Document:

EXHIBIT 10.8

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                                ESCROW AGREEMENT

         AGREEMENT made this 7th day of June, 2001 by and among the Issuer whose
name and address appears on the Information  Sheet (as defined herein)  attached
to this  Agreement and  Continental  Stock Transfer & Trust Company (the "Escrow
Agent").

                              W I T N E S S E T H:

         WHEREAS,  the  Issuer  has  filed  with  the  Securities  and  Exchange
Commission  (the  "Commission")  a  registration  statement  (the  "Registration
Statement")   covering  a  proposed  public  offering  of  its  securities  (the
"Securities") as described on the Information Sheet;

         WHEREAS,  the  Issuer,  through  its  officers  and  directors,  and/or
participating  selected dealers proposes to offer the Securities for sale to the
public on a "best  efforts,  all or none"  basis  with  respect  to the  Minimum
Securities  Amount and Minimum  Dollar  Amount and at the price per share all as
set forth on the Information Sheet;

         WHEREAS,  the Issuer  proposes  to  establish  an escrow  account  (the
"Escrow Account"), to which subscription monies which are received by the Escrow
Agent from the Issuer and participating  selected dealers, if any, in connection
with such public offering are to be credited, and the Escrow Agent is willing to
establish  the  Escrow  Account  on the  terms  and  subject  to the  conditions
hereinafter set forth; and

         WHEREAS,  the  Escrow  Agent has an  agreement  with  Chemical  Bank to
establish  a  special  bank  account  (the  "Bank   Account")   into  which  the
subscription  monies,  which are  received  by the  Escrow  Agent for the Issuer
and/or  participating  selected  dealers,  if any,  and  credited  to the Escrow
Account, are to be deposited;

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

         1. Information  Sheet.  Each capitalized term not otherwise  defined in
this Agreement shall have the meaning set forth for such term on the information
sheet which is attached  to this  Agreement  and is  incorporated  by  reference
herein and made a part hereof (the "Information Sheet").

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         2. Establishment of the Bank Account.

         2.1 The  Escrow  Agent  shall  establish  a  non-interest-bearing  bank
account at the branch of Chemical Bank selected by the Escrow Agent, and bearing
the designation set forth on the Information  Sheet  (heretofore  defined as the
"Bank  Account").  The purpose of the Bank Account is for (a) the deposit of all
subscription  monies (checks,  cash or wire transfers) which are received by the
Issuer and participating  selected dealers, if any, from prospective  purchasers
of the  Securities  and are delivered by the Issuer and  participating  selected
dealers, if any, to the Escrow Agent, (b) the holding of amounts of subscription
monies which are collected through the banking system,  and (c) the disbursement
of collected funds, all as described herein.

         2.2 On or before the date of the  initial  deposit in the Bank  Account
pursuant to this Agreement,  the Issuer shall notify the Escrow Agent in writing
of the effective date of the Registration  Statement (the "Effective Date"), and
the Escrow  Agent  shall not be required to accept any amounts for credit to the
Escrow  Account or for deposit in the Bank Account  prior to its receipt of such
notification.

         2.3 The  Offering  Period,  which  shall be deemed to  commence  on the
Effective  Date,  shall  consist of the number of calendar days or business days
set forth on the Information  Sheet. The Offering Period shall be extended by an
Extension  Period only if the Escrow Agent shall have  received  written  notice
thereof at least five (5) business days prior to the  expiration of the Offering
Period.  The  Extension  Period,  which  shall be deemed to commence on the next
calendar day following the expiration of the Offering Period, or the last day of
the Extension Period (if the Escrow Agent has received written notice thereof as
hereinabove  provided),  is referred to herein as the "Termination Date". Except
as provided in Section 4.3 hereof,  after the  Termination  Date the Underwriter
shall not deposit, and the Escrow Agent shall not accept, any additional amounts
representing payments by prospective purchasers.

         3. Deposits to the Bank Account.

         3.1 The  Issuer  and  participating  selected  dealers,  if any,  shall
promptly  deliver  to the  Escrow  Agent all  monies  which  they  receive  from
prospective  purchasers of the Securities,  which monies shall be in the form of
checks, cash, or wire transfers. Upon the Escrow Agent's receipt of such monies,
they shall be credited to the Escrow Account. All checks delivered to the Escrow
Agent shall be made payable to "Continental  Stock Transfer & Trust Company,  as
Escrow Agent for Guitron  International  Inc.".  Any check payable other than to
the  Escrow  Agent as  required  hereby  shall be  returned  to the  prospective
purchaser, or if the Escrow Agent has insufficient information to do so, then to
the Issuer  (together  with any  Subscription  Information,  as defined below or
other documents delivered  therewith) by noon of the next business day following
receipt of such check by the Escrow Agent, and such check shall be deemed not to
have been delivered to the Escrow Agent pursuant to the terms of this Agreement.

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         3.2  Promptly  after  receiving  subscription  monies as  described  in
Section  3.1,  the Escrow  Agent shall  deposit the same into the Bank  Account.
Amounts of monies so deposited are hereinafter  referred to as "Escrow Amounts".
The Escrow  Agent shall cause  Chemical  Bank to process all Escrow  Amounts for
collection through the banking system.  Simultaneously  with each deposit to the
Escrow  Account,  the  Issuer (or the  participating  selected  dealer,  if such
deposit is made by the selected dealer) shall inform the Escrow Agent in writing
of the name and address of the prospective  purchaser,  the amount of Securities
subscribed  for by such  purchaser,  and the  aggregate  dollar  amount  of such
subscription (collectively, the "Subscription Information").

         3.3 The Escrow  Agent shall not be required to accept for credit to the
Escrow  Account  or for  deposit  into the Bank  Account  checks  which  are not
accompanied by the appropriate Subscription Information. Wire transfers and cash
representing payments by prospective purchasers shall not be deemed deposited in
the  Escrow  Account  until  the  Escrow  Agent  has  received  in  writing  the
Subscription Information required with respect to such payments.

         3.4 The  Escrow  Agent  shall not be  required  to accept in the Escrow
Account any amounts representing payments by prospective purchasers,  whether by
check, cash, or wire, except during the Escrow Agent's regular business hours.

         3.5 Only those Escrow  Amounts,  which have been  deposited in the Bank
Account and which have cleared the banking system and have been collected by the
Escrow Agent, are herein referred to as the "Fund".

         3.6 If the proposed offering is terminated before the Termination Date,
the Escrow Agent shall refund any portion of the Fund prior to  disbursement  of
the Fund in accordance with Article 4 hereof upon instructions in writing signed
by the Issuer.

         4. Disbursement from the Bank Account.

         4.1  Subject to Section 4.3 below,  if by the close of regular  banking
hours on the Termination Date the Escrow Agent determines that the amount in the
Fund is less than the Minimum Dollar Amount or the Minimum Securities Amount, as
indicated by the Subscription Information submitted to the Escrow Agent, then in
either such case,  the Escrow Agent shall  promptly  refund to each  prospective
purchaser the amount of payment  received from such purchaser which is then held
in the Fund or which  thereafter  clears the banking  system,  without  interest
thereon or deduction  therefrom,  by drawing  checks on the Bank Account for the
amount of such payments and transmitting them to the purchasers.  In such event,
the Escrow Agent shall  promptly  notify the Issuer of its  distribution  of the
Fund.

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         4.2  Subject  to Section  4.3 below,  if at any time up to the close of
regular banking hours on the Termination  Date, the Escrow Agent determines that
the  amount  in the Fund is at least  equal to the  Minimum  Dollar  Amount  and
represents the sale of not less than the Minimum  Securities  Amount, the Escrow
Agent shall promptly notify the Issuer of such fact in writing. The Escrow Agent
shall  promptly  disburse  the Fund,  by drawing  checks on the Bank  Account in
accordance  with  instructions  in  writing  signed  by  the  Issuer  as to  the
disbursement of the Fund, promptly after it receives such instructions.

         4.3 If the  Escrow  Agent  or the  Issuer  has on hand at the  close of
business on the Termination Date any uncollected amounts which when added to the
Fund would raise the amount in the Fund to the Minimum Dollar Amount, and result
in the  Fund  representing  the  sale  of the  Minimum  Securities  Amount,  the
Collection  Period  (consisting  of the number of business days set forth on the
Information Sheet) shall be utilized to allow such uncollected  amounts to clear
the banking system.  During the Collection  Period, the Issuer and participating
selected  dealers,  if any,  shall not  deposit,  and the Escrow Agent shall not
accept,  any additional  amounts;  provided,  however,  that such amount as were
received by the Issuer (or the  participating  selected  dealer) by the close of
business on the Termination  Date may be deposited with the Escrow Agent by noon
of the next  business day  following  the  Termination  Date. If at the close of
business on the last day of the Collection  Period an amount sufficient to raise
the amount in the Fund to the Minimum  Dollar  Amount and which would  result in
the Fund  representing  the sale of the  Minimum  Dollar  Amount and which would
result in the Fund representing the sale of the Minimum  Securities Amount shall
not have cleared the banking system,  the Escrow Agent shall promptly notify the
Issuer in writing of such fact and shall promptly return all amounts then in the
Fund,  and any  amounts  which  thereafter  clear  the  banking  system,  to the
prospective purchasers as provided in Section 4.2 hereof.

         4.4 Upon disbursement of the Fund pursuant to the terms of this Article
4, the Escrow  Agent shall be relieved of all further  obligations  and released
from all liability under this Agreement.  It is expressly  agreed and understood
that in no event shall the aggregate amount of payments made by the Escrow Agent
exceed the amount of the Fund.

         5. Rights, Duties and Responsibilities of Escrow Agent.

         It is  understood  and agreed  that the duties of the Escrow  Agent are
purely ministerial in nature, and that:

         5.1 The Escrow Agent shall notify the Issuer,  on a daily basis, of the
Escrow Amounts which have been deposited in the Bank account and of the amounts,
constituting  the Fund,  which have  cleared  the  banking  system and have been
collected by the Escrow Agent.

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         5.2 The Escrow  Agent  shall not be  responsible  for or be required to
enforce any of the terms or conditions  of any agreement  between the Issuer and
participating   selected  dealers,  if  any,  nor  shall  the  Escrow  Agent  be
responsible  for the  performance  by the Issuer of its  obligations  under this
Agreement.

         5.3 The Escrow  Agent  shall not be  required to accept from the Issuer
any Subscription  Information  pertaining to prospective  purchasers unless such
Subscription  Information  is  accompanied  by checks,  cash, or wire  transfers
meeting the  requirements of Section 3.1, nor shall the Escrow Agent be required
to keep records of any information  with respect to the amount of such payments;
however,  the Escrow Agent shall notify the Issuer  within a reasonable  time of
any discrepancy between the amount set forth in any Subscription Information and
the amount  delivered  to the Escrow  Agent  therewith.  Such amount need not be
accepted  for  deposit in the Escrow  Account  until such  discrepancy  has been
resolved.

         5.4 The  Escrow  Agent  shall  be under  no duty or  responsibility  to
enforce  collection of any check  delivered to it  hereunder.  The Escrow Agent,
within a reasonable time, shall return to the Issuer any check received which is
dishonored,   together  with  the  Subscription   Information,   if  any,  which
accompanied such check.

         5.5 The Escrow Agent shall be entitled to rely upon the  accuracy,  act
in  reliance  upon the  contents,  and assume  the  genuineness  of any  notice,
instruction, certificate, signature, instrument or other document which is given
to the Escrow  Agent  pursuant to this  Agreement  without the  necessity of the
Escrow Agent verifying the truth or accuracy thereof. The Escrow Agent shall not
be obligated  to make any inquiry as to the  authority,  capacity,  existence or
identity of any person  purporting to give any such notice or instructions or to
execute any such certificate, instrument or other document.

         5.6 If the  Escrow  Agent  is  uncertain  as to its  duties  or  rights
hereunder or shall receive  instructions  with respect to the Bank Account,  the
Escrow  Amounts or the Fund  which,  in it sole  determination,  are in conflict
either  with other  instructions  received by it or with any  provision  of this
Agreement,  it shall be  entitled  to hold the Escrow  Amounts,  the Fund,  or a
portion thereof,  in the Bank Account pending the resolution of such uncertainty
to the Escrow Agent's sole satisfaction,  by final judgment of a court or courts
of competent jurisdiction or otherwise; or the Escrow Agent, at its sole option,
may deposit the Fund (and any other Escrow Amounts that  thereafter  become part
of the Fund) with the Clerk of a court of competent jurisdiction in a proceeding
to which all  parties in  interest  are  joined.  Upon the deposit by the Escrow
Agent of the Fund  with  the  Clerk of any  court,  the  Escrow  Agent  shall be
relieved of all further obligations and released from all liability hereunder.

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         5.7 The  Escrow  Agent  shall not be  liable  for any  action  taken or
omitted  hereunder,  or for the  misconduct of any  employee,  agent or attorney
appointed by it, except in the case of wilful  misconduct  or gross  negligence.
The Escrow  Agent shall be entitled to consult  with counsel of its own choosing
and shall not be liable  for any  action  taken,  suffered  or  omitted by it in
accordance with the advice of such counsel.

         5.8 The  Escrow  Agent  shall  have no  responsibility  at any  time to
ascertain whether or not any security interest exists in the Escrow Amounts, the
Fund or ant part thereof or to file any  financing  statement  under the Uniform
Commercial Code with respect to the Fund or any part thereof.

         6.  Amendment;  Resignation.  This  Agreement may be altered or amended
only with the  written  consent of the Issuer and the Escrow  Agent.  The Escrow
Agent may resign for any reason upon three (3) business  days written  notice to
the Issuer.  Should the Escrow Agent resign as herein provided,  it shall not be
required to accept any deposit,  make any  disbursement or otherwise  dispose of
the Escrow Amounts until they clear the banking system and the Fund for a period
of not more than five (5) business days  following  the  effective  date of such
resignation,  at which  tine (a) if a  successor  escrow  agent  shall have been
appointed and written  notice  thereof  (including  the name and address of such
successor  escrow agent) shall have been given to the resigning  Escrow Agent by
the Issuer and such  successor  escrow agent,  then the  resigning  Escrow Agent
shall pay over to the successor  escrow agent the Fund, less any portion thereof
previously paid out in accordance  with this Agreement;  or (b) if the resigning
Escrow Agent shall not have received  written  notice signed by the Issuer and a
successor  escrow agent,  then the resigning  Escrow Agent shall promptly refund
the amount in the Fund to each prospective  purchaser,  without interest thereon
or deduction therefrom, and the resigning Escrow Agent shall promptly notify the
Issuer in writing of its liquidation and distribution of the Fund; whereupon, in
either case, the Escrow Agent shall be relieved of all further  obligations  and
released  from  all  liability  under  this  Agreement.   Without  limiting  the
provisions of Section 8 hereof,  the resigning Escrow Agent shall be entitled to
be  reimbursed by the Issuer for any expenses  incurred in  connection  with its
resignation, transfer of the Fund to a successor escrow agent or distribution of
the Fund pursuant to this Section 6.

         7.  Representations  and Warranties.  The Issuer hereby  represents and
warrants to the Escrow Agent that:

         7.1 No  party  other  than  the  parties  hereto  and  the  prospective
purchasers  have,  or shall have,  any lien,  claim or security  interest in the
Escrow Amounts or the Fund or any part thereof.

         7.1 No financing statement under the Uniform Commercial Code is on file
in any  jurisdiction  claiming a security  interest  in or  describing  (whether
specifically or generally) the Escrow Amount or the Fund or any part thereof.

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         7.3 The Subscription  Information submitted with each deposit shall, at
the tine of  submission  and at the time of the  disbursement  of the  Fund,  be
deemed a  representation  and warranty that such deposit  represents a bona fide
payment by the  purchaser  described  therein for the amount of  Securities  set
forth in such Subscription Information.

         7.4 All of the Information contained in the Information Sheet is, as of
the date hereof,  and will be, at the time of any disbursement of the Fund, true
and correct.

         8. Fees and Expenses.  The Escrow Agent shall be entitled to the Escrow
Agent  Fees set  forth on the  Information  Sheet,  payable  as and when  stated
therein.  In addition,  the Issuer  agrees to reimburse the Escrow Agent for any
reasonable expenses incurred in connection with this Agreement,  including,  but
not limited to,  reasonable  counsel  fees.  Upon receipt of the Minimum  Dollar
Amount,  the Escrow  Agent  shall have a lien upon the Fund to the extent of its
fees for services as Escrow Agent.

         9. Indemnification and Contribution.

         9.1 The  Issuer  (herein  referred  to as the  "Indemnitor")  agrees to
indemnify the Escrow Agent and its officers,  directors,  employees,  agents and
shareholders  (collectively referred to as the "Indemnitees")  against, and hold
them  harmless  of and  from,  any and all loss,  liability,  cost,  damage  and
expense,  including  without  limitation,  reasonable  counsel  fees,  which the
Indemnitees  may suffer or incur by reason of any  action,  claim or  proceeding
brought  against the  Indemnitees  arising out of or relating in any way to this
Agreement  or any  transaction  to which this  Agreement  relates,  unless  such
action,  claim or  proceeding  is the result of the willful  misconduct or gross
negligence of the Indemnitees.

         9.2 If the  indemnification  provided for in Section 9.1 is applicable,
but for any reason is held to be unavailable,  the Indemnitor  shall  contribute
such amounts as are just and equitable to pay, or to reimburse  the  Indemnitees
for,  the  aggregate  of any and all  losses,  liabilities,  costs,  damages and
expenses,  including  counsel fees,  actually  incurred by the  Indemnitees as a
result of or in  connection  with,  and any amount  paid in  settlement  of, any
action, claim or proceeding arising out of or relating in any way to any actions
or omissions of the Indemnitor.

         9.3 The  provisions of this Article 9 shall survive any  termination of
this Agreement,  whether by disbursement of the Fund,  resignation of the Escrow
Agent or otherwise.

         10. Governing Law and Assignment.  This Agreement shall be construed in
accordance  with and  governed by the laws of the State of New York and shall be
binding upon the parties  hereto and their  respective  successors  and assigns;
provided,  however,  that any  assignment or transfer by any party of its rights
under this Agreement or with respect to the

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Escrow  Amounts or the Fund shall be void as against the Escrow Agent unless (a)
written  notice  thereof shall be given to the Escrow Agent;  and (b) the Escrow
Agent shall have consented in writing to such assignment or transfer.

         11. Notices.  All notices  required to be given in connection with this
Agreement  shall  be  sent by  registered  or  certified  mail,  return  receipt
requested,  Federal Express or comparable overnight courier, or by hand delivery
with receipt acknowledged,  or by the Express Mail service offered by the United
States Post Office, and addressed, if to the Issuer, at its address set forth on
the  Information  Sheet,  and if to the Escrow  Agent,  at its address set forth
above, to the attention of the Trust Department.

         12. Severability. If any provision of this Agreement or the application
thereof  to any  person or  circumstance  shall be  determined  to be invalid or
unenforceable,  the remaining provisions of this Agreement or the application of
such provision to persons or circumstances  other than those to which it is held
invalid or  unenforceable  shall not be affected  thereby and shall be valid and
enforceable to the fullest extent permitted by law.

         13. Execution in Several  Counterparts.  This Agreement may be executed
in several counterparts or by separate instruments, and all of such counterparts
and instruments  shall  constitute one agreement,  binding on all of the parties
hereto.

         14. Entire Agreement.  This Agreement  constitutes the entire agreement
between  the  parties  hereto  with  respect to the  subject  matter  hereof and
supersedes  all prior  agreements  and  understandings  (written or oral) of the
parties in connection therewith.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date and year first above written.

THE ISSUER                                              CONTINENTAL STOCK
                                                        TRANSFER & TRUST COMPANY

By:/s/ Richard F. Duffy                                 By:/s/ Steven Nelson
   --------------------                                    -----------------
     Richard F. Duffy, President                        Steven Nelson, President

                                       8
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                                         ESCROW AGREEMENT INFORMATION SHEET

1.       The Issuer

         Name:    Guitron International Inc.
         Address: 38 Place du Commerce, Suite 230, Nuns' Island,
                  Montreal, Quebec, Canada H3E 1T8
         State of incorporation of organization:  Delaware

2.       The Securities
         Description of the Securities to be offered (e.g., shares of
         or warrants for common stock, debentures, units consisting
         shares and warrants, etc.)                  common stock
         Par value, if any                           $.001 par value
         Offering price per share                    $1.00

3.       Minimum  Amounts  Required  for  Disbursement  of  the  Escrow  Account
         Aggregate  dollar  amount  which  must be  collected  before the Escrow
         Account  may be  disbursed  to the  Issuer  ("Minimum  Dollar  Amount")
         $250,000 Total amount of securities which must be subscribed for before
         the Escrow Account may be disbursed to the Issuer ("Minimum  Securities
         Amount") 250,000 shares

4.       Plan of Distribution of the Securities

         Offering Period:           60 calendar days
         Extension Period, if any:  15 calendar days
         Collection Period, if any: 5  business days

5.       Title of Escrow  Account:  Continental  Stock Transfer & Trust Company,
         Escrow Agent for the offering by Guitron International Inc.

6.       Escrow Agent Fees
         Amount due on execution of the Escrow Agreement: $1,000 and $1,000 upon
         completion of the escrow
         Fee for each check disbursed pursuant to the terms of the
         Escrow Agreement: $10
         Fee for each check returned pursuant to the terms of the
         Escrow Agreement: $10

                                       9<PAGE>   1
                                                                   EXHIBIT 10.17

[RENAULT & HANDLEY LETTERHEAD]

PARTIES

        THIS LEASE, executed in duplicate at Morgan Hill, California, this

        2nd day of November, 1994, by and between

        Jorge A. Lovato, Jr. & Robin E. Lovato, husband & wife

        and

        Thoits Bros., Inc., a California corporation

        hereinafter called respectively Lessor and Lessee, without regard to
        number or gender,

PREMISES

                1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee
        hires from Lessor, those certain premises, hereinafter in this lease
        designated as "the Premises", with the appurtenances situated in the
        City of Morgan Hill County of Santa Clara, State of California, and more
        particularly described as follows, to-wit:

        An approximately 35,000 square foot building and associated land at 180
        Cochrane Circle
        See Addendum for supplemental provisions.

USE

                2. The Premises shall be used and occupied by Lessee for
        office/warehouse and light industrial business operations.

        and for no other purpose without the prior written consent of Lessor.

TERM

                3. The term shall be for ten (10) years four months commencing
        on the 15th day of November, 1994, and ending on the 31st day of March,
        2005.

RENTAL

                4. Rent shall be payable to the Lessor without deduction or
        offset at such place or places as may be designated from time to time by
        the Lessor as follows:

        Twenty-Two Thousand Seven Hundred Fifty & no/100ths Dollars ($22,750.00)
        is due upon execution of this Lease constituting rent for November,
        1994. $22,750.00 will be due December 1, 1994 and on the 1st of each
        succeeding months thru February 1, 1996. Twenty Three Thousand Four
        Hundred Fifty ($23,450.00) will be due on March 1, 1996 and on the 1st
        of each succeeding month thru February 1997. Twenty Four Thousand Five
        Hundred & no/100ths Dollars ($24,500) will be due on March 1, 1997 and
        on the 1st of each succeeding month thru February, 1998. Twenty Five
        Thousand Five Hundred Fifty & no/100ths ($25,550) will be due on March
        1, 1998 and on the 1st of each succeeding month thru February, 1999.
        Twenty Six Thousand Two Hundred Fifty & no/100ths Dollars ($26,250) will
        be due March 1, 1999 and on the 1st of each month thru February 2000.
        Twenty Six Thousand Nine Hundred Fifty & no/100ths Dollars ($26,950.00)
        will be due March 1, 2000 and on the 1st of each succeeding month thru
        February 2001. Twenty Seven Thousand Six Hundred Fifty & no/100ths
        Dollars ($27,650) will be due March 1, 2001, and on the 1st of each
        succeeding month thru February 2002. Twenty Eight Thousand Seven Hundred
        & no/100ths Dollars ($28,700.00) will be due March 1, 2002 and on the
        1st of each succeeding month thru February 2003. Twenty Nine Thousand
        Seven Hundred Fifty & no/100ths Dollars ($29,750) will be due March 1,
        2003 and on the 1st of each succeeding month thru February 2004. Thirty
        Thousand Four Hundred Fifty & no/100ths Dollars ($30,450) will be due
        March 1, 2004 and on the 1st of each succeeding month thru the Lease
        term.

                                  Exhibit "A"
<PAGE>   2
DEPOSIT

     5.   Lessee has deposited with Lessor $_______ as security for the full and
faithful performance of each and every term, provision, covenant and condition
of this Lease, including, but not limited to ???? payment of rent Lessor may
use, apply or retain the whole or any part of any part of such security for the
payment of any rent in default or for any other sum which Lessor may spend or be
required to spend by reason of Lessee's default. Should Lessee faithfully and
fully comply with all of the terms, provisions, covenants and conditions of this
Lease, the security of any balance thereof shall be returned to Lessee or, at
the option of Lessor, to the last assignee of Lessee's interest in this Lease at
the expiration of the term hereof. Lessee shall not be entitled to any interest
to any interest on said security deposit.

POSSESSION

     6.   If Lessor, for any reason whatsoever, cannot deliver possession of the
Premises to Lessee at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable, nor shall Lessor, or
Lessor's agents, be liable to Lessee for any loss or damage resulting therefrom;
but in that event the commencement and termination dates of the Lease and all
other dates affected thereby shall be revised to conform to the date of Lessor's
delivery of possession. The above is, however, subject to the provision that the
period of delay of delivery of the Premises shall not exceed 45 days from the
commencement date herein. If the period of delay of delivery exceeds the
foregoing, Lessee, at his or its option, may declare this Lease null and void.

ACCEPTANCE OF PREMISES AND CONSENT TO SURRENDER

     7.   By entry hereunder, the Lessee accepts the Premises as being in good
and satisfactory condition. The Lessee agrees on the last day of the term
hereof, or on sooner termination of this Lease, to surrender the premises,
together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises by Lessor or Lessee, unto Lessor in the same
good condition as at Lessee's entry into the Premises excepting for such wear
and tear as would be normal for the period of the Lessee's occupancy. The
Lessee, or before the end of the term or sooner termination of this Lease, shall
remove all Lessee's personal property and trade fixtures from the premises and
all property not so removed shall be deemed to be abandoned by the Lessee. If
the Premises be not surrendered at the end of the term or sooner termination of
this Lease, the Lessee shall indemnify the Lessor against loss or liability
resulting from delay by the Lessee in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such
delay. *See Addendum hereto.

USES PROHIBITED

     8.   Lessee shall not commit, or suffer to be committed, any waste upon the
Premises, or any nuisance, or other act or thing which may disturb the quiet
enjoyment of any other tenant in or around the buildings in which the Premises
may be located, or allow any sale by auction upon the Premises, or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, or place any loads upon the floor, walls, or roof which endanger the
structure, or place any harmful liquids in the drainage system of the building.
No waste materials or refuse shall be dumped upon or permitted to remain upon
any part of the Premises outside of the building proper. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the buildings proper.

ALTERATIONS AND ADDITIONS

     9.   Except as hereinafter provided, the lessee shall make no alterations,
additions or improvements to the Premises or any part thereof without first
obtaining the prior written consent of the Lessor. The Lessor may impose as a
condition to the aforesaid consent such requirements as Lessor may deem
necessary in Lessor's sole discretion, including without limitation thereto, the
manner in which the work is done, a right of approval of the contractor by whom
the work is to be performed, the times during which it is to be accomplished,
and the requirement that upon written request of Lessor prior to the expiration
or earlier termination of the Lease, Lessee will remove any or all improvements
or additions to the Premises installed at Lessee's expense. All such
alterations, additions or improvements not specified to be removed shall at the
expiration of earlier termination of the lease become the property of the Lessor
and remain upon and be surrendered with the Premises. All movable furniture,
business and trade fixtures, and machinery and equipment shall remain the
property of the Lessee and may be removed by the Lessee at any time during the
Lease term when Lessee is not in default hereunder. Items which are not to be
deemed as movable furniture, business and trade fixtures, or machinery and
equipment shall include heating, lighting, electrical systems, air conditioning,
partitioning, carpeting, or any other installation which has become an integral
part of the Premises. The Lessee will at all times permit notices of
non-responsibility to be posted and to remain posted until the completion of
alterations or additions which have been approved by the Lessor. * See Addendum
hereto for supplemental provisions.

MAINTENANCE OF PREMISES

     10.  Lessee shall, at Lessee's sole cost, keep and maintain the Premises
and appurtenances and every part thereof, including but not limited to, glazing,
sidewalks, parking areas, plumbing, electrical systems, heating and air
conditioning installations, any store front, roof covering -- unless it is not
feasible to repair the existing roof covering and a new roof covering is
required, and the interior of the Premises in good order, condition, and repair.
Lessor at Lessor's sole cost and expense shall maintain the exterior of the
walls, and structural portions of the roof, foundations, walls, and floors
except for any repairs caused by the wrongful act of the Lessee and Lessee's
agents. The Lessor will replace the roof covering if repairs to said covering
are no longer economically feasible in the judgment of roofing experts, and
provided that said replacement is not made necessary by acts of the Lessee and
Lessee's agents. The Lessee shall water, maintain and replace, when necessary,
any shrubbery and landscaping provided by the Lessor on the Premises. The Lessee
expressly waives the benefits of any statute now or hereafter in effect which
would otherwise afford the Lessee the right to make repairs at Lessor's expense
or to terminate this lease because of Lessor's failure to keep the Premises in
good order, conditions or repair. Lessor shall not be obligated to paint the
exterior of the Premises.

FIRE AND EXTENDED COVERAGE INSURANCE AND SUBROGATION

*See Addendum hereto.

                                     2 of 5
<PAGE>   3
                     SEE REVISED INSURANCE CLAUSE ATTACHED

ABANDONMENT

     12.  Lessee shall not vacate or abandon the Premises at any time during the
term; and if Lessee shall abandon, vacate or surrender the premises, or be
dispossessed by process of law, or otherwise, any personal property belonging to
Lessee and left on the premises shall be deemed to be abandoned, at the option
of Lessor, except such property as may be mortgaged to Lessor.

FREE FROM LIENS

     13.  Lessee shall keep the Premises and the property in which the Premises
are situated, free from any liens arising out of any work performed, materials
furnished, or obligations incurred by Lessee.

COMPLIANCE WITH GOVERNMENTAL REGULATIONS

     14.  Lessee shall, at his sole cost and expense, comply with all of the
requirements of all Municipal, State and Federal authorities now in force, or
which may hereafter be in force, pertaining to the Premises, and shall
faithfully observe in the use of the Premises all Municipal ordinances and State
and Federal statutes now in force or which may hereafter be in force. The
judgment of any court of competent jurisdiction, or the admission of Lessee in
any action or proceeding against Lessee, whether Lessor be a party thereto or
not, that Lessee has violated any such ordinances or statute in the use of the
Premises, shall be conclusive of that fact as between Lessor and Lessee.

INDEMNIFICATION OF LESSOR AND LESSEE'S LIABILITY INSURANCE

     15.  The Lessee, as a material part of the consideration to be rendered to
the Lessor, hereby waives all claims against the Lessor for damages to goods,
wares and merchandise, and all other personal property in, upon, or about the
Premises and for injuries to persons in or about the Premises, from any cause
arising at any time, excepting claims arising from the Lessor's negligence, and
the Lessee will hold the Lessor exempt and harmless from any damage or injury to
any person, or to the goods, wares and merchandise and all other personal
property of any person, arising from the use of the Premises by the Lessee, or
from the failure of the Lessee to keep the Premises in good condition and
repair, as herein provided.

                     SEE REVISED INSURANCE CLAUSE ATTACHED

ADVERTISEMENTS AND SIGNS

     16.  Lessee will not place or permit to be placed, in, upon or about the
Premises any unusual or extraordinary signs, or any signs not approved by the
city or other governing authority. The Lessee will not place, or permit to be
placed, upon the Premises, any signs, advertisements or notices without the
written consent of the Lessor first had and obtained. Any sign so placed on the
Premises shall be so placed upon the understanding and agreement that Lessee
will remove same as the termination of the tenancy herein created and repair any
damage or injury to the Premises caused thereby, and if not so removed by Lessee
then Lessor may have same so removed at Lessee's expense.

UTILITIES

     17.  Lessee shall pay for all water, gas, heat, light, power, telephone
service and all other service supplied to the Premises. If the premises are not
served by a separate water meter, the Lessee shall pay to the Lessor 100 percent
of the water bill for the entire property covered by said bill and of which the
Premises are a part.

ATTORNEY'S FEES

     18.  In case suit should be brought for the possession of the Premises, for
the recovery of any sum due hereunder, or because of the breach of any other
covenant herein, the losing party shall pay to the prevailing party a reasonable
attorney's fee, which shall be deemed to have accrued on the commencement of
such action and shall be enforceable whether or not such action is prosecuted to
judgment.

DEFAULT

     19.  * See Addendum hereto.

LATE CHARGES

     20.  Lessee hereby acknowledges that late payment by Lessee to Lessor of
rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Lessor by the
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
Lessee shall pay to Lessor a late charge equal to ten percent (10%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason of late payment
by Lessee. Acceptance of such late charge by Lessor shall in no event constitute
a waiver of

                                     3 of 5
<PAGE>   4

Lessee's default with respect to such overdue amount, not prevent Lessor from
exercising any of the other rights and remedies granted hereunder.

SURRENDER OF LEASE

     21.  The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment to him of any or all such subleases
or subtenancies.

TAXES

     22.  The Lessee shall be liable for all taxes levied against personal
property and trade or business fixtures. The Lessee also agrees to pay, as
additional rental, during the term of this Lease and any extensions thereof, all
real estate taxes plus the yearly installments of any special assessments which
are of record or which may become a record during the term of this lease. If
said taxes and assessments are assessed against the entire building and building
site, and this Lease does not cover the entire building or building site, the
taxes and assessment installments allocated to the Premises shall be pro-rated
on a square footage or other equitable basis, as calculated by the Lessor. It is
understood and agreed that the Lessee's obligation under this paragraph will be
pro-rated to reflect the commencement and termination dates of this Lease.

NOTICES

     23.  All notices to be given to Lessee may be given in writing personally
or by depositing the same in the United States mail, postage prepaid, and
addressed to Lessee at the said Premises, whether or not Lessee has departed
from, abandoned or vacated the Premises, with a copy thereof to Lessee at P.O.
Box 21, Palo Alto, CA 94302.

ENTRY BY LESSOR

     24.  Lessee shall permit Lessor and his agents to enter into and upon the
Premises at all reasonable times for the purpose of inspecting the same or for
the purpose of maintaining the building in which the Premises are situated, or
for the purpose of making repairs, alterations or additions to any other portion
of said building, including the erection and maintenance of such scaffolding,
canopies, fences and props as may be required without any rebate of rent and
without any liability to Lessee for any loss of occupation or quiet enjoyment of
the Premises thereby occasioned; and shall permit Lessor and his agents, at any
time within ninety days prior to the expiration of this Lease, to place upon the
Premises any usual or ordinary "For Sale" or "To Lease" signs and exhibit the
Premises to prospective tenants at reasonable hours.

DESTRUCTION OF PREMISES

     25.  In the event of a partial destruction of the Premises during the said
term from any cause, Lessor shall forthwith repair the same, provided such
repairs can be made within ?? days under the laws and regulations of State,
Federal, County or Municipal authorities, but such partial destruction shall in
no way annul or void this Lease, except that Lessee shall be entitled to a
proportionate reduction of rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall interfere with the business carried on by Lessee in the Premises.
If such repairs cannot be made in ?? days, Lessor may, at his option, make same
within a reasonable time, this Lease continuing in full force and effect and the
rent to be proportionately reduced as aforesaid in ?? days, or such repairs
cannot be made under such laws and regulations, this Lease may be terminated at
the option of either party. In respect to any partial destruction which Lessor
is obligated to repair or may elect to repair under the terms of this paragraph,
the provision of Section 1932, Subdivision 2, and of Section 1933, Subdivision
4, of the Civil Code of the State of California are waived by Lessee. In the
event that the building in which the Premises may be situated be destroyed to
the extent of not less than 33 1/3% of the replacement cost thereof, Lessor may
elect to terminate this Lease, whether the Premises be injured or not. A total
destruction of the building in which the Premises may be situated shall
terminate this Lease. In the event of any dispute between Lessor and Lessee
relative to the provisions of this paragraph, they shall each select an
arbitrator, the two arbitrators so selected shall select a third arbitrator and
the three arbitrators so selected shall hear and determine the controversy and
their decision thereon shall be final and binding upon both Lessor and Lessee,
who shall bear the cost of such arbitration equally between them.

ASSIGNMENT AND SUBLETTING

     26.  *See Addendum hereto.

CONDEMNATION

     27.  If any part of the premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains which is susceptible of
occupation hereunder, this Lease shall, as to the part so taken, terminate as of
the date title shall vest in the condemnor or purchase, and the rent payable
hereunder shall be adjusted so that the Lessee shall be required to pay for the
remainder of the term only such portion of such rent as the value of the part
remaining after such taking bears to the value of the entire

                                     4 of 5
<PAGE>   5
Premises prior to such taking; but in the event Lessor shall have the option to
[ILLEGIBLE] title to the part so taken vests in the condemnor or purchaser. If
all of the premises, or a part thereof be taken so that there does not remain a
portion susceptible for occupation hereunder, this Lease shall thereupon
terminate. If a part or all of the Premises be taken, all compensation awarded
upon such taking shall go to the Lessor and the Lessee shall have no claim
thereto.

EFFECT OF CONVEYANCE

     28. The term "Lessor" as used in this Lease, means only the owner for the
time being of the land and building containing the Premises, so that, in the
event of any sale of said land or building, or in the event of a lease of said
building, the Lessor shall be and hereby is entirely freed and relieved of all
covenants and obligations of the Lessor hereunder, and it shall be deemed and
construed, without further agreement between the parties and the purchase at any
such sale, or the Lessee of the building, that the purchaser or lessee of the
building has assumed and agreed to carry out any and all covenants and
obligations of the Lessor hereunder. If any security be given by the Lessee to
secure the faithful performance of all or any of the covenants of this Lease on
the part of the Lessee, the Lessor may transfer and deliver the security, as
such, to the purchaser at any such sale or the [ILLEGIBLE] of the building, and
thereupon the Lessor shall be discharged from any further liability in reference
thereto.

SUBORDINATION

     29. Lessee agrees that this Lease may, at the option of Lessor, be subject
and subordinate to any mortgage, deed of trust or other instrument of security
which has been or shall be placed on the land and building or land or building
of which the Premises form a part, and this subordination is hereby made
effective without any further act of Lessor. The Lessee shall, at any time
hereinafter, on demand, execute any instruments, releases, or other documents
that may be required by any mortgagee, mortgagor, or trustor or beneficiary
under any deed of trust for the purpose of subjecting and subordinating this
Lease to the lien of any such mortgage, deed of trust or other instrument of
security, and the failure of the Lessee to execute such instruments, releases or
documents, shall constitute a default hereunder.

WAIVER

     30. The waiver by Lessor of any breach of any term, covenant or condition,
herein contained shall not be deemed to be a waiver of such term, covenant or
condition or any subsequent breach of the same or any other term, covenant or
condition therein contained. The subsequent acceptance of rent hereunder by
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of
any term, covenant or condition of this Lease, other than the failure of Lessee
to pay the particular rental so accepted, regardless of Lessor's knowledge of
such preceding breach at the time of acceptance of such rent.

HOLDING OVER

     31. Any holding over after the expiration of the said term, with the
consent of Lessor, shall be construed to be a tenancy from month to month, at a
rental to be negotiated by Lessor and Lessee prior to the expiration of said
term, and shall otherwise be on the terms and conditions herein specified, so
far as applicable.

SUCCESSORS AND ASSIGNS

     32. The covenants and conditions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto; and all of the parties
hereto shall be jointly and severally liable hereunder.

TIME

     33. Time is of the essence of this Lease.

MARGINAL CAPTIONS

     34. The marginal headings or titles to the paragraphs of this Lease are not
a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed by
all of the parties hereto or their respective successors in interest.

PROVISIONS SET FORTH ON THE ADDENDUM ATTACHED HERETO ARE HEREBY MADE A PART OF
THIS LEASE.

THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY WHO WILL REVIEW THE
DOCUMENT AND ASSIST YOU TO DETERMINE WHETHER YOUR LEGAL RIGHTS ARE ADEQUATELY
PROTECTED. RENAULT & HANDLEY IS NOT AUTHORIZED TO GIVE LEGAL AND TAX ADVICE. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY RENAULT & HANDLEY OR ITS AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
DOCUMENT OR ANY TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR YOUR
ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT.

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

                LESSOR                                    LESSEE

Jorge A., Jr. & Robin E. Lovato           CIDCO

                                          /s/ SCOTT MCDANIEL
-------------------------------------     --------------------------------------

-------------------------------------     --------------------------------------

-------------------------------------     --------------------------------------

                                     5 of 5
<PAGE>   6
                               ADDENDUM TO LEASE

     This Addendum to the attached Lease by and between JORGE A. LOVATO, JR. &
ROBIN E. LOVATO, husband and wife, as Lessor, and THOITS BROS., INC., a
California corporation, as Lessee, demising the property numbered 190 Cochrane
Circle, Morgan Hill, California (the "Premises"), is hereby amended by the
following provisions:

     1.   ALTERATIONS AND ADDITIONS

     Notwithstanding the provisions of Paragraph 9 of the Lease, Lessee may
make nonstructural alterations, additions or improvements to the interior of
the Premises without Lessor's consent and, similarly, in connection therewith
may make structural alterations, additions, or improvements to the Premises
without Lessor's consent provided the cost of such structural work does not
exceed Fifty Thousand Dollars ($50,000.00). Whether or not Lessor's consent
is required, Lessee will remove any such improvements or additions upon
Lessor's written request prior to expiration or sooner termination of the
Lease. Except for this modification, the provisions of Paragraph 9 of the Lease
shall prevail.

     Lessee shall provide Lessor with at least five (5) days prior written
notice of intent to commence any work to allow Lessor to post an appropriate
notice of non-responsibility.

     Any of said alterations, additions and improvements shall be performed by a
licensed contractor or contractors in accordance with all applicable ordinances
and regulations and, if required, under permit or permits issued by the
governmental agency having jurisdiction thereof.

     2.   FIRE AND EXTENDED COVERAGE INSURANCE AND SUBROGATION

     Paragraph 11 of the Lease is amended by deleting the text in the Lease
form and substituting the following therefor:

          11.  Lessee shall not use, or permit the Premises, or any part
thereof, to be used, for any purpose other than that for which the Premises are
hereby leased; and no use shall be made or permitted to be made on the
Premises, nor acts alone, which will cause a cancellation of any insurance
policy covering said building, or any part thereof, nor shall Lessee sell or
permit to be kept, used or sold, in or about the Premises, any article which
may be prohibited by the standard form of fire insurance policies. Lessee
shall, at his sole cost and expense, comply with any and all requirements
pertaining to the Premises, of any insurance organization or company, necessary
for the maintenance of

                                       1
<PAGE>   7
reasonable fire and public liability insurance, covering said building and
appurtenances.

          11.1 Lessee, shall at its expense, obtain and keep in force during
the term of this Lease a policy of comprehensive public liability insurance
insuring Lessee, Lessor, and any third parties named by Lessor which may
include Lessor's lender, against any liability arising out of the condition,
use, occupancy or maintenance of the Premises. Such insurance policy shall have
a combined single limit for both bodily injury and property damage in an amount
not less than Two Million No/100th Dollars ($2,000,000.00). The limits of said
insurance shall not limit the liability of Lessee hereunder. Additional
premiums, if any, resulting from insuring any third parties' named by Lessor
shall be borne by Lessor, other than Lessor's lender.

          11.2 Lessee shall, at its expense, keep in force during the term of
this Lease, a policy of fire and property damage insurance in an "all risk"
form with a sprinkler leakage endorsement, insuring Lessee's inventory,
fixtures, equipment and personal property within the Premises for the full
replacement value thereof.

          11.3 Lessor shall maintain a policy or policies of fire and property
damage insurance in an "all risk" form, with sprinkler covering loss or damage
to the building, including Lessee's leasehold improvements installed with the
written consent of the Lessor, in such amounts and with such coverage as Lessor
deems advisable.

          11.4 Lessee shall pay to Lessor as additional rent, during the term
hereof, upon receipt of an invoice therefore 100% of the premiums for any
insurance obtained by Lessor pursuant to 11.3 above. Lessor may obtain such
insurance for the Building separately, or together with other buildings and
improvements which Lessor elects to insure together under blanket policies of
insurance. In such case Lessee shall be liable for only such portion of the
premiums for such blanket policies as are allowable to the Premises. It is
understood and agreed that Lessee's obligation under this paragraph shall be
prorated to reflect the Commencement Date and Expiration Date of the Lease.

          11.5 Lessee and Lessor each hereby waives any and all rights of
recovery against the other, or against the officers, directors, employees,
partners, agents and representatives of the other, for loss of or damage to the
property of the waiving party or the property of others under its control, to
the extent such loss or damage is insured against under any insurance policy
carried by Lessor or Lessee hereunder. Each party shall notify their respective
insurance carriers of this waiver.

                                       2

<PAGE>   8

     3.   COMPLIANCE WITH GOVERNMENTAL REGULATIONS

     Paragraph 14: If Lessee is required to modify any portion of the Premises
in order to comply with Americans With Disabilities Act and the requirement is
not directly related to and occasioned by alterations, additions or
improvements to the Premises being undertaken by Lessee, then the cost of such
compliance with the Americans With Disabilities Act unrelated to Lessee's work
shall be paid by Lessee, but upon expiration or sooner termination of the
Lease, Lessor shall reimburse Lessee for a portion of the cost thereof
determined as follows: The depreciable life of the improvements to the Premises
resulting from said compliance with the Americans With Disabilities Act shall
be determined under the depreciation schedules provided under Regulations of
the Internal Revenue Service. Lessor shall reimburse to Lessee the portion of
the costs of such compliance equivalent to the percentage of the depreciable
life thereof remaining following the date of termination or sooner expiration
of the Lease.

     4.   DEFAULT

     The provisions of Paragraph 19 of the Lease shall be deemed deleted
therefrom and the following substituted therefor:

          19.  DEFAULT. In the event Lessee shall default in the payment of any
monetary obligation to be paid by Lessee hereunder, including without
limitation, the payment of any rentals, taxes, insurance and/or any monetary
obligation owing Lessor as a result of Lessor curing a default of Lessee
provided herein, Lessor shall so notify Lessee in writing, and failure of
Lessee to cure such default within five (5) days after receipt of such notice
shall, at the option of Lessor, entitle (but not obligate) Lessor to terminate
this Lease, or Lessor may enforce performance in any performance of any of the
terms or provisions of this Lease other than the payment of monetary
obligations owing by Lessee, Lessor shall promptly so notify Lessee in writing.
If Lessee shall fail to cure such default within thirty (30) days after receipt
of such notice, or if the default is of such character as to require more than
thirty (30) days to cure and Lessee shall fail to commence to do so within
thirty (30) days after receipt to such notice and thereafter diligently proceed
to cure such default, then Lessor may, in addition to any other rights or
remedies available to Lessor, terminate this Lease, or upon ten (10) days
written notice to Lessee, without waiving or releasing Lessee from any
obligation under this Lease, perform the obligation(s) of Lessee. All sums paid
by Lessor in curing Lessee's non-monetary defaults (including, without
limitation, all penalties, interest costs and attorneys' fees in connection
therewith) shall be due and payable by Lessee to Lessor as additional rent upon
demand.

                                       3
<PAGE>   9
            (a) LESSOR'S DAMAGES FOLLOWING TERMINATION FOR LESSEE DEFAULT.
Should Lessor terminate the Lease as a result of Lessee's default, Lessor may
recover from Lessee:

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

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

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

                  (4) Any other amounts necessary to compensate Lessor for
detriment proximately caused by the default by Lessee or which in the ordinary
course of events would likely result, including without limitation the
reasonable costs and expenses incurred by Lessor in:

                        (a) Retaking possession;

                        (b) Cleaning and making repairs and alterations
necessary to return the Premises to good condition and preparing the premises
for reletting;

                        (c) Removing, transporting, and storing any of Lessee's
property left at the Premises (although Lessor shall have no obligation to
remove, transport or store any of the property); and

                        (d) Reletting the Premises, including reasonable
brokerage commissions, advertising costs and attorneys' fees.

      The "worth at the term of award" of the amounts referred to in
subparagraphs (1) and (2) of this subparagraph (a) is computed by allowing
interest at a rate equal to the Lessee of ten percent (10%) per annum or the
maximum rate permitted by law. The "worth at the time of award" of the amount
referred to in subparagraph (3) of this subparagraph (a) shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent.

            (b) Upon default by Lessee and unless and until Lessor elects to
terminate this Lease, this Lease shall continue in

                                       4
<PAGE>   10
effect after the default and Lessor may enforce all rights and remedies under
this Lease, including the right to recover the rent as it becomes due under the
Lease. This provision is intended to provide Lessor with the remedy contained
in Civil Code Section 1951.4 and any amendments thereto or successor statute(s).

               (c)  In the term Lessor shall default in the performance of any
of the terms or provisions of this Lease, Lessee shall promptly so notify Lessor
in writing. If Lessor shall fail to cure such default within thirty (30) days
after receipt of such notice, or if the default is of such character as to
require more than thirty (30) days after receipt of such notice and thereafter
diligently proceed to cure such default, then, in either such event, Lessee may
cure such default and such expense shall be deducted from the rent otherwise
due, or cancel and terminate this Lease.

     5.   ASSIGNMENT AND SUBLETTING.

     Paragraph 26 of the Lease shall be deemed deleted therefrom and the
following substituted therefor:

          26.  ASSIGNMENT AND SUBLETTING.  Lessee shall not voluntarily sell,
assign, or transfer all or any part of Lessee's interest in this Leases or in
the Premises or any part thereof, sublease all or any part of the Premises, or
permit all or any part of the Premises to be used by any person or entity other
than Lessee or Lessee's employees, guests or invitees, except as specifically
provided in this Lease. The parties agree that the Lease is not intended to
allow Lessee to unreasonably profit by a future transfer of this Lease or the
right to use or occupy the Premises. In order to carry out this intent, if
Lessee assigns its interest in the Lease or subleases the Premises in accordance
with this paragraph, then Lessee shall pay to the Lessor, as additional rent
hereunder, eighty percent (80%) of the net consideration received on account of
such assignment or, eighty percent (80%) of rents received by Lessee which are
in excess of the amounts payable by Lessee to Lessor hereunder, each of said
amounts to be determined after deducting Lessee's costs of such assignment or
subletting, including without limitation, real estate commissions, reasonable
legal fees and alterations of the premises, if any, required by the assignee or
sublessee as a condition of accepting the assignment or entering into the
sublease. Such consideration shall be payable on the same basis, whether
periodic or lump sum, that such consideration is paid to Lessee. Any such
assignment, subletting or transfer of Lessee's interest shall be completed as
follows:

               a)   Lessee shall, by written notice, advise Lessor of Lessee's
desire on a stated date (which date shall not be less than thirty (30) days nor
more than ninety (90) days after the date

                                       5
<PAGE>   11
of Lessee's notice) to assign this lease or to sublet all or any part of the
Premises for any part of the Lease Term. Lessee's notice shall state the name,
legal composition and address of the proposed assignee or sublessee, and Lessee
shall provide the following information to Lessor with said notice: a true and
complete copy of the proposed assignment agreement or sublease; a financial
statement of the proposed assignee or sublessee prepared in accordance with
generally accepted accounting principles within one year prior to the proposed
effective date of the assignment or sublease; the nature of the proposed
assignee's or sublessee's business to be carried on in the Premises; the
payments to be made or other consideration to be given on account of the
assignment or sublease; and such other pertinent information as may be
requested by Lessor, all in sufficient detail to enable Lessor to evaluate the
proposed assignment or sublease and the prospective assignee or sublessee.
Lessee's notice shall not be deemed to have been served or given until such
time as Lessee has provided Lessee with all information reasonably requested by
Lessor pursuant to this paragraph. Lessee shall immediately notify Lessor of
any modification to the proposed terms of such assignment or sublease.

     b)   As long as Lessee is not in default under any of the terms, covenants
or conditions of this Lease on Lessee's part to be observed or performed,
Lessor agrees not to unreasonably withhold Lessor's consent to the proposed
assignment or subletting, on the terms and conditions specified in said notice.
Without otherwise limiting the criteria upon which Lessor may withhold its
consent to any proposed assignment or sublease, Lessor may withhold its consent
where Lessee is in default at the time of the giving of Lessee's notice or at
any time thereafter; where the net worth of the proposed assignee or sublessee
(according to generally accepted accounting principles) is less than eighty
percent (80%) of the book value net worth of Lessee at the time this Lease is
executed; or Lessor reasonably believes that the proposed assignee or
sublessee's use of the Premises may increase the risk of contamination of the
Premises by "hazardous substances or materials" or the violation of any
hazardous materials laws. Any assignment or subletting without Lessor's consent
as set forth above shall be voidable at Lessor's option, and shall constitute a
default by Lessee. Lessor's consent to any one assignment or sublease shall not
constitute a waiver of the provisions of this paragraph as to any subsequent
assignment or sublease nor a consent to any subsequent assignment or sublease.
Any assignment or sublease as provided herein, shall not release Lessee from
Lessee's primary liability under this Lease and Lessee shall remain jointly and
severally liable with the assignee or sublessee.

     c)   In the event Lessor consents to any assignment, such consent shall be
conditioned upon the assignee expressly assuming and agreeing to be bound by
each of Lessee's covenants, agreements and obligations (including, without
limitation, the

                                       6
<PAGE>   12
obligation to pay all rent and additional rent) contained in this Lease and
written assignment and assumption agreement in a form approved and executed by
Lessor. In the event Lessor consents to a proposed assignment or sublease, such
assignment or sublease shall be valid and the assignee or sublessor shall have
the right to take possession of the Premises (or applicable portion thereof)
only if an executed original of the assignment or sublease is delivered to
Lessor.

          d)   Lessee hereby irrevocably gives to and confers upon Lessor, as
security for Lessee's obligations under this Lease, the right, power and
authority to collect all rents from any assignee or sublessee of all or any part
of the Premises as permitted by this Paragraph 26, or otherwise, and Lessor, as
assignee of Lessee, or a receiver for Lessee appointed on Lessor's application,
may collect such rent and apply it toward Lessee's obligations under this Lease;
provided, however, that until the occurrence of any default by Lessee, Lessee
shall have the right to collect such rent. Upon the occurrence of any default by
Lessee, Lessor may at any time without notice in Lessor's own name sue for or
otherwise collect such rent, including rent past due and unpaid, and apply the
same, less costs and expenses of operation and collection, including reasonable
attorneys' fees, toward Lessee's obligations under this Lease. Lessor's
collection of such rents shall not constitute an acceptance by Lessor of
attornment by such sublessors; in the event of a default by Lessee, Lessor shall
have all rights provided by this Lease and by law, and Lessor may, upon re-entry
and taking possession of the Premises, eject all parties in possession or eject
some and not others, or eject none, as Lessor shall determine in Lessor's sole
discretion.

          e)   Lessee expressly agrees that the provisions of this paragraph are
not unreasonable standards or conditions for purposes of Section 1951.4(b)(2) of
the California Civil Code, as amended from time to time. Lessee shall pay, as
additional rent, Lessor's reasonable attorney's fees for reviewing,
investigating, processing and/or documenting any requested assignment or
sublease, whether or not Lessor's consent is granted. No interest of Lessee in
this Lease shall be assignable by operation of law, including, without
limitation, the transfer of this Lease by bankruptcy, testacy or intestacy. The
provisions of Paragraph 26 expressly applies to all heirs, successors,
sublessees, assignees and transferees of Lessee.

     6.   CERTIFICATE OF ESTOPPEL

     The provisions of paragraph 41 of the Lease shall be deemed replaced by the
following:

     41.  CERTIFICATE OF ESTOPPEL Each party shall, within ten (10) days after
receiving a written request therefore, execute

                                       7
<PAGE>   13
and deliver to the other party, in recordable form, a certificate stating that
the Lease is unmodified and in full force and effect, or in full force and
effect as modified and stating the modifications. The certificate shall also
state the amount of the monthly rent, that date to which monthly rent has been
paid in advance, the amount of the security deposit and/or prepaid monthly rent,
and shall include such other items as either party, or such party's lender, may
reasonably request. Failure to deliver such certificate within such time shall
constitute a conclusive acknowledgement by the party failing to deliver the
certificate that the Lease is in full force and effect and has not been modified
except as may be represented by the party requesting the certificate. Any such
certificate requested by Lessor may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises.

     7.   ATTORNMENT TO LENDER

     The provisions of paragraph 42 of the Lease shall be deemed replaced by the
following:

          42.  ATTORNMENT TO LENDER. In the event the interest of Lessor in the
Premises (whether such interest of Lessor is a fee title interest or a leasehold
interest) is encumbered by deed of trust, and such interest is acquired by a
lender or any other third party through judicial foreclosure or by exercise of
power of sale at private trustee's judicial foreclosure sale, Lessee hereby
agrees to attorn to the purchaser at any such foreclosure sale and to recognize
such purchaser as the Lessor under this Lease, upon the condition that Lessee's
leasehold interest is recognized by the attorney and that Lessee shall be
entitled to remain in occupancy of the Premises under the Lease so long as
Tenant fulfills its obligations thereunder.

     8.   OPTION

     Lessee shall have an option to purchase the leased property exercisable on
or after January 1, 1996, under the Option Agreement entered into by Lessor and
Lessee contemporaneously with the execution of this Lease.

     9.   PROPOSED SUBLEASE

     Lessor and Lessee acknowledge that Lessee intends to sublease the Premises
to CIDCO, a Delaware corporation, pursuant to the Sublease Agreement approved by
Lessor, and Lessor hereby consents to said proposed sublease only on the terms
and conditions set forth therein.

                                       8
<PAGE>   14
      10.   HAZARDOUS WASTE

      Without Lessor's advance written consent, Lessee shall not bring, use or
permit upon the leased Premises, temporarily or otherwise, or generate at, or
emit any toxic or hazardous substances, including, without limitation,
substances or materials which are listed on any of the Environmental Protection
Agency's lists of hazardous wastes or identified in any statute or regulation
of the State of California dealing with Hazardous wastes as the same may be
amended from time to time. Notwithstanding Lessor's consent, Lessee shall
comply, at its sole cost, with all laws pertaining to, and shall indemnify and
hold Lessor harmless from any claims, liabilities, costs or expenses incurred
or suffered by Lessor, arising from such bringing, using, permitting,
generating, or emitting or disposing. Lessee's indemnification and hold
harmless obligations include, without limitations, (i) claims, liability, costs
or expenses resulting from or based upon administrative or judicial (civil or
criminal) action brought by and any private or public person under common law
or under any Federal, State, County or Municipal law, ordinance or regulation,
(ii) claims, liabilities costs or expenses pertaining to the clean-up or
containment of wastes, the identification of the pollutants or the waste, the
identification of scope or any environments contamination, the removal of
pollutants from soils, river beds or aquifers, the provision of an alternative
public drinking water source, or the long-term monitoring of ground water and
surface water, and (iii) all costs of defending such claims.

      11.   Paragraph 7 of the Lease is amended by adding the following
paragraph thereto: "Lessor makes no representation or warranties with respect
to the compliance of the Premises with any and all statutes, ordinances, rules,
regulations, zoning or use permits applicable to the Premises. Lessor shall
deliver the Premises to Lessee in an 'as-is,' where-is condition with all of
Lessor's inventory and personal property removed prior to delivery of
possession."

Lessor:                                   Lessee:

/s/ JORGE A. LOVATO, JR.                  THOITS BROS., INC.,
--------------------------------          A California Corporation
JORGE A. LOVATO, JR.

/s/ ROBIN E. LOVATO                       By: /s/ WARREN R. THOITS
--------------------------------             -------------------------------
ROBIN E. LOVATO                              WARREN R. THOITS, President

                                       9

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