Document:

<PAGE>   1
                                                                     PROPERTY OF
                                                     ARGONAUT TECHNOLOGIES, INC.

                                                                   EXHIBIT 10.11

                    PROMISSORY NOTE SECURED BY DEED OF TRUST

$200,000                                     December 17, 1996
                                             San Carlos, California

     FOR VALUE RECEIVED, the undersigned, David P. Binkley ("EMPLOYEE") and
Cecilia Binkley, husband and wife, (collectively the "BORROWER"), promises to
pay to Argonaut Technologies, Inc., a Delaware corporation (the "COMPANY"), or
order, the principal amount of Two Hundred Thousand Dollars ($200,000). The
principal amount hereof plus interest at the rate of 6.31% per annum (compounded
annually) shall be due and payable to the holder hereof at 887 Industrial Road,
Suite G, San Carlos, CA 94070, or such other place as the holder hereof may
designate as follows:

     The principal amount and any accrued interest, if not sooner paid, shall be
     due and payable upon the earlier of the following dates (collectively,
     "MATURITY EVENTS"):

          (1) Ninety (90) days following the date of termination of the
          employment of Employee with the Company, whether voluntary or
          involuntary, and whether with cause or without cause;

          (2) The date of any sale, conveyance, assignment, alienation or any
          other form of transfer, whether voluntary or involuntary, of that
          certain real property commonly known as 11655 Putter Way, Los Altos,
          California 94024 (the "PROPERTY"), or any part of interest therein;
          except that the following transfers of the Property shall not be
          deemed to be a Maturity Event:

               (a) A transfer upon the death of Employee to Employee's surviving
               spouse (providing the surviving spouse is an obligor hereunder)
               or upon the death of Employee's spouse to Employee;

               (b) A transfer by an obligor hereof whereby such obligor's spouse
               becomes a co-owner of the property transferred;

               (c) A transfer resulting from a decree of dissolution of the
               marriage or legal separation of Employee and Cecilia Binkley or
               from a property settlement agreement incidental to such a decree
               which requires the obligor spouse to assume responsibility for
               the obligations under this Note and the deed of trust encumbering
               the Property and securing this Note (the "DEED OF TRUST") and
               pursuant to which Employee or Cecilia Binkley (whoever is the
               obligor) becomes the sole owner of the property transferred; or

               (d) A transfer by one or both obligors under this note into an
               inter vivos trust in which one or both obligors are
               beneficiaries; or
<PAGE>   2
          (3)  Ten (10) days after the date that any common stock of the Company
          or any other corporation or entity that owns more than 50% of the
          voting stock of the Company is publicly traded including any transfer
          of shares in connection with an initial public offering;

          or

          (4)  December 17, 2001.

     In the event that any of the following occurs, then unless otherwise
prohibited by law, the holder hereof shall have the option, without demand or
notice, to declare the entire outstanding principal balance of this Note,
together with all accrued and unpaid interest thereon to be immediately due and
payable: (i) Borrower defaults in the payment of principal or interest when due
pursuant to the terms hereof; (ii) Borrower defaults in its performance of any
obligation contained in the Deed of Trust or any other deed of trust, security
agreement or other agreement (including any amendment, modification or extension
thereof) which may hereafter be executed by Borrower for the purpose of securing
this Note; (iii) any representation or warranty contained in this Note or the
Deed of Trust or any other agreement or instrument executed in connection with
the loan evidenced hereby proves to have been false or misleading in any
material respect; (iv) Borrower defaults in its obligation to pay any
indebtedness or to perform any other obligation which is secured by a deed of
trust or other lien on the Property or default under any deed of trust securing
such indebtedness; (v) Borrower defaults in its obligation to pay any
indebtedness evidenced by any promissory note executed by Borrower and payable
to the holder hereof or there occurs any other default under any deed of trust,
mortgage or other document securing repayment of such indebtedness; or (vi) the
amount of the indebtedness secured by any deed of trust, lien or other
encumbrance encumbering the Property that is senior to the Deed of Trust is
increased over the amount of such indebtedness existing as of the date of this
Note.

     In the event any amount owed by Borrower pursuant to this Note is not paid
when due, such unpaid amount shall bear interest from the due date until paid at
a rate equal to the lesser of: (i) ten percent (10%) per annum; or (ii) the
maximum rate permitted by law. After such due date, all payments shall be
credited first to accrued interest and then to principal.

     If an action is instituted for collection of this Note, Borrower agrees to
pay court costs and reasonable attorneys' fees incurred by the holder hereof.

     This Note may be amended or modified, and provisions hereof may be waived,
only by the written agreement of Borrower and the holder hereof. No delay or
failure by the holder hereof in exercising any right, power or remedy hereunder
shall operate as a waiver of such right, power or remedy, and a waiver of any
right, power or remedy on any one occasion shall not operate as a bar or waiver
of any such right, power or remedy on any other occasion. Without limiting the
generality of the forgoing, the delay or failure by the holder hereof for any
period of time to enforce collection of any amounts due hereunder shall not be
deemed to be a waiver of any rights of the holder hereof under contract or under
law. The rights of the holder hereof under this Note are in addition to any
other rights and remedies which the holder hereof may have.

                                      -2-
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     This Note shall be governed by and construed in accordance with the laws
of the State of California.

     This Note may be prepaid at any time without penalty.

                                        BORROWER:

                                        /s/ DAVID P. BINKLEY
                                            ----------------
                                            David P. Binkley

                                        /s/ CECILIA BINKLEY
                                            ----------------
                                            Cecilia Binkley

                                      -3-
<PAGE>   4
ALL-PURPOSE ACKNOWLEDGEMENT
--------------------------------------------------------------------------------

State of California      }
                         }ss.
County of San Mateo      }

On December 18, 1996 before me, Cinthia Yesitis, personally appeared
   -----------------            ---------------
       (DATE)                      (NOTARY)

David Binkley and Cecelia Binkley,
---------------------------------
          (SIGNERS)

[ ] personally known to me - OR - [X] proved to me on the basis of satisfactory
                                      evidence to be the person(s) whose name(s)
                                      is/are subscribed to the within instrument
                                      and acknowledged to me that he/she/they
                                      executed the same in his/her/their
                                      authorized capacity(ies), and that by
                                      his/her/their signature(s) on the
         [NOTARY SEAL]                instrument the person(s), or the entity
                                      upon behalf of which the person(s) acted,
                                      executed the instrument.

                                      WITNESS my hand and official seal.

                                      /s/ CINTHIA YESITIS
                                      --------------------------------
                                             NOTARY'S SIGNATURE

----------------------------  OPTIONAL INFORMATION  ----------------------------

The information below is not require by law. However, it could prevent
fraudulent attachment of this acknowledgement to an unauthorized document.

CAPACITY CLAIMED BY SIGNER (PRINCIPAL)  DESCRIPTION OF ATTACHED DOCUMENT

[ ] INDIVIDUAL
[ ] CORPORATE OFFICER                   Promissory Note Secured by Deed of Trust
                                        ----------------------------------------
----------------------------------             TITLE OR TYPE OF DOCUMENT
             TITLE(S)

[ ] PARTNER(S)
[ ] ATTORNEY-IN-FACT                                   3
[ ] TRUSTEE(S)                          ----------------------------------------
[ ] GUARDIAN/CONSERVATOR                             NUMBER OF PAGES
[ ] OTHER:________________________
    ______________________________
    ______________________________                 December 18, 1996
                                        ----------------------------------------

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)

___________________________________     ________________________________________
___________________________________                       OTHER

--------------------------------------------------------------------------------<PAGE>   1
                                                                   EXHIBIT 10.19

                                     LEASE

     THIS LEASE, executed in duplicate as of this 9th day of July 1999, by and
between TANKLAGE FAMILY PARTNERSHIP, a Limited Partnership hereafter called
LESSOR, and ARGONAUT TECHNOLOGIES, a Delaware Corporation hereafter called the
LESSEE (Lessor and Lessee being for convenience herein, in the singular number
and masculine gender).

     WITNESSETH: Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, for and in consideration of the rent herein reserved and covenants
herein contained and upon the conditions hereof, that certain real property
situated in the City of San Carlos, County of San Mateo, State of California,
commonly known as 887 Industrial Road, Units D, E, F & G and 871 Industrial
Road, Units A & B, and 853 Industrial Road, Units A, I, & J and described as
follows:

     853 Industrial, A, I & J: Approximately 8,100 sq. ft.
     887 Industrial, D, E, F, & G: Approximately 11,950 sq. ft.
     871 Industrial, A & B: Approximately 3,910 sq. ft.
     as per exhibits, A, B, C, D, E, F, G, H, I, & J
     on an "AS IS" basis

A.   The terms of this lease shall be for one year, beginning on the 19th day
of July 1999 and ending on the 18th day of July 2000 inclusive, for a monthly
base rental of $30,934.00 per month in advance, commencing with the first day of
said term and on the same day of each succeeding month thereof. Receipt of the
first month's rent in the amount of $-0- is hereby acknowledged.

B.   As consideration for the execution of this lease, the Lessee shall pay to
the Lessor the sum of $30,934.00*, receipt of which is hereby acknowledged. In
the event Lessee is not then in default under the terms of this lease, said sum
of $30,934.00 shall be applied toward the rental due for the last one month of
the term hereof. If this lease is extended, said consideration, if Lessee is not
then in default, shall be applied toward rental due for the last month of the
extended term, in lieu of the last month of the initial term. * see paragraph 9

C.   The base rental above set forth shall be subject to escalation as follows:

     At the end of the first twelve (12) months of the lease term, the monthly
rental shall be increased as follows for the next and each succeeding twelve
(12) month period of the lease term:

  (a) The Consumer Price Index, for all Urban consumers, as published monthly by
the U.S. Department of Labor, Bureau of Labor Statistics, All Items, for the
United States Average (1967 = 100) is the "Index" herein referred to. Said Index
as published shall be used herein, whether or not certain items may hereafter be
added or deleted therefrom by the Bureau of Labor Statistics, or whether a
"successor index" is published.

  (b) The "Base Year Index" shall be the average monthly Index over the twelve
(12) month period ending with the calendar month immediately preceding the month
in which the term of this lease commences.

  (c) Commencing with the second twelve (12) months of the lease term, and
continuing thereafter for each remaining twelve (12) month lease period (and for
the last months of the term if said period is less than twelve (12) months),
monthly rent for each such period of the term shall be increased in the same
ratio that the average monthly Index for the previous twelve (12) months
preceding the month in which such rental period commences, shall have increased
over the Base Year Index. In no event shall the rental for any month of the
lease term be less than the base rental for the first month of the lease term.

     IT IS HEREBY AGREED BY LESSOR AND LESSEE that this lease is made upon the
following terms, covenants and conditions:

     1.   RENTAL. The Lessee will pay said rental monthly in advance and without
deductions to Lessor at the office listed as Lessor's address under Lessor's
signature hereto, or at such place or places as Lessor may in writing designate,
without grace or previous demand.

     2.   POSSESSION. If Lessor is unable to deliver possession of the premises
to Lessee on the date specified for commencement of the term hereof, this lease
shall not be void or voidable, nor shall Lessor be responsible to Lessee for
damages therefor, but there shall in such event be a deduction of rent for the
pro rata period during which possession is delayed. Neither such delay nor
occupancy by Lessee prior to the commencement date shall extend or shorten the
term, but Lessee shall pay rent for such latter period at the initial monthly
rate.

     3.   USES OF PREMISES. The Lessee shall during the term hereof exclusively
and actively conduct therein and thereon the sole business of

     Research and development, manufacturing and laboratory use in connection
     with the development of systems using chemical synthesis

     Roof surfaces shall not be penetrated by Lessee or his agents without prior
written consent of Lessor.

     The premises shall not be used for living quarters.

     Motor vehicle parking, if any, provided to Lessee under this lease shall be
non-exclusive, subject to reallocation by Lessor from time to time, and Lessee
agrees that no vehicle will be parked on the leased premises for longer than
eighteen (18) hours in any twenty-four (24) hour period. Lessee agrees that in
the event this provision is violated, the motor vehicle may at Lessor's option
be towed away at Lessee's expense.

     Lessee shall not use solid hard tires on any fork lifts or dollies on paved
parking, truck loading or driveway areas, and in the event Lessee violates this
provision, Lessee shall be responsible for the cost of resurfacing the entire
area.

     Lessee shall not use any machinery on said premises the use of which will
shake or vibrate the improvements thereon, or any part thereof, to such a degree
that injury will be done to such improvements.

     No use of said premises shall be made, or any act committed thereon, or any
article kept thereon, which would increase the existing rate of fire insurance
upon the improvements upon said premises or cause a cancellation of such
insurance; that Lessee shall not commit any act on said premises, the doing of
which is prohibited by any condition or restriction of record affecting the
title to or the right to occupy that property; that no public sale or auction
shall be conducted on said premises; and that Lessee shall not in the use of
said premises violate any present or future law, ordinance or regulation of any
public authority; and that no waste or public or private nuisance shall be
committed on said premises.

     No corrosive chemicals, acids, inflammable liquids, paints, dangerous or
toxic substances or similar materials shall be used or stored on the leased
premises. Lessee shall comply with all federal, state and local environmental
laws, ordinances and regulations, and shall indemnify Lessor against any
liability, claims and expense at any time incurred for violation of this
subparagraph, including any sum assessed against Lessor for any violations of
said laws, regulations or ordinances or incurred at any time for the elimination
of toxic substances effects or soil removal. Lessee agrees in this connection to
waive the statute of limitations applicable to any action brought hereunder.

     4.   ALTERATIONS. No alterations shall be made on or of said premises
without the written consent of Lessor first have been obtained, and any
alterations of said premises or additions thereto shall, when affixed to the
realty, become a part thereof, except moveable furniture and trade fixtures.

     No additional lock or locks shall be placed by Lessee on any door, nor
shall any existing lock be re-keyed, unless written consent of Lessor shall have
been obtained. Two keys will be furnished by Lessor. All keys shall be
surrendered to Lessor upon termination of the lease term.

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<PAGE>   2
     The following items, whether installed by Lessor or Lessee shall be deemed
permanent improvements and not trade fixtures, but shall be subject to the
election by Lessor to require removal of any or all of them at the termination
of the lease:

     Electrical wiring, panels and conduit; all piping and ductwork; heating
units, air conditioners, lighting fixtures, ballasts, globes and tubes; and hot
water heaters, shelving and counters, and partition walls.

     5.   REPAIRS. Lessee accepts said premises (including glazing, outside
adjacent sidewalks and parking areas, if any) in their present condition,
acknowledging same to be in good order and repair; Lessee shall maintain the
said premises in as good order and repair as when received, damage by fire,
war, earthquake, or reasonable use and wear thereof, excepted; unless said fire
be caused by the negligence of Lessee, his employees or invitees. Lessee waives
the provisions of Sections 1941 and 1942 of the California Civil Code, or any
other law which would permit Lessee to make repairs at Lessor's expense.

     Lessee agrees to water, maintain and replace, when necessary, any
shrubbery, landscaping, exterior lighting, sprinklers and other such facilities
provided by Lessor on the leased premises. If parking and landscaping are
provided for an entire building or building site, the maintenance cost of such
parking and landscaping, including sweeping service, by a service designated by
Lessor shall be prorated on a square footage or other equitable basis as
calculated by Lessor. Lessee agrees to pay this cost in addition to the monthly
rental.

     Included in repairs and maintenance for which the Lessee is obligated to
pay are: replacement when necessary of light globes, fluorescent tubes,
ballasts and starters in all lighting equipment; and for repairs to doors,
storefronts and windows, including glazing, door closers, locks and frames,
landscape sprinkler system, toilet fixtures, fire sprinkler and fire sprinkler
supervisory systems, due to damage from any cause. This list is not intended to
be exclusive and shall not limit the general provisions hereof concerning
repairs.

     For the duration of the lease, Lessee agrees to maintain and pay for a
service contract which meets the manufacturer's recommendations of the air
conditioning and heating systems installed in the leased premises. Lessor shall
not be obligated to repair minor settlement cracks on walls or floor of the
leased premises, and shall not be responsible for the leaking of said walls due
thereto or as the result of porosity thereof.

     6. INDEMNIFICATION OF LESSOR; INSURANCE. Lessee assumes all risk of injury
to person and property in or about said premises, including Lessee's property,
and will hold Lessor free and harmless from liability therefor, including costs
and counsel fees. Lessee shall secure and keep in force a public liability
insurance policy on an occurrence basis covering leased premises, including
parking areas, if any, included in this lease, insuring Lessee and naming
Lessor as an additional insured, and a copy of same shall be delivered to
Lessor. Said insurance policy shall have minimum limits of coverage of $500,000
personal injury and property damage. Lessee shall further insure, at his
expense, the glass, glazing, window frames, skylights, door, mullions and
storefront window wall, if any, in said premises in a company and in an amount
acceptable to Lessor; loss, if any, to be payable to Lessor. A copy of said
policy shall be delivered to Lessor; and if the Lessee does not so deliver said
policy to Lessor, Lessor may insure said glass and glazing, and collect the
cost thereof from Lessee. All policies shall be kept current and provide for
non-cancellation and non-modification without 30 days advance notice to Lessor.

     7. UTILITIES. Lessee will pay, when due, all charges incurred by him for
water, light, power, heat, gas, garbage removal, sewer charges and storm drain
charges (rental, tax, assessment or other), telephone and other services
furnished to said premises, including fire sprinkler supervisory. If any such
charges are assessed to a larger building of which the leased premises are a
part, such charges shall be appropriately prorated on the basis of area by the
Lessor. All such charges incurred by Lessor for the common areas of an entire
premises of which the leasehold is a part, including but not limited to
walkways, driveways, parking areas and landscaping, shall be prorated on a
square footage or other equitable basis as calculated by Lessor. Lessee agrees
to pay this cost in addition to the monthly rental.

     8. ASSIGNMENT. Lessee shall not assign this lease, or any interest
therein, or sub-lease said premises, or any portion thereof, or license the use
thereof, or any portion thereof, without the written consent of Lessor first
had and obtained; that consent given by Lessor to one or more assignments,
sub-leases or licenses shall not be construed as a subsequent or continuing
consent; and that any such assignment, sub-letting or licensing (including
transfer by operation of law) without such consent shall at Lessor's option
terminate this lease. In the event of any assignment or sub-lease hereunder
whether consented to by Lessor or not, Lessee agrees to pay Lessor monthly 100%
of the excess of the rent provided under assignment or sub-lease over the rent
specified herein.

     9. SUBORDINATION TO DEED OF TRUST. This lease at the option of Lessor
shall be subordinate to any deed of trust now existing, or which Lessor may in
the future execute covering said premises. Lessee agrees forthwith upon request
of Lessor to execute such documents providing subordination of this lease to
any such deed of trust executed now or in the future.

     Lessee shall from time to time upon ten (10) days' prior written request
by Lessor execute, acknowledge and deliver to Lessor (a) a statement in writing
certifying, if such be true, that his Lease is unmodified and in full force and
effect (or if there have been modifications that the same is in full force and
effect as modified and stating the modifications) and the dates to which rental
and other charges have been paid; and (b) such other instruments as may
reasonably be required or requested by any mortgagee, beneficiary of a deed of
trust or holder of any other encumbrance on the Premises.

     10. DESTRUCTION OF PREMISES. In the event the premises are totally
destroyed, then this lease will be forthwith terminated. In the event the
demised premises are part of a building and such building is damaged to such an
extent that the cost of repairs exceeds one-third of the cost of replacement of
said building, then at the option of the Lessor, this lease shall terminate. In
the event of partial destruction of the premises, which Lessor elects to or is
bound to repair, the same shall be repaired by Lessor as soon as reasonably
possible if such repairs can be made in ninety (90) working days after receipt
of all permits under the laws, ordinances and regulations applicable thereto,
and also if the necessary financing therefor is obtainable on a reasonable
basis from local lending agencies; but if such repairs cannot be so made, then
this lease, at the option of Lessor, shall terminate; but if not so terminated,
then Lessor shall repair the same as soon as reasonably possible. During the
time such repairs are being made Lessor shall not unreasonably interfere with
Lessee's business, and the rent for such period shall be reduced
proportionately to the extent Lessee is deprived of the use of the premises.
Lessee waives the provisions of sections 1932 (subdivision 2) and 1933
(subdivision 4) of the California Civil Code.

     11. DEFAULT. In the event Lessee defaults in the terms hereof, Lessor, at
his option, and in addition to any other rights he may have, may re-enter and
repossess said premises and remove all property therefrom and store the same at
the expense of Lessee. Lessor, upon default of Lessee, may relet said premises
or any portion thereof, in a changed condition or otherwise, for such rental
and upon such terms as he deems reasonable, and hold Lessee for the difference
received, plus expenses of reletting and collecting such rental, and the rental
herein provided. No such re-entry or taking of possession by Lessor shall be
deemed an election to terminate this lease unless Lessee is served with notice
of said termination by Lessor or the same be decreed by a court of competent
jurisdiction.

     In the event Lessee shall breach this lease and abandon the demised
premises, Lessor may also elect to continue the lease in effect and Lessor may
enforce all rights and remedies hereunder, including the right to recover rent
as it becomes due, all pursuant to the provisions of Section 1951.4 of the
California Civil Code. In the event of such election by Lessor to continue the
lease, Lessee hereby irrevocably appoints Lessor the agent of Lessee to enter
upon the demised premises and remove any and all persons and/or property
whatsoever situated upon said premises, and to place all or any portion of said
property, except such property as may become the property of Lessor, in storage
for the account of and at the expense of Lessee; and, in such case, Lessor may
relet the demised premises upon such terms as to it may seem fit, and if a
sufficient sum shall not be thus realized, after paying expenses of such
reletting and collecting, to satisfy the rent and such other sums as may be
reserved herein to be paid, Lessee shall satisfy and pay any deficiency, and
pay the expenses of such reletting and collecting. Lessee hereby releases
Lessor and agrees to save harmless Lessor from any cost, loss or damage arising
out of or caused by any such entry or reentry upon the demised premises and/or
the removal of persons and/or property and storage of such property by Lessor
or his agents.

     Lessee hereby grants to Lessor a security interest in all its fixtures,
machinery, equipment, presently owned by Lessee and located at said demised
premises. While Lessee is not in default in the payment of rent or any of its
obligations under this Lease, it may trade in or replace any of said items free
of this security interest and the security interest shall then apply to the
newly acquired items. All trade fixtures, equipment and other like property
which the Lessee has installed in the building shall remain the property of the
Lessee, subject to Lessor's security interest, and the Lessor agrees that the
Lessee shall have the option at any time, and from time to time, provided the
Lessee is not then in default in the performance of any of the obligations of
the lease on its part to be performed, to trade in or replace any and all of its
trade fixtures, equipment, and other

                                    page two
<PAGE>   3
like property which it may have installed in the building or improvements, and
upon the termination of the lease, to remove same, provided, that if Lessee be
in default it shall not then have any right of trading in, replacing or
removing of such trade fixtures, equipment and other like property which it may
have installed.

     12. ATTORNEY'S FEES. In the event of any suit, action or proceeding
brought by either party for the breach of any term hereof, or to enforce any
provision hereof, or for unlawful detainer, the losing party will pay to the
other reasonable counsel fees in said action or proceeding as fixed by the
court.

     In the event Lessee is in default in payment of rent for any period or in
Lessee's performance of any covenant hereof, and the Lessor engages an attorney
to prepare a notice of such default for service on the Lessee, the Lessee
agrees to reimburse the Lessor for the services of such attorney; and in the
event the default is cured prior to institution of suit, the fee for the
preparation of such notice shall be a reasonable amount therefor, plus actual
costs of service.

     13. ENTRY AND INSPECTION. Lessor reserves the right to enter said premises
at all reasonable times for the purpose of repairing, altering or maintaining
the improvements thereon, inspecting said premises, showing the same to
prospective encumbrancers, lessees, insurers, or purchasers, posting any notice
or sign deemed necessary by him to protect his title or interest in said
property; and during the last one hundred twenty (120) days of the term hereof
placing and maintaining therein customary "for sale" or "to let" signs.

     14. WAIVER. The waiver by Lessor of any breach hereof shall not be deemed
a waiver of any subsequent breach of the terms hereof.

     15. HOLDING OVER. Should Lessee remain in said premises after the
expiration of this lease, such holding over shall be construed as a tenancy
from month to month upon such increase in rental, if any, as established by
notice from Lessor, but otherwise on the terms and conditions hereof so far as
applicable, including rent, and the provisions for cost of living increases
therein (if any) and tax reimbursement. This paragraph shall in no sense imply
any consent by Lessor to such holding over.

     16. NOTICES TO LESSEE. All notices required by law or this lease to be
given to Lessee by Lessor may be given personally to Lessee or mailed to him
by United States mail, postage prepaid and addressed to Lessee at the premises,
whether or not Lessee has abandoned or vacated them.

     17.  TRANSFER OF SECURITY. In the event any security be given by the
Lessee to secure the faithful performance of this lease, Lessor shall not be
chargeable with interest thereon, and in the event of a sale of said premises
he may transfer such security to the purchaser and be relieved of further
liability therefor.

     18.  INSOLVENCY OR BANKRUPTCY. To the extent permitted by law, the
interest of Lessee in such premises and this lease, at the opinion of Lessor,
shall terminate in the event of levy of execution against Lessee upon such
interest (provided Lessee fails for a period of five (5) days to discharge or
bond against said levy), or upon Lessee filing or having filed against him
bankruptcy proceedings or other proceedings under the bankruptcy statutes, or
upon Lessee making a general assignment for the benefits of creditors, or upon
the appointment of a receiver to take possession of all or substantially all of
Lessee's assets.

     19.  LIENS. In the event any lien is filed against said premises for any
claim against Lessee, Lessee shall remove the same forthwith; but failing to do
so, Lessor may remove the same at the expense of Lessee. Lessee may, however,
dispute the validity of such lien, but as a condition thereof, shall file with
Lessor a surety bond covering the amount thereof.

     20.  SIGNS. Lessee shall not place any signs, visible from the exterior,
on any part of the premises without the written consent of Lessor. Upon the
expiration of this lease, Lessee shall remove all signs or decorations placed
on or in said premises and shall repair any damage done by placing, maintaining
or removing of said signs or other equipment on the roof or other portions of
the premises. Lessee may place professionally designed signs in and on said
building advertising Lessee's business after written approval by Lessor, and
governmental entitles. Signs shall include tethered airborne objects and mobile
units.

     21.  SURRENDER OF PREMISES. Lessee agrees to surrender the premises at the
termination of the tenancy herein created, in the same condition as herein
agreed they have been received,* damage caused by war, earthquake, and ordinary
wear and tear excepted; and upon the surrender of the premises, either at the
expiration of the term or otherwise, Lessee agrees to remove all personal
property and rubbish from the premises; but if not so removed by Lessee, Lessor
may have the same removed at Lessee's expense. In the event of surrender of
this lease, Lessor shall have the option of terminating all existing sub-leases
or of assigning said sub-leases to Lessor. At the time of termination of this
lease, Lessor may require any or all of the alterations or additions installed
by Lessee or by Lessor for the benefit of Lessee at Lessee's request, to be
removed and the premises restored to their original condition, whether or not
said alterations or additions have become part of the premises under paragraph
4 hereof. *See paragraph 34

     22.  SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, shall apply to and bind
the heirs, executors, administrators, successors and assigns of Lessor and
Lessee. The term "Lessor" as used herein shall mean only the owner or owners at
the time in question of the fee title or a Lessee's interest in a ground lease
of the Premises, and except as expressly herein provided, in the event of any
transfer of such title or interest, Lessor herein named (and in case of any
subsequent transfers the then grantor) shall be relieved from and after the
date of such transfer of all liability as respects Lessor's obligations
thereafter to be performed, provided that any funds in the hands of Lessor or
the then grantor at the time of such transfer, in which Lessee has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to
be performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.

     23.  TIME. Time is of the essence of this lease.

     24.  RECORDING. This lease shall not be recorded by Lessee, but in the
event the interest of Lessee herein is shown as an exception to title in any
title company report of title, Lessee agrees to execute and deliver to Lessor a
quitclaim deed covering all Lessee's interest in said premises, forthwith upon
termination of this lease.

     25.  TAX INCREASES. Lessee agrees to pay Lessor the amount of any increase
in city, county and district real estate taxes assessed against said premises,
in excess of the taxes for the fiscal year 1999 - 2000. Included in "taxes"
shall be any levy, tax, charge or fee levied by a governmental entity on
parking spaces or privileges or parking uses in the leased premises and any tax
on Lessor's gross rental receipts (other than income tax).

     Also included in said taxes shall be any future special assessments for
local improvements of any sort. If said assessments are permitted to go to
bond, the total amount of the annual installment shall be added to the tax bill
for the purpose of the computation of any increase in taxes; if Lessor
discharges said assessment and does not permit the same to go to bond, the
amount which each annual installment, less interest, would have been if the
same had gone to bond, shall be annually added to Lessor's tax bill for the
purpose of tax increase computation.

     Lessee shall pay Lessor the amount of any such increase in real property
taxes, as above defined, in two equal installments, one on December 1 and the
other on April 1 of the said fiscal tax years. Submission of copies of tax
bills by Lessor shall be evidence of and notice of the amount of said taxes.
The amount of said increase shall be prorated in the event this lease commences
or terminates during any fiscal tax year, and in such event the split-period,
proratable semi-annual installment of the tax increase shall be paid either
thirty (30) days prior to the termination of this lease or within ten (10) days
of notification by the Lessor to the Lessee of the amount of said increase.

     In the event said tax reimbursement payments are not made to Lessor on or
before the dates herein set forth, the Lessee shall pay to Lessor a ten percent
(10%) per annum late charge for such delinquency to be added to the tax
reimbursement payment due. If said taxes and assessments are assessed against
the entire building and building site, the taxes and assessments allocated to
the leased premises shall be prorated on a square footage or other equitable
basis, as calculated by Lessor.

     If the assessed value of the Lessor's premises is increased by the
inclusion therein of a value placed upon the personal property or improvements
of the Lessee, and if the Lessor pays the taxes based on such increased
assessment, the Lessee shall, upon demand, repay to the Lessor the portion of
such taxes resulting from such increase in assessment.

     26.  OUTSIDE STORAGE. No materials, supplies, equipment, finished products
or semi-finished products, raw materials or articles of any nature shall be
stored upon or permitted to remain on any portion of the leased premises
outside of the building constructed thereon, except with the prior written
consent of the Lessor.

     No waste materials or refuse shall be dumped upon or permitted to remain
unreasonably upon any part of the leased premises outside of building proper,
unless approved by Lessor.

     27.  OTHER RULES. Lessor reserves the right to make such other reasonable
rules and regulations, including parking regulations, as in Lessor's judgment
may from time to time be necessary for the safety, cleanliness and orderly
operation of the leased premises for the benefit of all the tenants in the
area. Lessee agrees to require its employees, executive, invitees and customers
to abide by such results and regulations, including parking regulations.

                                   page three
<PAGE>   4
     28.  CONDEMNATION. In the event more than ten per cent (10%) of the
building area or more than twenty per cent (20%) of the surrounding land in the
demised premises shall be condemned by any public authority under eminent
domain, this lease shall terminate and the award for damages shall belong
entirely to Lessor, except as to trade fixtures of Lessee. If a lesser portion
of the premises be condemned, the Lessee shall be entitled to a reasonable
abatement of rent proportionate to the loss of use of space being leased. The
granting by Lessor of storm drainage or utility easements over the demised
premises shall not involve any reduction in rent, unless such easements
materially affect Lessee's use of the demised premises.

     29.  NOTICES TO LESSOR. All notices required by law or this lease to be
given to Lessor by Lessee shall be mailed to Lessor, registered or certified
mail, return receipt requested, by United States Mail, postage prepaid to Lessor
at the following address or such other address as Lessor may direct in writing:

                         1025A Tanklage Road
                         San Carlos, CA 94070

     30.  ROOF MAINTENANCE. Notwithstanding the provisions of Paragraph 5,
Lessor shall maintain the roof and structural components of the leased
premises, such duty to repair being subject to the condition precedent that
Lessee shall give prior written notice of at least 24 hours to Lessor (during
working hours) specifying the need for such repairs. Structural components are
defined as outside walls (excluding windows, doors, doorframes, storefront,
glazing, door closers, locks and hardware), footings, columns, floor slab, and
roof structure systems. The Lessee, however, shall be obligated to make any and
all repairs caused by any act or omission of Lessee, his employees or invitees.

     31.  ADDITIONAL CLAUSES TO THIS LEASE. The following additional paragraphs
have been included in this lease as attachments thereto: No. 32, 33, 34, 35, 36,
37, 38, 39, & 40. In the event any of the provisions of said added paragraphs
conflicts with the provisions of paragraphs 1 through 31 hereof, the additional
paragraphs shall control and shall be effective.

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

LESSOR: TANKLAGE FAMILY PARTNERSHIP       LESSEE: ARGONAUT TECHNOLOGIES, a
        a Limited Partnership                     Delaware Corporation

        /s/ DON TANKLAGE                          /s/ DAVID P. BINKLEY
        ------------------------------            ------------------------------
         Tanklage Construction Co., Inc.          David P. Binkley, Ph.D.
         General Partner
         Don Tanklage, President
Address: 1025 Tanklage Road, Unit A      Address: 887 Industrial Road, Unit G
         San Carlos, California 94070             San Carlos, California 94070

32.) Lessee shall not generate or cause any of the following: Noise,
vibrations, odor or dust discernible or audible to adjoining tenants and in the
event of any complaint by any adjoining tenant, Lessor or any municipal entity
or agency, then Lessee shall cure such breach of the lease within 60 days of
said notice.

33.) Any other provisions of this lease not withstanding, the parties hereby
agree that the demised premises may be subject to the terms and conditions of
the Americans with Disabilities Act of 1990 (herein after the "ADA") as a
result of Lessee's use of said premises. The parties further agrees to
indemnify and hold the Lessor harmless against any claims which may arise out
of Lessee's failure to comply with the ADA. Such indemnification shall include,
but not necessarily be limited to reasonable attorney's fees, court costs and
judgments as a result of said claims.

34.) "received shall be defined as received at the time of the original lease
dated October 9, 1995 for 853 Industrial Road, Units A, I & J; and original
lease dated November 4, 1997 for 871 Industrial Road, Units A & B; and original
lease dated January 19, 1995 for 887 Industrial Road, Units D, E, F & G.

35.) All dumpster and garbage cans to be stored indoors except on day of pickup.

36.) Lessee agrees that only pneumatic tired forklifts and hand trucks shall be
used, operated, parked or stored on the leased premises, and any violation of
this provision shall be deemed a material breach of the lease entitling the
Lessor to exercise any or all of its remedies at law or as provided by this
lease.

37.) Lessee agrees to notify Lessor and P.G.&E. of any electrical loads
connected within the space by filling out a SerCare sheet and submit it to
P.G.&E. with a copy to Lessor. Lessee agrees to indemnify and hold Lessor
harmless and pay for any damages caused by connection of electrical loads to
building electrical system or P.G.&E. transformer.

38.) Lessor acknowledges that Lessee uses and stores small quantities of
products which have as their ingredients items listed on Exhibit "E". Storage
and use of chemicals and hazardous waste to comply with federal, state and
local regulations. Flammable solvent waste to be stored in separate, labeled
containers not exceeding 5 gallons.

39.) Deposits: 887 Industrial Road - $17,327.00 paid to Escagenetics and
received by Tanklage Family Partnership 3/18/96; 853 Industrial Road -
$5,265.00 paid to Escagenetics and received by Tanklage Family Partnership
3/18/96; 871 Industrial Road - $3,206.00 received 11/18/97. The amount of
$5,136.00 due with the execution of this lease dated 7/9/93.

                                   page four
<PAGE>   5
40.) OPTION - The Lessee shall have the right to one, one year option, extending
     the term of the lease from July 19, 2000 through July 18, 2001 providing
     Lessee is not in default of the terms and conditions of this lease and that
     notice of Lessee's exercise of the option is given in writing to Lessor
     prior to January 18, 2000. The base year rent for July 19, 2000 and the
     first year rent for the option period for the new lease shall be the
     greater of the following: 1) 95% of the market rent based on comparable
     properties in the immediate area; 2) the 1999-2000 base year index adjusted
     or updated to July 2000, using the same formula specified in the original
     lease dated July 9, 1999. All terms and conditions agreed upon in the
     original lease shall carry forward to the lease option period with the
     exception of the change in base year rental amount, the lease term and the
     option clause.

                                   page five

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