Document:

CATAPULT COMMUNICATIONS CORPORATION

                                 1998 STOCK PLAN

                   (As Amended and Restated October 30, 2001)

     1. Purposes of the Plan. The purposes of this Stock Plan are:

          o    to attract and retain the best available personnel for positions
               of substantial responsibility,

          o    to provide additional incentive to Employees, Directors and
               Consultants, and

          o    to promote the success of the Company's business.

     Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

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

     (a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

     (b) "Applicable Laws" means the requirements relating to the administration
of stock option plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Options or Stock Purchase Rights are, or will be, granted
under the Plan.

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

     (d) "Change in Control" means the occurrence of any of the following
events:

          (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
     the Exchange Act), other than (A) a trustee or other fiduciary holding
     securities under an employee benefit plan of the Company acting in such
     capacity, (B) a corporation owned directly or indirectly by the
     stockholders of the Company in substantially the same proportions as their
     ownership of stock of the Company or (C) Richard A. or Nancy H. Karp,
     becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange
     Act), directly or indirectly, of securities of the Company representing
     fifty percent (50%) or more of the total voting power represented by the
     Company's then outstanding voting securities; or

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          (ii) The consummation of the sale or disposition by the Company of all
     or substantially all of the Company's assets; or

          (iii) The consummation of a merger or consolidation of the Company
     with any other corporation, other than a merger or consolidation which
     would result in the voting securities of the Company outstanding
     immediately prior thereto continuing to represent (either by remaining
     outstanding or by being converted into voting securities of the surviving
     entity or its parent) at least fifty percent (50%) of the total voting
     power represented by the voting securities of the Company or such surviving
     entity or its parent outstanding immediately after such merger or
     consolidation.

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

     (f) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.

     (g) "Common Stock" means the common stock of the Company.

     (h) "Company" means Catapult Communication Corporation, a Nevada
corporation.

     (i) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

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

     (k) "Disability" means total and permanent disability as defined in Section
22(e)(3) of the Code.

     (l) "Employee" means any person, including Officers and Directors, employed
by the Company or any Parent or Subsidiary of the Company. A Service Provider
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

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

     (n) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

          (i) If the Common Stock is listed on any established stock exchange or
     a national market system, including without limitation the Nasdaq National
     Market or The Nasdaq

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     SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be
     the closing sales price for such stock (or the closing bid, if no sales
     were reported) as quoted on such exchange or system for the last market
     trading day prior to the time of determination, as reported in The Wall
     Street Journal or such other source as the Administrator deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized
     securities dealer but selling prices are not reported, the Fair Market
     Value of a Share of Common Stock shall be the mean between the high bid and
     low asked prices for the Common Stock on the last market trading day prior
     to the day of determination, as reported in The Wall Street Journal or such
     other source as the Administrator deems reliable; or

          (iii) In the absence of an established market for the Common Stock,
     the Fair Market Value shall be determined in good faith by the
     Administrator.

     (o) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (p) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.

     (q) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

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

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

     (t) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

     (u) "Option Exchange Program" means a program whereby outstanding Options
are surrendered in exchange for Options with a lower exercise price.

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

     (w) "Optionee" means the holder of an outstanding Option or Stock Purchase
Right granted under the Plan.

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

     (y) "Plan" means this 1998 Stock Plan.

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     (z) "Restricted Stock" means shares of Common Stock acquired pursuant to a
grant of Stock Purchase Rights under Section 11 of the Plan.

     (aa) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

     (bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (cc) "Section 16(b) " means Section 16(b) of the Exchange Act.

     (dd) "Service Provider" means an Employee, Director or Consultant.

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

     (ff) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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

     3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 1,800,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

     4. Administration of the Plan.

     (a) Procedure.

          (i) Multiple Administrative Bodies. The Plan may be administered by
     different Committees with respect to different groups of Service Providers.

          (ii) Section 162(m). To the extent that the Administrator determines
     it to be desirable to qualify Options granted hereunder as
     "performance-based compensation" within the

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     meaning of Section 162(m) of the Code, the Plan shall be administered by a
     Committee of two or more "outside directors" within the meaning of Section
     162(m) of the Code.

          (iii) Rule 16b-3. To the extent desirable to qualify transactions
     hereunder as exempt under Rule 16b-3, the transactions contemplated
     hereunder shall be structured to satisfy the requirements for exemption
     under Rule 16b-3.

          (iv) Other Administration. Other than as provided above, the Plan
     shall be administered by (A) the Board or (B) a Committee, which committee
     shall be constituted to satisfy Applicable Laws.

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

          (i) to determine the Fair Market Value;

          (ii) to select the Service Providers to whom Options and Stock
     Purchase Rights may be granted hereunder;

          (iii) to determine the number of shares of Common Stock to be covered
     by each Option and Stock Purchase Right granted hereunder;

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

          (v) to determine the terms and conditions, not inconsistent with the
     terms of the Plan, of any Option or Stock Purchase Right granted hereunder.
     Such terms and conditions include, but are not limited to, the exercise
     price, the time or times when Options or Stock Purchase Rights may be
     exercised (which may be based on performance criteria), any vesting
     acceleration or waiver of forfeiture restrictions, and any restriction or
     limitation regarding any Option or Stock Purchase Right or the shares of
     Common Stock relating thereto, based in each case on such factors as the
     Administrator, in its sole discretion, shall determine;

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

          (vii) to institute an Option Exchange Program;

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

          (ix) to prescribe, amend and rescind rules and regulations relating to
     the Plan, including rules and regulations relating to sub-plans established
     for the purpose of qualifying for preferred tax treatment under foreign tax
     laws;

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          (x) to modify or amend each Option or Stock Purchase Right (subject to
     Section 15(c) of the Plan), including the discretionary authority to extend
     the post-termination exercisability period of Options longer than is
     otherwise provided for in the Plan;

          (xi) to allow Optionees to satisfy withholding tax obligations by
     electing to have the Company withhold from the Shares to be issued upon
     exercise of an Option or Stock Purchase Right that number of Shares having
     a Fair Market Value equal to the amount required to be withheld. The Fair
     Market Value of the Shares to be withheld shall be determined on the date
     that the amount of tax to be withheld is to be determined. All elections by
     an Optionee to have Shares withheld for this purpose shall be made in such
     form and under such conditions as the Administrator may deem necessary or
     advisable;

          (xii) to authorize any person to execute on behalf of the Company any
     instrument required to effect the grant of an Option or Stock Purchase
     Right previously granted by the Administrator;

          (xiii) to make all other determinations deemed necessary or advisable
     for administering the Plan.

     (c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

     5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

     6. Limitations.

     (a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.

     (b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

     (c) On the date grants of Options under the Plan are required to comply
with Section 162(m) of the Code, the following limitations shall apply to grants
of Options:

          (i) No Service Provider shall be granted, in any fiscal year of the
     Company, Options to purchase more than 225,000 Shares.

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          (ii) In connection with his or her initial service, a Service Provider
     may be granted Options to purchase up to an additional 225,000 Shares which
     shall not count against the limit set forth in subsection (i) above.

          (iii) The foregoing limitations shall be adjusted proportionately in
     connection with any change in the Company's capitalization as described in
     Section 13.

          (iv) If an Option is canceled in the same fiscal year of the Company
     in which it was granted (other than in connection with a transaction
     described in Section 13), the canceled Option will be counted against the
     limits set forth in subsections (i) and (ii) above. For this purpose, if
     the exercise price of an Option is reduced, the transaction will be treated
     as a cancellation of the Option and the grant of a new Option.

     7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.

     8. Term of Option. The term of each Option shall be stated in the Option
Agreement, provided, however, that prior to the date the Common Stock is listed
on a national securities exchange or a national market system which qualifies
under Section 25100(o) of the Corporations Code of California, the term of each
Option shall be no more than ten (10) years from the date of grant. In the case
of an Incentive Stock Option, the term shall be ten (10) years from the date of
grant or such shorter term as may be provided in the Option Agreement. Moreover,
in the case of an Incentive Stock Option granted to an Optionee who, at the time
the Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Incentive Stock Option
shall be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.

     9. Option Exercise Price and Consideration.

     (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

          (i) In the case of an Incentive Stock Option

               (A) granted to an Employee who, at the time the Incentive Stock
          Option is granted, owns stock representing more than ten percent (10%)
          of the voting power of all classes of stock of the Company or any
          Parent or Subsidiary, the per Share exercise price shall be no less
          than 110% of the Fair Market Value per Share on the date of grant.

               (B) granted to any Employee other than an Employee described in
          paragraph (A) immediately above, the per Share exercise price shall be
          no less than 100% of the Fair Market Value per Share on the date of
          grant.

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

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               (A) prior to the date the Common Stock is listed on a national
          securities exchange or a national market system which qualifies under
          Section 25100(o) of the Corporations Code of California:

               (1) to a Service Provider who, at the time the Nonstatutory Stock
          Option is granted, owns stock representing more than ten percent (10%)
          of the voting power of all classes of stock of the Company or any
          Parent or Subsidiary, the per Share exercise price shall be no less
          than 110% of the Fair Market Value per Share on the date of grant.

               (2) granted to any other Service Provider the per Share exercise
          price shall be no less than 85% of the Fair Market Value per Share on
          the date of grant.

               (B) on or after the date the Common Stock is listed on a national
          securities exchange or a national market system which qualifies under
          Section 25100(o) of the Corporations Code of California to any Service
          Provider, the per Share exercise price shall be determined by the
          Administrator. In the case of a Nonstatutory Stock Option intended to
          qualify as "performance-based compensation" within the meaning of
          Section 162(m) of the Code, the per Share exercise price shall be no
          less than 100% of the Fair Market Value per Share on the date of
          grant.

               (iii) Notwithstanding the foregoing, Options may be granted with
          a per Share exercise price of less than 100% of the Fair Market Value
          per Share on the date of grant pursuant to a merger or other corporate
          transaction.

     (b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised; provided, however, that prior to the date the Common Stock is
listed on a national securities exchange or a national market system which
qualifies under Section 25100(o) of the Corporations Code of California, except
in the case of Options granted to Officers, Directors, and Consultants, Options
shall become exercisable at a rate of no less than 20% per year over five (5)
years from the date the Options are granted.

     (c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:

               (i) cash;

               (ii) check;

               (iii) promissory note;

               (iv) other Shares which (A) in the case of Shares acquired upon
          exercise of an option, have been owned by the Optionee for more than
          six months on the date of surrender, and (B) have a Fair Market Value
          on the date of surrender equal to the aggregate exercise price of the
          Shares as to which said Option shall be exercised;

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               (v) consideration received by the Company under a cashless
          exercise program implemented by the Company in connection with the
          Plan;

               (vi) a reduction in the amount of any Company liability to the
          Optionee, including any liability attributable to the Optionee's
          participation in any Company-sponsored deferred compensation program
          or arrangement;

               (vii) any combination of the foregoing methods of payment; or

               (viii) such other consideration and method of payment for the
          issuance of Shares to the extent permitted by Applicable Laws.

     10. Exercise of Option.

     (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted to Officers and Directors hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

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

     (b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for thirty (30) days following the Optionee's termination. Prior to the date the
Common Stock is listed on a national securities exchange or a national market
system which qualifies under Section 25100(o) of the Corporations Code of

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California, such Option must remain exercisable for a period of at least thirty
(30) days after the Optionee ceases to be a Service Provider. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

     (c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. Prior to the date the Common Stock is listed on a national
securities exchange or a national market system which qualifies under Section
25100(o) of the Corporations Code of California, such Option must remain
exercisable for a period of at least six (6) months after the Optionee ceases to
be a Service Provider due to Optionee's disability. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

     (d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. Prior
to the date the Common Stock is listed on a national securities exchange or a
national market system which qualifies under Section 25100(o) of the
Corporations Code of California, such Option must remain exercisable for a
period of at least six (6) months after the Optionee ceases to be a Service
Provider. If, at the time of death, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

     (e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     11. Stock Purchase Rights.

     (a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it

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shall advise the offeree in writing or electronically, by means of a Notice of
Grant, of the terms, conditions and restrictions related to the offer, including
the number of Shares that the offeree shall be entitled to purchase, the price
to be paid, and the time within which the offeree must accept such offer. The
offer shall be accepted by execution of a Restricted Stock Purchase Agreement in
the form determined by the Administrator. Prior to the date the Common Stock is
listed on a national securities exchange or a national market system which
qualifies under Section 25100(o) of the Corporations Code of California, the
terms of the offer of Stock Purchase Rights under the Plan shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of
Regulations.

     (b) Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
service with the Company for any reason (including death or Disability). The
purchase price for Shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at a rate determined by the Administrator; provided, however,
that prior to the date the Common Stock is listed on a national securities
exchange or a national market system which qualifies under Section 25100(o) of
the Corporations Code of California, that except with respect to Shares
purchased by Officers, Directors and Consultants, the repurchase option shall in
no case lapse at a rate of less than 20% per year over five (5) years from the
date of purchase.

     (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion.

     (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.

     12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

     13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale, or Change in Control

     (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted

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or which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.

     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option or Stock Purchase Right shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to
the consummation of such proposed action.

     (c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its

                                      -12-
<PAGE>

Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

     (d) Additional Vesting for Certain Directors Upon Change in Control. Unless
the Option shall have become fully exercisable pursuant to Sections 13(b) or
13(c) of the Plan, in the event of a Change in Control each outstanding option
granted to a Director who is not an Employee shall become vested and exercisable
as to an additional number of Shares equal to the number of Shares which had
become vested and exercisable immediately prior to the Change in Control;
provided, however, that in no event shall the Option become vested and
exercisable pursuant to this provision for a number of Shares greater in the
aggregate than the number of Shares subject to the Option. The Administrator
shall notify the Director in writing or electronically not less than fifteen
(15) days prior to the Change in Control that the vesting of the Option shall
accelerate and the Director shall be entitled to exercise the Option as to the
additional Shares concurrently with the Change in Control.

     14. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

     15. Amendment and Termination of the Plan.

     (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.

     (b) Shareholder Approval. The Company shall obtain shareholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

     (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     16. Conditions Upon Issuance of Shares.

     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option or Stock Purchase Right unless the exercise of such Option or Stock
Purchase Right and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

                                      -13-
<PAGE>

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

     17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     18. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     19. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

     Information to Optionees and Purchasers. Prior to the date the Common Stock
is listed on a national securities exchange or a national market system which
qualifies under Section 25100(o) of the Corporations Code of California, the
Company shall provide to each Optionee and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the period
such Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and, in the case of an individual who acquires Shares pursuant to
the Plan, during the period such individual owns such Shares, copies of annual
financial statements. The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure
their access to equivalent information.

                                      -14-FIRST AMENDMENT TO LEASE
                                      DATED
                                 OCTOBER 9, 1996
                                     BETWEEN
                      JACK DYMOND LATHING COMPANY (LESSOR)
                                       AND
                        CATAPULT COMMUNICATIONS (LESSEE)

This Amendment to Lease is entered into this 22nd day of August 2000 by and
between Jack Dymond Lathing Company (Lessor) and Catapult Communications
(Lessee).

WHEREAS, Lessor and Lessee agree to modify the Lease as follows:

1. Article 7.02 (a): Change to read as follows; 25% of all water, sewer and
common area charges for the Industrial Center, City of Mountain View, account
number 3070-43600.00 and 3070-440000.00 as billed to Lessee by Lessor, and
16.72% of the following, including but not limited to, landscape maintenance,
lighting maintenance, and parking lot sweeping.

2. Article 8.03: Change lines 12-16 to read as follows; Lessee shall pay to
Lessor, as additional rent, an amount equal to 100% of the premiums paid by
Lessor for the hazard and rental income insurance policies described herein for
Building F, 160 South Whisman Road, Mountain View, California, such amount to be
paid within ten (10) days after Lessee's receipt of a billing therefore from
Lessor.

3. Article 10.01: Change to read as follows; Lessee shall pay to Lessor as
additional rent, 25% of all real property taxes levied or assessed against
parcel number 160-64-017-00 during the Lease term, except that:

4. Effective date of this Amendment to Lease shall be August 22, 2000.

5. All other terms and conditions of the Lease are hereby ratified and
confirmed.

NOW THEREFORE, the parties agree that this Amendment modifies the terms and
conditions of the Lease. In the event of any conflict between this Amendment and
the Lease, the provisions of the Amendment shall govern.

IN WITNESS HEREOF, the parties hereto have executed these presents as of the day
and year first above mentioned.

LESSOR:  JACK DYMOND LATHING COMPANY

BY: ________________________________

DATED: _____________________________

LESSEE:  CATAPULT COMMUNICATIONS

BY: ________________________________

DATED: _____________________________

<PAGE>

                     Second Amendment and Extension to Lease
                                      Dated
                                 October 6, 1996
                                     Between
                      Jack Dymond Lathing Company (Lessor)
                                       And
                        Catapult Communications (Lessee)

This Amendment to Lease is entered into this 8th day of October 2001 between
Jack Dymond Lathing Company (Lessor) and Catapult Communications (Lessee).

Whereas, Lessor and Lessee agree to modify the Lease as follows:

     1.   ARTICLE 2.01 TERM: The term of the Lease shall be extended for a
          period of three (3) years beginning on February 10, 2002 and ending on
          February 9, 2005.

     2.   ARTICLE 3.01 RENT: The monthly rent during the extended period will be
          as follows:

             MONTHS                      RENT                     RENT/SQ.FT.
           ------------                ----------                 -----------
              1-12                     $15,087.50                  $.85 NNN
             13-24                     $15,442.50                  $.87 NNN
             25-36                     $15,797.50                  $.89 NNN

     3.   The effective date of this Amendment to Lease shall be February 10,
          2002.

     4.   All other terms and conditions of the Lease are hereby ratified and
          confirmed.

NOW THEREFORE, the parties agree that this Amendment modifies the terms and
conditions of the Lease. In the event of any conflict between the Amendment and
the Lease, the provisions of the Amendment shall govern.

IN WITNESS HEREOF, the parties hereto have executed these presents as of the day
and year first above mentioned.

LESSOR:  JACK DYMOND LATHING COMPANY

BY: ________________________________

DATE: ______________________________

LESSEE:  CATAPULT COMMUNICATIONS

BY: ________________________________

DATE: ______________________________

<PAGE>

                                  BT COMMERCIAL

                                    SUBLEASE

     1. PARTIES. This Sublease, dated January 25, 2000, is made between WESCORP
a division of DESCO INDUSTRIES, INC., a California Corporation ("Sublessor"),
and CATAPULT COMMUNICATIONS, a California Corporation ("Sublessee").

     2. MASTER LEASE. Sublessor is the lessee under a written lease dated
December 3, 1996, wherein JACK DYMOND LATHING COMPANY, a California General
Partnership "Lessor") leased to Sublessor the real property located in the City
of Mountain View County , County of Santa Clara , State of California ,
described as 190 South Whisman Road, Building B ("Master Premises"). Said lease
has been amended by the following amendments: NONE ; said lease and amendments
are herein collectively referred to as the "Master Lease" and are attached
hereto as Exhibit "A."

     3. PREMISES. Sublessor hereby subleases to Sublessee on the terms and
conditions set forth in this Sublease the following portion of the Master
Premises ("Premises"): The entire premises per the Master Lease .

     4. WARRANTY BY SUBLESSOR. Sublessor warrants and represents to Sublessee
that the Master Lease has not been amended or modified except as expressly set
forth herein, that Sublessor is not now, and as of the commencement of the Term
hereof will not be, in default or breach of any of the provisions of the Master
Lease, and that Sublessor has no knowledge of any claim by Lessor that Sublessor
is in default or breach of any of the provisions of the Master Lease.

     5. TERM. The Term of this Sublease shall commence on February 15, 2000
("Commencement Date"), or when Lessor consents to this Sublease (if such consent
is required under the Master Lease), whichever shall last occur, and end on
December 31, 2001 ("Termination Date"), unless otherwise sooner terminated in
accordance with the provisions of this Sublease. In the event the Term commences
on a date other than the Commencement Date, Sublessor and Sublessee shall
execute a memorandum setting forth the actual date of commencement of the Term.
Possession of the Premises ("Possession") shall be delivered to Sublessee on the
commencement of the Term. If for any reason Sublessor does not deliver
Possession to Sublessee on the commencement of the Term, Sublessor shall not be
subject to any liability for such failure, the Termination Date shall not be
extended by the delay, and the validity of this Sublease shall not be impaired,
but rent shall abate until delivery of Possession. Notwithstanding the
foregoing, if Sublessor has not delivered Possession to Sublessee within thirty
(30) days after the Commencement Date, then at any time thereafter and before
delivery of Possession, Sublessee may give written notice to Sublessor of
Sublessee's intention to cancel this Sublease. Said notice shall set forth an
effective date for such cancellation which shall be at least ten (10) days after
delivery of said notice to Sublessor. If Sublessor delivers Possession to
Sublessee on or before such effective date, this Sublease shall remain in full
force and effect. If Sublessor fails to deliver Possession to Sublessee on or
before such effective date, this Sublease shall be cancelled, in which case all
consideration previously paid by Sublessee to Sublessor on account of this
Sublease shall be returned to Sublessee, this Sublease shall thereafter be of no
further force or effect, and Sublessor shall have no further liability to
Sublessee on account of such delay or cancellation. If Sublessor permits
Sublessee to take Possession prior to the commencement of the Term, such early
Possession shall not advance the Termination Date and shall be subject to the
provisions of this Sublease, including without limitation the payment of rent.

     6. RENT.

6.1 Minimum Rent. Sublesee shall pay to Sublessor as minimum rent, without
deduction, setoff, notice, or demand, at DESCO INDUSTRIES, INC., 3651 Walnut
Avenue, Chino, CA 91710, Attention Mr. David Maerzke or at such other place as
Sublessor shall designate from time to time by notice to Sublessee, the sum of
Eight Thousand Eight Hundred Eighty Four and No/100 Dollars ($8,884.00) per
month, in advance on the first day of each month of the Term. Sublessee shall
pay to Sublessor upon execution of this Sublease the sum of Eight Thousand Eight
Hundred Eighty Four and No/100 Dollars ($8,884.00) as rent for February 15, 2000
to March 14, 2000 . If the Term begins or ends on a day other than the first or
last day of a month, the rent for the partial months shall be prorated on a per
them basis. Additional provisions: Rent shall increase on February 15, 2001 from
Eight Thousand Eight Hundred Eighty Four and No/100 Dollars ($8,884.00) per
month to Nine Thousand Four Hundred Fifty Nine and NO/100 Dollars ($9,459.00)
per month, for the balance of the Sublease term. Upon full execution of the
Sublease agreement until the Commencement date of the Sublease Agreement,
Sublessor shall provide Sublessee early occupancy of the Premises rent free.
During the early occupancy period all other terms and conditions of the Sublease
and Master Lease shall be in full force and effect.

                                        1
<PAGE>

6.2 Operating Costs. If the Master Lease requires Sublessor to pay to Lessor all
or a portion of the expenses of operating the building and/or project of which
the Premises are a part ("Operating Costs"), including but not limited to taxes,
utilities or insurance, then Sublessee shall pay to Sublessor as additional rent
One Hundred percent (100%) of the amounts payable by Sublessor for Operating
Costs incurred during the Term. Such additional rent shall be payable as and
when Operating Costs are payable by Sublessor to Lessor. If the Master Lease
provides for the payment by Sublessor of Operating Costs on the basis of an
estimate thereof, then as and when adjustments between estimated and actual
Operating Costs are made under the Master Lease, the obligations of Sublessor
and Sublessee hereunder shall be adjusted in a like manner; and if any such
adjustment shall occur after the expiration or earlier termination of the Term,
then the obligations of Sublessor and Sublessee under this Subsection 6.2 shall
survive such expiration or termination. Sublessor shall, upon request by
Sublessee, furnish Sublessee with copies of all statements submitted by Lessor
of actual or estimated Operating Costs during the Term,

     7. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon execution
of this Sublease the sum of Nine Thousand Four Hundred Fifty Nine and No/100
Dollars ($9,459.00) as security for Sublessee's faithful performance of
Sublessee's obligations hereunder ("Security Deposit"). If Sublessee fails to
pay rent or other charges when due under this Sublease, or fails to perform any
of its other obligations hereunder, Sublessor may use or apply all or any
portion of the Security Deposit for the payment of any rent or other amount then
due hereunder and unpaid, for the payment of any other sum for which Sublessor
may become obligated by reason of Sublessee's default or breach, or for any loss
or damage sustained by Sublessor as a result of Sublessee's default or breach.
If Sublessor so uses any portion of the Security Deposit, Sublessee shall,
within ten (10) days after written demand by Sublessor, restore the Security
Deposit to the full amount originally deposited, and Sublessee's failure to do
so shall constitute a default under this Sublease. Sublessor shall not be
required to keep the Security Deposit separate from its general accounts, and
shall have no obligation or liability for payment of interest on the Security
Deposit. In the event Sublessor assigns its interest in this Sublease, Sublessor
shall deliver to its assignee so much of the Security Deposit as is then held by
Sublessor. Within ten (10) days after the Term has expired, or Sublessee has
vacated the Premises, or any final adjustment pursuant to Subsection 6.2 hereof
has been made, whichever shall last occur, and provided Sublessee is not then in
default of any of its obligations hereunder, the Security Deposit, or so much
thereof as had not theretofore been applied by Sublessor, shall be returned to
Sublessee or to the last assignee, if any, of Sublessee's interest hereunder.

     8. USE OF PREMISES. The Premises shall be used and occupied only for
general office, research and development and light manufacturing , and for no
other use or purpose.

     9. ASSIGNMENT AND SUBLETTING. Sublessee shall not assign this Sublease or
further sublet all or part of the Premises without the prior written consent of
Sublessor (and the consent of Lessor, if such is required under the terms of the
Master Lease).

     10. OTHER PROVISIONS OF SUBLEASE. All applicable terms and conditions of
the Master Lease are incorporated into and made a part of this Sublease as if
Sublessor were the lessor thereunder, Sublessee the lessee thereunder, and the
Premises the Master Premises, except for the following: Paragraph 2.03 of the
Master Lease shall not apply to Sublessee. In addition, the premises shall be
delivered in its "AS IS" condition. Sublessor makes no representations or
warranties as to the condition of any of the operating systems of the building
or the building itself. Sublessor agrees to allow Sublessor to perform any
improvements Sublessee deems necessary, at Sublessee's sole cost and expense,
subject to Lessor's prior written consent.

Sublessee assumes and agrees to perform the lessee's obligations under the
Master Lease during the Term to the extent that such obligations are applicable
to the Premises, except that the obligation to pay rent to Lessor under the
Master Lease shall be considered performed by Sublessee to the extent and in the
amount rent is paid to Sublessor in accordance with Section 6 of this Sublease.
Sublessee shall not commit or suffer any act or omission that will violate any
of the provisions of the Master Lease. Sublessor shall exercise due diligence in
attempting to cause Lessor to perform its obligations under the Master Lease for
the benefit of Sublessee. If the Master Lease terminates, this Sublease shall
terminate and the parties shall be relieved of any further liability or
obligation under this Sublease, provided however, that if the Master Lease
terminates as a result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to the nondefaulting party for the damage suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives Sublessor
any right to terminate the Master Lease in the event of the partial or total
damage, destruction, or condemnation of the Master Premises or the building or
project of which the Master Premises are a part, the exercise of such right by
Sublessor shall not constitute a default or breach hereunder.

     11. ATTORNEYS' FEES. If Sublessor, Sublessee, or Broker shall commence an
action against the other arising out of or in connection with this Sublease, the
prevailing party shall be entitled to recover its costs of suit and reasonable
attorney's fees.

     12. AGENCY DISCLOSURE. Sublessor and Sublessee each warrant that they have
dealt with no other real estate broker in connection with this transaction
except BT COMMERCIAL REAL ESTATE, who represents WESCORP, and BT COMMERCIAL
REAL ESTATE, who represents CATAPULT COMMUNICATIONS.

                                       2
<PAGE>

In the event that BT COMMERCIAL REAL ESTATE represents both Sublessor and
Sublessee, Sublessor and Sublessee hereby confirm that they were timely advised
of the dual representation and that they consent to the same, and that they do
not expect said broker to disclose to either of them the confidential
information of the other party.

     13. COMMISSION. Upon execution of this Sublease, and consent thereto by
Lessor (if such consent is required under the terms of the Master Lease),
Sublessor shall pay Broker a real estate brokerage commission in accordance with
Sublessor's contract with Broker for the subleasing of the Premises, if any, and
otherwise in the amount of per agreement Dollars ($________), for services
rendered in effecting this Sublease. Broker is hereby made a third party
beneficiary of this Sublease for the purpose of enforcing its right to said
commission.

     14. NOTICES. All notices and demands which may or are to be required or
permitted to be given by either party on the other hereunder shall be in
writing. All notices and demands by the Sublessor to Sublessee shall be sent by
United States Mail, postage prepaid, addressed to the Sublessee at the Premises,
and to the address hereinbelow, or to such other place as Sublessee may from
time to time designate in a notice to the Sublessor. All notices and demands by
the Sublessee to Sublessor shall be sent by United States Mail, postage prepaid,
addressed to the Sublessor at the address set forth herein, and to such other
person or place as the Sublessor may from time to time designate in a notice to
the Sublessee.

To Sublessor:           Mr. David Maerzke
                        DESCO INDUSTRIES, INC.
                        3651 Chino, CA 91710
                        (909) 627-8178 Phone
                        (909) 627-7449 Fax

To Sublessee:           Ms. Barb Fairhurst
                        Catapult Communications
                        160 South Whisman Road
                        Mountain View, CA 94041
                        (650) 960-1025 Phone
                        (650) 960-1029 Fax

     15. CONSENT BY LESSOR. THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS
CONSENTED TO BY LESSOR WITHIN 10 DAYS AFTER EXECUTION HEREOF, IF SUCH CONSENT IS
REQUIRED UNDER THE TERMS OF THE MASTER LEASE.

     16. COMPLIANCE. The parties hereto agree to comply with all applicable
federal, state and local laws, regulations, codes, ordinances and administrative
orders having jurisdiction over the parties, property or the subject matter of
this Agreement, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment in Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.

Sublessor: WESCORP                       Sublessee: CATAPULT COMMUNICATIONS

By:___________________________           By:___________________________

Title: _______________________           Title: _______________________

By:___________________________           By:___________________________

Title: _______________________           Title: _______________________

Date: ________________________           Date: ________________________

                          LESSOR'S CONSENT TO SUBLEASE

The undersigned ("Lessor"), lessor under the Master Lease, hereby consents to
the foregoing Sublease without waiver of any restriction in the Master Lease
concerning further assignment or subletting. Lessor certifies that, as of the
date of Lessor's execution hereof, Sublessor is not in default or breach of any
of the provisions of the Master Lease, and that the Master Lease has not been
amended or modified except as expressly set forth in the foregoing Sublease.

Lessor: __________________________

By: ______________________________

Title: ___________________________

Date: ____________________________

                                       3
<PAGE>

--------------------------------------------------------------------------------
CONSULT YOUR ADVISERS - This document has been prepared for approval by your
attorney. No representation or recommendation is made by BT COMMERCIAL REAL
ESTATE as to the legal sufficiency or tax consequences of this document or the
transaction to which it relates. These are questions for your attorney.

In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
--------------------------------------------------------------------------------

                                       4

<PAGE>

                                 LEASE AGREEMENT

     THIS LEASE, dated October 4, 2000, by and between: JACK DYMOND LATHING
COMPANY, A California Partnership ("Lessor") and CATAPULT COMMUNICATIONS, A
Nevada Corporation ("Lessee"), is made with reference to the following facts:

     A. Lessor is the owner of certain industrial property (the "Industrial
Center") located at 240 South Whisman, and 190 South Whisman Road (Buildings A,
B, C, D, E, F, G, and I) Mountain View, California, consisting of (8) eight
buildings having a floor area of approximately 106,132 square feet and related
parking facilities and landscaped areas.

     B. Lessee desires to rent a portion of the Industrial Center and Lessor has
agreed to lease the same to Lessee, on the terms and conditions hereinafter set
forth.

     NOW, THEREFORE, the parties agree as follows:

ARTICLE 1. DEMISED PREMISES AND COMMON AREAS

     1.01 Lessor does hereby lease to Lessee, and Lessee does hereby rent from
Lessor, that portion of the Industrial Center known as Building B, 190 South
Whisman Road, Mountain View, California consisting of approximately 11,500
square feet as shown on the drawing attached hereto as Exhibit "A" and made a
part hereof, (the "Demised Premises"), together with the right to use the Common
Areas of the Industrial Center as hereinafter described. The parties hereby
stipulate and agree that the Demised Premises constitutes 10.84% of the total
leasable floor area of the Industrial Center.

     1.02 Lessee shall have the non-exclusive right to use the Common Areas of
the Industrial Center, subject to any reasonable rules and regulations
concerning such use as may be adopted from time to time by Lessor. The term
"Common Areas" shall mean those areas within the Industrial Center provided and
designated by Lessor for the general non-exclusive use by the occupants of the
Industrial Center and their respective employees, customers and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, driveways, and landscaped areas. Lessor reserves the right
of exclusive control and management of the Common Areas, including the right, in
Lessor's sole discretion:

          (a) To make alterations or construct additional improvements within
     the Common Areas;

          (b) To temporarily close any of the Common Areas for maintenance
     purposes, so long as reasonable access to the Demised Premises remains
     available; and

          (c) To use the Common Areas while engaged in making additional
     improvements, repairs or alterations to the Industrial Center, or any
     portion thereof.

<PAGE>

ARTICLE 2. TERM

     2.01 The term of this Lease shall be a period of ONE (1) YEAR ONE (1) MONTH
and NINE (9) DAYS, commencing on January 1, 2002 and ending on February 9, 2003,
unless sooner terminated as provided herein.

     2.02 If Lessor, for any reason whatsoever, is unable to deliver possession
of the Demised Premises to Lessee on the commencement date specified in Section
2.01 above, Lessor shall not be liable to Lessee for any loss or damage
resulting therefrom, nor shall this Lease be void or voidable, but in such event
Lessee shall not be liable for rent or other sums due Lessor until possession of
the Demised Premises is offered to Lessee. No delay in delivery of possession
shall operate to extend the term hereof unless otherwise stipulated in writing
by the parties. Notwithstanding the above, lessor will make every effort to
enable Lessee to occupy premise no later than ninety days from City Permit
approval.

     2.03 Provided that Lessee is not then in default in the performance of any
of Lessee's obligations hereunder, Lessee shall have one (1) option to extend
the term for an additional period of two (2) years. Such option can only be
exercised by Lessee giving written notice thereof to Lessor at least one hundred
twenty (120) days prior to expiration of the initial term of the lease. The rent
during the option period shall be as follows:

                  Year 1:    11,500 sq. ft. @$.98 NNN/sq. ft./mo
                             ($11,270.00 per month)

                  Year 2:    11,500 sq. ft. @$1.01 NNN/sq. ft./mo
                             ($11,615.00 per month)

ARTICLE 3. RENT

     3.01 Lessee shall pay to Lessor as Base Rent for the Demised Premises, in
lawful money of the United States, payable in advance on or before the first day
of each calendar month without any deduction, offset or demand, the following
amount:

     TEN THOUSAND NINE HUNDRED TWENTY-FIVE AND 00/100 DOLLARS ($10,925.00).

     3.02 If the commencement date is not the first day of a calendar month, or
if the termination date is not the last day of a calendar month, the monthly
rental for the fractional month shall be prorated on the basis of a thirty (30)
day month.

     3.03 Lessee acknowledges that late payment of rent and any other charges
provided herein will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
determine. Such costs include, without limitation, processing and accounting
charges, late charges that may be imposed on Lessor by the terms of any
encumbrances against the Industrial Center and penalties on delinquent tax
payments. Lessee therefore agrees that if any installment of rent or other
charge payable by Lessee hereunder is not received by Lessor within ten (10)
days after the same becomes due, Lessor shall be entitled to

                                      -2-
<PAGE>

collect an additional sum equal to one percent (1.%) of the delinquent payment
for each month or fraction thereof that the rent or other charge remains unpaid.
Acceptance of any late charge shall not constitute a waiver of Lessee's default
with respect to the overdue amount, nor prevent Lessor from exercising any other
rights and remedies available to Lessor hereunder or provided by law.

ARTICLE 4. SECURITY DEPOSIT: WAIVED

ARTICLE 5. USE

     5.01 The Demised Premises shall be used and occupied by Lessee solely for
Office, R&D, Distribution and Warehouse and for no other or additional purpose
without the prior written consent of Lessor.

     5.02 Lessee shall not use the Demised Premises or permit anything to be
done in or about the Demised Premises which is prohibited by or will in any way
conflict with any law, statute, ordinance or governmental rule or regulation now
in force or which may hereafter be in force, or which is prohibited by the
standard form of fire insurance policy, or will in any way increase the existing
rate of any fire or other insurance covering the Industrial Center or any of its
contents, or cause any change or cancellation of such insurance. The judgment of
any court of competent jurisdiction or the admission of Lessee in any action
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact as between Lessor and Lessee.
Lessee shall not do or permit anything to be done in or about the Demised
Premises which will in any way obstruct or interfere with the rights of other
tenants in the Industrial Center, or injure or annoy them, or use or allow the
Demised Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Lessee cause, maintain or permit any nuisance in, on or about
the Demised Premises or commit or suffer to be committed any waste in, on or
about the Demised Premises.

ARTICLE 6. LEASEHOLD IMPROVEMENTS

     6.01 Lessor shall have no obligation to make any alterations or
improvements to the Demised Premises for the benefit of Lessee except as may be
specifically described in a written addendum to this Lease executed by Lessor
and Lessee. By taking possession of the Demised Premises, Lessee accepts and
acknowledges the Demised Premises as being in good order, condition and repair.
Acceptance of the Demised Premises shall constitute acceptance of any
alterations and improvements therein performed by Lessor. Lessee acknowledges
that neither Lessor nor anyone acting on Lessor's behalf has made any
representation or warranty as to the suitability or fitness of the Demised
Premises for the conduct of Lessee's business or for any other purpose.

     6.02 Lessee may perform, at Lessee's own expense, the alterations and
improvements to the Demised Premises as described in Exhibit "B", attached
hereto and made a part hereof, and Lessor hereby consents to the performance of
such work. Lessee may have access to the Demised Premises prior to the
commencement of the lease term for the purpose of installing Lessee's
improvements, provided that such work does not obstruct or interfere with the
work being performed

                                      -3-
<PAGE>

therein by Lessor. No delay by Lessee in the completion of Lessee's work, shall
delay commencement of the lease term on the date specified in Section 2.01,
unless such delay was directly and primarily caused by Lessor. Lessor may submit
a bid to Lessee for performance of the work described in Exhibit "B" by Lessor,
but Lessee shall not be obligated to utilize the services of Lessor and may
select any licensed contractor to perform such work. Lessee shall not be
required to remove lease hold improvements at the end of the lease term.

     6.03 Except as expressly provided herein, Lessor shall have no obligation
to make any alterations or improvements to the Demised Premises for the benefit
of Lessee. Lessee acknowledges that neither Lessor nor anyone acting on Lessor's
behalf has made any representation or warranty as to the suitability or fitness
of the Demised Premises for the conduct of Lessee's business or for any other
purpose.

ARTICLE 7. UTILITIES AND SERVICES

     7.01 Lessor shall provide separate electricity and gas meters for the
Demised Premises. Lessee shall establish its own account with the utility
company to provide electricity and gas service to the Demised Premises and shall
pay all fees and charges for such services directly to the utility company.

     7.02 Lessee shall pay, as additional rent, the cost of the following
utilities and services furnished to the Demised Premises:

          (a) 16.25% of all water, sewer, and Common Area maintenance charges
     for the Industrial Center, City of Mountain View, account number
     3070-43600.00 and 3070-440000.00 as billed to Lessee by Lessor, and 10.84%
     of the following, including but not limited to, landscape maintenance,
     lighting maintenance, utility charges, and parking lot sweeping.

          (b) Garbage collection charges attributable to the Demised Premises,
     as billed to Lessee by Lessor according to Lessee's actual usage thereof.

The foregoing charges shall be due and payable to Lessor within ten (10) days
after receipt of a billing therefore by Lessee. Billing shall occur on a monthly
basis. If requested, lessor shall provide lessee copies of the actual bills for
charges lessee is responsible to pay his pro rata share of. (See paragraph 31
below)

     7.03 Lessor shall maintain the Common Areas of the Industrial Center in
good condition and repair, except for damage occasioned by the act of Lessee or
Lessee's agents or invitees, which damage shall be repaired by Lessor at
Lessee's expense. Lessor shall have no obligation to provide janitorial service
for the Demised Premises.

     7.04 Lessor shall not be in default hereunder or be liable for any damages
directly or indirectly resulting from, nor shall the rent provided herein be
abated by reason of Lessor's failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by accident,
breakage, repairs, strikes, lockouts or other labor dispute, or by limitation,
curtailment, rationing or restrictions on use of electricity, gas, water or
other utility, or any other cause, similar or dissimilar, beyond the reasonable
control of Lessor.

                                      -4-
<PAGE>

ARTICLE 8. INDEMNITY AND INSURANCE

     8.01 Lessee hereby waives any and all claims against Lessor for damage to
any property or injury to or death of any person in, upon or about the Demised
Premises, arising at any time and from any cause other than solely by reason of
the negligence or willful misconduct of Lessor. Lessee further expressly
indemnifies and holds Lessor harmless from and against any and all claims,
demands, causes of action, liabilities, costs or expenses, including attorney's
fees, occasioned by or in any way connected with the condition, use or misuse of
the Demised Premises, or occasioned by any act or omission of Lessee and
Lessee's agents, servants, employees, invitees or other persons who may come
upon the Demised Premises, except for damage to any property or injury to or
death of any person caused solely by the negligence or willful misconduct of
Lessor.

     8.02 Lessee hereby agrees to maintain in full force and effect at all times
during the term of this Lease, at Lessee's expense, a policy or policies of
comprehensive general liability insurance, insuring against all liability of
Lessee and Lessee's authorized representatives, agents and invitees arising out
of or in connection with Lessee's use and occupancy of the Demised Premises and
also insuring performance by Lessee of the indemnity provisions set forth in
Section 8.01. The initial amount of such insurance shall be at least
$2,000,000.00, and shall be subject to periodic increase based upon inflation,
provided increased amount is commercially reasonable and available,
recommendations by Lessor's insurance advisors, and other relevant factors.
However, the amount of such general liability insurance shall not limit Lessee's
liability nor relieve Lessee of any obligations under this Lease. The general
liability insurance policy shall name Lessor as an insured party thereunder, and
no cancellation or reduction in coverage will be made without thirty (30) days
prior written notice by Lessee to Lessor unless lessee is prevented from giving
thirty (30) days notice due to circumstances beyond lessee's control. A copy of
the policy or a certificate of insurance shall be furnished to Lessor.

     8.03 Lessor shall maintain in full force and affect a policy or policies
covering loss or damage to the Industrial Center, to the extent of the
replacement value thereof. Such policy or policies shall provide protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, and any other perils (excluding flood
and earthquake) which Lessor deems necessary. Lessor shall also maintain in full
force and effect a rental income insurance policy, with loss payable to Lessor,
in an amount equal to one year's gross rent from the Industrial Center, which
insurance shall also cover all real estate taxes and insurance costs for said
period. Lessee shall pay to Lessor, as additional rent, an amount equal to 100%
of the premiums paid by Lessor for the hazard and rental income insurance
policies described herein for Building B, 190 South Whisman Road, Mountain View,
California, such amount to be paid within ten (10) days after Lessee's receipt
of a billing therefore from Lessor. Lessee shall be responsible for maintaining
its own insurance covering the personal property, trade fixtures and removable
leasehold improvements owned by Lessee and located upon the Demised Premises.

     8.04 Lessor and Lessee each hereby waive any and all rights of recovery
against the other, or against the agents, employees or representatives of the
other, on account of loss or damage to the property of the waiving party to the
extent that such loss or damage is insured against under any insurance policies
which either Lessor or Lessee may have in force at the time of such loss or
damage. Lessee shall, upon obtaining the insurance required hereunder, give
notice to the insurance

                                      -5-
<PAGE>

carrier that the foregoing mutual waiver of subrogation is contained in this
Lease and Lessee shall cause each insurance policy obtained by Lessee to provide
that the insurance company waives all right of recovery by way of subrogation
against either Lessor or Lessee in connection with any damage covered by such
policy.

ARTICLE 9. REPAIRS AND MAINTENANCE

     9.01 Lessee shall, at all times during the term hereof and at Lessee's own
expense, keep and maintain the Demised Premises and every part thereof in good
condition and repair. Lessee hereby waives all rights to make repairs at the
expense of Lessor or in lieu thereof to vacate the Demised Premises as provided
by California Civil Code Section 1942 or any other law, statute or ordinance now
or hereafter in effect (see paragraph 31 below).

     9.02 The obligations of Lessee to maintain the Demised Premises shall not
include the roof or structural components of the building. Moreover, Lessor
hereby warrants to Lessee that all mechanical, electrical, plumbing and other
systems within the Demised Premises are in good operating condition and repair.

ARTICLE 10. TAXES AND ASSESSMENTS

     10.01 Lessee shall pay to Lessor, as additional rent, 16.25% of all real
property taxes levied or assessed against parcel number 160-64-017-00 during the
Lease term, except that:

          (a) Lessee shall pay 100% of any increase in real property taxes
     attributable to the alterations and improvements described in Exhibits "A"
     and "B" attached hereto, and any other alterations or improvements to the
     Demised Premises constructed by or for the benefit of Lessee;

          (b) Lessee shall not be charged for any increase in real property
     taxes after the date hereof solely attributable to alterations or
     improvements constructed or installed within the Industrial Center as
     leasehold improvements for the use and benefit of any other tenant or
     tenants.

          (c) Lessee shall not be responsible for tax increases associated with
     a sale or transfer of the property.

     10.02 Payment by Lessee of the real property taxes referred to herein shall
be made within ten (10) days after Lessor furnishes to Lessee a copy of the tax
bill showing the total amount of property taxes levied or assessed against the
Industrial Center, the amount thereof payable by Lessee, and the calculation
utilized by Lessor to determine such amount. Billing shall be in two
installments made by Lessor on or about February 1, and November 1, of each year
of the Lease.

     10.03 As used herein, the term "real property taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax imposed on the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal agency, or any
school, sanitary, fire, street, drainage, or other improvement district. The
term shall also include any tax, fee, levy, assessment, or charge imposed by any
taxing authority upon Lessor's right to receive, or the receipt of, rent or
income from the Industrial Center, or against Lessor's business of leasing the
Industrial

                                      -6-
<PAGE>

Center. However, the term "real property taxes" does not include Lessor's
federal or state personal income or franchise taxes.

     10.04 Lessee shall pay prior to delinquency all taxes levied or assessed
against the trade fixtures, equipment, furnishings, and other personal property
of Lessee located upon the Demised Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, equipment, furnishings, and other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten
(10) days after Lessor furnishes to Lessee a written statement describing the
property in question and showing the amount of tax thereon payable by Lessee.

ARTICLE 11. ALTERATIONS AND IMPROVEMENTS

     11.01 Except for the leasehold improvements authorized to be performed by
Lessee under Section 6.02, Lessee shall not, without the prior written consent
of Lessor (which consent shall not be unreasonably withheld), make any
alterations, additions or improvements in, on or about the Demised Premises, if
the alterations and improvements exceed $10,000.00 in cost. As a condition to
giving such consent, Lessor may require Lessee to provide Lessor a surety bond
or other security satisfactory to Lessor to insure Lessor against mechanics' and
materialmen's liens and to insure completion of the work.

     11.02 All alterations, additions and improvements, whether temporary or
permanent in character, made by Lessee in, on or about the Demised Premises,
except movable trade fixtures installed at the expense of Lessee, shall, in the
absence of a written request by Lessor, which written request shall be given at
the time Lessee requests permission to make improvement, for their removal,
become the property of Lessor and shall remain upon and be surrendered with the
Demised Premises at the termination of this Lease by lapse of time or otherwise
without compensation to Lessee.

ARTICLE 12. DAMAGE OR DESTRUCTION

     12.01 If the demised Premises, or other portion of the Industrial Center of
which the Demised Premises constitute a part, are damaged, by fire or other
casualty, Lessor shall forthwith repair the same, provided such repairs can, in
Lessor's opinion, be completed within ninety (90) days. In such event, this
Lease shall remain in full force and effect except that if there is damage to
the Demised Premises and such damage was not the result of negligence or willful
misconduct of Lessee or Lessee's employees or invitees, the rent payable by
Lessee shall be abated while the repairs are being made by the extent to which
the Demised Premises are unusable by Lessee in the normal conduct of Lessee's
business. If the repairs cannot, in Lessor's opinion, be completed within ninety
(90) days, Lessor may, at Lessor's option, make the repairs and this Lease shall
continue in full force and effect, subject to abatement of rental as hereinabove
in this Section provided. In the event Lessor does not elect to make the repairs
which cannot be completed within ninety (90) days, and provided the damage
affects the Demised Premises or common areas necessary to Lessee's use, Lessor
shall give written notice of such fact to Lessee within thirty (30) days after
the date on which the damage occurred and either Lessor or Lessee may, within
thirty (30) days after the giving of such

                                      -7-
<PAGE>

notice, terminate this Lease. Lessee shall have the right to make improvements
and continue the lease, subject to abatement of rental as provided in this
section, if Lessor does not elect to make the repairs which cannot be completed
within ninety (90) days.

     12.02 Notwithstanding the provisions of Section 12.01 above, Lessor shall
have the option of terminating this Lease in any of the following circumstances:

          (a) Where the damage or destruction arises from a casualty or cause
     not covered by Lessor's insurance then in force.

          (b) Where the building in which the Demised Premises are located is
     damaged or destroyed to the extent of 33-1/3 percent or more of the
     replacement cost thereof, whether the Demised Premises be insured or not.

          (c) Where the repairs cannot be made by reason of any statute,
     ordinance, rule or regulation of any governmental authority.

     12.03 If Lessor is obligated or elects to repair any damage pursuant to
this Article, Lessor shall not be required to repair or replace any improvements
installed in the Demised Premises by Lessee, other than building standard tenant
improvements made by Lessor, and Lessee shall, at Lessee's own expense, repair
and restore Lessee's portion of such improvements.

     12.04 A total destruction of the entire building in which the Demised
Premises are located shall automatically terminate this Lease.

     12.05 Except as otherwise expressly provided in this Article, Lessee hereby
waives the provisions of California Civil Code Sections 1932(2) and 1933(4).

ARTICLE 13. CONDEMNATION

     13.01 If all of the Demised Premises or so much thereof is taken by right
of eminent domain, or purchase in lieu thereof, such that the Demised Premises
are no longer reasonably suitable for Lessee's use, this Lease shall terminate
as of the date that possession of the Demised Premises or part thereof is taken.

     13.02 If any part of the Demised Premises is taken and the remaining part
thereof (after reconstruction of the then existing building) is reasonably
suitable for Lessee's use, this Lease shall, as to the part so taken, terminate
as of the date that possession of such part is taken and the rent payable
hereunder shall be reduced in the same proportion that the floor area of the
portion of the Demised Premises so taken (less any addition thereto by reason of
any reconstruction) bears to the original floor area of the Demised Premises
immediately prior to the taking. Lessor shall, at Lessor's expense, make all
necessary repairs or alterations to restore the remaining Demised Premises to a
complete architectural unit.

     13.03 No award for any partial or entire taking shall be apportioned and
Lessee hereby assigns to Lessor all of Lessee's interest therein, except that
Lessee shall be entitled to any portion of the award specifically designated as
compensation for the taking of personal property belonging to

                                      -8-
<PAGE>

Lessee, for the interruption of Lessee's business, for Lessee's moving costs or
loss of goodwill suffered by Lessee and for the cost of improvements to the
premises paid by Lessee. No temporary taking of the Demised Premises shall
terminate this Lease or give Lessee any right to abatement of rent hereunder;
any award recovered by Lessee for such temporary taking shall belong entirely to
Lessee and Lessor shall have no interest therein. Each party agrees to execute
and deliver to the other all instruments and documents that may be required to
implement the provisions of this Section.

ARTICLE 14. ASSIGNMENT AND SUBLETTING

     14.01 Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, pledge, hypothecate or encumber all or any part of Lessee's
interest in this Lease or in the Demised Premises or any part thereof, without
Lessor's prior written consent and any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a breach
of this Lease. If Lessee is a corporation, or partnership any transfer of a
controlling ownership interest in the stock of Lessee shall constitute an
assignment hereunder.

     14.02 If Lessee complies with the following conditions, Lessor shall not
unreasonably withhold Lessor's consent to the assignment of this Lease or the
subletting of the Demised Premises or any portion thereof. Lessee shall submit
in writing to Lessor:

          (a) The name and legal composition of the proposed Assignee or
     Sublessee;

          (b) The terms and provisions of the proposed Assignment or Sublease;
     and

          (c) Such financial information as Lessor may reasonably request
     concerning the proposed Assignee or Sublessee.

     14.03 No consent by Lessor to any assignment or subletting by Lessee shall
relieve Lessee of any obligation to be performed by Lessee under this Lease,
whether occurring before or after such consent, assignment or subletting. The
consent by Lessor to any assignment or subletting shall not relieve Lessee from
the obligation to obtain Lessor's express written consent to any other
assignment or subletting. The acceptance of rent by Lessor from any other person
shall not be deemed to be a waiver by Lessor of any provisions of this Lease or
to be a consent to any assignment, subletting or other transfer. Consent to one
assignment, subletting or other transfer shall not be deemed to constitute
consent to any subsequent assignment, subletting or other transfer.

ARTICLE 15. TRANSFER OF LESSOR'S INTEREST

     15.01 Lessor shall have the right at any time to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of Lessor's interest in the Demised
Premises and in this Lease. In the event of any such sale, transfer, assignment,
pledge, hypothecation or other disposition, all obligations of Lessor hereunder
shall devolve upon the transferee and Lessor shall be released and discharged
from all further obligation or liability hereunder; provided, that Lessor shall
be responsible for any funds in the hands of Lessor in which Lessee has an
interest until such funds have been delivered to the transferee. Lessee agrees
to attorn to the transferee provided all of Lessor's obligations hereunder are
assumed by the transferee in writing for the benefit of Lessee.

                                      -9-
<PAGE>

ARTICLE 16. MECHANICS' LIENS

     16.01 Lessee shall keep the Demised Premises free and clear of all
mechanics' liens resulting from any construction work done by or for Lessee.
Lessee shall have the right to contest the correctness or validity of any such
lien if, immediately on demand by Lessor, Lessee procures and records a lien
release bond issued by a corporation authorized to issue surety bonds in
California in an amount equal to one and one-half (1-1/2) times the amount of
the claim of lien or other security satisfactory to Lessor. If used, the bond
shall meet the requirements of Section 3143 of the California Civil Code and
shall provide for the payment of any sum that the claimant may recover on the
claim, together with costs of suit. Should Lessee fail to discharge any such
lien or cause the same to be released within sixty (60) days from the date the
lien is filed, Lessor may, without inquiring into the validity thereof, cause
the same to be discharged and all amounts so expended by Lessor, together with
reasonable attorney's fees and expenses, shall be paid by Lessee to Lessor as
additional rent hereunder, together with interest thereon at the rate of fifteen
percent (15%) per annum. Lessee shall give ten (10) days prior written notice to
Lessor of the date on which any construction work will be commenced so as to
afford Lessor the opportunity to post a notice of nonresponsibility.

ARTICLE 17. ENTRY BY LESSOR

     17.01 Lessor and Lessor's authorized representatives shall have the right
to enter the Demised Premises with 24 hour prior verbal notice unless in cases
of emergency at reasonable hours for any of the following purposes:

          (a) To examine and inspect the Demised Premises;

          (b) To supply any service to be provided by Lessor to Lessee
     hereunder;

          (c) To perform any necessary maintenance or repairs that Lessor is
     required or permitted to perform hereunder;

          (d) To serve, post or keep posted any notices required or allowed
     under the provisions of this Lease;

          (e) To post "for sale" signs at any time during the term, to post "for
     rent" or "for lease" signs during the last one hundred twenty (120) days of
     the Lease term, or during any period while Lessee is in default;

          (f) To show the Demised Premises to prospective tenants, buyers,
     lenders or other persons at any time during the Lease term;

          (g) To do any other act or thing necessary for the safety or
     preservation of the Demised Premises or the Industrial Center.

     17.02 Lessor shall at all times have and retain a key with which to unlock
all of the doors in, on or about the Demised Premises (excluding Lessee's
vaults, safes and other secured areas designated in writing by Lessee in
advance); and Lessor shall have the right to use any and all means

                                      -10-
<PAGE>

which Lessor may deem proper to open said doors in an emergency in order to
obtain entry to the Demised Premises, and any entry to the Demised Premises
obtained by Lessor by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or
a detainer of the Demised Premises, or an eviction, actual or constructive, of
Lessee from the Demised Premises, or any portion thereof.

ARTICLE 18. DEFAULT BY LESSEE

     18.01 The occurrence of any one or more of the following events ("Events of
Default") shall constitute a material default and breach of this Lease by
Lessee:

          (a) Unless cured within ten day period following due date, any failure
     by Lessee to pay any rental or any other sum required to be paid by Lessee
     hereunder, as and when the same becomes due and payable.

          (b) Any failure by Lessee to observe and perform any other provision
     of this Lease to be observed or performed by Lessee, where such failure
     continues for ten (10) days after written notice thereof by Lessor to
     Lessee; provided, however, that if the nature of such default is such that
     it cannot reasonably be cured within such ten (10) day period, Lessee shall
     not be deemed to be in default if Lessee shall within such period commence
     such cure and thereafter diligently prosecute the same to completion.

          (c) The making by Lessee of any general assignment or general
     arrangement for the benefit of creditors; the filing by or against Lessee
     of a petition to have Lessee adjudged a bankrupt or a petition for
     reorganization or arrangement under any law relating to bankruptcy (unless,
     in the case of a petition filed against Lessee, the same is dismissed
     within ninety (90) days); the appointment of a trustee or receiver to take
     possession of substantially all of Lessee's interest in this Lease, where
     possession is not restored to Lessee within sixty (60) days; or the
     attachment, execution or other judicial seizure of substantially all of
     Lessee's assets located at the Demised Premises or of Lessee's interest in
     this Lease, where such seizure is not discharged within forty-five (45)
     days.

     18.02 Any notice given under this Article shall specify the Event of
Default and the applicable lease provisions, and shall demand that Lessee
perform the provisions of this Lease, within the applicable period of time. No
such notice shall be deemed a forfeiture or a termination of this Lease provided
Lessee cures the default within the applicable period of time.

ARTICLE 19. LESSOR'S REMEDIES UPON DEFAULT

     19.01 Lessor shall have the following remedies upon the occurrence of an
Event of Default, such remedies being cumulative and not exclusive and in
addition to any other remedies available to Lessor as now or hereafter provided
by law:

          (a) Lessor can continue this Lease in full force and effect, and the
     Lease will continue in effect as long as Lessor does not terminate Lessee's
     right to possession, and Lessor shall have the right to collect rent when
     due, irrespective of whether Lessee shall have abandoned the Demised
     Premises. During the period Lessee is in default, Lessor can enter the
     Demised Premises

                                      -11-
<PAGE>

     and relet them, or any part of them, to third parties for Lessee's account.
     Lessee shall be liable immediately to Lessor for all costs Lessor incurs in
     such reletting, including, without limitation, broker's commissions and
     like costs. Reletting can be for a period shorter or longer than the
     remaining term of this Lease. Lessee shall pay to Lessor the rent specified
     in this Lease on the dates when the same becomes due, less the rent Lessor
     receives from any reletting. No act by Lessor allowed by this paragraph
     shall terminate this Lease unless Lessor notifies Lessee that Lessor elects
     to terminate this Lease. After Lessee's default and for as long as Lessor
     does not terminate Lessee's right to possession of the Demised Premises,
     Lessee shall have the right to assign or sublet Lessee's interest in this
     Lease pursuant to Article 14, but Lessor's consent may be conditioned upon
     all defaults by Lessee being fully cured at the time of assignment or
     subletting.

          (b) Lessor can terminate Lessee's right to possession of the Demised
     Premises at any time during Lessee's default. No act by Lessor other than
     giving written notice to Lessee shall terminate this Lease. Acts of
     maintenance, efforts to relet the Demised Premises, or the appointment of a
     receiver on Lessor's initiative to protect Lessor's interest under this
     Lease shall not constitute a termination of Lessee's right to possession.
     On termination, Lessor has the right to recover from Lessee:

               (1) The worth, at the time of the award, of the unpaid rent that
          has been earned at the time of termination of this Lease; plus

               (2) The worth, at the time of the award, of the amount by which
          the unpaid rent that would have been earned after the date of
          termination of this Lease until the time of award exceeds the amount
          of the loss of rent that Lessee proves could have been reasonably
          avoided; plus

               (3) The worth, at the time of the award, of the amount by which
          the unpaid rent for the balance of the term after the time of award
          exceeds the amount of the loss of rent that Lessee proves could have
          been reasonably avoided; and

               (4) Any other amount, and court costs, necessary to compensate
          Lessor for all detriment proximately caused by Lessee's default.

     "The worth, at the time of the award," as used in (1) and (2) above, is to
be computed by allowing interest at the rate of ten percent (10%) per annum from
the date of default. "The worth, at the time of the award" as used in (3) above
is to be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus one percent (1%).
The term "rent," as used in this Article shall be deemed to include all monetary
sums required to be paid by Lessee pursuant to the terms of this Lease.

ARTICLE 20. LESSOR'S RIGHT TO CURE DEFAULTS

     20.01 If Lessee shall fail to pay any sum of money, other than rent,
required to be paid by Lessee hereunder, or shall fail to perform any other act
on Lessee's part to be performed hereunder, and such failure shall continue for
ten (10) days after notice thereof by Lessor, Lessor may, but shall not be
obligated to do so, and without waiving or releasing Lessee from any obligations
of Lessee,

                                      -12-
<PAGE>

make such payment or perform any such other act on Lessee's part to be made or
performed hereunder. All sums expended by Lessor, including necessary incidental
costs, shall be deemed additional rent hereunder and shall be payable to Lessor
immediately upon demand, together with interest thereon at the rate of fifteen
percent (15%) per annum from the date of expenditure to the date of
reimbursement.

ARTICLE 21. COSTS OF SUIT

     21.01 In the event legal action between Lessor and Lessee shall become
necessary in order to enforce or interpret this Lease, or any provision
contained herein, the prevailing party shall be entitled to recover all costs
and expenses as may be incurred in connection therewith, including reasonable
attorney's fees.

     21.02 Should Lessor, without fault on Lessor's part, be made a party to any
litigation instituted by Lessee or by any third party against Lessee, or by or
against any person holding under or using the Demised Premises by license of
Lessee, or for the foreclosure of any lien for labor or materials furnished to
or for Lessee or any such other person or otherwise arising out of or resulting
from any act or transaction of Lessee or of any such other person, Lessee
covenants to save and hold Lessor harmless from any judgment rendered against
Lessor or the Demised Premises or any part thereof, and all costs and expenses,
including reasonable attorney's fees, incurred by Lessor in connection with such
litigation.

ARTICLE 22. SUBORDINATION

     22.01 In the event the holder of any deed of trust hereafter to be placed
against the Demised Premises requires that this Lease be subordinate to any such
encumbrance, this Lease shall be subordinate to that encumbrance if Lessor first
obtains from the holder of the deed of trust a written agreement providing that
for so long as Lessee shall perform all of Lessee's duties and obligations
hereunder, no foreclosure, deed given in lieu of foreclosure or sale under such
deed of trust shall affect Lessee's rights under this Lease. Lessee shall attorn
to any purchaser at any foreclosure sale, or to any grantee or transferee
designated in any deed given in lieu of foreclosure. Lessee shall execute the
written agreement and any other documents required by the holder of the deed of
trust to accomplish the purposes of this Article, and upon Lessee's failure or
refusal to do so within five (5) days after demand, Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to execute such agreement or other documents
for and on behalf of Lessee. The power of attorney granted herein shall be
deemed to be coupled with an interest and to be irrevocable.

ARTICLE 23. ESTOPPEL CERTIFICATE

     23.01 Each party, within ten (10) days after notice from the other, shall
execute and deliver to the other, in recordable form, a certificate provided by
Lessor at no cost to Lessee stating that this Lease is unmodified and in full
force and effect, or in full force and effect as modified stating the
modifications. The certificate also shall state the amount of monthly rent, the
dates to which the rent has been paid in advance, the amount of any security
deposit or prepaid rent, and shall further certify that there is no incurred
default by the other party under the Lease, or specify such default, if any is
claimed. Failure to deliver the certificate within the ten (10) days, shall be
conclusive upon the party

                                      -13-
<PAGE>

failing to deliver the certificate for the benefit of the party requesting the
certificate, and any successor to the party requesting the certificate, that
this Lease is in full force and effect and has not been modified except as may
be represented by the party requesting the certificate, that there are no
incurred defaults by the party requesting the certificate and that not more than
one (1) month's rent has been paid in advance.

ARTICLE 24. HOLDING OVER

     24.01 If Lessee remains in possession of all or any part of the Demised
Premises after the expiration of the term hereof, with the express or implied
consent of Lessor, such tenancy shall be from month to month only, and not a
renewal hereof or an extension for any further term and in such case rent shall
be double the amount payable at the expiration of the term of this Lease. Other
monetary sums due hereunder, and such month to month tenancy, shall be subject
to every other term, covenant and agreement contained herein.

ARTICLE 25. SURRENDER

     25.01 Upon the expiration or earlier termination of this Lease, Lessee
shall surrender the Demised Premises in the same condition as received, ordinary
wear and tear and damage by fire, earthquake, act of God or the elements alone
excepted. Lessee shall remove all of Lessee's personal property and trade
fixtures and shall repair, at Lessee's expense, any damage to the Demised
Premises or the Industrial Center caused by such removal, including, without
limitation, repair of floors and patching and repainting of walls where
required, all to Lessor's reasonable satisfaction. Any personal property or
trade fixtures not removed at the expiration or earlier termination of this
Lease shall be deemed abandoned by Lessee. If Lessor so elects, Lessee shall
also remove any alterations or improvements installed by or for Lessee which
would otherwise remain as part of the Demised Premises and Lessee shall restore
the Demised Premises to their condition prior to such installation.

     25.02 Should Lessee fail to remove any personal property or trade fixtures,
or fail to remove any alterations or improvements as requested by Lessor, Lessee
shall be liable to Lessor for any and all removal costs, transportation and
storage expenses, and the cost of restoring the Demised Premises as required
herein. Lessee shall indemnify Lessor against any loss, damage or liability
resulting from delay by Lessee in so surrendering the Demised Premises,
including, without limitation, any claims made by any succeeding tenants founded
on such delay.

ARTICLE 26. WAIVER

     26.01 No covenant, term or condition or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of any covenant, term or condition shall not be deemed
to be a waiver of any preceding or succeeding breach of the same or any other
covenant, term or condition. Acceptance by Lessor of any performance by Lessee
after the time the same shall have become due shall not constitute a waiver by
Lessor of the breach or default of any covenant, term or condition unless
otherwise expressly agreed to by Lessor in writing. The receipt and acceptance
by Lessor of delinquent rent shall constitute only a waiver of timely payment
for the particular rent payment involved.

                                      -14-
<PAGE>

ARTICLE 27. QUIET ENJOYMENT

     Lessor hereby covenants with Lessee that upon payment by Lessee of the rent
as aforesaid and upon observance and performance of the terms of this Lease by
Lessee, Lessee shall peaceably hold and enjoy the Demised Premises for the term
hereby demised without hindrance or interruption by Lessor or any person or
persons lawfully or equitably claiming by, through or under Lessor.

ARTICLE 28. NOTICES

     28.01 All notices or demands required or permitted to be given hereunder
shall be in writing and shall be either personally served or mailed by certified
mail, return receipt requested, to the other party at the following addresses:

       To Lessor:                         To Lessee:

       JACK DYMOND LATHING COMPANY        CATAPULT COMMUNICATIONS
       450 First Street                   160 South Whisman Road
       Los Altos, CA 94022                Building F
                                          Mountain View, CA 94041

     28.02 Either party may change the foregoing address by giving notice to the
other in the manner provided herein. Any notice sent by mail shall be deemed
received on the second business day following deposit of the notice in the
United States Mail, with proper postage prepaid thereon.

ARTICLE 29. MISCELLANEOUS PROVISIONS

     29.01 Captions. The captions used in this Lease are for convenience only
and shall not be deemed to be relevant in resolving any question of
interpretation or construction of any provision contained herein.

     29.02 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any prior agreements or
understandings, whether written or oral. This Agreement can only be modified by
a written amendment hereto executed by both parties.

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

     29.04 Time. Time is hereby declared to be of the essence of this Lease and
each and every provision hereof.

     29.05 Corporate Authority. If Lessee is a corporation, each of the persons
executing this Lease on behalf of Lessee does hereby represent and warrant that
Lessee currently is in good standing in the state of its incorporation, that
Lessee is qualified to do business in California, that the corporation has full
right and authority to enter into this Lease, and that each person executing
this Lease on behalf of the corporation is duly authorized and empowered to do
so.

                                      -15-
<PAGE>

     29.06 Calendar Days. All references herein to any acts or obligations to be
performed within a certain number of days shall mean calendar days, unless
otherwise specified.

     29.07 Effective Date. Submission of this instrument for examination or
signature by Lessee does not constitute a reservation of or option for lease,
and this instrument is not effective as a lease or otherwise until execution and
delivery by both Lessor and Lessee, in which event this Lease shall become
effective on the date of execution or such other date as may be specified in
writing signed by Lessor and Lessee.

     29.08 Choice of Law. This Lease shall be governed by and interpreted in
accordance with the laws of the State of California.

     29.09 Memorandum of Lease. This Lease Agreement shall not be recorded but
the parties may agree to execute and record a Memorandum of Lease, in form
satisfactory to Lessor and Lessee.

     29.10 Successors and Assigns. Subject to the restrictions against
assignment and subletting by Lessee, this Lease shall be binding upon and inure
to the benefit of the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto.

     THIS LEASE CANCELS AND SUPERCEDES THAT OPTION TO LEASE DATED JANUARY 15,
2000 (Page 1) AND FEBRUARY 17, 2000 (Page 2) BETWEEN LESSOR AND LESSEE.

     IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day and
year first above written.

                                            LESSOR:

                                            JACK DYMOND LATHING COMPANY, a
                                            California Partnership

                                            By:
                                                --------------------------------

                                            Date:
                                                  ------------------------------

                                            LESSEE:

                                            CATAPULT COMMUNICATIONS, a
                                            California Corporation

                                            By:
                                                --------------------------------

                                            Date:
                                                  ------------------------------

                                      -16-

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