence or absence of language in prior drafts of this document shall not
be used to interpret any provision hereof. This Agreement has been prepared and
revised by attorneys for both parties, so any rule of law or construction that
ambiguities are to be construed against the party responsible for drafting the
Agreement or a provision hereof shall not apply.

            8.04 Successors Bound. The provisions hereof shall be binding upon
and inure to the benefit of the successors and assigns of Buyer and Seller, as
provided herein.

            8.05 Resolution of Disputes. Any dispute, controversy or claim
arising out of or relating to this Agreement, including any dispute relating to
interpretation of or performance under this Agreement ("DISPUTE"), shall be
resolved in the manner set forth in this Section 8.05, which shall be in lieu of
litigation in any court (except as provided in

                                      -22-
<PAGE>
Section 8.05.B regarding provisional remedies), and the parties specifically
waive any right to a jury trial of any dispute between them.

                  8.05.A Negotiation. A party contending that there is a Dispute
 shall notify the other party of the Dispute in writing explaining the nature of
 the Dispute ("DISPUTE NOTICE"). The parties will attempt in good faith to
 resolve the Dispute promptly (but no later than 30 days after receipt of the
 notice of such Dispute) by negotiations between senior representatives of the
 parties who have authority to settle the Dispute (each, a "REPRESENTATIVE").
 Prior to expiration of the 30-day negotiation period, the party who has first
 notified the other party of the Dispute shall submit a written offer to settle
 the Dispute that includes a specific dollar amount.

                  8.05.B Provisional Remedies. At any time after expiration of
 the 30-day negotiation period and prior to selection of the Arbitrator, a party
 requiring provisional relief to maintain the status quo, may seek provisional
 relief in court. The granting of such provisional relief shall not constitute a
 waiver of the parties' obligations to resolve the Dispute by arbitration as
 described in Section 8.05.C and the Arbitrator shall not be deemed deprived of
 jurisdiction to award or modify any provisional relief. Once the Arbitrator has
 been selected, the Arbitrator shall promptly determine if any existing
 provisional relief should remain in effect and may continue, terminate or
 modify such provisional relief.

                  8.05.C ARBITRATION OF DISPUTES. In the event the
 Representatives have not resolved the Dispute within the 30-day negotiation
 period, the Dispute shall be resolved by binding arbitration before the
 arbitrator (the "ARBITRATOR") identified in subsection 8.05.C(10) below, in
 accordance with the following provisions:

                        (1)   The parties stipulate and agree that any and
all necessary parties may be joined in the arbitration, but the parties agree to
proceed with arbitration of all Disputes between themselves even if other
parties refuse to participate. The parties specifically waive any objection to
arbitration based on the failure or refusal of any other party to be joined.

                        (2)   Within 60 days after the expiration of the
30-day negotiation period, the arbitration shall be initiated by written notice
(the "ARBITRATION NOTICE") of a demand to arbitrate by registered or certified
mail sent by one party to the other party or parties. If an Arbitration Notice
is not given within the 60-day period, then the right to make a claim based on
the Dispute described in the Dispute Notice shall be forever waived. The
Arbitration Notice shall include a plain statement of the Dispute and the relief
requested and shall select to be governed by either AAA (as described below) or
JAMS (as described below). Within 30 days of receipt of the Arbitration Notice,
each responding party or parties shall provide its own plain statement of the
Dispute and the bases of any defenses it intends to assert in response to the
demand. Seller and Buyer shall each advance one-half of the Arbitrator's fee, as
fixed and required by the Arbitrator in order to initiate the arbitration,
although the parties shall ultimately bear responsibility for such fee as
determined by the Arbitrator.

                        (3)   The parties shall attempt to agree on a
retired judge to be the Arbitrator. If they are unable to agree, the parties
shall simultaneously exchange the

                                      -23-
<PAGE>
names of three available retired judges and a judge appearing on both lists
shall be selected. If there is no common available Arbitrator and the parties
still cannot agree on an Arbitrator, the parties shall submit further lists
until one is selected. If the parties have not selected the Arbitrator within 15
days following the responding party's statement of its position, the arbitrator
shall be selected in accordance with the applicable rules of arbitration (AAA or
JAMS, as the case may be). The Arbitrator so selected shall be notified
immediately and a date for the arbitration shall be set within six months (if
the Close of Escrow has not occurred) or nine months (if the Close of Escrow has
occurred) after selection of the Arbitrator. The Dispute shall be resolved by
binding arbitration under the American Arbitration Association's ("AAA")
Commercial Arbitration Rules or the arbitration rules of JAMS (whichever is
elected by the party giving the Arbitration Notice) then in effect, as
supplemented by this Section 8.05. To the extent this Section 8.05 is
inconsistent with the applicable arbitration rules, the provisions of this
Section 8.05 shall control.

                        (4)   The Arbitrator shall schedule a pre-hearing
conference to resolve procedural matters and arrange for the exchange of
information.

                        (5)   Prior to the arbitration, the parties shall
be allowed the following limited discovery: each party shall be entitled to
receive relevant non-attorney-client privileged documents and to take up to
three fact and/or expert witness depositions in the discretion of the
Arbitrator. Any further discovery shall only be allowed by order of the
Arbitrator upon a showing that it is critical to the presentation of a party's
claims or defenses. All discovery shall be completed 30 days prior to the
arbitration.

                        (6)   The arbitration shall be completed in no
more than five full consecutive days, if possible. The following is the
timetable preferred by the parties and which the parties agree cannot be varied
except by the Arbitrator upon a showing that it is critical to the presentation
of a party's claims or defenses. Each party shall have two days to present its
position using documentary and testimonial evidence. The party giving the
Arbitration Notice shall present its case first. One day shall be reserved for
argument or the taking of such further evidence as the Arbitrator may require.

                        (7)   The Arbitrator shall have the power to grant
all legal and equitable remedies, including, but not limited to, injunction,
specific performance, reformation, cancellation, accounting and compensatory
damages, except only that lost profits, consequential damages and punitive
damages shall not be awarded. The Arbitrator shall issue a binding decision
within 30 days of the conclusion of the arbitration. The Arbitrator's
interpretations of California law or applicable federal law shall form the basis
of the decision. The Arbitrator's decision shall be conclusive and binding, and
it may thereafter be confirmed as a judgment by the Superior Court of the State
of California, subject only to challenge on the grounds set forth in California
Code of Civil Procedure Section 1286.2. The validity and enforceability of the
Arbitrator's decision is to be determined exclusively by the California courts
pursuant to the provisions of this Section 8.05.

                        (8)   The Arbitrator shall award reasonable
attorneys' fees and costs, including the Arbitrator's fees and expert fees, to
the "Prevailing Party." For purposes of this section, the "PREVAILING PARTY"
shall be the party which obtains a net monetary recovery, exclusive of
attorneys' fees and costs UNLESS the net monetary

                                      -24-
<PAGE>
recovery is equal to or less than the amount of a written offer from the
opposing party made after the negotiations described in Section 8.05.A. The
Arbitrator shall have exclusive and binding authority to determine entitlement
to attorneys' fees and costs, including Arbitrator's and experts' fees, under
this section.

                        (9)   The arbitration shall be conducted in Santa
Clara County, California.  Any party may be represented by counsel or
other authorized representative.

                        (10)  The Arbitrator shall be a retired judge of
the Federal District Court or Court of Appeal or the Superior Court,
Appellate Court or Supreme Court of the State of California.

      "NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
      DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF
      DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
      CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE
      THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLING IN THE
      SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND
      APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE 'ARBITRATION
      OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
      AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
      AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
      THIS ARBITRATION PROVISION IS VOLUNTARY. YOU ACKNOWLEDGE THAT YOU HAVE
      REVIEWED THE "ARBITRATION OF DISPUTES" PROVISION WITH COUNSEL OR HAVE HAD
      AN OPPORTUNITY TO REVIEW IT WITH COUNSEL AND HAVE CHOSEN NOT TO DO SO.

      "WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
      DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF
      DISPUTES' PROVISION TO NEUTRAL ARBITRATION."

              -------------------------     ----------------------------
                  Buyer's Initials              Seller's Initials

            8.06 Time of Essence. Time is of the essence of this Agreement and
of the Escrow provided for herein.

            8.07 Attorneys' Fees. In the event any of the parties shall commence
legal proceedings for the purpose of enforcing any provision or condition
hereof, or by reason of any breach arising under the provisions hereof, then the
successful party in such proceeding shall be entitled to court costs and
reasonable attorneys' fees to be determined by the Court or Arbitrator. Without
limiting the generality of the foregoing, the prevailing party shall be

                                      -25-
<PAGE>
entitled to recover its attorneys' fees and other legal expenses incurred in
connection with a bankruptcy or other insolvency-related proceeding of the other
party (and including such fees and expenses incurred in efforts, whether
successful or not, to obtain adequate protection, annulment, modification or
termination of the automatic stay).

            8.08 Integration. Except for the Due Diligence Agreement, this
Agreement and the Exhibits hereto contain the entire agreement of the parties
hereto, and supersede any prior written or oral agreements between them
concerning the subject matter contained herein, including, without limitation,
any letters of intent or letters of interest between the parties. THERE ARE NO
REPRESENTATIONS, AGREEMENTS, ARRANGEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN,
RELATING TO THE SUBJECT MATTER WHICH ARE NOT FULLY EXPRESSED HEREIN, OR IN THE
DUE DILIGENCE AGREEMENT.

            8.09 Dependency and Survival of Provisions. The respective
warranties, representations, covenants, agreements, obligations and undertakings
of each party hereunder shall be construed as dependent upon and given in
consideration of those of the other party. The representations and warranties
given in Section 5.03 and Section 5.04 shall survive the Close of Escrow and the
delivery of the Grant Deed for six months. Seller's indemnification set forth in
Section 7.03 shall survive the Close of Escrow and delivery of the Grant Deed
for a period of three years, as provided therein. In addition, the provisions of
Sections 2.06, 3.05, 4.01.A, 5.04.D, 5.05.D, 8.01, 8.02, 8.03, 8.04, 8.05, 8.07,
8.08, 8.09, and 8.13 shall survive the Close of Escrow and delivery of the Grant
Deed, without limitation. Notwithstanding anything in this Agreement, if Buyer
proceeds to and consummates the Close of Escrow, Buyer shall be deemed to have
waived any claim against Seller for and released Seller from any breach of this
Agreement, of the Deposit Note and the Deposit Deed of Trust arising out of any
matter, fact or circumstance known to Buyer prior to the Close of Escrow.

            8.10 Risk of Loss; Possession. Risk of loss with respect to the
Purchase Property shall remain with Seller until the Closing, in accordance with
this Agreement. Possession of the Purchase Property and the risk of loss with
respect to the Purchase Property shall pass to Buyer at the Closing.

            8.11 Counterparts; Facsimile Signatures. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original, but
which together shall constitute a single document. Signatures transmitted by
facsimile shall be binding; provided, however, that any person transmitting his
or her signature by facsimile shall promptly send an original signature to the
other parties in accordance with Section 8.02. If a facsimile signature is used
for purposes of executing this Agreement, then the party executing by facsimile
shall also promptly send an original signature to Escrow Holder at the address
specified in Section 1.05.

            8.12 Force Majeure. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain labor or
materials or reasonable substitutes therefor, governmental restrictions,
regulations or controls, enemy or hostile government action, civil commotion,
fire or other casualty, and other causes beyond the reasonable control of the
party obligated to perform, shall excuse the performance by such

                                      -26-
<PAGE>
party for a period equal to that resulting from such prevention, delay or
stoppage. The foregoing shall not apply to the end of the Feasibility Period,
and the Feasibility Period shall not be extended as a result of force majeure,
without the express consent of the parties, in their discretion.

            8.13 Title Claims. Notwithstanding anything herein or in the Grant
Deed, Buyer and Seller agree that any claim Buyer may have after Close of Escrow
relating to title to the Purchase Property shall first be pursued by Buyer
against the Title Company under the Buyer's Title Policy prior to recovering
from Seller.

            8.14  Assignment.

                  8.14.A By Buyer. Other than as provided in this Section 8.14.A
 or in furtherance of a tax-deferred exchange in accordance with Section 2.06,
 Buyer may not assign its rights or delegate its obligations under this
 Agreement, the Deposit Note or the Deposit Deed of Trust, without the prior
 written consent of Seller, which consent may be withheld in Seller's
 discretion. Seller's prior consent shall not be required for a complete
 assignment, after the deposit by Buyer of the Additional Deposit, of all of
 Buyer's right, title and interest in and to this Agreement, the Purchase
 Property, the Deposit Note and the Deposit Deed of Trust, provided that Buyer
 notifies Seller in advance of any such complete assignment, the assignee has
 the resources available to perform Buyer's obligations under this Agreement,
 and the assignee executes, for Seller's benefit, a written assumption and
 agreement to perform all of the obligations of Buyer under, and to remain
 subject to all of the conditions of, this Agreement, as may be amended, the
 Deposit Note and the Deposit Deed of Trust.

                  8.14.B By Seller. Buyer acknowledges that this Agreement is
 not intended to restrict any transfers of ownership interests in Seller, change
 of control, merger, acquisition, sale of all or substantially all of Seller's
 assets or other similar transaction affecting Seller. In addition,
 notwithstanding anything herein, including without limitation Sections 5.03.B
 and 5.03.C, Seller shall have the right to transfer or assign the Purchase
 Property and any such transfer or assignment shall not be a default under this
 Agreement, provided that Seller notifies Buyer in advance of any such
 assignment and the acquiring party expressly assumes and agrees, in writing for
 the benefit of Buyer, to be bound by the obligations of Seller under this
 Agreement, the Deposit Note and the Deposit Deed of Trust and the acquiring
 party has the resources available to perform Seller's obligations under this
 Agreement.

            8.15 Confidentiality. Buyer and Seller each agrees to treat as
confidential all information, whether written or oral, designated as
confidential in connection with this transaction, including, without limitation,
any documents or information relating to the parties, negotiations between the
parties, the terms and conditions of the letter of intent and this Agreement and
the condition of the Purchase Property. Notwithstanding the foregoing, the
following disclosures are permitted: (a) such disclosures to third persons
(including, in the case of Seller, to Varian) as may be reasonably necessary in
order to consummate the transaction contemplated by this Agreement; (b)
privileged communications by the respective parties, including communications
with the parties' respective counsel and advisors; (c) such disclosures as may
be necessary or required by those governmental

                                      -27-
<PAGE>
agencies, authorities, or examiners having jurisdiction over Seller and Buyer,
respectively; and (d) such disclosures as may be required by subpoena or any
other similar court order or discovery request in any civil or criminal
proceeding or investigation. In the event either party desires to disclose any
confidential information or to publicly disclose the pendency of this
transaction, prior to any such disclosure or communication, the party seeking to
make such disclosure or communication shall (1) prior to the deposit of the
Additional Deposit, obtain the consent of the other party, which consent will
not be unreasonably withheld, and (2) consult with the other party regarding the
content of any press release or other public disclosure. Prior to the deposit of
the Additional Deposit, each party shall inform each and every party receiving
confidential information that such information is confidential and is subject to
a prohibition on further dissemination or circulation by any means. Upon
termination of this Agreement other than as a result of the Close of Escrow,
upon request each party shall promptly return to the other party all documents
and materials provided to such party and all copies thereof made by it or its
representatives. The parties acknowledge and agree that remedies at law for
breach or threatened breach of this Section 8.15 are inadequate, and that in
addition to such remedies, each party shall be entitled to equitable relief,
including injunctive relief and specific performance, in the event of any such
breach or threatened breach without the need to demonstrate that monetary
damages are inadequate.

            8.16 No Obligations to Third Parties. Except as otherwise expressly
provided herein, the execution and delivery of this Agreement shall not be
deemed to confer any rights upon, nor obligate any of the parties hereto, to any
person or entity other than the parties hereto.

                         (Signatures on following page.)

                                      -28-
<PAGE>
DATED:  February 7, 2003

                                 SELLER:

                                 COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                 CORPORATION, a Delaware corporation

                                 By:____________________________________________

                                 Print Name_____________________________________

                                 Its____________________________________________

                                 BUYER:

                                 PALO ALTO MEDICAL FOUNDATION, a California
                                 nonprofit public benefit corporation

                                 By:____________________________________________

                                 Print Name_____________________________________

                                 Its____________________________________________

                                      -29-
<PAGE>
                           ACCEPTANCE BY ESCROW HOLDER

      The undersigned Escrow Holder hereby acknowledges that on February ____,
2003, which, pursuant to Section 1.05, is the "EFFECTIVE DATE," the undersigned
received a fully executed duplicate original (with Sections 2.04 and 8.05
initialled by both parties) of the foregoing Agreement of Purchase and Sale by
and between Communications & Power Industries Holding Corporation, as Seller,
and Palo Alto Medical Foundation, as Buyer. Subject to Escrow Holder's receipt
of acceptable supplemental escrow instructions, Escrow Holder agrees to act as
the Escrow Holder under this Agreement, and to comply with these instructions.
Escrow Holder has assigned Escrow No. NCS-11665-SM to this transaction for that
purpose.

FIRST AMERICAN TITLE COMPANY

By:_______________________________
Date:_____________________________

EFFECTIVE DATE: __________________

                                      -30-
<PAGE>
                             INDEX OF DEFINED TERMS

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
AAA....................................................................       24
Additional Deposit.....................................................       2
Agreement..............................................................       1
Arbitration Notice.....................................................       23
Arbitrator.............................................................       23
Buyer..................................................................       1
Buyer Approval Notice..................................................       8
Buyer's Broker.........................................................       21
Buyer's Termination Notice.............................................       5
Buyer's Title Notice...................................................       11
Buyer's Title Policy...................................................       12
Buyer's Title Waiver Notice............................................       11
City...................................................................       1
Close of Escrow........................................................       5
Closing................................................................       5
Closing Extension Period...............................................       5
Code...................................................................       7
Completion Notice......................................................       20
County.................................................................       1
Demolition.............................................................       20
Demolition Plan........................................................       20
Deposit Deed of Trust..................................................       2
Deposit Interest Rate..................................................       3
Deposit Note...........................................................       2
Dispute................................................................       22
Dispute Notice.........................................................       23
Documents and Materials................................................       8
Due Diligence Agreement................................................       1
Effective Date.........................................................       1
End of Feasibility.....................................................       8
Environmental Laws.....................................................       15
Escrow.................................................................       5
Escrow Holder..........................................................       1
Existing First Deed of Trust...........................................       3
Feasibility Period.....................................................       8
Feasibility Status Notice..............................................       10
Full Deposit...........................................................       3
Full Reconveyance......................................................       2
Hazardous Materials....................................................       15
Initial Deposit........................................................       2
Initial Title Review Date..............................................       11
Land...................................................................       1
Material Inaccuracy....................................................       18
Outside Closing Date...................................................       5
</TABLE>
<PAGE>
<TABLE>
<S>                                                                          <C>
Permitted Exceptions...................................................       11
Preliminary Report.....................................................       11
Prevailing Party.......................................................       25
Purchase Price.........................................................       2
Purchase Property......................................................       1
Remediation Plan.......................................................       19
Remediation............................................................       19
Repayment Event........................................................       6
Representative.........................................................       23
Section 1542...........................................................       17
Seller.................................................................       1
Seller's Approval Notice...............................................       13
Seller's Broker........................................................       21
Seller's knowledge or Seller's best knowledge..........................       14
Seller's Title Notice..................................................       11
Seller's Title Response Date...........................................       11
State..................................................................       1
Sutter Health..........................................................       1
Termination of Buyer's Rights..........................................       4
Varian.................................................................       9
Varian Site Access Agreement...........................................       9
Varian Stock Sale Agreement............................................       9
</TABLE>
<PAGE>
                              SEVENTH AMENDMENT TO
                         AGREEMENT OF PURCHASE AND SALE

      This Seventh Amendment to Agreement of Purchase and Sale ("SEVENTH
AMENDMENT") is entered into as of November 12, 2003, by and between
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation
("SELLER"), and PALO ALTO MEDICAL FOUNDATION, a California nonprofit public
benefit corporation ("BUYER"), who for consideration, the receipt and adequacy
of which is agreed between them, agree as follows:

      1.    Original Agreement. Seller and Buyer are the parties to that certain
Agreement of Purchase and Sale dated February 7, 2003, which was reinstated and
amended by that certain First Amendment to Agreement of Purchase and Sale dated
June 9, 2003, and further amended by that certain Second Amendment to Agreement
of Purchase and Sale dated June 30, 2003, that certain Third Amendment to
Agreement of Purchase and Sale dated July 23, 2003, that certain Fourth
Amendment to Agreement of Purchase and Sale dated August 29, 2003, that certain
Fifth Amendment to Agreement of Purchase and Sale dated September 30, 2003, that
certain Sixth Amendment to Agreement of Purchase and Sale dated October 31,
2003, and those certain extension letters between Patricia D. Elliott, Esq. on
behalf of Buyer and Wendy G. Glenn, Esq. on behalf of Seller dated November 7,
2003 and November 11, 2003 (the "AGREEMENT"), which affects the property
("PROPERTY") commonly known as 301 Industrial Way, designated San Mateo County
Assessor's Parcel No. 046-051-020 and 046-051-070. Capitalized terms not defined
in this Seventh Amendment shall have the meaning given to them in the Agreement.

      2.     Feasibility Period. The Agreement provides that the End of the
Feasibility Period shall be 5:00 PM Pacific Time on November 12, 2003. Buyer has
requested additional time to agree with Seller on the Remediation Plan and the
Demolition Plan and (a) file and pursue an application to the City of San Carlos
seeking a future change of the City General Plan, Specific Plan, zoning and use
permit for the development by Buyer of the Property as a medical/hospital
facility (collectively, the "ENTITLEMENTS"), and (b) obtain preliminary approval
of the Regional Water Quality Control Board to the Remediation Plan before
depositing the Additional Deposit. Seller is willing to agree to extensions
relating to those conditions, on the terms of this Seventh Amendment, provided
that Buyer agrees that all conditions to be satisfied prior to the end of the
Feasibility Period have been satisfied or waived subject to the provisions of
this Seventh Amendment.

      3.     Buyer's Approval Notice and Seller's Approval Notice. The parties
agree that for all purposes under the Agreement, the Feasibility Period has
ended and all conditions to have been satisfied prior to the end of the
Feasibility Period have been satisfied or waived; provided however, that this
Seventh Amendment specifies additional or extended conditions. Buyer hereby
gives Buyer's Approval Notice as to all matters other than those matters
described in Sections 6, 7, 8, 9 and 10 herein. No further Buyer's Approval
Notice is required as a condition to Buyer's obligations under the Agreement.
Section 4.02 of the Agreement relating to the Seller's Approval Notice shall be
modified by deleting the phrase

                                       1
<PAGE>
"prior to the end of the Feasibility Period" in the 14th and 17th lines of the
Section and replacing it with the phrase "prior to February 27, 2004" in each
instance.

      4.     Deposit.  Section 2.03A of the Agreement is modified as
follows:

                  A. Initial Deposit. The Initial Deposit ($200,000, plus
      accrued interest) shall be released to Seller by Escrow Holder and shall
      hereafter be non-refundable, except as otherwise expressly provided in the
      Agreement. It is expressly agreed that the failure of any condition to
      Buyer's obligations under the Agreement, including without limitation the
      failure of the City of San Carlos to approve or indicate approval of the
      Application (defined below), the RWQCB Preliminary Approval or the parties
      to agree on the Remediation and Demolition Plan shall not entitle Buyer to
      a refund of the Initial Deposit.

                  B. Second Deposit. On February 17, 2004, unless Buyer has
      terminated this Agreement as provided in Section 7 below, Buyer shall
      deposit with Escrow Holder the sum of $1,000,000 (the "SECOND DEPOSIT"),
      which Escrow Holder shall deposit into an interest-bearing account.

                  C. Additional Deposit. Within five (5) business days of
      obtaining the RWQCB Preliminary Approval, the Additional Deposit (i.e.,
      sufficient funds to bring the total of the Initial Deposit, the Second
      Deposit and the Additional Deposit to $17,500,000) shall be deposited by
      Buyer with Escrow Holder into an interest-bearing account.

                  D. Deposit Note and Deed of Trust. The form of the Deposit
      Deed of Trust is attached hereto and incorporated herein as EXHIBIT D.

                  E. Full Deposit. The "FULL DEPOSIT" shall mean the Initial
      Deposit, the Second Deposit and the Additional Deposit. The "EXISTING
      FIRST DEED OF TRUST" means the Deed of Trust recorded December 22, 2000 as
      document number 2000-162764 in San Mateo County official records for the
      benefit of Wells Fargo Bank, a National Association, and securing payment
      of a promissory note in the original principal amount of $18,000,000, or
      any replacement deed of trust. If upon the deposit by Buyer of the
      Additional Deposit, the funds on deposit with Escrow Holder are
      insufficient to satisfy the Existing First Deed of Trust, Seller shall
      deposit with Escrow Holder any required funds, including without
      limitation any portion of the Full Deposit previously released to Seller
      pursuant to the Agreement, as amended hereby, necessary to satisfy the
      Existing First Deed of Trust. If there is no Existing First Deed of Trust,
      the Full Deposit shall be released to Seller upon recordation of the
      Deposit Deed of Trust.

      5.     Close of Escrow. Section 3.03A of the Agreement is modified to
provide that the "OUTSIDE CLOSING DATE" shall be the date twenty-four (24)
months after the Additional Deposit is deposited with Escrow Holder by Buyer.
Section 3.03B of the Agreement is modified to provide that all three possible
Closing Extension Periods may be exercised by Seller if Seller has been unable
to complete Seller's obligations under the Agreement, as modified hereby, prior
to the Outside Closing Date.

      6.     Remediation Plan and Demolition Plan. Buyer and Seller shall have
until November 25, 2003 to agree on the Remediation Plan and the Demolition
Plan, in their

                                       2
<PAGE>
discretion, it being understood that Seller's agreement shall be subject to
obtaining, to Seller's reasonable satisfaction, Varian's approval, as provided
in the Agreement as amended hereby. Section 4.01C, Section 4.02B and Section
7.02 of the Agreement shall be modified by replacing the phrase "Prior to the
end of the Feasibility Period" with "Prior to November 25, 2003". Section 7.01
shall be modified by replacing the phrase "During the Feasibility Period" with
"Prior to November 25, 2003". In the event the parties do not agree on the
Remediation Plan and/or Demolition Plan by November 25, 2003, either party may
elect to terminate the Agreement by providing written notice of such termination
to the other and to Escrow Holder, whereupon the Agreement shall terminate,
except for Buyer's obligations under Sections 4.01A and 8.15 of the Agreement.

      7.     Application for Zoning Change. Buyer will submit, on or before
December 15, 2003, an application to the City of San Carlos for a future zoning
change to permit a medical/hospital facility to be developed on the Property
("APPLICATION") and use its commercially reasonable efforts to determine the
City of San Carlos' intent to approve and grant the Entitlements. Seller,
through its specifically authorized representatives, will be supportive of the
Application (once approved by Seller) in any contacts with representatives of
the City and Seller's employees. Seller, through its specifically authorized
representatives, will express in writing to the City if reasonably necessary,
Seller's desire that the Application be approved. Seller shall not unreasonably
withhold its approval of the Application (subject to obtaining Varian's
approval). Buyer and Seller hereby waive the provisions of Section 8.15 of the
Agreement with respect to the filing of the Application. If on or before
February 17, 2004, the City of San Carlos has not indicated its support of the
Application to Buyer's satisfaction, this condition shall be deemed to have not
been satisfied. If the City of San Carlos either has failed to indicate its
support of the Application to Buyer's satisfaction or has indicated that it does
not intend to approve the Application, Buyer may terminate the Agreement (except
for Buyer's obligations under Sections 4.01A and 8.15 of the Agreement) upon
written notice to Seller and Escrow Holder given on or before February 17, 2004.
If Buyer does not so elect to terminate the Agreement, Buyer shall deliver the
Second Deposit. Notwithstanding anything herein, prior to the Close of Escrow,
Buyer shall not cause the current designation/permitted uses of the Property to
change or any imposition or restriction to be imposed on the Property or Seller.
Nothing in this Section shall be deemed to modify Buyer's obligations under the
Agreement, including without limitation those obligations set forth in Section
4.01A(4) of the Agreement. For the purposes of this Section 7, Seller's
specifically authorized representatives shall mean O. Joe Caldarelli, Robert
Fickett, Joel Littman and Mike Cheng.

      8.     RWQCB Preliminary Approval. The parties agree, provided Seller has
obtained Varian's approval of the Remediation Plan, to present the Remedial
Action Plan (Table 1 to be attached to the Remediation Plan) to the San
Francisco Regional Water Quality Control Board ("RWQCB") for preliminary
confirmation that RWQCB will enter into a Voluntary Cleanup Agreement with
Seller in connection with the performance of the Remedial Action Plan ("RWQCB
PRELIMINARY APPROVAL"). Seller shall use its commercially reasonable efforts to
obtain Varian's approval of the Remedial Action Plan and shall advise Buyer by
November 25, 2003, December 15, 2003 and February 17, 2004 or at any time prior
to any of these dates if Seller believes Varian will not support the proposed
Remedial Action Plan. Seller shall have no obligation to relieve Varian of any
of its obligations owed to Seller or its affiliates, to pay any monies to Varian
or to incur any

                                       3
<PAGE>
other liability or obligation to Varian in order to obtain Varian's approval of
the Remedial Action Plan. The parties agree that it is not necessary or even
desirable to obtain a written response from RWQCB, although the parties agree
that Seller shall submit a written confirmation letter to RWQCB following the
meeting in collaboration with Buyer. Buyer's environmental consultant,
Northgate, shall be present at the RWQCB meeting, shall observe and not take any
active participation unless otherwise agreed in advance by Buyer and Seller, and
shall be publicly supportive of the Remedial Action Plan. If the Second Deposit
has been made and the RWQCB Preliminary Approval is obtained (Varian's approval
of the Remedial Action Plan having been obtained), the Second Deposit shall be
non-refundable and Buyer shall promptly deposit the Additional Deposit as
described above. If the RWQCB Preliminary Approval is not obtained by March 31,
2004, the Second Deposit shall be refundable to Buyer upon written notice to
Seller and Escrow Holder given on or before April 5, 2004 that Buyer elects to
terminate the Agreement (except for Buyer's obligations under Sections 4.01A and
8.15 of the Agreement). If Buyer does not so elect to terminate the Agreement,
Seller may at any time elect to terminate the Agreement (except for Buyer's
obligations under Sections 4.01A and 8.15 of the Agreement) upon written notice
to Buyer and Escrow Holder, whereupon the Second Deposit shall be refunded to
Buyer.

      9.     Varian. Section 4.01D and Section 4.02C of the Agreement shall be
modified by replacing the phrase "Prior to the end of the Feasibility Period"
with "Prior to February 27, 2004".

      10.    Sutter Health Approval. Section 4.01 G of the Agreement shall be
modified by replacing the phrase "Prior to the end of the Feasibility Period"
with "Prior to February 17, 2004".

      11.    Owner/Authority. Section 5.03B of the Agreement shall be modified
by replacing the phrase, appearing in the last sentence, "As of the end of the
Feasibility Period" with "As of February 27, 2004".

      12.    Documents and Materials. Attached hereto and incorporated herein is
an amended EXHIBIT B listing Documents and Materials provided or made available
to Buyer.

      13.    Effect. As modified by this Seventh Amendment, the Agreement
remains in full force and effect. In the event of any inconsistency between the
Agreement and this Seventh Amendment, the provisions of this Seventh Amendment
shall control.

      14.    Counterparts and Facsimiles. The parties hereto may execute this
Seventh Amendment simultaneously, in any number of counterparts, and/or upon
facsimile copies, each of which shall be deemed to be an original, but which
together, shall constitute one and the same Seventh Amendment. Each party shall
be entitled to rely upon the facsimile signature of the other party.

                           [Signatures on next page.]

                                       4
<PAGE>
In witness whereof, the parties have executed this Seventh Amendment.

Dated:  November 12, 2003
                                 SELLER:

                                 COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                 CORPORATION, a Delaware corporation

                                 By:____________________________________________

                                       PRINT NAME_______________________________

                                 Its____________________________________________

                                 BUYER:

                                 PALO ALTO MEDICAL FOUNDATION, a California
                                 nonprofit public benefit corporation

                                 By:____________________________________________

                                       PRINT NAME_______________________________

                                 Its____________________________________________

                                       5
<PAGE>
                           ACCEPTANCE BY ESCROW HOLDER

      The undersigned Escrow Holder hereby acknowledges that on November ____,
2003, the undersigned received a fully executed duplicate original of the
foregoing Seventh Amendment to Agreement of Purchase and Sale by and between
Communications & Power Industries Holding Corporation, as Seller, and Palo Alto
Medical Foundation, as Buyer. Escrow Holder agrees to release the Initial
Deposit (including accrued interest) to Seller in accordance with Seller's wire
instructions.

FIRST AMERICAN TITLE COMPANY

By:________________________________

Date:______________________________

                                       6
<PAGE>
                               NINTH AMENDMENT TO
                         AGREEMENT OF PURCHASE AND SALE

      This Ninth Amendment to Agreement of Purchase and Sale ("NINTH AMENDMENT")
is dated June ___, 2004 for reference purposes and is entered into effective as
of January 30, 2004, by and between COMMUNICATIONS & POWER INDUSTRIES, INC., a
Delaware corporation ("SELLER"), as successor in interest by merger to
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation,
and PALO ALTO MEDICAL FOUNDATION, a California nonprofit public benefit
corporation ("BUYER"), who for consideration, the receipt and adequacy of which
is agreed between them, agree as follows:

      1.    Original Agreement.  Seller and Buyer are the parties to that
certain Agreement of Purchase and Sale dated February 7, 2003, which was
reinstated by that certain Reinstatement of Agreement of Purchase and Sale
dated March 17, 2003 and amended by that certain First Amendment to
Agreement of Purchase and Sale dated June 9, 2003, and further amended by
that certain Second Amendment to Agreement of Purchase and Sale dated June
30, 2003, that certain Third Amendment to Agreement of Purchase and Sale
dated July 23, 2003, that certain Fourth Amendment to Agreement of
Purchase and Sale dated August 29, 2003, that certain Fifth Amendment to
Agreement of Purchase and Sale dated September 30, 2003, that certain
Sixth Amendment to Agreement of Purchase and Sale dated October 31, 2003,
those certain extension letters between Patricia D. Elliott, Esq. on
behalf of Buyer and Wendy G. Glenn, Esq. on behalf of Seller dated
November 7, 2003 and November 11, 2003, that certain Seventh Amendment to
Agreement of Purchase and Sale ("SEVENTH AMENDMENT") dated November 12,
2003, that certain extension letter from Patricia D. Elliott, Esq. on
behalf of Buyer to Wendy G. Glenn, Esq. on behalf of Seller dated November
25,2003, that certain Eighth Amendment to Agreement of Purchase and Sale
dated November 26, 2003 and those certain extension letters between
Patricia D. Elliott, Esq. on behalf of Buyer  and Wendy G. Glenn, Esq. on
behalf of Seller dated December 10, 2003, December 15, 2003, December 19,
2003 and January 20, 2004 (the "AGREEMENT"), which affects the Purchase
Property.  Capitalized terms not defined in this Ninth Amendment shall
have the meaning given to them in the Agreement.

      2. Feasibility Period. The Agreement provides that the End of the
Feasibility Period shall have ended on January 30, 2004. Since that time, Buyer
and Seller have been negotiating to satisfy Buyer's and Seller's conditions to
the purchase of the Purchase Property by Buyer. Those conditions have been
addressed by the parties as provided in this Ninth Amendment. Accordingly, the
Feasibility Period has terminated and Buyer agrees to proceed with the purchase
of the Purchase Property on the terms of the Agreement, as modified by this
Ninth Amendment..

      3. Buyer's Approval Notice and Seller's Approval Notice. The parties agree
that for all purposes under the Agreement, the Feasibility Period has ended and
all conditions to have been satisfied prior to the end of the Feasibility Period
have been satisfied or waived; Buyer hereby gives Buyer's Approval Notice as to
all matters other than the approval of the RWQCB as provided in Section 11
herein. No further Buyer's Approval Notice is required

                                       1
<PAGE>
as a condition to Buyer's obligations under the Agreement, except as provided in
Section 11 herein.

      4. Purchase Price. Section 2.02 of the Agreement shall be modified to
provide that the Purchase Price for the Purchase Property is reduced to Twenty
Three Million Seven Hundred Fifty Two Thousand Five Hundred Dollars
($23,752,500), subject to further adjustment as described in this Ninth
Amendment.

      5.    Deposit.  Section 2.03.A of the Agreement, as previously
amended by the Seventh Amendment, is further modified as follows:

                  A. Second Deposit. In lieu of the Second Deposit in the amount
      of $1,000,000, upon execution of this Agreement, Buyer shall deliver to
      Seller, outside of Escrow, but with full credit as a deposit in Escrow the
      sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "SECOND
      DEPOSIT"). It is expressly agreed that the failure of any condition to
      Buyer's obligations under the Agreement, including without limitation the
      failure to obtain the RWQCB approval described in Section 11 of this Ninth
      Amendment shall not entitle Buyer to a refund of the Second Deposit, or
      the Initial Deposit. Upon Closing, the Initial Deposit and Second Deposit
      shall be credited against the Purchase Price.

                  B.    Additional Deposit.  In lieu of the Additional
       Deposit described in the Seventh Amendment, within five (5)
       business days of obtaining the RWQCB Approval, Twelve Million Five
       Hundred Thousand Dollars ($12,500,000) shall be delivered to
       Seller, outside of Escrow, but with full credit as a deposit in
       Escrow, as the Additional Deposit (i.e., for a Full Deposit of
       Twelve Million Nine Hundred Fifty Thousand Dollars ($12,950,000)).
       No interest shall accrue on the Full Deposit.

                  C.    Deposit Note and Deed of Trust.  All references in
       the Agreement to the Deposit Note, the Deed of Trust, Exhibit D to
       the Agreement, and the Full Reconveyance are hereby deleted.

                  D.    Existing First Deed of Trust.  The "Existing First
       Deed of Trust" has been satisfied and released of record.

      6.       Liquidated Damages.  Section 2.04 of the Agreement is
deleted and replaced with the following:

      "2.04 LIQUIDATED DAMAGES BY INITIALLING THIS SECTION 2.04 IN THE SPACE
PROVIDED BELOW, BUYER AND SELLER AGREE THAT IF THE CLOSING FAILS TO OCCUR BY
REASON OF THE DEFAULT OF BUYER, THE FULL DEPOSIT SHALL BE DEEMED LIQUIDATED
DAMAGES FOR BUYER'S NON-PERFORMANCE AS SELLER'S SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER FOR SUCH DEFAULT. BUYER AND SELLER AGREE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES RESULTING FROM SUCH
DEFAULT, DUE TO THE NATURE OF THIS TRANSACTION AND THE UNIQUE NATURE OF THE
PURCHASE PROPERTY, AND THAT A REASONABLE ESTIMATE OF SELLER'S DAMAGES IN SUCH
EVENT IS THE FULL DEPOSIT ($12,950,000.00), IN VIEW OF, AMONG OTHER THINGS, THE
ANCILLARY AGREEMENTS

                                       2
<PAGE>
UNDERTAKEN BY SELLER IN CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT
LIMITATION, THE ENVIRONMENTAL AGREEMENT AND OTHER AGREEMENTS WITH VARIAN AND/OR
RELATED TO RELOCATING SELLER'S BUSINESS OPERATIONS) AND SELLER'S AGREEMENT TO
ACCEPT A LIQUIDATED SUM IN LIEU OF ITS REMEDY OF SPECIFIC PERFORMANCE. BUYER AND
SELLER AGREE THAT LIQUIDATED DAMAGES ARE PARTICULARLY APPROPRIATE FOR THIS
TRANSACTION AND AGREE THAT SAID LIQUIDATED DAMAGES SHALL BE PAID IN THE EVENT OF
BUYER'S BREACH OF ITS OBLIGATION TO PURCHASE THE PURCHASE PROPERTY,
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT. THE PAYMENT OF SUCH AMOUNT
AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE
MEANING OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER UNDER CALIFORNIA CIVIL CODE SECTIONS
1671, 1676 AND 1677. NOTHING IN THIS PROVISION SHALL, HOWEVER, BE DEEMED TO
LIMIT BUYER'S LIABILITY TO SELLER FOR DAMAGES OR INJUNCTIVE RELIEF FOR BREACH OF
BUYER'S OBLIGATIONS UNDER SECTION 4.01A (INDEMNITY RE: BUYER'S ACTIVITIES AT THE
PROPERTY) OR SECTION 8.07 (ATTORNEYS' FEES). IN THE EVENT ANY PORTION OF THE
FULL DEPOSIT REMAINS IN ESCROW AT THE TIME OF BUYER'S DEFAULT, BUYER AND SELLER
HEREBY INSTRUCT AND AUTHORIZE ESCROW HOLDER TO RELEASE SUCH PORTION TO SELLER.
FURTHER, BUYER AND SELLER HEREBY INSTRUCT AND AUTHORIZE ESCROW HOLDER TO RETURN
TO SELLER THE DEPOSIT NOTE MARKED "SATISFIED" AND RECORD THE FULL RECONVEYANCE
AND THE TERMINATION OF BUYER'S RIGHTS, WHICH ARE BEING HELD BY ESCROW HOLDER."

          __________________________            ____________________________
                  Buyer                               Seller

      7. Memorandum of Agreement. Section 2.05 of the Agreement is modified to
provide that simultaneously with delivery of the Additional Deposit to Seller,
Seller and Buyer shall execute a Memorandum of the Agreement which shall be
recorded. The Memorandum of Agreement shall provide notice of Buyer's right to
purchase the Property in accordance with the terms of the Agreement. Buyer shall
deposit with Escrow Holder an executed (in recordable form) Termination of
Buyer's Rights under the Agreement to be held by Escrow Holder and recorded in
the event the Agreement is terminated as a result of Buyer's default.

      8. Buyer's Remedies. Section 2.07 of the Agreement is modified to provide
that in the event of Seller's default under the Agreement, Buyer shall have the
remedy of specific performance, in addition to its right to terminate its
obligations under the Agreement. These remedies shall be exclusive and only one
such remedy may be elected by Buyer. In the event Seller fails to vacate the
Purchase Property as provided in Section 7.02 of the Agreement as modified by
this Ninth Amendment (see Section 14 below) prior to the Outside Closing Date,
as may be extended as provided in Section 3.03.B of the Agreement, as modified
by this Ninth Amendment, Buyer shall have the right to evict Seller and deduct

                                       3
<PAGE>
from the Purchase Price any reasonable out of pocket costs incurred by Buyer in
such eviction.

      9. Close of Escrow. Sections 3.03A of the Agreement is modified to provide
that the "OUTSIDE CLOSING DATE" shall be the date twenty four (24) months after
the Additional Deposit is delivered to Seller by Buyer. Section 3.03.B of the
Agreement is modified to allow Seller to extend the Closing beyond the Outside
Closing Date, up to six (6) additional months to enable Seller to vacate the
Property in accordance with Sections 7.01and 7.02 of the Agreement, as modified
by this Ninth Amendment. In the event the Outside Closing Date is so extended by
Seller, Buyer shall receive a credit against the Purchase Price of One Hundred
Thousand Dollars ($100,000) for each month the Closing is extended beyond the
Outside Closing Date, prorated on a daily basis for any portion of the extension
period which is less than one full month. Similarly, if Seller provides Buyer
notice that it has vacated the Property in compliance with Sections 7.01 and
7.02 of the Agreement, as modified by this Ninth Amendment, prior to the Outside
Closing Date, the Purchase Price shall be increased by One Hundred Thousand
Dollars ($100,000) for each month prior to the Outside Closing Date that the
Closing occurs, prorated on a daily basis for any portion of the period which is
less than one full month.

      10. Seller's Failure to Comply. Section 3.03.C of the Agreement is
modified to provide that a "REPAYMENT EVENT" shall mean only that Seller has
failed to vacate the Purchase Property and deliver the Grant Deed in accordance
with the Agreement, as modified by this Ninth Amendment.

      11. Environmental Agreement. Attached hereto as EXHIBIT G is a form of
agreement ("ENVIRONMENTAL AGREEMENT") relating among other things to Hazardous
Materials on the Purchase Property, the implementation of a Remedial Action Plan
(therein and herein defined as "RAP") and the purchase of an Insurance Policy,
to be entered into by Seller, Buyer, Varian, and others. The Environmental
Agreement provides that the RAP will be submitted to the Regional Water Quality
Control Board for the San Francisco Bay area ("RWQCB") for its approval. Buyer
agrees to comply or cause the applicable party to comply with the obligations to
timely submit the RAP and seek the approval of the RWQCB to such RAP and
Prospective Purchaser Agreement. In the event that the approval of the RAP by
the RWQCB is not obtained within 120 days of the effective date of the
Environmental Agreement, and for no other reason, Buyer may, by prompt (two
business days) written notice to Seller and Escrow Holder, terminate its
obligation to purchase the Purchase Property under the Agreement, and the
parties to the Agreement shall have no further obligations under the Agreement,
except Buyer's obligations under Sections 4.01A and 8.15 of the Agreement.
Without limiting the provisions of the Agreement as modified by this Ninth
Amendment, Buyer expressly acknowledges to Seller that no change in circumstance
(including with regard to the status of entitlements for redevelopment of the
Purchase Property), other than a failure of an express condition set forth in
the Agreement as modified by this Ninth Amendment, shall entitle Buyer to
terminate its obligations under the Agreement.

      12. Buyer's Conditions to Closing. The conditions to Buyer's obligation to
purchase the Purchase Property set forth in Sections 4.01.C, 4.01.D, 4.01.E,
4.01.F, and 4.01.G of the Agreement and in Sections 7 and 8 of the Seventh
Amendment, are hereby waived and satisfied. There shall be added to the
Agreement Section 4.01.J, as follows:

                                       4
<PAGE>
      "4.01.J Compliance with Environmental Agreement. Seller shall have timely
performed all of its obligations under the Environmental Agreement which were to
be performed prior to the Closing."

      13.   Seller's Conditions to Closing.  The conditions to Seller's
obligation to sell the Purchase Property set forth in Sections 4.02.B,
4.02.C, 4.02.D, and 4.02.E to Buyer's obligation to purchase the Purchase
Property, are hereby waived and satisfied.  There shall be added to the
Agreement Section 4.02.G, as follows

      "4.02G Compliance with Environmental Agreement. Buyer shall have timely
performed all of its obligations under the Environmental Agreement which were to
be performed prior to the Closing."

      14.   Hazardous Materials Remediation, Demolition and Vacation. .
Article 7 (Sections 7.01, 7.02 and 7.03 and any subsections thereof) of
the Agreement is deleted and replaced with the following:

      "7.01 Hazardous Materials Remediation. Buyer agrees that Seller shall have
no obligation to undertake any remediation of Hazardous Materials existing on
the Purchase Property, except (A) in connection with the decommissioning and
closure of its facility in accordance with the provisions of Appendix III D to
the Environmental Agreement and incorporated herein and (B) "New Contamination".
"NEW CONTAMINATION" means any Hazardous Materials which are introduced onto the
Property after the Effective Date of this Agreement and before the Close of
Escrow by any party other than Buyer or an agent of Buyer, and of which Seller
is notified by Buyer within five (5) years after the Close of Escrow."

      "7.02 Seller to Vacate the Purchase Property. Prior to the Outside Closing
Date, as may be extended by Seller as provided in Section 3.03.B of the
Agreement, as amended by this Ninth Amendment, Seller shall cease its operations
at the Purchase Property and complete its obligations specified in Appendix III
D to the Environmental Agreement relating to decommissioning and closure of its
facilities. Seller shall remove all personal property and equipment, including
trade fixtures, other than those identified in Appendix V D to the Environmental
Agreement, which items may remain on the premises. Upon request, Seller shall
advise Buyer of the status of its activities including the status of any permit
process in the City of Palo Alto, California in which Seller intends to relocate
its business from the Purchase Property and Buyer may periodically attend
meetings between Seller and the City of Palo Alto to monitor the status of the
permit process."

      15. Owner/Authority. Section 5.03B of the Agreement shall be modified by
replacing the phrase, appearing in the last sentence, "As of the end of the
Feasibility Period" with "As of execution of the Ninth Amendment".

      16.   Documents and Materials.  Attached hereto and incorporated
herein is an amended EXHIBIT B listing Documents and Materials provided or
made available to Buyer.

      17. Assignment. Section 8.14.A of the Agreement is modified to provide
that Buyer may not assign the Agreement or any of its rights thereunder nor may
it delegate its obligations thereunder to any person or entity other than to 301
Industrial, LLC ("301"), which is a party to the Environmental Agreement. Any
assignment to 301 shall be pursuant to the form of Assignment attached as
Appendix III A to the Environmental Agreement.

                                       5
<PAGE>
      18.   Confidentiality.  Section 8.15, of the Agreement is deleted.

      19. Effect. As modified by this Ninth Amendment, the Agreement remains in
full force and effect. In the event of any inconsistency between the Agreement
and this Ninth Amendment, the provisions of this Ninth Amendment shall control.
This Ninth Amendment including the Exhibits hereto contains the terms, promises,
representations and understandings between Buyer and Seller relating to the
subject matter of this Ninth Amendment, and supercedes any other oral or written
agreement or understanding between Buyer and Seller regarding the subject matter
of this Ninth Amendment. Buyer and Seller each agrees that no promises,
representations or inducements have been made to it by the other which caused it
to sign this Agreement other than the promises which are expressly set forth
herein or in any writing entered into contemporaneously herewith or which
writing is referred to herein. This Ninth Amendment is the result of
negotiations among and has been reviewed by each party and its respective
counsel; accordingly, this Ninth Amendment shall be deemed to be the product of
both parties, and no ambiguity shall be construed in favor or against either
party.

      20. Counterparts and Facsimiles. The parties hereto may execute this Ninth
Amendment simultaneously, in any number of counterparts, and/or upon facsimile
copies, each of which shall be deemed to be an original, but which together,
shall constitute one and the same Ninth Amendment. Each party shall be entitled
to rely upon the facsimile signature of the other party.

      21.   Headings. The headings in this Ninth Amendment are inserted
for convenience only and are not intended to describe, interpret, define,
or limit the scope, extent or intent of this Ninth Amendment or any
provision hereof.

                           [Signatures on next page.]

                                       6
<PAGE>
      In witness whereof, the parties have executed this Ninth Amendment.

Dated:  June ___, 2004
                                 SELLER:

                                 COMMUNICATIONS & POWER INDUSTRIES, INC., a
                                 Delaware corporation

                                 By:____________________________________________

                                 PRINT NAME_____________________________________

                                 Its____________________________________________

                                 BUYER:

                                 PALO ALTO MEDICAL FOUNDATION, a California
                                 nonprofit public benefit corporation

                                 By:____________________________________________

                                 PRINT NAME_____________________________________

                                 Its____________________________________________

                                       7
<PAGE>
                        ACCEPTANCE BY ESCROW HOLDER

      The undersigned Escrow Holder hereby acknowledges that on _________, 2004,
the undersigned received a fully executed duplicate original of the foregoing
Ninth Amendment to Agreement of Purchase and Sale by and between Communications
& Power Industries, Inc., as Seller, and Palo Alto Medical Foundation, as Buyer.

FIRST AMERICAN TITLE COMPANY

By:__________________________________

Date:________________________________

                                       8

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