Document:

ACQUISITION AGREEMENT
        Acquisition agreement made this 23rd day of December, 1998 among:

                          CPM Associates Holding Corp.
                              184 West Main Street
                           Tarrytown, New York, 10591

                                                                      ("Buyer")

                                       and

               Contracting, Planning, Management, Associates, Inc.
                           D/b/a CPM Associates, Inc.
                                  195 Route 125
                         Brentwood, New Hampshire 03833,
                           a New Hampshire corporation

                                                                (the "Company")

                                       and

              William J. Poleatewich, Jr. and Marta L. Poleatewich
                                  195 Route 125
                         Brentwood, New Hampshire, 03833
                               Married individuals
                                                                     ("Seller")

WHEREAS;

A.  Buyer,  directly  and through one or more subsidiaries, intends to engage in
the  Furniture  and  Fixture  business.

B.  The  parties  hereto deem it to be in the best interest of each of them that
Buyer  purchase  80  percent  of the issued and outstanding capital stock of the
Company, an S Corporation, and generally succeed to the business of the Company,
all  pursuant  to  such  terms,  provisions and conditions as the parties hereto
shall  agree.

<PAGE> 67

NOW, THEREFORE, WITNESSETH, that for and in consideration of the premises and of
the  mutual  promises  and  covenants  hereinafter set forth, the parties hereto
agree  as  follows:

I.  CERTAIN  DEFINITIONS

As  used  in  this  agreement,  the  term:

A.  "Environmental,  Health  and  Safety  Laws"  means,  collectively,  the
Comprehensive  Environmental  Response,  Compensation  and Liability act, 42 USC
Section  9601  et. seq.; Emergency Planning and Community Right to Know Act, 42,
USC  11001  et.seq.;  the Resource Conservation and Recovery Act, 42 USC Section
691  et.  seq.;  the Federal Water Pollution Act, 33 USC Section 1251, et. seq.;
the Safe Drinking Water Act, 42 USC Section 330(f) et. seq.; the Toxic Substance
Control  Act,  15  USC Section 7401 et. seq.; the Occupational Safety and Health
Act,  29  USC  Section  651,  et.  seq.; 42 U.S.C. Section 7401 et. seq. Each as
amended  together  with the regulations promulgated in connection with the above
statutes and those pertaining to asbestos including 40 CFR part 61 subpart M and
29  CFR  1910.1001 and 1926.58; N.H. RSA 125-C, 125-I, 146-A, 146-C, 147, 147-A,
147-B,  149-M,  482-A,  485, 485-A, 485-C; including all regulations thereunder.

B.  "Knowledge"   (including  derivatives,   e.g.  "Know",  etc.)  means  actual
knowledge,  including  that  knowledge  which  would  result  from  a reasonable
investigation   following   actual   knowledge   of  any   underlying  facts  or
circumstances relating  thereto,  but  nothing  herein shall obligate a Party to
undertake  any  special  investigation   in  conjunction  with  the  transaction
contemplated  by  this
Agreement.

C.  "Liability"  means any liability (whether known or unknown, whether asserted
or  unasserted,  whether  absolute  or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any  liability  for  Taxes  and  including  Loans.

II.  PURCHASE  AND  PAYMENT

     1.  Purchase  and  Sale  of  Stock.

A.  Buyer  agrees to purchase from the Seller and Seller agrees to sell, assign,
transfer and deliver to Buyer 80 percent of the issued and outstanding shares of
stock  of  the company owned by Seller as described in Schedule A annexed hereto
and  made  a  part  of  (collectively,  the  "Stock").

B.  The purchase and payment for the Stock by Buyer shall take place as the time
and  in  the manner hereinafter provided, and the sale, assignment, transfer and
delivery of the Stock by the Seller, shall take place on the Closing Date at the
Closing  as  those terms are hereinafter defined, subject tot the fulfillment of
the  conditions  hereinafter  provided.

<PAGE> 68

III.  REPRESENTATION  AND  WARRANTIES  OF  BUYER.

Buyer  hereby  represents  and  warrants  that (I) Buyer is a duly organized and
validly  existing  corporation  under  the laws of the State of Nevada, (ii) the
execution, delivery and performance of this Agreement by the Buyer has been duly
authorized  by  all  necessary corporate action, (iii) this Agreement is a valid
and  legally  binding obligation of the Buyer enforceable in accordance with the
terms  hereof,  (iv)  no  governmental  authorization, approval, order, license,
permit,  franchise or consent and no registration or fling with any governmental
authority  is required in connection with the execution, delivery or performance
of this Agreement by the Buyer, (v) the Buyer acknowledges that the Company w8ll
lose  its  status  an  as  S  corporation  as  a  result  of  the closing of the
transaction  contemplated  by  this  Agreement  (the  "Transaction"),  (vi)  the
business  and financial condition of the company has deteriorated since the date
of  the internal Financial Statements, as such term is defined herein, and that,
(vii)  after  having  performed  such  due diligence through its experienced and
sophisticated   principals  and  such  experts  as   they  deemed  necessary  or
appropriate,  are  buying  the  lettered  or restricted Stock for its investment
purposes  and  not  with  a view to redistribution on the terms set forth herein

IV.  REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY.

Seller  and  the  Company  hereby warrant and represent to Buyer that, as of the
date hereof except as otherwise stated herein and to the best of their Knowledge
as  businesspersons,  but  not  as  accountants  or attorneys, on such date, the
following  statements  are true and correct in all material respects, except for
such  exemptions  as  are set forth in Schedule D annexed hereto and made a part
hereof,  or elsewhere in this Agreement, except as to statements in Sections C.2
and  C.6. which are made only by Seller who owns the Stock with respect to which
the  statement  is  made.

     1.  Corporate  Status.

The  Company  is (a) duly organized, validly existing and in good standing under
the  laws of the State of New Hampshire; (b) has full corporate power to own all
of  its  properties  and carry on its business as it is now being conducted; and
(c)  is  qualified  to  do  business  as  a  foreign  corporation in each of the
jurisdictions  in which it operates and the character of the properties owned by
the  Company  or  could  qualify to do business as a foreign corporation without
payment  of any significant penalty should qualifications prove to be necessary,
or  the  nature  of  the  business  transacted  by  the  company  does  not make
qualification  necessary  in  any  other  jurisdiction  or  jurisdictions.

     2.  Authority  to  Sell.

Except for any limitations or restrictions imposed by federal and state statutes
regulating,  restricting  or  governing the sale of unregistered securities (the
"Securities  Regulation  Statutes"),  Seller has full right, power and authority
with  the  terms  of  this  Agreement, and otherwise to consummate and close the
transaction  provided  for  in  this  Agreement in the manner and upon the terms
herein  specified  herein.

     3.  Hazardous  Substances.

Except  for  hazardous  substances  and  wastes,  as  such terms are used in the
Environmental health and Safety laws generated, stored or used by the Company at
its  business  premises  in the ordinary course of business, the Company has not
generated,  stored  or  used  hazardous  substances  or  wastes on or within its
business  premises  to  the  best  of  the Company's and the Seller's Knowledge.

<PAGE> 69

     4.  Financial Statements.

On  or  about  September  __,  1998,  the  Company  delivered  to Buyer internal
financial  statements  dated  as  of  August 31, 1998, comprising Schedule E - 1
hereto  (the  "Internal  Financial Statements"), including the related notes and
explanatory  notes,  present  fairly the financial position of the company as of
the  date  thereof  and  the  results  of its operations for the periods therein
indicated.

     5.  Period  Since  Date  of  Internal  Financial  Statements.

From the date of the Balance Sheet constituting a part of the Internal Financial
Statements  included  in  the  Company's Schedule E Financials, the Company has:

A.  Not  affirmatively  waived, canceled or compromised any of its rights, debts
or  claims  of  substantial  value, except for its claims, demands and causes of
action  against  Fleet  Bank-NH.

B.  No  issued  any additional shares of stock, rights or options to purchase or
convert  into  such  stock  or  other  securities.

C.  Not  made  any  distribution  to  its  shareholders, as shareholders, of any
assets,  by  way  of  dividends,  purchase  of  shares  or  otherwise, except as
disclosed  on  Schedule  D  hereto.

D.  Not  mortgaged,  pledged  or  granted  a  lien  or encumbrance on any of its
properties  or assets, except with respect to equipment purchased by the company
during  such  period.

E.  Not  sold  or  transferred any of its assets, tangible or intangible, except
motor  vehicles and except inventory and other assets sold or disposed of in the
ordinary  and  usual  course  of  business.

F.  Not  incurred any uninsured casualty losses and/or incurred or become liable
for  any obligations or liabilities except the new, current liabilities incurred
in  the  ordinary  and  usual  course  of  business,  or  made any extraordinary
expenditures other than for the purchase of motor vehicles and for additions and
betterments  to  existing  plant,  equipment  and  facilities.

G.  Not  increased the rate of compensation for any of its officers or directors
nor  for  any executive employees, except as may be in accord with pas practices
and  in  the  usual  and  ordinary  course  of  business  of  the  Company

H.  Not  experienced any material adverse effect on its business, properties and
assets  as  the  result of fire, explosion, flood, drought, windstorm, accident,
strike,  embargo,  confiscation  of  vital  equipment,  material  or  inventory,
cancellation  of  contracts by any domestic or foreign government, or any agency
thereof, or customer whose business with seller represents 5% or more of sellers
gross  revenue,  riot,  activities of armed forces, or acts of God or the public
enemy  although  the  Company  has  missed or been forced to notify customers or
re-scheduled  delivery  dates.

<PAGE> 70

     6.  Capital  Structure.

The  Company  (a)  had  authority  under its charter and applicable law to issue
capital  stock  of  the  type  and  having par values as set forth in Schedule A
hereto;  (b) has no issued and outstanding shares of its capital stock whatever,
except  as specifically indicated in Schedule A hereto, all of which such shares
are  fully  paid  and  non-assessable;  (c)  does not have authorized, issued or
outstanding any subscription, option, warrant, conversion or other rights to the
issuance  or  receipt  of  shares  of  its  capital stock except as set forth in
Schedule  A  hereto  other  than  pre-emptive  rights  appurtenant to the shares
identified  in  Schedule  A; (d) has all voting rights vested exclusively in the
presently  issued  and  outstanding  capital  stock;  and (e) has outstanding no
bonds, debentures or other similar evidences of long-term indebtedness except as
specifically  disclosed in its balance sheet as of August 31, 1998, (and related
notes  thereto).

     7.  Ownership  of  Stock.

All  of  the  issued  and outstanding shares of capital stock of the company are
owned  by  William  J.  Poleatewich,  Jr.  and Marta I. Poleatewich, individuals
married  to  each  other.  Seller  owns beneficially and of record the number of
shares set forth in Schedule A hereto opposite Seller's name.  Seller holds such
stock  free and clear of all liens, claims, debts, encumbrances and assessments,
and  any and all restrictions as to sale, assignment or transferability thereof,
except  as  otherwise  disclosed  in  the  Certificate for such Stock or herein.
Subject  to  compliance  with the requirements of all federal and state statutes
and  administrative  regulations  governing   or  restricting  the  issuance  of
securities  to the extent necessary.  Seller has full right, power and authority
to  sell,  transfer and delivery all of the shares of Stock owned by said Seller
and  the  certificates  therefor, sold hereunder, to Buyer in accordance wit the
terms  of  this Agreement, and otherwise to consummate and close the transaction
provided  for  in  this  Agreement  in  the  manner  and  upon  the terms herein
specified.

     8.  Title  to  Assets.

The company has good and marketable title to all of the assets which it owns, as
set  forth  on  Schedule  B  hereto, which good and marketable title is free and
clear  of  all  mortgages,  pledges,  liens,  credit agreements, title retention
agreements  (other  than  leases), security agreements, taxes, claims, debts and
other  obligations  and  encumbrances  except  (a)  as specifically set forth in
Schedule  D, including the security interests held by Fleet Bank-NH, (b) if any,
of current taxes not yet due and payable and (c) such additional encumbrances or
imperfections  of  title, if any, which are not substantial in character, amount
or  extent  and  which  do  not materially detract from the value, or materially
interfere  wit  the  present  or  future intended use, of the properties subject
thereto  or  affected  thereby,  and which do not otherwise materially impair or
affect  the  business  and  operations  of  the  Company.   The  Company  hereby
acknowledges that it shall pay any and all present outstanding taxes owed to the
New  Hampshire  State  Sales  Tax  Division  and  the  Internal Revenue Service.

<PAGE> 71

     9.  Peaceable  Possession  of  Assets.

The  ownership  and/or  possession of all of the assets of the company have been
peaceably  and  undisturbed  and  the  title  thereto has never been disputed or
question to the knowledge of the company, nor does the Company know of any facts
by  reason  of  which  the  possession  or title thereof by the company might be
disturbed  or  questioned  or  by  reason of which any claim to its assets might
arise  or  be  set up adverse to the company.  This section is predicated on the
acceptance  of  a  proposed chapter 11 filing by the appropriate jurisdiction of
the  Bankruptcy  court  of  Hillsboro  County,  New  Hampshire.

     10.  Regulatory  Good  Standing.

The  Company  has  all  material  rights,  certificates,  authorities,  permits,
licenses,  franchises  and other authorizations necessary to and has complied in
material  respects  with  all laws applicable to, the conduct of its business in
the  manner and in the areas in which such business is presently being conducted
and  all  such  certificates, authorities, rights, permits, licenses, franchises
and  authorizations are valid, in good standing, in full force and effect, under
no  orders  of  suspension  or  restraints,  and  subject  to  no  disciplinary,
probationary  or  other  orders.  To  the best of its knowledge, the Company has
engaged  in  no  activity  whatever  which  would  cause  or lead to proceedings
involving  revocation,  suspension,  restraint, disciplinary action or any other
action whereby any of such certificates, authorities, rights, permits, licenses,
franchises  or  authorizations,  or  any   part  thereof,   might  be  canceled,
terminated,  suspended,  impaired,  lost or otherwise adversely affected, and no
action or proceeding looking to or contemplating any of the foregoing is pending
or  to  the  company's knowledge threatened, except as specifically set forth in
Schedule  D  annexed  hereto and made a part hereof.  The foregoing shall not be
deemed  to  constitute  a  warranty  or  representation  that the company as not
heretofore or shall not hereafter suffer to be committed minor and unintentional
violations of any governmental regulations of such nature as not to cause either
suspension  or  revocation  of  the  Company's  operating  authority.

     11.  Insurance.

The  policies  of  insurance described in Schedule F are presently in full force
and  effect.

     12.  Litigation.

Except  as  set  forth in Schedule B or D hereof, the on-going IRS audit and the
pending  litigation  with Fleet, the Company is not a party to any pending or to
its  Knowledge  threatened  suit,  action, proceeding, prosecution or litigation
which  might  materially  adversely  affect  the  financial condition, business,
assets,   properties,   certificates,   rights,   authorities,   franchises   or
authorizations  of  the  Company,  or materially interfere therewith, nor to the
knowledge  of  the  Company  is  there  any  threatened  or pending governmental
investigation  involving  the  company  or  any  of  its  operations,  including
inquires,  citations  or complains by any federal, state or local administration
or  agency,  which  would  materially  adversely affect the financial condition,
business  assets  or  properties  of  the company; and there are no outstanding,
existing  or   pending   judgments,   orders,  decrees,   rulings,   directives,
stipulations  or  other  mandates  of  any  court  or any public or quasi-public
agency,  body  or official which have been in any way violated as they relate to
or  affect  the  Company   or  any  of  the  Company's  properties,  businesses,
operations,  affairs  or  activities.

<PAGE> 72

     13.  Defaults.

Except  as  set  forth in Schedule B or D annexed hereto and made a part hereof,
there  are  no  material  defaults on the part of the company under any material
contract,  lease, mortgage, pledge, credit agreement, title retention agreement,
security  agreement,  lien,  encumbrance  or  any  other  commitment,  contract,
agreement or  undertaking  to  which  the  Company  is  a  party.

     14.  Tax  Returns.

Except  as  set forth in Schedule B or D annexed hereto and mad a part hereof or
otherwise   disclosed  herein,  all   returns  for   federal,  state  and  other
governmental  income  taxes,  surtaxes,  excess  profits taxes, franchise taxes,
sales  and  use  taxes,  real  and personal property taxes and any and all other
taxes  to which the Company, or its assets, operations or income may be subject,
due  as  of the date hereof, have been duly prepared and filed in good faith and
all  taxes  shown  thereon  have  been  paid  or are accrued on the books of the
Company.

     15.  Tax  Accruals.

Except  for the unpaid payroll taxes due the IRS and any sums which have been or
are  assess  as a result of the Audit, all other taxes and other assessments and
levies  which the company 8s required by law to withhold or to collect have been
duly  withheld  and collected and have been paid over to the proper governmental
authorities or are held by the Company for such payment and all such withholding
and collections and all other payments unpaid and due in connection therewith as
of  August 31, 1998 are duly reflected in the balance sheet of the company as of
said  date.

     16.  Labor  Problems.

Except as set forth in Schedule B or D annexed hereto and made a part hereof, no
labor  or  labor union problems or difficulties, strikes, walk-outs, slow downs,
job  actions,  boycotts,  arbitrations,  investigations,  litigations or similar
proceedings  with respect thereto, are presently existing, suffered, pending, or
threatened  with  respect  to  the  Company, its employees, business operations,
assets  or  properties.

     17.  Compliance  with  Law.

Except  as  set  forth in Schedule B or D annexed hereto and made a part hereof,
all  of the properties, assets and business operations of the company conform in
material  respects  with  all   applicable  ordinances,  regulations,  laws  and
statutes,  including  but  not  limited to building, zoning, safety, highway and
other  such  laws,  rules,  regulations  and  ordinances.

     18.  Infringements.

The  Company  has  never  been  charged  with  infringement  or violation of any
adversely  held patent, trademark, trade name, or copyright, with claims reading
on  operations of the company or on apparatus or methods employed by the Company
in effecting the same, which would materially adversely affect any operations of
the  Company,  nor  is  the  Company  using  or  in  any  way  making use of any
confidential information or trade secrets, of any former employer or any present
or  past  employee  of  the Company except as a result of the acquisition of the
business  of  such  former  employer.

<PAGE> 73

     19.  Truth  of  Representation.

No representation by the Company made in this Agreement and no statement made in
any certif8icate or schedule furnished in connection with the transaction herein
contemplated  contains  or  will  contain  any  knowingly  untrue statement of a
material  fact  or  knowingly  omits  or  will  omit  to state any material fact
reasonably  necessary  to make any such representation or any such statement not
misleading  to  the  Buyer  in  light  of the due diligence of the Buyer and its
officers,  employees  and  agents  have  performed and will perform prior to the
Closing.

V.  COVENANTS  OF  THE  SELLER  AND  THE  COMPANY.

Seller  hereby  covenants  and  agrees  as  follows:

     1.  Inspection  of  Records.

Through  the  date of this Agreement (the "Due Diligence Period"), the Buyer has
had  the  right  and opportunity at its own expense to make such examination and
investigations  of  the  Company's business, properties and affairs as the Buyer
deemed  necessary  or desirable for all purposes relating to this Agreement (the
"Due  Diligence")  and  to  that  end,  throughout the Due Diligence Period, the
Company  has  allowed and granted the Buyer, its officers, counsel, accountants,
auditors  and  executive  employees  (collectively,  the "Buyer") full, free and
continuos access, during normal business hours and without interference with the
conduct  of  the  Company's  business,  to  all  of  the  premises,  properties,
contracts,  commitments, leases, books, papers, documents, instruments, books of
account, minutes and other records of the company and furnished and provided the
Buyer  with  all  such  financial  and  other statements and all such additional
information  and  particulars in respect of the business, properties and affairs
of the Company as the Buyer requested from time to time during the Due Diligence
Period.

     2.  Conduct  of  Business.

During  the  period  from  the  date  hereof to the Closing Date as that term is
hereinafter  defined,  the  Company  shall:

A.  Conduct  its  business  and  operations  solely  in  its normal and ordinary
course;

B.  Issue  no  additional  shares  of  stock,  options, calls or other rights to
purchase  such  stock,  or  any  other  securities  of  any  kind  whatever;

C.  Make  no  distributions  to  its shareholders, as shareholders of any of its
assets  or  properties  by  way of dividends, purchase of shares, redemptions or
otherwise;

D.  Not  transfer  to  any  person,  firm or corporation any customers, customer
lists  or  customer  accounts  of  the  Company;

E.  Make  no increase of any kind in salary, wages, bonus or compensation of any
officer,  employee,  representative  or  agent  of  the Company or pay any extra
compensation of any kind whatever to any of such persons, except with respect to
such  increases in or additions to compensation as may be required to be paid in
accordance  with  existing  firm  and  binding  contracts and commitments of the
company and except as may be in accordance with past procedures and in the usual
and  ordinary  course  of  business  of  the  Company;

<PAGE> 74

F.  Not  sell,  transfer  or  dispose  of  any  of  the  Stock;

G.  Not  sell, transfer or dispose of any of its business, properties or assets,
tangible  or  intangible,  except for a full and fair consideration in the usual
and  ordinary  course  of  business;

H.  Make  no  purchases  or  acquisitions  of  any real or personal property nor
increase  or  decrease  inventory,  except  in  the usual and ordinary course of
business;

I.  Not  subject  any  of its business, property or assets whatever, tangible or
intangible,  to  any mortgage, lien, pledge, hypothecation or encumbrance in any
manner except for a full and fair consideration in the usual and ordinary course
of  business;

J.  Not  borrow  any  money,  make  any unusual or extraordinary expenditures or
incur  or  become  liable  for  any  obligations  or  liabilities except current
liabilities  in  the  usual  and  ordinary  course  of  its  business

K.  Not  make any loans or advances or extend any credit except in the usual and
ordinary  course  of  its  business.

     3.  Publicity.

All  notices  to  third  parties  other  than  Seller  and  all  other publicity
concerning  the transactions contemplated by this Agreement shall be planned and
coordinated  jointly  by  Buyer  and  by  the  Company

VI.  CONDITIONS  PRECEDENT  TO  CLOSING.

     1.  Seller's  Conditions  Precedent:

All  obligations  of  the  Seller  under  this  Agreement  are  subject  to  the
fulfillment of each of the following conditions, in additions to the fulfillment
of  any  and  all  other  conditions  set  forth  in  this  Agreement:

A.  Bridge  Loan.

Buyer  shall  make  available  to  the  Company  a  Bridge Loan in the amount of
$350,000  to provide working capital to the Company.  This Loan shall be made at
the prime rate of interest as published in the "Wall Street Journal".  This Loan
shall  be  made  available  pursuant  to  the  acceptance  and  approval  of the
appropriate  jurisdiction  of  the  Bankruptcy  Court  of  Hillsboro County, New
Hampshire.

B.  Performance  of  Covenants.

Each  and  every  covenant  herein made by Buyer and the Parent, which are to be
performed  at  or  prior  to the Closing Date, shall have been duly performed by
such  times including, without limitation, the payment of the Purchase Price and
the  execution  and  delivery  of  the  related  documents.

     2.  Buyer's  Conditions  of  Precedent.

All  of  the  obligations  of  the buyer under this Agreement are subject to the
fulfillment  of each of the following conditions, in addition to the fulfillment
of  any  and  all  other  conditions  set  forth  in  this  Agreement:

<PAGE> 75

A.  Effectiveness  of  Warranties.

Except  for  any representation or warranty which by its terms relates to a date
earlier  than  the  closing  or  has  been  waived  by the expiration of the Due
Diligence  Period  without  objection insofar as any circumstance, event or fact
which  existed  on  or  before  such  expiration  date, each and every on of the
warranties  and  representations  of  Seller and the Company as hereinbefore set
forth  in  Paragraph  C  hereof,  shall be true at and as of the Closing Date as
though  such  representations  were  made  at  and  as  of  such  time.

B.  Performance  of  Covenants.

Each  and  every covenant herein made by Seller and the company, as set forth in
paragraph  D,  which  are to be performed at or prior to the Closing Date, shall
have  been  duly  performed  by  such  time.

VII.  INDEMNIFICATION

     1.  Buyer  shall  be  indemnified  by  Seller  and  the Company as follows:

Seller  and  the  Company  shall  indemnify and hold harmless the buyer from and
against  any  losses,  damages  or expenses which may be suffered or incurred by
Buyer   arising  from  or   by  reason  of  the   inaccuracy  of  any  Surviving
Representation.  Without  expanding  Seller's  liability under the terms of this
Agreement,  Seller  shall  have  no  liability  under this Section for any loss,
damage, expense or amount suffered or incurred by Buyer or the  Company (a) as a
result  of  any  election  made  by  the  Buyer or the Company subsequent to the
Closing  under  Section  338 of the Internal Revenue Code of 1954, as amended or
(b) which is covered by Insurance maintained by the Company on the Closing Date.

     2.  The  Buyer  shall  indemnify  the Company and Seller and shall hold the
Company  and Seller harmless, on demand, from and against any losses, damages or
expenses which may be suffered or incurred by the Company or Seller arising from
or  by reason of the inaccuracy of any statements, representation or warranty of
the  Buyer  made  herein  or in any statement, representation or warranty of the
Buyer  made  herein  or  in any document or instrument delivered by the Buyer to
Seller  or  the Company in connection with the transactions herein contemplated,
or  the  failure of Buyer to perform any agreement or covenant made by it herein
or  in any document or instrument delivered by Buyer to Seller or the Company in
connection  with  the  transactions  herein  contemplated.

VII.  CLOSING

     1.  Time  and  Place.

The  closing  under  this Agreement (the "Closing") and all deliveries hereunder
shall  take  place  on a date and place acceptable to both parties (the "Closing
Date").

     2.  Delivery  of  Documents.

At  the  Closing, the Company will deliver to the Buyer the following documents:

<PAGE> 76

A.  A  written  opinion,  dated on the Closing Date, of counsel representing the
Company,  in  the  form of Schedule G hereto, to the effect that the Company has
been  duly  incorporated  and  is  on  the  closing  date  validly existing as a
corporation  in  good standing under the laws of the state of its incorporation;
that  the  Company is duly qualified or licenses as a foreign corporation in all
other  states  in  which  it  does  business;  that  the shares of capital stock
delivered  by  Seller  to  Buyer at the closing have been validly issued and are
outstanding,  fully  paid,  and non-assessable, and constitute all of the issued
and  outstanding  shares  of  capital  stock  of  the Company; that such counsel
knows  of  no  litigation,  proceeding  or  investigations pending or threatened
against  the  Company  or  Seller  which  might  result  in any material adverse
change  in the validity  of this Agreement or of any action taken or to be taken
pursuant to or in  connection  with the provisions of this Agreement, other than
as  represented  elsewhere  in  this  Agreement;  and  that to thee knowledge of
such  counsel  the sale, transfer, assignment and delivery by Seller to Buyer of
the Stock pursuant to  this  Agreement  will vest in buyer all rights, title and
interest in and to such  Stock  free  and  clear  of  all  liens,  encumbrances,
and  equities.

B.  A  written  confirmation  dated  the  Closing  Date,  by  the Accountant who
reviewed  any  and  all  of the financial statements of the Company and who most
recently examined the books and records of the Company in the form of Schedule H
hereto.

C.  A certificate of the Chief Operating Officer and the Chief Financial Officer
of  the Company, dated the Closing Date certifying to the best of his knowledge,
in  reasonable  detail  as  buyer  may  request  on  and as of said date, to the
fulfillment,  as  of  the  Closing Date, of each and every one of the conditions
precedent  to the closing set forth in paragraph E hereof to the extent required
thereby.

D.  Such  additional  copies  or  duplicate  originals  of  the  above described
documents  and  such other documents, undertakings and assurances as Buyer shall
reasonably require, all of which documents, undertakings and assurances shall be
delivered  to  Buyer sufficiently in advance of the Closing Date, as Buyer shall
reasonably  require,  so  as  to  permit  adequate  inspect8ion  and examination
thereof,  all  of  which  documents undertakings and assurances shall be in form
reasonably  satisfactory  to  counsel  to  Buyer.

At  the  Closing,  Buyer  will  deliver  to  each  Seller  the  following:

E.  A  written  opinion  of  counsel  to  Buyer, dated as of the Closing, to the
effect  of the representations of Buyer and the Majority Stockholders in Section
B  hereof.

IX.  CONFIDENTIALITY.

All  information  and documentation provided or to be provided by the Company or
Seller  to  Buyer  in  connection  with  this  Agreement  and  the  transactions
contemplated  hereby has been and shall be provided in the strictest confidence.
Pending  the  Closing,  Buyer  covenants  and  agrees  not  to  use  any of such
information  or  documentation  in or for the benefit of any business engaged in
directly  or  indirectly  by  buyer  and  not to furnish or disclose any of such
information  or  documentation  to  any  person or company.  If the transactions
contemplated  by this Agreement are not consummated, Buyer covenants  and agrees
to  return  all such information and documentation to the Company and not retain
any  copies  thereof,  and  buyer  further  covenants and agrees to maintain the
confidentiality  of such information and documentation and to neither use any of
it  in  or  for the benefit of any business engaged in directly or indirectly by
the  Buyer  nor  furnish  or  disclose  any  of  it  to  any  person or company.

<PAGE> 77

X.  GENERAL  PROVISIONS.

     1.  Brokerage  Fees.

Buyer will pay brokerage fees to BKR International Mergers & Acquisitions group,
LLC  and  Leveson  Associates,  Inc.  by separate agreements and the Buyer shall
hold  the  Seller  harmless  from  any  claim  for  the  payment  of  such fees.

     2.  Conversion  Rights.

William  J.  Poleatewich,  Jr.  and  Marta L. Poleatewich will have the right to
convert their stock into the shares of any public company that may in the future
acquire  or  merge  with  the  Buyer.

3.  Due  Diligence.

The  Buyer  has conducted its own Due Diligence and has a right granted to it by
this  Agreement  the  authority  to  have  its  own  auditors conduct a full and
expansive  audit  of  the  books  and  records  of  CPM, in the normal course of
auditing  for year end purposes on or before August 1, 1999 (the "Unwind Date").
Should  it  be  finally  determined  that Seller or the Company has breached any
Surviving  Representation,  then the Buyer shall have the right to call upon the
un-wind  provisions  as  delineated  herein.

     4.  Restructure  of  Debt.

The  Seller and the Company agree to make a good faith effort to restructure the
debt  with  Fleet  Bank  and  various  other  vendors.  The  parameters  of  the
restructure  is  to  include:

A.  Fleet  Bank  accepting $360,.000 in full payment of debt owed to it from the
Company  at  closing.

B.  Mutual  releases  covering Fleet Bank, the Company and the guarantors of the
debt.

C.  The  Company  will  make  a  good  faith  effort  to restructure outstanding
accounts  payable.

     5.  Employment  Contracts.

William  J.  Poleatewich,  Jr.  will  continue  as president and Chief Operating
Officer  of  the  Company  pursuant to an employment agreement terms of which to
include  a  salary  of $100,000 per year for a 5 year period.  This Agreement is
subject  to  the execution of Employment contracts satisfactory to both parties.

Marta L. Poleatewich will continue as Vice President and Chief Financial Officer
of  the  Company pursuant to an employment agreement terms of which to include a
salary  of  $40,000  per year for a 5 year period.  This Agreement is subject to
the  execution  of  Employment  Contracts  satisfactory  to  both  parties.

     6.  Non-Compete  Agreements.

William J. Poleatewich and Marta L. Poleatewich will sign non-compete agreements
satisfactory  to  the  Buyer  and  to  the  Seller.

<PAGE> 78

     7.  Corporate  Action.

Prior  to  the Closing Date, the Board of Directors of the Company and the Buyer
shall  have  duly  adopted  resolutions  to  the same effect with respect to the
aforesaid  matters.

     8.  Termination.

In the event any of the foregoing conditions shall not be fulfilled prior to the
Closing,  unless  caused  by  any action or failure to act on the part of Buyer,
Buyer  shall  have  the  right  to  terminate the Agreement by notice thereof in
writing  to  the  Company,  and  the parties thereto shall be restored as far as
possible  to  status  quo,  whereupon  the  parties hereto shall have no further
obligations  or  liabilities  hereunder,  one  against the other, except for the
obligation  of Buyer under Section H hereof which shall survive a termination of
this  Agreement.

     9.  Refinancing  of  Certain  Debt.

The  Seller  and  the  Company  will  make  a  good  faith  effort to pursue the
refinancing of certain corporate debt through key bank and will notify the Buyer
promptly  of  any  change  in  the  status  of  these  negotiations.

     10.  Survival  of  Representations,  Warranties  and  Covenants.

The affirmations, representations and warranties by Seller and/or the Company in
Paragraph  IV,  3.  and  4.  of this Agreement (the "Surviving Representations")
shall survive the Closing until August 1, 1999 when they shall expire and become
non-actionable.  Except  for the Surviving Representations, the representations,
warranties,  covenants  indemnities  and other agreements herein contained shall
not survive the closing and shall expire and become non-actionable automatically
at the conclusion of the Closing for a period not to exceed nine months from the
date  of  Closing.

     11.  Diligence.

The  parties  hereto  agree that each shall with reasonable diligence proceed to
take  all action which may be reasonably required to consummate the  transaction
herein  contemplated.

     12.  Waivers.

Each  party  hereto  may:

A.  Extend  the  time  for  performance  of  any of the obligations of the other
party;

B.  Waive  in writing any inaccuracies in representations and warranties made to
it  contained  in  this  Agreement  or any schedule hereto or any certificate or
certificates  delivered  by any of the other parties pursuant to this Agreement;
and

C.  Waive  in  writing  the  failure  of  performance  of any of the agreements,
covenants,  obligations  or  conditions of the other parties herein set forth or
alternatively  terminate  this  Agreement  for  such  failure.

<PAGE> 79

     13.  Non-Waiver.

The  waiver by any party hereto of any breach, default, inaccuracy or failure by
another  party  with  respect to any provision of this Agreement or any schedule
hereto  shall  not  operate  or  be construed as a waiver of any other provision
thereof  or  of  any  subsequent  breach  thereof.

14.  Further  Assurances.

Each  party  hereto  agrees  to  execute  such further documents or instruments,
requested  by the other party, s may be reasonably necessary or desirable to the
effect  the  purposes  of this Agreement and to carry out its provisions, at the
expense  of  the  party  requesting  the  same.

     15.  Entire  Agreement.

This  Agreement  constitutes  a  complete  statement  of  all  the arrangements,
understandings  and  agreements between the parties, and all prior memoranda and
oral  understandings  with  respect thereto are merged in this Agreement.  There
are  no  representations,  warranties, covenants, conditions or other agreements
among  the  parties  except  as  herein  specifically set forth, and none of the
parties  hereto shall rely on any statement by or on behalf of the other parties
which  is  not  contained  in  this  Agreement.

     16  Governing  Law.

Irrespective  of  the  place  of  execution or performance of this Agreement, it
shall  be  governed by and construed in accordance with the laws of the State of
new  Hampshire  applicable to contracts made and to be performed in the State of
New  Hampshire, and cannot be changed, modified, amended or terminated except in
writing,  signed  by  the  parties  hereto.

     17.  Benefit  and  Assignablity.

This  agreement  shall  bind  and inure to the benefit of the parties hereto and
their  respective  legal  representatives,  successors  and  assigns,  provided,
however,  that  this Agreement cannot be assigned by any party except by or with
the  written  consent  of  the  others.  Nothing  herein expressed or implied is
intended  or  shall  be  construed to confer upon or to give any person, firm or
corporation   other  than   the  parties  hereto   and  their  respective  legal
representatives,  successors,  and  assigns  any  rights or benefits under or by
reason  of  this  Agreement.

     18.  Approval  of  Counsel.

The  form  of  all  legal  proceedings  and  of all papers and documents used or
delivered  hereunder, shall be subject tot the approval of counsels to Buyer and
Seller.

    19.  Costs.

The  Buyer  shall  not  be  entitled  to  reimbursement of the Buyer's costs and
expenses of the transaction.  The costs and expenses of the Seller in connection
with  this Agreement and the transactions contemplated hereby shall be borne and
paid  by  CPM  Associates.

<PAGE> 80

     20.  Counterparts.

This  Agreement  may  be  executed  in any number of counterparts, each of which
shall  be deemed an original, but all of which together shall constitute one and
the  same  Agreement.

     21.  Notices.

Any  notices  and  other communications under this Agreement shall be in writing
and  shall  be  considered  given if delivered personally or mailed by certified
mail to the party, for whom such notice is intended, at the address indicated at
the  outset hereof (or at such other address as such party may specify by notice
to  the  other  parties  hereto).

     22.  Headings.

The  headings  in  this  Agreement  are  intended  solely for the convenience of
reference  and shall be given no effect in the construction or interpretation of
this  Agreement.

     23.  Further  Action.

Any  further  action  required  or  permitted  to be taken under this Agreement,
including  giving notices, executing documents, waiving conditions, and agreeing
to  amendments  or modifications, may be taken on behalf of a party by its Board
of  Directors,  its  President  or  any  other person designated by its Board of
Directors,  and  when  so  taken  shall  be  deemed  the  action  of  such party

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

BUYER                                     SELLER

CPM ASSOCIATES HOLDING CORP.             By:  /s/ William J. Poleatewich, Jr.
                                         Witness: /s/ signed
By:  /s/ Richard J. Verdiramo            By: /s/ Marta L. Poleatewich
Richard J. Verdiramo, Vice President     Witness: /s/ signed
Witness: /s/ signed                      THE COMPANY
                                         CONTRACTING, PLANNING, MANAGEMENT,
                                         ASSOCIATES, INC.
                                         By:  /s/ William J. Poleatewich, Jr.
                                         William J. Poleatewich, Jr. President
                                         Witness: /s/ signedLEASE

LEASE AGREEMENT

 

 

DATE:March 1, 2000

LANDLORD:STEVENSON BUSINESS PARK, LLC

a California limited liability Company 

c/o Trumark Companies
4135 Blackhawk Plaza Circle, Suite 280

Danville, CA 94506

TENANT:AVANEX CORPORATION, 
a Delaware corporation

The Premises

1.Premises.  Landlord hereby leases to Tenant upon the terms and conditions contained in this lease ("Lease")
those certain premises (the "Premises") consisting of approximately 91,332 square feet (measured from the Building
"drip-line," as per custom and practice in Alameda County) constituting all of that certain building known as
"Building C" and located at 40949  Encyclopedia Circle, Fremont, California (the "Building"), which Premises are
shown within the cross-hatched area on the map of the Building attached hereto as Exhibit "A."  The land upon which the
Building is situated is hereinafter referred to as the "Land" and consists of a real property parcel described as
"Parcel 3 "of Parcel Map 7251. The figure of 91,332 square feet shall be used for all calculations under this Lease in
which the square footage of the Building is a factor, including, without limitation, any purchase price calculations pursuant to
Section 3.3 below. On or about September 8, 1999, Landlord and Tenant entered into a lease with respect to Building B of the
Project.

For the purposes of this Lease, the following definitions shall apply:

a.The term "Building Shell" shall mean a concrete tilt-up building (for group B occupancy only), (1) of a design
and construction quality equivalent to that of Building B and (2) containing four  (4) combination dock high truck doors (two (2)
grade level loading doors) with approximately 24 foot clear height; .495 GPM/2000 square feet rated fire sprinkler system; and, a
2000 amp-277/480 volt, three phase power service (with no power panel). 

bThe term "Project" shall mean that certain three (3) building complex otherwise know as the Stevenson Business
Park in which the Building is located.

c.The term "Declaration" shall mean that certain Declaration of Covenants, Rules, and Restriction and Reciprocal
Easement Agreement, which has been recorded with respect to the Project.

d.The term "Land" shall refer to the real property upon which the Project is situated.  

e. The term "Common Areas" shall mean all parking areas, landscape areas and other areas, facilities or
improvements located on the Land which are designated in the Declaration as "Common Area." 

f.The term "Exclusive Common Area" shall mean those portions of the Common Area, which exclusively serve the Building.

g.The term "Improvement Allowance" shall mean the sum of THREE MILLION ONE HUNDRED NINETY-SIX
THOUSAND SIX HUNDRED TWENTY DOLLARS ($3,196, 620). 

h.The term "Improvements Costs" shall mean all of the costs and expenses to be incurred in
connection with the design, permitting, construction and testing of the Tenant Improvements (including, without limitation, the cost
of the space plan for the Tenant Improvements and the Approved Plans and the fees and charges of the Contractor). Landlord will not
charge a separate construction management or supervision fee in connection with the construction of the Tenant Improvements. 

 

i.The term "Approved Plans" shall mean the plans and specifications for the each Phase of the Tenant
Improvements which have been prepared by DES Architects + Engineers (the "Architect") and approved by Landlord and
Tenant prior to the date hereof. 

j.The term "Tenant Improvements" shall mean the interior improvements configured for Tenant's intended use and
occupancy of the Premises, which are set forth on the Approved Plans.  The term "Phase 1" shall mean that initial
portion of the Tenant Improvements consisting of approximately 25,000 square feet of area improvements. The term "Phase
2" shall mean improvements to the remaining areas of the Premises. 

2.Building Shell and Tenant Improvements. 

2.1.Building Shell. Tenant hereby acknowledges as follows:

a.Landlord has designed and constructed the Building Shell as a generic or "spec" office and manufacturing
building for group "B" occupancy. The Building Shell was not constructed in contemplation of the Tenant's specific
improvements, use and/or occupancy; 

b.Tenant has reviewed and inspected the Building Shell and Building Shell plans and specifications and is satisfied that the
Building Shell will be suitable for the Tenant Improvements and Tenant's intended use and operation therein;

c.Except as to the Warranty (as defined in Section 2.6 below), Landlord has made not, and will not make, any representations
or warranties regarding the Building Shell, the Common Areas, the Tenant Improvements, or any aspect of the Project or the Common
Areas. 

d.Tenant has not relied on Landlord to provide any advice or services in connection with the design of the Tenant
Improvements or as to any modifications which may need to be made in order to accommodate the Tenant Improvements or Tenant's
particular use of the Premises.

e.Except as to the Warranty and subject to completion of punchlist items as described in Section 2.4below, upon delivery of
the Premises to Tenant, Tenant shall accept the same, together with the Tenant Improvements, in their "AS IS" in
condition. 

f.Tenant has requested that the Tenant Improvements be designed and constructed on a "fast track" basis and, in
order to accommodate this, the Tenant Improvements will be designed by the Building Architect and constructed by the Building
Contractor. 

	As a result of the "fast track" design and construction of the Tenant Improvements, as requested by Tenant, during the
course of construction, the actual Improvement Costs are likely to increase above any original estimates which may be provided by
the Building Contractor. H

h.Tenant will have the Approved Plans reviewed by its own consulting architect. 

2.2Tenant Improvements. 

	Construction. Landlord and Tenant agree that the construction of the Tenant Improvements, as set forth on the Approved
Plans, will be carried out by the "Building Contractor", Hollander Smith Construction. Landlord will use
commercially reasonably efforts to negotiate a fixed-price contract with the Building Contractor (the "Construction
Contract") which is competitive for similar work in the Fremont-Newark area based upon "fast-track " design and
construction conditions. 

Landlord shall use diligent efforts to have the Building Contractor substantially complete Phase 1 of the Tenant Improvements by
April 15, 2000. Landlord shall use diligent efforts to have the Building Contractor substantially complete Phase 2 of the Tenant
Improvements by July 1, 2000. 

"Substantially complete" "or "substantial completion" shall mean that the particular Phase of the Tenant
Improvements have been constructed in accordance with the Approved Plans (as evidenced by a certificate of Substantial Completion
submitted by the Building Architect), as modified by material change orders approved by Landlord and Tenant except for minor
"field" changes in the Approved Plans, other minor deviations and punchlist items) and are in such condition so as to
allow Tenant to install Tenant's own fixtures, furnishings, and equipment and, thereafter,  to conduct its operations. 

"Landlord's Construction Obligations" shall mean Landlord's obligation to utilize diligent efforts to supervise
and direct the Building Contractor and the construction process such that construction of each Phase is substantially complete by
the dates set forth above. Provided that Landlord has exerted the diligent efforts specified herein, Landlord shall be deemed to
have satisfied Landlord's Construction Obligations even if the construction of a Phase is not substantially complete by the dates
set forth above.

2.2.2Improvement Costs; Additional Costs. Landlord shall pay for that portion of the Improvement Costs which are up to
the Improvement Allowance; provided, however, in no event shall Landlord be obligated to advance any portion of the Improvement
Allowance, or otherwise assume any financial responsibility, with respect to the purchase, construction or installation of any of
the items set forth in Exhibit D attached hereto. Any portion of the Improvement Costs ("Additional Costs")
which are in excess of the Improvement Allowance or which are related to the items set forth in Exhibit D shall be paid for
by Tenant. 

	Tenant's Advances. Prior to the commencement of construction of Phase 1, Tenant shall pay to Landlord an amount equal to
the estimated Additional Costs for Phase 1 ("Tenant's Phase 1 Advance"), which estimate shall be based upon the
Building Contractor's estimate of Improvement Costs for that Phase. In no event shall Landlord be obligated to direct the Building
Contractor to obtain building permits for, or commence construction of, Phase 1 unless and until Landlord has received Tenant's
Phase 1 Advance. 

Prior to the commencement of construction of Phase 2, Tenant shall pay to Landlord an amount equal to the estimated
Additional Costs for Phase 2 ("Tenant's Phase 2 Advance"), which estimate shall be based upon the Building
Contractor's estimate of Improvement Costs for that Phase. In no event shall Landlord be obligated to direct the Building Contractor
to obtain building permits for, or commence construction of, Phase 2 unless and until Landlord has received Tenant's Phase 2
Advance.

If at any time, and from time to time, during construction of the Tenant Improvements, Landlord reasonably determines that
the Additional Costs will exceed the balance of Tenant's Phase 1 Advance or Tenant's Phase 2 Advance, as applicable, then, within
five (5) days following written demand from Landlord, Tenant shall advance to Landlord ("Additional Advance") the
amount of such excess. 

Tenant's Phase 1 Advance and Tenant's Phase 2 Advance shall be applied by Landlord towards the payment of Improvement Costs after
Landlord has expended the full amount of the Improvement Allowance applicable to each Phase; provided, however, as to those items
set forth in Exhibit D, Landlord shall expend Tenant's advances as and when needed to pay for such items regardless of
whether Landlord has expended the full amount of the Improvement Allowance. In no event shall Landlord be obligated to expend from
its own funds (including funds advanced to Landlord from the Project lender) more than the sum of the Improvement Allowance. 

If upon completion of construction of Phase 1 or Phase 2 there are any Additional Costs which have not been covered by Tenant's
Phase 1 Advance, Tenant's Phase 2 Advance, and/or any Additional Advances, then Tenant shall pay to Landlord, as Additional Rent,
any such remaining Additional Costs within ten (10) days following written demand. 

     
If, upon the completion of construction of the Tenant Improvements and any other improvements constructed after completion of the
Tenant Improvements pursuant to change orders requested by Tenant and upon the payment of all amounts owing to the Building
Contractor and otherwise, there are any unexpended portions of Tenant's Initial Advance and/or any Additional Advances ("TI
Surplus"), then Landlord shall pay to Tenant any such TI Surplus not later than thirty (30) days following the completion
of all punchlist items with respect to the Tenant Improvements and such other improvements If Landlord does not pay any TI Surplus
within the aforesaid thirty (30) day period, then the TI Surplus shall accrue interest at the rate set forth in Section 28.8  below
from the end of the aforesaid thirty (30) day period until the date the payment is actually paid. 

2.2.4Walk-through-Punchlist. Upon Substantial Completion of Phase 1, Landlord, Tenant, Tenant's consultant, and
the Building Contractor shall conduct a walk-through of the Building to inspect the Tenant Improvements as completed and shall
prepare a list of punchlist items to be completed. Landlord shall cause the Building Contractor to complete all punchlist items
within thirty (30) days following the walk-through. Upon Substantial Completion of Phase 2, the parties shall follow the same walk-
through and punchlist procedure.  Upon Substantial Completion of both Phase 1 and Phase 2,  Landlord shall diligently pursue
obtaining from the City of Fremont final inspections of the Tenant Improvements and, if applicable, a certificate of occupancy for
the Building.

2.2.5Date of Delivery; As Is. Landlord shall deliver the Premises to Tenant
upon the Substantial Completion of Phase 1 of the Tenant Improvements. Landlord shall not be in default hereunder and shall not be
liable to Tenant for any damage or loss incurred by Tenant by reason of Landlord's failure, for whatever reason, to cause the
Premises to be delivered by any particular date (including, without limitation, the dates set forth in Section 2.2.1 above), nor
shall this Lease be void or voidable on account thereof. Notwithstanding the foregoing, if Phase 1 of the Tenant Improvements are
not Substantially Completed by August 15, 2000 and the delay in such Substantial Completion is not a result of any Tenant Delays (as
defined in Section 3.1 below), then at any time during the period between August 15 and August 25th, 2000, Tenant may provide
written notice to Landlord electing to terminate this Lease; provided, however, Tenant shall have no right to terminate this Lease,
as provided above, if Tenant has taken occupancy of all or any part of the Building. If, within five (5) days following a
termination notice by Tenant, Phase 1 of the Tenant Improvements are not substantially completed, then this Lease shall terminate
upon the expiration of such five (5) day period and, thereafter, neither Landlord nor Tenant shall have any further rights or
obligations hereunder. If, within five (5) days following a termination notice by Tenant, Phase 1 of the Tenant Improvements is
substantially completed, then this Lease shall continue and Tenant's termination notice shall be of no further force or
effect.

 
Subject to the completion of punchlist items and, except as to the Warranty, Tenant shall accept the Premises (together with the
Tenant Improvements as completed) on the Commencement Date (as defined below) in its "As Is" condition. 

2.2.6Limited Warranty. For a period of one (1) year following Substantial Completion of each Phase of the Tenant
Improvements, Landlord warrants (the "Warranty") that each Phase has been completed in a good and workmanlike
manner free from defects, and that all systems installed as part of such Phase will be in good working order and condition. Tenant
shall provide prompt written notice to Landlord of any defect or condition to which the Warranty applies (a "Warranty
Notice"). Upon receipt of a Warranty Notice from Tenant, Landlord shall be obligated, at its cost and expense, to
diligently cause the defect or condition to be remedied within a reasonable period of time; provided, however, in no event shall any
defect or condition entitle Tenant to terminate this Lease or provide to Tenant any right of offset, abatement, or deduction as
against any Rents becoming due hereunder. The Warranty shall not apply to any component or system within the Tenant Improvements
which (a) have been installed, altered, or modified by Tenant, (b) affected by the installation of Tenant's fixtures, furnishings,
and equipment or by any other act or omission of Tenant, or (c) have been used in a manner for which such component or system was
not designed or intended, or (d) have not been properly maintained to the extent such maintenance is the responsibility of Tenant or
to which Tenant has otherwise conducted its own maintenance or repairs. 

3.Term; Option to Renew and Purchase.

	3.1Term.  The term of this Lease (the "Lease Term") shall commence on the Commencement Date and shall end on
the date that is ten (10), years thereafter. The "Commencement Date" shall be the earlier of the following: 

	the date that Phase 1 of the Tenant Improvements are substantially completed, or the date the Tenant Improvements would have
been substantially completed but for any Tenant Delays, or 
	April 15, 2000,  provided that Landlord has satisfied Landlord's Construction Obligations.

"Tenant Delays" on the part of Tenant shall include, without limitation, Tenant's failure to timely deposit
funds with Landlord (as provided in Section 2.2.5 above), change orders requested by Tenant, and/or any failure by Tenant to timely
provide to Landlord, the Building Architect, and/or the Building Contractor information or approvals as may be requested from time
to time; provided, however, an act or omission on the part of Tenant shall only comprise a Tenant Delay if the completion of the
Tenant Improvements are actually delayed thereby and Landlord has provided to Tenant written notice that such act or omission may
delay the progress of construction, which notice is provided by Landlord within five (5) days following the date Landlord is
informed that Tenant's act or omission will cause a delay. 

3.2Option to Renew. The Landlord hereby grants to Tenant one option to extend the Lease Term (the "Option")
upon the following terms and conditions:

(a)The Option shall give Tenant the right to extend the Lease Term for one (1) additional five (5) year period (the
"Extended Term");

(b)Tenant shall give Landlord written notice of its exercise of the Option no earlier than twelve (12) months nor
later than six (6) months before the date the Lease Term would end but for said exercise;

(c)Tenant shall not have the right to exercise the Option if at the time of exercise Tenant is in material default
under this Lease.  The period of exercise for the Option shall not be extended for any period for which Tenant is unable to exercise
the Option by reason of Tenant's material default;

(d)All terms and conditions of this Lease shall apply during the Extended Term except that Base Rent shall be
determined as provided in Section 4.2 below; and,

(e)Once Tenant delivers notice of its exercise of the Option pursuant to (b) above, Tenant may not withdraw such
exercise, and such notice of exercise shall operate to automatically extend the Lease Term; provided, however, if Tenant is in
material default under this Lease (provided that Tenant's default with respect to any monetary obligation shall in all events be
regarded as material) on the date an Extended Term is to begin, this Lease, at Landlord's election and upon written notice from
Landlord specifying the default, shall not be extended pursuant to the provisions of this Section 3.2, but shall terminate on
the last day of the Lease Term. If Landlord determines that any exercise notice received from Tenant constitutes an
ineffectual exercise of the Option, then Landlord shall provide to Tenant notice of that fact within three (3) days following
Landlord's receipt of the exercise notice.

The term "Lease Term" shall mean and refer to the initial term of the Lease, as described in Section 3.1 above, together
with the Extended Term which has been put into effect by reason of an exercise of the Option by Tenant pursuant to this
Section 3.2.

4.Rent.

4.1 Base Rent.  Tenant agrees, as of the Commencement Date, to pay Landlord, without prior notice, demand, or
right of deduction and/or offset, monthly "Base Rent" as follows: 

a.Upon the Commencement Date, SIXTY-THREE THOUSAND NINETEEN DOLLARS TEN CENTS ($63,019.10) per month; and, 

	Upon the earlier of (1) July 1, 2000 or (2) the date that Phase 2 of the Tenant Improvements are substantially completed or
would have been substantially completed but for any Tenant Delays, monthly Base Rent shall be payable in the amounts set forth in
Exhibit "B" attached hereto. 

Base Rent shall be due and payable at Landlord's address shown above on the first day of each calendar month throughout the Lease
Term. Base Rent for any period during the Lease Term which is for less than one (1) month shall be prorated based on a thirty (30)
day month. For the purposes of determining the applicable rent under Exhibit "B," "Lease Year" shall
mean each successive twelve (12) month period during the Lease Term, commencing on the Commencement Date.

 4.2Rent for Extended Term. Base Rent for the Extended Term shall be an amount equal to the fair market rental
value of the Premises in relation to market conditions at the time of the extension; provided, however, in no event shall the Base
Rent for the Extended Term be less than the Base Rent applicable during the tenth (10th) lease year of the Lease Term,
nor shall the annual increases of such Base Rent be less then applicable market rates. The fair market rental value of the Premises
shall be determined by and as follows:

4.2.1Mutual Agreement. After timely receipt by Landlord of Tenant's notice of exercise of the Option, Landlord
and Tenant shall have a period of thirty (30) days in which to agree on Base Rent for the Extended Term.  If Landlord and Tenant
agree on Base Rent during that period, they shall immediately execute an amendment to this Lease stating Base Rent for the Extended
Term.  If Landlord and Tenant are unable to so agree on Base Rent, then Base Rent for the Extended Term shall be calculated by
utilizing the fair market rental value of the Premises determined as provided in Section 4.2.2 below.

4.2.2Appraisal. Within ten (10) days after the expiration of the thirty (30) day period
described in Section 4.2.1 above, each party, at its cost and by giving notice to the other party, shall appoint M.A.I. real
estate appraiser, with at least five (5) years full-time commercial appraisal experience in Alameda County, to appraise and set the
fair market rental value of the Premises.  If a party does not appoint an appraiser within five (5) days after the other party has
given notice of the name of its appraiser, the single appraiser appointed shall be the sole appraiser and shall set the fair market
rental value of the Premises.  The cost of such sole appraiser shall be borne equally by the parties.  The two appraisers appointed
by the parties shall meet promptly and attempt to set the fair market rental value of the Premises.  If they are unable to agree
within twenty (20) days after the last appraiser has been appointed, then the two appraisers shall attempt to select a third
appraiser meeting the qualifications stated in this Section 4.2.2 within ten (10) days after the last day the two appraisers
are given to set the fair market rental value of the Premises If they are unable to agree on the third appraiser, either of the
parties to this Lease, by giving ten (10) days notice to the other party, may apply to the presiding judge of the Superior Court of
Alameda County for the selection of a third appraiser who meets the qualifications stated above.  Each of the parties shall bear
one-half (1/2) of the cost of appointing the third appraiser and of paying the third appraiser's fee.  The third appraiser, however
selected, shall be instructed to select which of the two appraisals submitted by the parties' respective appraisers more closely
represents the fair market rental value for the Premises, which selection shall be the fair market rental value of the Premises.  In
establishing the fair market rental value, the appraiser or appraisers shall consider (on a triple net basis) the reasonable market
rental value for the Premises (which shall include considerations of (a) rental rates for comparable space with comparable tenant
improvements (provided that in no event shall the determination of the fair market rental value of the Premises include rent
applicable to any portion of the Tenant Improvements in excess of the Improvement Allowance or of any other improvements paid for
directly by Tenant), (b) cost of living increases or other rental adjustments (c) the relative strength of the tenants, and (d) the
size of the space without regard to the existence of this Lease. 

4.3Additional Rent.  In addition to Base Rent, Tenant shall pay, as "Additional Rent," Tenant's
Percentage Share of Operating Expenses and Taxes, utility costs as referred to in Section 7 below, late charges and interest as
provided for in this Lease, and all other items to be paid hereunder to Landlord.  The term "Rent(s)" whenever used herein
refers to Base Rent and Additional Rent.

4.4Rent Deposit .  Upon execution of this Lease, Tenant shall pay to Landlord the sum of ONE HUNDRED SIX THOUSAND FOUR
HUNDRED ONE DOLLARS AND SEVENTY-EIGHT CENTS ($106,401.78) as a deposit for the Base Rent due on July 1, 2000. 

5.Security Deposit.  Upon execution of this Lease, Tenant shall deposit with Landlord ONE MILLION TWO HUNDRED SEVENTY-
SIX THOUSAND EIGHT HUNDRED TWENTY-ONE DOLLARS AND THIRTY CENTS ($1,276,821.30) as a security deposit for the performance by Tenant
of the provisions of this Lease.  The security deposit shall consist of (a) cash in the amount of ONE HUNDRED FIFTY-ONE THOUSAND
FOUR HUNDRED FOURTY-TWO DOLLARS AND EIGHTY-SEVEN CENTS ($151,442.87)(the, "Cash Deposit") and (b) a Letter of
Credit (the "Letter of Credit") in the amount of ONE MILLION ONE HUNDRED TWENTY-FIVE THOUSAND THREE HUNDRED
SEVENTY-EIGHT DOLLARS AND FIFTY CENTS ($1,125, 378.50) which meets the requirements set forth below. Tenant may elect to deposit the
Letter of Credit with Landlord within fifteen (15) days following Tenant's execution of this Lease. Tenant's failure to deliver the
security deposit or any component thereof, as and when required in this Section 5 shall be a material default by Tenant under this
Lease. Upon such default, Landlord, in addition to its other rights and remedies, may instruct the Building Contractor to cease
construction of the Tenant Improvements until the default is cured. In addition, any cessation of work shall be automatically
regarded as a Tenant Delay without the necessity of any notice on the part of Landlord. If Tenant is in default, Landlord can use
the security deposit, or any portion of it, to cure the default or to compensate Landlord for all damages sustained by Landlord
resulting from Tenant's default.  Tenant shall pay immediately on demand to Landlord a sum equal to the portion of the security
deposit expended or applied by Landlord as provided in this Section so as to maintain the security deposit in the sum initially
deposited with Landlord. In this regard, in the event Landlord draws only a portion of the Letter of Credit (as described in 5. e.
below), then Tenant shall immediately provide to Landlord a replacement Letter of Credit in the amount of ONE MILLION ONE HUNDRED
TWENTY-FIVE THOUSAND THREE HUNDRED SEVENTY-EIGHT DOLLARS AND FIFTY CENTS ($1,125,378.50) which meets the requirements set forth
below.    As soon as practicable after the expiration or termination of this Lease, Landlord shall return the security deposit to
Tenant, less such amounts as are reasonably necessary to remedy Tenant's defaults in payment of Rent, to repair damages to the
Premises caused by Tenant or to clean the Premises upon such termination, reasonable and normal wear and tear excepted.  In the
event of the sale of the Building, the security deposit will be transferred to the purchaser and Landlord will be relieved of any
liability with reference to such security deposit upon such transfer.  Landlord shall not be required to keep the security deposit
separate from its other funds, and Tenant shall not be entitled to interest on such deposit. Notwithstanding the foregoing, interest
shall accrue on the unused balance of the Cash Deposit at an annual rate of two percent (2%) from the date the Cash Deposit is
placed with Landlord through the date that the Cash Deposit, or any remaining portion thereof, is returned to Tenant following the
expiration or termination of this Lease. Accrued interest on the unused portion of the Cash Deposit shall only be payable to Tenant
upon the expiration or termination of this Lease; provided, however, no interest shall be payable to Tenant if this Lease has been
terminated by Landlord following an event of default on the part of Tenant. 

The Letter of Credit shall comply with the following:

	The Letter of Credit shall be issued by a financial institution with a rating of "AA" or better by Moody's Investor
Service and "AA" or better by Standard & Poors Corporation and otherwise reasonably approved by Landlord and any
lender which has provided, or will be providing, financing for the Building (a "Building Lender"), which issuer
shall have offices from which the Letter of Credit may be drawn in either Alameda County or Santa Clara County, California;
	The Letter of Credit shall be for the direct account and benefit of Landlord and, if requested by Landlord, the Building Lender,
and in the form of a clean, irrevocable, non-documentary and unconditional letter of credit and otherwise in form reasonably
approved by Landlord and the Building Lender
	The Letter of Credit shall be fully transferable and/or assignable by Landlord and/or the Building Lender to successor owners of
the Building, provided that Landlord, or its successors, shall pay for any transfer charges that are customarily imposed by the
issuer of the Letter of Credit.
	The Letter of Credit shall, on its face,  be for an initial term of one year with an automatic extension for consecutive periods
of one year each, unless the issuer thereof sends notice (the "Non-Renewal Notice") to Landlord by certified mail
not less than thirty (30) days prior to the then expiration date of the Letter of Credit; 
	The Letter of Credit shall, on its face, state that Landlord shall have the right to draw thereunder upon presentation of a
written statement certifying that there has occurred an event of default under this Lease. Upon an event of default, Landlord shall
only be entitled to draw a portion of the Letter of Credit which is equal to the damages which Landlord reasonably determines
Landlord has incurred or will incur in connection therewith (which damages may include all damages to which Landlord may be entitled
pursuant to Section 20 below). Prior to making a draw upon the Letter of Credit by reason of default by Tenant, Landlord shall have
provided to Tenant written notice of the subject default. 
	The Letter of Credit shall, on its face, also state that Landlord shall have the right to draw the full amount thereof upon
written request given within thirty (30) days following Landlord's receipt of a Non-Renewal Notice. 
	The Letter of Credit shall also contain such other provisions as may be requested by the Building Lender. 

 
6.Operating Expenses and Taxes.

6.1Payment by Tenant .  Pursuant to this Section 6, Tenant shall pay to Landlord Tenant's Percentage Share of
Operating Expenses and Taxes.

a.Operating Expenses .  Landlord shall determine or estimate the amount of Tenant's Percentage Share of
Operating Expenses for the calendar year in which the Occupancy Date occurs.  Beginning on the Commencement Date, one-twelfth (1/12)
of the amount estimated by Landlord to be Tenant's Percentage Share of Operating Expenses shall be due and payable by Tenant to
Landlord, as Additional Rent, on the first day of each calendar month remaining in the calendar year.  Thereafter, Landlord may
estimate such increases to Tenant's Percentage Share of Operating Expenses as of the beginning of each calendar year and may require
Tenant to pay one-twelfth (1/12) of such estimated amount as Additional Rent hereunder as of the first day of each calendar
month.

In the event that during the course of any calendar year Operating Expenses have increased by more than five percent (5%) over
the amount of Operating Expenses estimated by Landlord at the commencement of that calendar year, Landlord may recalculate the
amount of the monthly estimated payments to be paid by Tenant in order to take into account any such increases and, following notice
from Landlord of any such increase, Tenant shall pay the full amount of the recalculated payments on a monthly basis for the
remainder of the subject calendar year.  In making the aforesaid recalculation, Landlord may include amounts necessary to reimburse
Landlord for any increased Operating Expenses applicable to that portion of the subject calendar year, which was prior to the date
of Landlord's notice.

Not later than ninety (90) days following any calendar year (including the year following the year in which this Lease
terminates), Landlord shall furnish Tenant with a true and correct accounting of the actual Operating Expenses incurred by Landlord
in the preceding calendar year, and within thirty (30) days of Landlord's delivery of such accounting, Tenant shall pay to Landlord
the amount of any underpayment by Tenant of Tenant's Percentage Share of Operating Expenses.  Notwithstanding the foregoing, failure
by Landlord to give such accounting shall not constitute a waiver by Landlord of its right to collect Tenant's Percentage Share of
Operating Expenses or any underpayment by Tenant thereof.  Landlord shall credit the amount of any overpayment by Tenant toward the
next estimated installment(s) of Tenant's Percentage Share of Operating Expenses or, where the term of the Lease has expired or been
terminated (other than due to a default by Tenant), shall refund the amount of overpayment to Tenant within thirty (30) days without
obligation upon Tenant to demand such refund from Landlord.

b.Taxes .  Tenant shall pay to Tenant's Percentage Share of Taxes within ten (10) days following the written
demand by Landlord therefor, which demand shall be accompanied by a copy of the tax bill reflecting the Taxes for which Landlord is
seeking payment and shall be made by Landlord no earlier than thirty (30) days prior to the due date of such Taxes.  If any Taxes
cover any period of time either prior to the Occupancy Date or after the expiration of the Lease Term, Tenant's Percentage Share of
Taxes shall be prorated to cover only the period of time following the Commencement Date or prior to the expiration of the Lease
Term, as applicable.

Within twelve (12) months following the end of any calendar year, Tenant shall have the right, at it sole cost and expense, to
review Landlord's books and records with respect to the Operating Expenses and Taxes for such calendar year. If upon such review it
is determined that there were any errors in the calculation of Operating Expenses or Taxes, then, within thirty (30) days after such
determination, Landlord shall credit any overpayment by Tenant to Base Rent thereafter becoming due or Tenant shall pay to Landlord
any underpayment, as the case may be.  In the event that a review by Tenant determines that Tenant has overpaid by more than three
percent (3%), then Landlord shall reimburse Tenant for the reasonable out-of-pocket costs incurred by Tenant in connection with such
review. 

6.2Definitions .  "Tenant's Percentage Share" shall be (a) one hundred percent (100%) which respect to all
Operating Expenses and Taxes which are directly attributable to Building, including, without limitation, all Common Area Expenses
(as defined in the Declaration) which are allocable to the Building's Exclusive Common Area, and (b) forty-nine and nine tenths
percent (49.9%) as to Common Area Expenses which are attributable to the Non-Exclusive Common Areas (as defined in the Declaration).

"Operating Expenses" are defined as all reasonable costs and expenses paid or incurred by Landlord in connection with the
ownership, maintenance, repair, management, and operation of the Premises, the Building, and the Common Areas, which reasonable
costs and expenses shall include, without limit, the following:

i.Landlord's reasonable costs and expenses in carrying out repairs and maintenance pursuant to Section 11.2(b)
and (c) below, the Building's percentage share of all Common Area Expenses and other expenses benefiting the Project in general and
all of the Exclusive Common Area Expenses allocable to the Building;

ii.Landlord's cost of fire, extended coverage (including rental loss insurance) and other insurance for the Building
and the Land;

iii. Landlord's reasonable cost of the fire sprinkler monitoring system; 

iv.an annual management fee equal to three percent (3%) of the gross revenues from the Building; and,

v.the amortized portion of any capital expenditure incurred by Landlord with respect to the Building, to the extent
such capital expenditures are intended to reduce or replace other items of Operating Expenses. 

"Amortized portion" of any capital expenditure to be paid by Tenant shall mean Tenant's Percentage Share of the following: the
amount of the expenditure amortized (on a monthly basis) over the useful life of the item to which the expenditure is applicable.
Tenant's Percentage Share of such amortized amount shall be payable in each month after such expenditure is incurred until the
earlier of (i) the expiration of the Lease Term, or (ii) the end of the useful life of the item to which the expenditure is
applicable 

"Taxes" are defined as all real property taxes applicable to the Land, the Building, and the Premises.  The term "real
property taxes" shall include any form of assessment (general, special, supplemental, ordinary or extraordinary), commercial rental
tax, improvement bond or bonds, license fee, license tax, rental tax, levy, penalty imposed by any authority having the direct or
indirect power of tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or
other improvement district thereof, as against any legal or equitable interest of Landlord in the Land, the Building, and/or the
Premises, as against Landlord's right to rent or to other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant, or any other tax, fee, or excise, however described, including any value added tax, or any tax
imposed in substitution, partially or totally, of any tax previously included within the definition of real property taxes, or any
additional tax, the nature of which was previously included within the definition of real property tax.  The term "real property
taxes" shall not include any income or franchise taxes imposed on Landlord. If, for any reason, the Taxes for the Land, Building,
and Premises are not separately assessed from the Project as a whole, then Taxes shall be allocated to the Land, Building, and
Premises based upon the percentage in which Common Area Expenses are allocated to the Building pursuant to the Declaration. 

7.Utilities.  Tenant shall be solely responsible for paying the cost of all water, gas, heat, electricity, telephone,
garbage and other utilities directly used on the Premises.  Tenant shall pay directly to the utility provider the cost of all such
utilities. Tenant, as part of Tenant's Percentage Share of Operating Expenses, will pay for a portion of the utilities servicing the
Non-Exclusive Common Area and for all of the utilities servicing the Building's Exclusive Common Area. 

8.Late Charges.  Tenant acknowledges that late payment by Tenant to Landlord of Base Rent, Tenant's Percentage Share
of Operating Expenses and Taxes or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs being extremely difficult and impracticable to fix.  Such costs include, without limitation, processing
and accounting charges and late charges that may be imposed on Landlord by the terms of any encumbrances or notes secured by any
encumbrance covering the Premises.  Therefore, if any installment of Base Rent or other sum due from Tenant is not received by
Landlord when due, then, within ten (10) days following the date said Base Rent or other sum is due, Tenant shall pay to Landlord,
without additional invoice or demand, an additional sum equal to six percent (6%) of such overdue amount as a late charge; provided,
however, if payments of Base Rent have been made to Landlord in a timely manner pursuant to automatic wire transfer then the late
charge herein shall be an additional sum equal to five percent (5%) of the overdue amount. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant.  The accrual
and/or acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, nor
prevent Landlord from exercising any of Landlord's other rights and remedies.

9.Use of Premises; Compliance with Laws.

9.1General .  The Premises are to be used for office, research and development, and light manufacturing for group
B occupancy  (collectively, "Tenant's Operations"). Any other use of the Premises shall only be made upon the prior written
consent of Landlord, which consent shall not be unreasonably withheld if any proposed change in use would be allowed under
applicable land use ordinances. Tenant shall not do anything or permit anything to be done in or about the Premises nor keep or
bring anything or permit anything to be kept or brought therein which will in any way increase the existing rate of or affect any
policy of fire or other insurance upon the Building or any of its contents, or cause a cancellation of any insurance policy.  Tenant
shall not use or allow the Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in,
on or about the Premises.  Tenant shall not damage or deface or otherwise commit or suffer to be committed any waste in or upon the
Premises.  Tenant shall honor the terms of all recorded covenants, conditions and restrictions relating to the Land.  Tenant shall
honor the terms of any reasonable rules and regulations established by Landlord during the Lease Term, which relate to the Premises
and/or the Building.

In connection with Tenant's use of the Premises, Tenant shall, at its sole cost and expense, do the following:

a.Apply for, obtain and maintain throughout the Lease Term any and all permits, licenses and other governmental
approvals, which are required in connection with Tenant's Operations;

b.Comply with any and all laws, rules, regulations or ordinances (collectively, "Law") of any governmental authority
which govern Tenant's Operations;

c.Adopt such measures as are, from time to time, necessary or required in order to prevent injury, or damage to
persons or properties, in or around the Premises as a result of any activities related to Tenant's Operations; 

d. Subject to Article 10 below, carry out any and all alterations and improvements to the Premises which may be
necessary in order to comply with the Laws, to the extent such compliance is (1) required for Tenant's specific use or occupancy of
the Building, (2) imposed in connection with any alterations or improvements being made by, or on behalf of Tenant, or (3) imposed
in connection with any governmental permit, approval, or authorization applied for by Tenant; and, 

e.Comply with all of the terms and provisions of the Declaration, as the same may be amended from time to time during the
Lease Term. 

9.2Hazardous Materials.

9.2.1Prohibition .  Tenant and Tenant's agents, contractors, subcontractors, and employees shall not use,
store, release or dispose of (collectively "Release(s)"), or allow a Release of, any Hazardous Materials (defined below) in or about
the Premises, except that Tenant may, subject to the terms of this Lease, use and store in the Premises any Permitted Materials
(defined below).  Tenant shall, at its sole cost and expense, comply with any and all laws, rules, regulations or ordinances of any
governmental authority which govern the use, handling or storage of any Hazardous Materials which are placed in or about the
Premises in connection with Tenant's operations or otherwise relating to any activity undertaken by, or on behalf of, Tenant.  All
provisions of this Lease relating to Tenant's obligations with respect to Hazardous Materials, including, without limitation, the
obligations set forth in this Section 9.2, in Section 11.1 (regarding maintenance of the Premises) and Section 13
(regarding Tenant's indemnity of Landlord with respect to Hazardous Materials), shall survive the termination or earlier expiration
of this Lease.

9.2.3Definitions .  As used in this Lease, the term "Hazardous Materials" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste" or "restricted hazardous waste" under
Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii)
defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and
Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground Storage of Hazardous Substances), (v) petroleum and any petroleum by-products, (vi) asbestos, (vii) urea formaldehyde
foam insulation, (viii) listed under Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11 of Title 22 of
the California Administrative Code, Division 4, Chapter 20, (ix) designated as a "hazardous substance" pursuant to Section 311
of the Federal Water Pollution Control Act (33 U.S.C.  1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of
the Federal Resource Conservation and Recovery Act, 42 U.S.C.  6901 et seq. (42 U.S.C.  6903), (xi) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601 et seq. (42 U.S.C.   9601), or (ix) determined to be, or defined as, under any federal, state or local governmental authority
as hazardous, toxic, or dangerous to persons, animals or the environment.

As used in this Lease, the term "Permitted Materials" shall mean and refer to those Hazardous Substances which are (a)
customarily used by Tenant in the conduct of Tenant's Operations, (b) designated by Tenant to Landlord in writing prior to use, and
(c) approved, in advance of its use, by Landlord.  As to any Hazardous Materials which are "Permitted Materials," Tenant shall
comply with any reasonable requirements imposed by Landlord to confirm that Tenant's use of such materials are, or will be, in
compliance with all applicable rules, laws and regulations, and will not otherwise not pose a threat of contamination or unlawful
release in or about the Premises.

9.3Signage.  Tenant shall be entitled to place its name and logo ("Tenant's Signs") on the monument sign
for the Project and on the exterior of the Building, subject to the following:

a.The design of Tenant's Sign shall be subject to Landlord's prior reasonable approval and shall comply with any sign
restrictions set forth in the Declaration;

b.Tenant's Signs shall comply with all appropriate sign ordinances of the City of Fremont; 

c. The size, color, materials, and location of Tenant's Sign shall be subject to the Project and Building sign
allocation limitations adopted by Landlord and/or the Association (as defined in the Declaration); and, 

d. All costs and expenses in connection with Tenant's Sign shall be borne by Tenant.

9.4Reasonableness of Restrictions.Landlord and Tenant hereby acknowledge and agree that the use restrictions
set forth in this Section 9 shall be deemed reasonable in all respects and under all circumstances. 

10. Alterations; Condition on Termination.  Tenant shall not install any signs, fixtures or improvements
("Alterations") to the Premises, the cost of which is Ten Thousand Dollars ($10,000) or more, without the prior written
consent of Landlord. At such time as Landlord is granting its consent to any proposed Alterations, Landlord shall indicate whether
such Alterations will be required to be removed upon a termination of this Lease. Tenant shall obtain all governmental permits,
licenses and other consents, and shall comply with all governmental rules, laws, regulations and requirements, which are applicable
to any Alterations and/or additions constructed on the Premises by Tenant, all at Tenant's sole cost and expense.  Any Alteration
shall be carried-out by licensed and experienced contractors reasonably approved in advance of any work by Landlord. Tenant shall
keep the Premises, the Building and the Land free from any liens arising out of any work performed, materials furnished or
obligations incurred by or on behalf of Tenant.  During the Lease Term, all Alterations placed or constructed on the Premises by
Tenant shall be deemed the property of Landlord.  During the Lease Term, Tenant may remove any such Alterations (but not the
original Tenant Improvements) without the prior consent of Landlord, provided that Tenant shall pay all costs and expenses relating
to damage caused by such removal.  Upon the termination of this Lease, Tenant shall cause all its equipment and trade fixtures to be
removed from the Premises and shall repair any damage to the Premises resulting therefrom at its sole cost and expense.  With
respect to any Alterations (including any Alterations not requiring the prior written consent of Landlord) not removed by Tenant
prior to the termination of this Lease and provided that Landlord has not indicated otherwise, Landlord expressly reserves the right
to require Tenant to remove any or all of such Alterations upon the termination of this Lease, and Tenant shall promptly remove any
Alterations that Landlord so requires to be removed and repair any damage to the Premises resulting from such removal, all at
Tenant's sole cost and expense. All Alterations not required, pursuant to this Section 10, to be removed shall become the property
of Landlord upon the termination of this Lease.

Upon termination of this Lease, Tenant shall (a) repair any damage caused by the installation or removal of any Alterations
placed or constructed on the Premises by Tenant, (b) assure that the Premises, the Building and/or the Land are free and clear of
all Hazardous Materials used or stored by Tenant, or Tenant's agents, employees, contractors, subcontractors, licensees, customers
or invitees, during the Lease Term, and (c) assure that the Premises are in good condition and in good working order (except as to
any casualty damage and where, pursuant thereto, this Lease has been terminated pursuant to Section 27 below), reasonable and
normal wear and tear excepted.

11.Repairs and Maintenance.

11.1Tenant's Obligations .  Tenant shall, at Tenant's sole cost and expense, do the following: 

a.maintain the interior portions of the Premises in good, clean and safe condition and repair;

b. maintain all phone, network, and other communications cabling on, about or within the Premises;

c.maintain those exterior portions of the Premises which are not otherwise the responsibility of Landlord as set
forth in Section 11.2 below in good, clean and safe condition and repair;

d.repair any damage to the Premises, the Building or Common Areas caused by any act or omission of Tenant or its
employees, agents, invitees, licensees or contractors; and

e.conduct all maintenance, clean-ups and repair required in connection with Tenant's or Tenant's agents, employees,
contractors, subcontractors, licensees, customers or invitees use and/or storage of Hazardous Materials on or about the Premises,
the Building and/or the Land.

Tenant shall have no right to install any device on the roof of the Premises or the Building without the express prior written
consent of Landlord.  Tenant shall not make any penetrations of the roof of the Premises or the Building without the express prior
written consent of Landlord.

11.2Landlord's Obligations .  Landlord shall do the following:

a.repair and maintain the structural portions of the Building and the Premises (including, without limit, the roof
structure);

b.repair and maintain all heating and HVAC systems servicing the Premises and the Building. 

All costs advanced by Landlord in connection with the performance of Landlord's obligations in this Section 11.2 shall be
subject to repayment by Tenant to Landlord as part of Tenant's Percentage Share of Operating Expenses, except those costs advanced
by Landlord in connection with the work described in 11.2(a) to the extent such work is not required by reason of any act or
omission on the part of Tenant, its employees, agents, contractor, customers, suppliers, and/or invitees.  Tenant acknowledges that
the repair and maintenance of the Common Area will be carried out by the Association and that Landlord shall have no obligation or
responsibility under this Lease to carry out any such repairs or maintenance. 

12.Insurance.

12.1Tenant's Insurance .  Tenant shall at all times during the Lease Term, and at its sole cost and expense,
maintain general commercial liability insurance (together with a broad form comprehensive general liability endorsement) against
liability for bodily injury and property damage.  The aforesaid liability insurance shall also contain an endorsement naming
Landlord and Landlord's member, as "additional insureds," which endorsement shall cover the aforesaid additional insureds for all
acts and omissions of said parties in or about the Premises.  The aforesaid insurance shall be in an amount of not less than Two
Million Dollars ($2,000,000) per occurrence and not less than Five Million Dollars ($5,000,000) in the aggregate.  In no event shall
the limits of said policy be considered as limiting the liability of Tenant under this Lease.

Tenant shall also at all times maintain standard "all risk" casualty insurance upon all of Tenant's equipment, furnishings and
fixtures.

The aforesaid insurance shall be with companies licensed to do business with the Insurance Commissioner of the State of
California.  A certificate of such insurance shall be delivered to Landlord prior to the Occupancy Date and, thereafter, on each
anniversary date of the Commencement Date. The certificate for Tenant's liability insurance shall certify that the policy names
Landlord and the other aforesaid persons and entities as "additional insureds" and that the policy shall not be canceled or altered
without thirty (30) days prior written notice to Landlord.

12.2Landlord's Insurance.  During the Lease Term, Landlord shall maintain standard "all risk" casualty insurance
on the Building and the Premises (including the original Tenant Improvements), which coverage shall be in an amount not less than
the full replacement cost of the Building, exclusive of architectural and engineering fees, excavations, footings, and foundations,
and the General Tenant Improvements, and the original Tenant Improvements.

12.3Waiver of Subrogation .  Notwithstanding any other provision of this Lease, Landlord and Tenant each hereby
waive any right of recovery against the other and the authorized representatives of the other for any loss or damage that is of the
type required to be covered by any policy of insurance required under Section 12.1 or 12.2 above.  Each party shall cause each
insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy.  If any insurance policy cannot be obtained with a waiver of
subrogation, or is obtainable only by the payment of an additional premium charge above that charged by insurance companies issuing
policies without waivers of subrogation, the party undertaking to obtain the insurance shall notify the other party of this fact.
The other party shall have a period of thirty (30) days after receiving such notice either to replace the insurance with a
company that is reasonably satisfactory to the other party and that will carry the insurance with a waiver of subrogation, or to
agree to pay the additional premium if such policy is obtainable at additional cost.  If the insurance cannot be obtained or the
party in whose favor a waiver of subrogation is desired refuses to pay the additional premium charge, the other party is relieved of
the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved.

13.Limitation of Liability and Indemnity.  Tenant agrees to save, defend and hold Landlord harmless and indemnify
Landlord, and Landlord's partners, employees, agents, and contractors, against all liabilities, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the prosecution or defense of any litigation) by reason of
injury to person or property, from whatever cause, while in or on the Premises, or in any way connected with the Premises, with the
improvements or with the personal property therein, including any liability for injury to person or property of Tenant, its agents
or employees or third party persons; provided, however, Landlord shall be liable only for property damage and bodily injury
resulting from the negligent acts or omissions of Landlord, or any of its partners, employees, agents or contractors.

Tenant's obligations under this Section 13 shall include the obligation to indemnify, hold harmless, and defend Landlord,
and its partners, agents and employees, from and against any and all claims, losses, liabilities, costs and expenses arising out of
or in connection with (a) any injury or damage resulting from Tenant's use of the Premises in connection with Tenant's Operations,
and (b) any Release of any Hazardous Materials in or about the Premises, the Building and/or the Land, to the extent the Release is
caused or permitted by Tenant, or any of its agents, employees, contractors, subcontractors and/or invitees.  Tenant's indemnity
obligations under this Section 13 shall survive termination of this Lease.

Landlord, and Landlord's partners, employees, agents, and contractors, shall not be liable to Tenant for any damage to Tenant or
Tenant's property, nor for any injury to or loss of Tenant's business nor for any damage or injury to any person from any cause;
provided, however, Landlord shall be liable for, and shall indemnify, defend and hold Tenant harmless from and against any claims
arising in connection with, property damage and bodily injury resulting from the willful misconduct or negligent acts or omissions
of Landlord, or any of its partners, employees, agents, or contractors, but only to the extent any such property damage and bodily
injury is not covered by either the insurance required to be maintained by Tenant under this Lease or by any other insurance
actually maintained by Tenant.

14.Assignment and Subletting.

14.1In General.  Tenant shall not, either voluntarily or by operation of law, 

assign, transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest therein, and shall not sublet the Premises
or any part thereof, or any right or privilege appurtenant thereto, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld. Landlord shall be reasonable in withholding its consent to any proposed assignment if the net
worth of the proposed assignee is not equal to or greater than the net worth of Tenant as of the date of execution of this Lease or
the date of the proposed assignment, whichever is higher. Tenant shall give Landlord at least fifteen (15) days written notice of
its desire to assign or sublet all or some of the Premises.  Any such assignment, sublease or the like which is approved by Landlord
must be pursuant to a written agreement in a form acceptable to Landlord.  Each permitted assignee, transferee, or sublessee shall
assume and be deemed to have assumed this Lease (or the appropriate part hereof) and shall be and remain jointly and severally
liable with Tenant for the payment of Rents and for the due performance of and compliance with all the terms, covenants, conditions
and agreements to be performed or complied with by Tenant herein (including, but not limited to, the provisions of this
Section 14). Notwithstanding the foregoing, if Landlord consents to a full assignment of this Lease by the original Tenant
hereunder during the initial ten (10) year term hereof, then the original Tenant hereunder shall be released from any obligations
under this Lease if the transferee elects to exercise the Option pursuant to Section 3.2 above; provided, however, if, in evaluating
the proposed assignment, Landlord determines that the proposed transferee's projected financial condition during the Extended Term
is not satisfactory, then Tenant shall elect to either (a) assign to the proposed transferee only Tenant's rights through the
remaining initial ten (10) year Lease Term (in which event the transferee shall have no right to exercise the Option), or (b) remain
liable for any and all obligations arising under this Lease during the Extended Term to the extent the transferee exercises the
Option. Upon any release of the original Tenant, as provided above, such original Tenant shall have no right to retain any portion
of Excess Rents (as provided in Section 14.4 below) or any other rents or other charges which are paid or payable by any assignee or
other party during the Extended Term. 

14.2Transfers of Interests in Tenant .  Any merger or reorganization of the entity which comprises Tenant, any
sale, or transfer of substantially all of the assets of Tenant, or any sale or other transfer of a majority of the interests in
Tenant shall not be deemed an assignment of this Lease requiring the prior written consent of Landlord pursuant to Section 14.1
1 above.

14.3Right to Terminate.  If Tenant notifies Landlord of its desire to assign this Lease or any interest herein, to
sublet all or any part of the Premises for more than seventy-five percent (75%) of the remainder of the Lease Term, or to sublet
more than seventy-five percent (75%) of the Premises for any period, Landlord may elect to treat Tenant's notice as an offer to
terminate this Lease or Tenant's interest in the portion of the Premises specified and, thereupon, Landlord shall have the right to
terminate the Lease (a) entirely, in the event of a proposed assignment or a sublease of the entire Premises for the remainder of
the Lease Term, (b) as to the portion of the Premises which is the subject of a proposed sublease for more than seventy-five percent
(75%) of the remainder of the Lease Term, or (c) as to the portion of the Premises which is the subject of a proposed sublease of
more than seventy-five percent (75%) of the Premises for any period, as specified in Tenant's notice.  For purposes of this
Section 14.3, (i) the term of a proposed sublease shall include all options to extend or renew, and (ii) a proposed sublease
shall be deemed to be for the remainder of the Lease Term if the term of the proposed sublease will expire within one (1) year of
the end of the Lease Term.  If Tenant's notice specifies all of the Premises and Landlord elects to terminate, this Lease shall
terminate on the date stated in the notice given by Tenant pursuant to Section 14.1 above, subject to any obligations which
have accrued and are unfulfilled as of such date.  If Tenant's notice specifies less than all of the Premises and Landlord elects to
terminate, this Lease shall terminate on the date stated with respect to that portion of the Premises, and Base Rent and Tenant's
Percentage Share shall be adjusted, based upon the area retained by Tenant after the termination, compared to the total area of the
entire Premises excluding any areas of the Premises designated in the proposed sublease for ingress and egress and common areas.
The Lease as so amended shall continue thereafter in full force and effect.  Landlord and Tenant shall execute an amendment to this
Lease specifying the new Premises, the adjusted Base Rent and Tenant's adjusted Percentage Share; provided, however, that failure by
either party to execute such an amendment shall not affect the validity of this Lease.

14.4Excess Rents.  Except as provided in the last sentence of Section 14.1 above, any Excess Rents (defined below)
payable pursuant to any assignment or subletting shall be paid to Landlord and Tenant on a fifty-fifty (50-50) basis.  Landlord
shall have the right to impose terms and conditions on its consent to any assignment or subletting to assure the accounting and
payment of Landlord's share of Excess Rents.  "Excess Rents" shall mean any and all rents, payments, charges and other
considerations to be received by Tenant upon an assignment or subletting of all or any portion of the Premises which are in excess
of the Rents payable by Tenant to Landlord under this Lease after the recovery by Tenant of reasonable and customary amounts for
brokerage commissions, legal expenses, and tenant improvement costs, to the extent such items have been actually incurred by Tenant
in connection with the subject assignment or sublease.

15.Ad Valorem Taxes.  Tenant shall pay before delinquent all taxes assessed against the personal property of Tenant
and all taxes attributable to any leasehold improvements installed by Tenant.

16.Lender Requirements.

16.1Subordination.  This Lease is subordinate to any and all mortgages and/or deeds of trust ("Encumbrances") now
of record against the Land and/or the Building.  Tenant shall, upon the request of Landlord, execute any instrument reasonably
necessary or desirable to (a) acknowledge the subordination of this Lease to any existing mortgages or deeds of trust, or (b)
subordinate this Lease and all of Tenant's rights hereunder to any and all Encumbrances hereafter recorded against the Land and/or
the Building; provided, however, Tenant may require as a condition to any subordination in (b) above that the holder of any future
Encumbrance agree to not disturb Tenant's possession of the Premises under the terms of this Lease in the event such holder acquires
the Premises pursuant to foreclosure or otherwise. In addition to requiring nondisturbance protection as provided in the preceding
sentence, as to any future Encumbrance arranged by the original Landlord under this Lease or by any entity affiliated with such
original Landlord, then Tenant may require that (1) Landlord has made a collateral assignment to the holder of any future
Encumbrance of the Letter of Credit provided that Landlord may retain all rights to such Letter of Credit unless and until there has
been a default on the part of Landlord in connection with such Future Encumbrance and (2) the holder of any future Encumbrance which
takes an assignment of the Letter of Credit agrees in writing that such assignment, for so long as the same is in effect, shall be
regarded as having possession of that portion of the Security Deposit which is represented by the Letter of Credit.

16.2Attornment.  In the event any proceedings are brought for foreclosure or in the event of the exercise of the
power of sale under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall, at the option of such
purchaser, attorn to the purchaser upon any such foreclosure or sale and shall recognize such purchaser as the Landlord under this
Lease, provided such purchaser agrees in writing to assume all obligations of Landlord under this Lease accruing following such sale
or purchase and provides a copy of such agreement to Tenant.

16.3Approval by Lender.  Tenant acknowledges that any future holder of an Encumbrance may retain the right to
approve the terms and provisions of this Lease.  Tenant agrees that, in the event such holder shall require any modification of this
Lease in order to protect its security interest in the Premises; provided, however, no modification of this Lease shall materially
increase Tenant's obligations under this Lease or impose requirements upon Tenant which are more burdensome.

 

17.Right of Entry.  Tenant grants Landlord or its agents the right to enter the Premises at all reasonable times
during normal business hours for purposes of inspection, exhibition, repair or alteration; provided, however, Landlord shall give
Tenant at least one (1) business day prior notice (except in the event of emergency) of Landlord's intent to enter the Premises.
Landlord shall have the right to use any and all means Landlord deems necessary to enter the Premises in an emergency.  Landlord
shall also have the right (a) to place "for rent" signs of a reasonable size on the outside of the Premises at a reasonable location
during the last six (6) months of the Lease Term and (b) to place "for sale" signs of a reasonable size on the outside of
the Premises at a reasonable location at any time.  Tenant hereby waives any claim for damages or for any injury or inconvenience to
or interference with Tenant's business, or any other loss occasioned thereby; provided, however, Landlord shall be liable for
property damage and bodily injury resulting from the negligent acts or omissions of Landlord or Landlord's authorized
representatives (except where Landlord is released from liability for negligence in Section 12.3 above).

18.Estoppel Certificate.  Tenant shall execute and deliver to Landlord, upon not less than five (5)) days prior
written notice, a statement in writing certifying (a) that this Lease is unmodified and is in full force and effect (or, if
modified, stating the nature of such modification), (b) the date to which Rent and other charges are paid in advance, if any, (c)
that there are not, to such party's knowledge, any uncured defaults on the part of the other party or specifying such defaults as
they are claimed, and (d) such other information (including, without limitation, current financial information of Tenant) as a
prospective purchaser, lender or encumbrancer of the Premises may reasonably require.  Any such statement may be conclusively relied
upon by any prospective purchaser, encumbrancer, assignee or subletter of the Premises, as applicable.  A failure by Tenant to
provide the statement and information required within the time and manner provided herein shall be a material default on the part of
Tenant. Landlord shall execute and deliver to Tenant, upon not less than five (5)) days prior written notice, a statement in writing
certifying (a) that this Lease is unmodified and is in full force and effect (or, if modified, stating the nature of such
modification), (b) the date to which Rent and other charges are paid in advance, if any, and (c) that there are not, to such party's
knowledge, any uncured defaults on the part of the other party or specifying such defaults as they are claimed. 

19.Tenant's Default.  The occurrence of any one or more of the following events shall constitute a default and breach
of this Lease by Tenant:

a.The failure by Tenant to make any payment of Rent or any other payment required hereunder within five (5) days from the
date the same is due and payable;

b.Tenant abandons the Premises for a continuous period of at least thirty (30) days;

c.The failure of Tenant to observe, perform or comply with any of the conditions or provisions of this Lease for a
period, unless a longer period is otherwise provided herein, of thirty (30) days after written notice, or if such default cannot be
cured within that time, then such additional time as may be reasonably necessary if within such thirty (30) days Tenant has
commenced and is diligently pursuing such activities as are necessary to cure the default; and

d.Tenant becomes the subject of any bankruptcy, reorganization or insolvency proceeding, whether voluntary or
involuntary, and, in the case of an involuntary bankruptcy proceeding, Tenant fails to cause the same to be dismissed within sixty
(60) days following that date of the filing of such bankruptcy.

Any notice from Landlord to Tenant described in this Section 19 shall, in the sole discretion of Landlord, constitute a
three (3) day notice pursuant to California Code of Civil Procedure section 1161 or any successor statute.  With respect to any
"default" by Tenant referenced in this Lease, the term "default" as used in such context shall mean any of the events described in
subsections (a), (b) and/or (c) of this Section 19.

20.Remedies for Tenant's Default.  Upon any default by Tenant, Landlord shall have the following remedies, in addition
to all other rights and remedies provided by law, to which Landlord may resort cumulatively, or in the alternative:

20.1Termination.  Upon any default by Tenant, Landlord shall have the right (but not the obligation) to terminate
this Lease and Tenant's right to possession of the Premises.  If Landlord has given Tenant any written notice pursuant to
Section 19 above, then Landlord shall not be required to give Tenant any additional notice terminating this Lease.  Upon
termination of this Lease, Landlord shall have the right to recover from Tenant:

a.The worth at the time of award of the unpaid Rents which had been earned at the time of termination;

b.The worth at the time of award of the amount by which the 

Rents, which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant
proves, could have been reasonably avoided;

c.The worth at the time of award (computed by discounting at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent) of the amount by which the Rents for the balance of the Lease Term after the time
of award exceed the amount of such rental loss that Tenant proves could be reasonably avoided; and

d.Any other amounts necessary to compensate Landlord for all detriment proximately caused by the default by Tenant or
which in the ordinary course of events would likely result, including without limitation the following:

(i)Expenses in retaking possession of the Premises;

(ii)Expenses for cleaning, repairing or restoring the Premises;

(iii)Expenses for removing, transporting, and storing any of Tenant's property left at the Premises (although Landlord shall
have no obligation to remove, transport, or store any such property);

(iv)Any penalties, additional assessments, or others costs levied against the Building pursuant the Declaration
to the extent such items arise as a result of a breach or default by Tenant; and, 

(v)Attorneys' fees and court costs.

The "worth at the time of award" of the amounts referred to in subparagraphs (a) and (b) of this Section 20.1 is computed by
allowing interest at an annual rate equal to the greater of: ten percent (10%); or five percent (5%) plus the rate established by
the Federal Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the month immediately preceding the default by
Tenant, on advances to member banks under Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter from
time to time amended, not to exceed the maximum rate allowable by law.

20.2Continuance of Lease .  Upon a default by Tenant and unless and until Landlord elects to terminate this Lease
pursuant to Section 20.1 above, this Lease shall continue in effect after the default by Tenant, and Landlord may enforce all
rights and remedies under this Lease, including, without limitation, the right to recover payment of Rents as they become due.
Neither efforts by Landlord to mitigate damages caused by a default by Tenant nor the acceptance of any Rents shall constitute a
waiver by Landlord of any of Landlord's rights or remedies, including the rights and remedies specified in this Section 20. It
is intended that the remedy set forth in this Section 20.2 is to provide Landlord the rights set forth in California Civil Code
Section 1951.4. The use restrictions set forth in Section 9 above shall apply to Landlord's rights under this Section 20.2 except to
the extent Tenant proves under all circumstances that the enforcement of such restrictions would be unreasonable.

20.3Reletting Premises .   Upon a default by Tenant, Landlord may, at Landlord's election, re-enter the Premises
and, without terminating this Lease, and at any time and from time to time, relet the Premises or any part or parts thereof for the
account and in the name of Tenant or otherwise.  Landlord may, at Landlord's election, eject Tenant or any of Tenant's subtenants,
assignees or other person claiming any right in or through this Lease.  Tenant shall nevertheless pay to Landlord on the due dates
specified in this Lease all sums required to be paid by Tenant under this Lease, plus Landlord's expenses, less the proceeds of any
sublease or reletting.  Notwithstanding any prior reletting without termination, Landlord may later elect to terminate this Lease
because of default by Tenant.

20.4Right to Cure Tenant's Default .  In the event Tenant fails to cure a default described under
Section 19(b) within a period of thirty (30) days after written notice (unless a longer period of time is otherwise provided
herein), Landlord may, in addition to all other rights and remedies under this Lease, to which Landlord may resort cumulatively or
in the alternative, cure such default and demand reimbursement by Tenant of the cost actually incurred by Landlord in curing such
default by Tenant, with interest thereon from the date such cost is incurred by Landlord until payment.  All amounts due and payable
to Landlord under this Section 20.4 shall constitute Rent under this Lease.  The cure by Landlord of any default shall in no
way be deemed a waiver or release of Tenant from any obligation under this Lease.

21.Bankruptcy: Holdover.  

21.1Bankruptcy.

A.In the event Tenant shall become a Debtor under Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization
or adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the Code, or a proceeding is filed under Chapter 7 and
is transferred to Chapters 11 or 13, the Trustee or Tenant, as Debtor-In-Possession, may not elect to assume this Lease unless, at
the time of such assumption, the Trustee or Debtor-In-Possession has:

(i)Cured or provided Landlord "Adequate Assurance" (as defined below) that:

a)The Trustee or the Debtor-In-Possession has cured, or has provided Landlord Adequate Assurance that:

(1) Within ten (10) days from the date of such assumption the Trustee or Debtor-In-Possession will cure
all monetary defaults under this Lease; and

(2)Within thirty (30) days from the date of such assumption the Trustee will cure all nonmonetary
defaults under this Lease.

(ii)For purposes of this Section 21.1, Landlord and Tenant acknowledge that, in the context of a bankruptcy
proceeding of Tenant, at a minimum "Adequate Assurance" shall mean:

(a)The Trustee or the Debtor-In-Possession has and will continue to have sufficient resources to fulfill the
obligations of Tenant under this Lease as the same become due; and

(b)The Bankruptcy Court shall have entered an Order segregating sufficient cash payable to Landlord and/or
the Trustee or Debtor-In-Possession shall have granted a valid and perfected first lien and security interest and/or mortgage in
property of Tenant, Trustee or Debtor-In-Possession, acceptable as to value and kind to Landlord, to secure to Landlord the
obligation of the Trustee or Debtor-In-Possession to cure the monetary and/or non-monetary defaults under this Lease within the time
periods set forth above.

B.If the Trustee or Debtor-In-Possession has assumed the Lease pursuant to the provisions of this Section 21.1 for the
purpose of assigning Tenant's interest hereunder to any other person or entity, such interest may be assigned only after the
Trustee, Debtor-In-Possession or the proposed assignee have complied with all of the terms, covenants and conditions of Section 14.1
herein, Landlord and Tenant acknowledging that such terms, covenants and conditions are commercially reasonable in the consent of a
bankruptcy proceeding of Tenant.    The terms of Section 14.1 applicable to any such assignment shall include, without limitation,
those with respect to Additional Rent and the use of the Premises only as permitted in this Lease.

C.Unless otherwise allowed by the Court and until such time as the Lease is assumed or rejected, the Trustee or Debtor-In-
Possession shall timely perform all the monetary and non-monetary obligations under this Lease which arise after the bankruptcy
filing, including, without limitation, the payment of Fixed Rent and such other Additional Rent charges payable hereunder.

D.The rights, remedies and liabilities of Landlord and Tenant set forth in this Section 21.1 shall be in addition to those
which may now or hereafter be accorded, or imposed upon, Landlord and Tenant by the Code.

21.2 Holdover. Upon termination of the Lease or expiration of the term hereof, if Tenant retains possession of the
Premises without Landlord's written consent first had and obtained, then Tenant's possession shall be deemed a tenancy at
sufferance, and Landlord may bring an action for possession or detainer at any time thereafter.  If Tenant holds possession of the
Premises after the term of this Lease with Landlord's consent, Tenant shall become a tenant from month to month upon the terms and
conditions as provided in this Lease except that Base Rent shall equal one hundred fifty percent (150%) of the Base Rent due during
the last year of the Lease Term, payable in advance on or before the first day of each month.  All options if any, granted under the
terms of this Lease shall be deemed terminated and be of no effect during said month to month tenancy.  Tenant shall continue in
possession until such tenancy shall be terminated by either Landlord or Tenant giving written notice of termination to the other
party at least thirty (30) days prior to the effective date of termination.

22.Landlord's Default.  Upon any default by Landlord under this Lease, Tenant shall provide Landlord with written
notice of such default and a reasonable time period in which to cure such default.  

23.Parking.  Tenant shall have the right during the Lease Term to use, on a non-exclusive basis, two hundred and
seventy-three  (273) spaces within the parking facilities situated within the Common Areas. Tenant shall have the right to park on
the undeveloped land owned by Landlord which is adjacent to the Building, as designated in Exhibit "C" attached
hereto, provided that Tenant pays for all costs associated with acquiring access to and creating a surface parking area on the
undeveloped land described in Exhibit "C", including, without limitation, all costs of City of Fremont permits and
meeting permit conditions, paving, landscaping, bridge construction, and acquisition of needed right-of-ways and access. Exhibit C
parking area is exclusive to Avanex use.

24.Sale of Premises.  In the event of any sale of the Premises by Landlord, Landlord shall be, without any further act
or acknowledgment on the part of Landlord or Tenant, entirely released from all liability under any and all of its covenants and
obligations contained in or derived from this Lease or arising out of any act, occurrence or omission occurring after the
consummation of such sale.  The purchaser at such sale or any subsequent sale of the Premises shall be deemed, without any further
agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of Landlord under this Lease. Unless a successor to the Landlord's
interest under this Lease has received the Cash Deposit portion of security deposit or such successor has not received the Cash
Deposit but does agree, for the benefit of Tenant, to return that portion of the Cash Deposit to which Tenant may be entitled
pursuant to this Lease, then Tenant shall be entitled to offset against the Base Rent due for the last month of the Lease term that
portion of the Cash Deposit to which Tenant may otherwise be entitled. The foregoing offset, to the extent applicable, shall only be
offset against portions of the Base Rent due for the last month of the Lease Term at the time such Base Rent is due and payable and
shall in no event be used to offset Base Rent for any other month of the Lease Term and/or against any other Rents which become due
and payable under this Lease. 

25.Waiver.  No delay or omission in the exercise of any right or remedy of either party on any default by the other
party shall impair such a right or remedy or be construed as a waiver.  The subsequent acceptance of Rents by Landlord or payments
by Tenant after breach by the payee of any covenant or term of this Lease shall not be deemed a waiver of such breach, other than a
waiver of timely payment for the particular payment involved, and shall not prevent the aggrieved party from maintaining any action
based on such breach (including an unlawful detainer action, if applicable).  No payment by a party or receipt by the other party of
a lesser amount than the Rent and other sums due hereunder shall be deemed to be other than on account of the earliest Rent or other
sums due, nor shall any endorsement or statement on any check or accompanying any check or payment be deemed an accord and
satisfaction.  A party may accept such check or payment without prejudice to its right to recover the balance of such Rent or other
sum or pursue any other remedy provided in this Lease.  The waiver by a party of any breach of any term of this Lease shall not be
deemed a waiver of such term or of any subsequent breach thereof.

26.Casualty Damage.  If the Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give
prompt written notice thereof to Landlord.  In case the Building or the Premises shall be damaged by fire or other casualty (a) such
that more than thirty percent (30%) reconstruction of the Building or the Premises is required, as determined by Landlord, or (b)
regardless of the extent of damage, such damage is either uninsured or the insurance proceeds are unavailable or insufficient for
Landlord to restore the Building or the Premises, Landlord may elect to either terminate this Lease or restore the Building or the
Premises.  In all other cases, Landlord shall promptly commence reconstruction repair subject to this Section 26.  If Landlord
elects to terminate the Lease, the estate created hereby shall terminate forty-five (45) days following the date of damage, and Base
Rent due hereunder shall be abated as of the date of such damage.  If Landlord elects to repair and restore the Building or the
Premises, then Landlord shall proceed with reasonable diligence to restore the Building or the Premises (except Landlord shall not
be responsible for delays outside of its control) to substantially the same condition existing immediately prior to the casualty.
If Landlord is required to make any repairs or restorations pursuant to this Section 26, Landlord shall not be required to
spend for such repairs or restoration an amount in excess of the insurance proceeds actually received by Landlord as a result of the
casualty.  If Landlord elects to repair or restore the Building or the Premises, then Tenant, within thirty (30) days after the date
the damage occurred, may request in writing from Landlord an estimate of the time required to repair or restore the Building or the
Premises.  Landlord shall notify Tenant of Landlord's reasonable estimate of the time for restoration or repair. If a casualty
damages more than forty percent (40%) of the manufacturing area within the Premises and, as a result thereof, Tenant is not able to
conduct its manufacturing operations in any portion of the Premises, then Tenant shall have the right to terminate this Lease if
Landlord estimates that the Premises cannot be restored within one hundred and twenty (120) days from the date the damage occurred.
Tenant shall exercise (if at all) the aforesaid right to terminate within five (5) business days from receipt of Landlord's
estimate, which termination shall be effective as of the date the damage occurred.  Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of use of any part of the Premises by Tenant or loss of
Tenant's personal property resulting in any way from such damage or the restoration thereof, except that, during any restoration,
Landlord shall allow Tenant a fair diminution of Base Rent during the time and to the extent the Premises are unfit for occupancy.

It is the intent of the parties hereto that the original Tenant Improvements will be covered by the casualty insurance
carried by Landlord on the Building and that, in the event of a casualty where Landlord elects or its otherwise required to restore
or repair, Landlord will restore or repair such improvements to the extent of insurance proceeds which are actually available to
Landlord for such purpose; provided, however, in no event shall Landlord be required to rebuild, repair or replace any part of   any
Alterations or other improvements constructed by, or of behalf of, Tenant or any of Tenant's furniture, furnishings or fixtures and
equipment except to the extent that Landlord actually receives insurance proceeds with respect to the damage of such property
(Tenant acknowledges that Landlord is under no obligation to maintain insurance covering such property and that neither Landlord nor
any of its representatives have made any representations or warranties to Tenant that Landlord intends to maintain any insurance
covering such property).  Tenant hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of the California
Civil Code.

Landlord or Tenant shall have the right to terminate this Lease if (a) the damage to the Premises occurs during the last year of
the term of this Lease, and (b) it is estimated by Landlord that the necessary repairs will take more than ninety (90) days
from the date of the damage.

27.Condemnation.  If thirty percent (30%) or more of the Land or fifteen percent (15%) or more of the Premises is
taken for any public or quasi-public purpose of any lawful governmental power or authority, by exercise of the right of
appropriation, reverse condemnation, condemnation or eminent domain, or sold to prevent such taking, Tenant or Landlord may, at its
sole option, terminate this Lease as of the effective date of such taking.  Tenant shall not assert any claim against Landlord or
the taking authority for any compensation because of such taking, and Landlord shall be entitled to receive the entire amount of any
award without deduction for any estate of interest of Tenant; provided, Tenant shall be entitled to any portion of an award
separately designated as compensation to Tenant for moving expenses and/or loss of goodwill.  If less than thirty percent (30%) of
the Land and/or less than fifteen percent (15%) of the Premises is taken, Landlord shall, if necessary, promptly proceed to restore
the Premises and the Common Areas to substantially its same condition prior to such partial taking, allowing for the reasonable
effects of such taking, and a proportionate allowance shall be made to Tenant for the Rent corresponding to the time during which,
and to the part of the Premises of which, Tenant is deprived on account of such taking and restoration.  Notwithstanding the
foregoing, Landlord shall not be required to expend funds in connection with the restoration of the Premises in excess of
compensation actually received by Landlord from the condemning authority.

28.General Provisions.

28.1Time .  Time is of the essence in this Lease and with respect to each and all of its provisions in which
performance is a factor.

28.2Successors and Assigns .  The covenants and conditions herein contained, subject to the provisions as to
assignment, apply to and bind the heirs, successors, executors and assigns of the parties hereto.

28.3Recordation .  Tenant shall not record this Lease or a short form memorandum hereof without the prior written
consent of Landlord.

28.4Landlord's Personal Liability.  The liability of Landlord to Tenant for any default by Landlord under the
terms of this Lease shall be limited to the interest of Landlord in the Building, and Tenant agrees to look solely to Landlord's
interest in the Building for the recovery of any judgment, it being intended that Landlord (nor any of its partners) shall not be
personally liable for any judgment or deficiency.

28.5Separability .  Any provisions of this Lease which shall prove to be invalid, void or illegal shall in no way
affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect.

28.6Choice of Law .  This Lease shall be governed by the laws of the State 

of California.

28.7Attorneys' Fees .  In the event any legal action is brought to enforce or interpret the provisions of this
Lease, the prevailing party therein shall be entitled to recover all costs and expenses including reasonable attorneys' fees.

28.8Interest .  Any installment of Base Rent or any other sum due from Tenant under this Lease which is received
by Landlord after thirty (30) days from when the same is due shall bear interest from said thirtieth (30th) day until paid at an
annual rate equal to the greater of; (a) ten percent (10%); or (b) five percent (5%) plus the rate established by the Federal
Reserve Bank of San Francisco as of the twenty-fifth (25th) day of the month immediately preceding the due date on advances to
member banks under Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter from time to time amended,
not to exceed the maximum rate allowable by law.  The accrual and/or acceptance of any interest shall not constitute a waiver of
Tenant's default with respect to any overdue amount, nor prevent Landlord from exercising any of Landlord's other rights or
remedies.

28.9Notices .  All notices and demands required to be sent to Landlord or Tenant under the terms of this Lease
shall be personally delivered or sent by certified or registered mail, or by overnight carrier or fax transmission, to the addresses
indicated above or to such other addresses as the parties may from time to time designate by notice.  

28.10Authorization.  The persons signing this Lease on behalf of Avanex hereby represents and warrants to Landlord
the following:

a.That Avanex, by duly passed resolution of the board of directors of the corporation, is authorized to enter into
this Lease and to incur and perform all the obligations of Tenant hereunder (which resolution shall be submitted to Landlord upon
Tenant's delivery of this Lease);

b.That the person signing this Lease on behalf of Avanex has been authorized by the corporation to execute this Lease
on behalf of such corporation and deliver the same to Landlord.

28.11Prior Agreements .  This Lease contains all of the agreements of the parties hereto, other than the Tenant
Improvement Agreement, with respect to any matter covered or mentioned in this Lease, and no prior agreements or understandings
pertaining to any such matters shall be effective for any purpose.  No provision of this Lease may be amended or added to except by
an agreement in writing signed by the parties hereto or their respective successors-in-interest.

28.12Quiet Enjoyment .  If Tenant timely pays the Rents and other amounts provided in this Lease, and observes and
performs all the covenants, terms, and conditions of this Lease, Tenant shall peaceably and quietly hold and enjoy the Premises for
the Lease Term without interruption by Landlord or any person or persons claiming by, through or under Landlord, subject,
nevertheless, to the terms and conditions of this Lease. Notwithstanding the foregoing, Tenant hereby acknowledges (a) that Landlord
will be constructing Building C of the Project during Tenant's occupancy of the Building, (b) that during the course of such
construction there may be additional noise, vibrations, and traffic, together with other elements normally attendant to
construction, which may cause some temporary disruption to Tenant's use and enjoyment of the Premises, (c) that Tenant hereby waives
any and all claims, costs, liabilities and damages which may result from such disruption, (d) that such disruption shall not
constitute a constructive eviction nor Tenant shall be entitled to any abatement of Rents or other credits in connection therewith,
and (e) that Tenant shall reasonably cooperate with Landlord, upon request, in connection with the construction of Building C. 

28.13Real Estate Commissions. The parties hereto acknowledge that only David Sandlin and Rob Shannon of Colliers
International, as Landlord's broker, and John King and Jana Gluckman of BT Commercial, as Tenant's broker, (collectively, the
"Brokers") are the only parties entitled to any commission or fees in connection with this Lease and that Landlord, pursuant
to a separate agreement with David Sandlin and Rob Shannon of Colliers International, will pay the commissions becoming due in
connection with this Lease. John King and Jana Gluckman of BT Commercial shall be entitled to one half of the fees payable to David
Sandlin and Rob Shannon of Colliers International. Each of Landlord and Tenant hereby represents and warrants to the other that,
other than to the Brokers, no real estate brokerage commission is payable to any person or entity in connection with the transaction
contemplated hereby, and each party agrees to and does hereby indemnify and hold the other harmless against the payment of any
commission to any person or entity claiming by, through or under the indemnifying party. This indemnification shall extend to any
and all claims, liabilities, costs and expenses (including reasonable attorney fees and litigation costs) arising as a result of
such claims and shall survive any termination of this Lease.

28.14Joint and Several Liability. Each of the parties executing this lease as "Tenant" shall be jointly and
severally liable for the performance of all of the Tenant's obligations under this Lease.

EXHIBITS

Exhibit ACross-hatch of Building

Exhibit BBase Rent Schedule

Exhibit CAdjacent Property

Exhibit DItems Excluded From Improvement Allowance

IN WITNESS WHEREOF, this Lease is executed on the date and year first above written.

LANDLORD:

STEVENSON BUSINESS PARK, LLC

a California limited Liability Company

By: ______________

Ron Winter, 

its Managing Member 

TENANT:

AVANEX CORPORATION,

a Delaware corporation

By:_______________

its: Chief Executive Officer

By:_______________

its:  Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT "B"

BASE RENT SCHEDULE

 
Lease YearMonthly Base Rent

	$106,401.78
	$110,657.85
	$115,084.16
	$119,687.52
	$124,475.02
	$129,454.02
	$134,632.18
	$140,017.46
	$145,618.15
	$151,442.87

 

EXHIBIT "D"

The Improvement Allowance shall not be used for or otherwise applied to (and Tenant shall pay for) any an all fixtures,
furnishings, equipment, or any specialized systems, components or installations, which items shall include, but not limited to the
following:

	Furniture, i.e.: cubicles, chairs, and desks
	Trash Compactor
	Kitchen appliances, i.e.: Refrigeratiors, microwave ovens, ice makers, etc.
	Cabling & cable trays
	Generator or UPS systems (backup battery)
	Costs associated with upgrading electrical service for 2,000 AMPS
	Mezzanine
	Air compressors and associated piping
	Vacuum pumps and associated piping
	Phone system
	HVAC over and above standard including, air handling units, Hepa fan units, Hepa filters and upgrade for installation

 

LEASE AGREEMENT

BETWEEN

STEVENSON BUSINESS PARK, LLC

A CALIFORNIA LIMITED LIABILITY COMPANY

AS LANDLORD

AND

AVANEX CORPORATION,
A DELAWARE CORPORATION

AS

TENANT

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