Document:

<PAGE>

                                                                    EXHIBIT 10.7

                               OFFICE SPACE LEASE

                                     BETWEEN

                               WALMART.COM, INC.,
                                  ("LANDLORD")

                                       AND

                                 STENTOR, INC.,
                                   ("TENANT")

                                  MAY 14, 2002

<PAGE>

                                     TABLE OF CONTENTS

<TABLE>
<S>                                                                                        <C>
1. MASTER LEASE & INCORPORATION OF TERMS...............................................     1

2. TERM & EARLY TERMINATION............................................................     2

3. POSSESSION..........................................................................     2

4. ANNUAL BASIC RENT...................................................................     3

5. RENTAL ADJUSTMENT...................................................................     4

6. SECURITY DEPOSIT....................................................................     9

7. NOTICES.............................................................................     9

8. CONDITION OF PREMISES...............................................................     9

9. REPAIRS.............................................................................    10

10. LIENS..............................................................................    11

11. ENTRY BY LANDLORD..................................................................    11

12. UTILITIES AND SERVICES / COMMON AREAS..............................................    11

13. DEFAULTS AND REMEDIES..............................................................    12

14. SUBORDINATION......................................................................    15

15. ESTOPPEL CERTIFICATE...............................................................    16

16. RULES AND REGULATIONS .............................................................    16

17. PERFORMANCE BY TENANT .............................................................    17

18. PERFORMANCE BY LANDLORD............................................................    17

19. DEFINITION OF LANDLORD.............................................................    17

20. PARKING............................................................................    18

21. EXAMINATION OF LEASE...............................................................    18

22. RECORDING..........................................................................    18

23. LIMITATION ON LIABILITY ...........................................................    18

24. LEASEHOLD IMPROVEMENTS.............................................................    19

25. ASSIGNMENT & SUBLETTING............................................................    20

26. SIGNS .............................................................................    20
</TABLE>

                                       (i)

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<TABLE>
<S>                                                                                        <C>
27. WAIVER OF SUBROGATION .............................................................    21
28. LANDLORD'S OBLIGATIONS ............................................................    21
29. QUIET ENJOYMENT ...................................................................    21
</TABLE>

                                      (ii)
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                                TABLE OF EXHIBITS

EXHIBIT   ITEM

A-L    SITE PLAN

A-2    FLOOR PLAN OF THE BUILDING, SHOWING PREMISES

B      TENANT IMPROVEMENT PLANS

C      RULES AND REGULATIONS

D      ROOFTOP SIGNAGE

E      TEMPORARY SPACE AT 7000 MARINA BLVD.

F      FORM OF SECURITY LETTER OF CREDIT

                                     (iii)
<PAGE>

                               OFFICE SPACE LEASE

      This summary of the basic lease provisions ("Basic Lease Provisions") of
the Office Space Lease ("Lease") entered into this 14th day of May, 2002, by and
between Walmart.com, Inc., a Delaware corporation ("Landlord"), and Stentor,
Inc., ("Tenant") is hereby made a part of the Lease for the purpose of setting
forth information referred to in the Lease.

      In the event of any conflict, inconsistency or ambiguity created by or
between the Basic Lease Provisions and the Lease to which it is attached, which
Landlord and Tenant acknowledge having read in full, the terms and conditions of
the Lease shall govern.

                             BASIC LEASE PROVISIONS

1. Tenant's Trade Name:        Stentor, Inc

2. Address of Premises:        5000 Marina Blvd, Suite No. 100
                               Brisbane, CA 94005-1830

3. Use of Premises:            general office purposes, research and
                               development, shipping and receiving, and any
                               related lawful purpose in conformance with
                               municipal zoning requirements and Master
                               Lessor's consent.

4. Lease Term:                 Five (5) years, subject to a one time right of
                               termination as more fully described in Section 2.

5. Commencement Date:          Upon substantial completion of the Leasehold
                               Improvements to be constructed by Landlord, and
                               delivery of possession of the Premises to Tenant
                               as ready for occupancy, which is anticipated to
                               be approximately August 1, 2002, as to both the
                               first floor space, and Expansion Space.

6. Initial Annual Basic Rent:  $813,293.40, payable at $67,774.45 per month
                               ($25.80 per square foot per year, $2.15 per
                               square foot per month), provided that Landlord
                               has granted to Tenant a rental concession
                               equivalent to three (3) months of free rent as
                               to the first floor space and six (6) months of
                               free rent as to the Expansion Space, such that
                               the monthly rent shall be payable at $0.00 for
                               the first three (3) months of the term and at
                               $44,988.75 during the fourth (4th) through sixth
                               (6th) months of the term. (Any reference in this
                               Lease to the rental payable at the commencement
                               of the term shall mean the stated rental without
                               reference to rental concessions

                                       (A)

<PAGE>

                                             which may have been granted.)

7. (a) Tenant's Percentage of Building       Thirty Three percent (33%), as of
    Direct Expense:                          the commencement of the term, to be
                                             adjusted upon occupancy of the
                                             Expansion Space.

   (b) Direct Expenses Base.                 Calendar year 2002

8. Floor Area of Premises:                   It is anticipated that the floor
                                             area of the premises will contain
                                             20,925 rentable square feet, to be
                                             expanded by an additional 10,598
                                             rentable square feet as of the 1st
                                             anniversary of the Commencement
                                             Date, for a total of 31,523
                                             rentable square feet. The actual
                                             square footage shall be determined
                                             pursuant to the Standard Method for
                                             Measuring Floor Area in Office
                                             Buildings published by the Building
                                             Owners and Managers Association
                                             International ("BOMA") as revised
                                             and readopted June 7, 1996 (the
                                             "Standard Measure"). Tenant
                                             reserves the right to measure the
                                             Premises to confirm that the
                                             measurement provided by Landlord is
                                             accurate and conforms to the
                                             Standard Measure. Any discrepancy
                                             shall be promptly resolved by the
                                             parties through good faith
                                             negotiations and, if relevant, all
                                             items in this Lease which are based
                                             upon the square footage of the
                                             Premises (e.g., Basic Rent and
                                             Tenant's percentage of Building
                                             Direct Expenses) shall be promptly
                                             adjusted in proportion to the
                                             change in square footage.

9. Security Deposit:                         $155,723.62 (does not include
                                             prepaid rent)

10. Prepaid Rent:                            $44,988.75, constituting one (1)
                                             full month's rent, to be applied
                                             against rent due for the fourth
                                             (4th) month of the term.

11. Tenant Improvement Allowance:            A total of $35 per usable square
                                             foot. Additionally, Landlord shall,
                                             at the request of Tenant, provide
                                             up to $10 per usable square foot in
                                             additional sublessee improvement
                                             funds for either subtenant
                                             improvements or for the purchase
                                             and installation of FF&E, which
                                             will be amortized into the monthly
                                             rent over the Sublease Term. To the
                                             extent said funds are used for the
                                             purchase of FF&E, Sublessee will
                                             grant Sublessor a security interest
                                             in the FF&E.

12. Broker(s):                               Harry Schoening, of the Staubach
                                             Company, 301 Howard Street, Suite
                                             930, San Francisco, CA 94105, and
                                             Clarke Funkhauser and Mike Moran,
                                             of BT Commercial Real Estate, 1350
                                             Bayshore Highway, Suite 150,
                                             Burlingame, CA

                                       (B)

<PAGE>

                                  94010 on behalf of Landlord, and

                                  Steve Lico/Dave Tipton of CRESA Partners, 2483
                                  E. Bayshore Road, Suite 102, Palo Alto,
                                  California 94303, on behalf of Tenant

13. Address for Notices:

LANDLORD                           TENANT

Wal-Mart.Com                       Stentor, Inc.
7000 Marina Blvd.
Brisbane, CA 94005-1830            5000 Marina Boulevard, Suite 100
Attn: Building Manager             Brisbane, CA 94005-1830

                                   Attn: Jim Boyle

14. Address for Rent Payments and  Wal-Mart.Com
copies of notices:                 7000 Marina Blvd.
                                   Brisbane, CA 94005-1830
                                   Attn: Finance - Accounts Receivable

                                      (C)

<PAGE>

                               OFFICE SPACE LEASE

      THIS LEASE is made as of the 14th day of May, 2002, by and between
Walmart.com, Inc., ("Landlord"), and Stentor, Inc., ("Tenant"). In consideration
of the Rent as defined in Sections 3 and 4 herein and the provisions of this
Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
Suite Number 100 (the "Premises") outlined on the floor plan attached hereto and
marked Exhibit "A-2", the Premises being agreed, for the purposes of this Lease,
to have an area of approximately 20,925 square feet initially, being situated on
the first (1st) floor of that certain office building located at 5000 Marina
Blvd, Brisbane, CA (the "Building"). As of the 1st anniversary of the
Commencement Date, the Premises will be expanded by the addition of 10,598
square feet (the "Expansion Space") located on the second (2nd) floor of the
Building, as shown on Exhibit "A-2". Until such time, however, Tenant shall have
no right to occupancy of the Expansion Space, and Landlord shall be entitled to
lease the same to third parties for the period prior to Tenant's occupancy
thereof. Tenant shall have the non-exclusive right in common with Landlord,
other tenants and invitees, to use the Common Area as defined herein.

      Tenant acknowledges that the exterior demising walls of the Premises and
the area between the finished ceiling of the Premises and the slab of the
Building floor or roof thereabove and between the finished floor of the Premises
and the foundation or finished ceiling of the portion of the Building therebelow
have not been leased to Tenant. Landlord reserves the use thereof, together with
the right to locate or relocate (both vertically and horizontally), install,
maintain, use, repair and replace pipes, utility lines, ducts, conduits, flues,
refrigerant lines, drains, sprinkler mains and valves, access panels, wires and
appurtenant meters or equipment, and structural elements leading through, under
or above the Premises in locations which will not materially interfere with
Tenant's use of the Premises.

      1. MASTER LEASE & INCORPORATION OF TERMS. The parties acknowledge that
this Lease is actually a sublease of the interest held by Landlord in the
Building pursuant to the terms of an Office Space Lease dated as of the 15th day
of September, 2000, (the "Master Lease") by and between Foster Enterprises, a
California general partnership, as landlord therein ("Master Lessor"), and
Landlord, as tenant therein. Tenant acknowledges receipt of a copy of the Master
Lease. This Lease is expressly made subject to the terms and conditions
contained in the Master Lease as they relate to the Premises. Neither Tenant nor
Landlord shall do, permit or cause any act or occurrence to be done which would
constitute a violation of the Master Lease. Without limiting the foregoing, the
following provisions of the Master Lease are expressly incorporated herein, and
except insofar as certain portions of such provisions as they relate to the
Premises only may be inconsistent with the express terms of this Lease (in which
event the terms of this Lease shall control, as between Landlord and Tenant),
such provisions shall be interpreted with respect to Landlord and Tenant as
though Landlord and Tenant herein were the landlord and tenant under the Master
Lease. In the event of a conflict between this Lease and the Master Lease, as
between Landlord and Tenant only, the terms of this Lease shall prevail:

<TABLE>
<S>               <C>
Section 7         relating to Use, subject, however, to Section 3 of the Basic
                  Lease Provisions of this Lease,
</TABLE>

                                  PAGE 1 OF 23

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<TABLE>
<S>               <C>
Section 9         relating to Brokers, subject, however, to Section 12 of the
                  Basic Lease provisions of this Lease,

Section 10        relating to Surrender & Holding Over,

Section 11(b)     rating to Personal Property Taxes,

Section 12        relating to Alterations, but substituting "$25,000" for $85,000"

Section 16        relating to Assumption of Risk & Indemnification,

Section 17        relating to Insurance, but excluding the earthquake and
                  self-insurance provisions thereof,

Section 18        relating to Damage & Destruction,

Section 19        relating to Eminent Domain,

Section 22        relating to Assignment & Subletting

Section 28        relating to Waiver, and

Section 40        relating to Miscellaneous items
</TABLE>

      2. TERM & EARLY TERMINATION The term of this Lease shall be for the period
shown in Item 4 of the Basic Lease Provisions.

      Tenant is hereby granted the option to terminate this Lease as of the
twenty fourth (24th) month following the Commencement Date upon satisfaction of
each of the following conditions:

      (a)   Tenant shall have delivered written notice to Landlord of such
            election at least six (6) months prior to the anticipated
            termination date (the "Termination Date"),

      (b)   Tenant shall pay to Landlord on or before the Termination Date an
            amount equal to the sum of:

            (i)   the unamortized cost actually incurred by Landlord with
                  respect to the Tenant Improvements constructed in the Premises
                  described in this Lease,

            (ii)  the unamortized cost of any leasing commissions actually
                  incurred by Landlord with respect to this Lease, and

            (iii) the unamortized cost of any free rent or other concessions,
                  including without limitation, tenant improvement allowances,
                  granted by Landlord to Tenant upon the commencement of this
                  Lease.

            Each of the items described above as being amortized shall include
            only those costs actually incurred by Landlord on a non-reimbursed
            basis, and shall be amortized over the originally anticipated term
            of this Lease at an interest rate of ten percent (10%).

      3. POSSESSION Tenant agrees that, if Landlord is unable to deliver
possession of the Premises to the Tenant on the scheduled commencement of the
term of this Lease, this Lease shall

                                  PAGE 2 OF 23

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not be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom, but in such event Tenant shall not be liable for any
rent until Landlord tenders possession of the Premises to Tenant ready for
occupancy. If the Premises are ready for occupancy prior to the date scheduled,
Landlord shall deliver possession of the Premises to Tenant and the term of this
Lease shall thereupon commence. The Premises shall be "ready for occupancy" for
purposes of this Section when the Tenant Improvements to be constructed by
Landlord are substantially completed, as certified by Landlord's architect or
construction manager. Notwithstanding, the above, if Landlord is unable to
deliver possession of the Premises to Tenant on or before thirty (30) days after
August 1, 2002 (the "Late Date"), Tenant shall be entitled to two (2) days of
abatement of Rent for each day of delay in delivery of possession of the
Premises to Tenant. If the Premises are not delivered to Tenant by sixty (60)
days after the August 1, 2002 (the "Outside Date") Tenant shall have the right,
but not the obligation, to terminate this Lease as to the Premises or Expansion
Space as the case may be; except that a Force Majeure delay or a Tenant delay,
including, without limitation, delays resulting from Tenant Change Orders shall
extend such Late Date and Outside Date on a day for day basis.

      4. ANNUAL BASIC RENT

      (a)   Tenant agrees to pay Landlord as Annual Basic Rent for the Premises
            as shown in Item 6 of the Basic Lease Provisions payable in advance
            on the first day of each calendar month during the term, except that
            the first month's rent shall be paid upon the execution hereof. If
            the term of this Lease commences or ends on a day other than the
            first day of a calendar month, then the rental for such period shall
            be prorated in the proportion that the number of days this Lease is
            in effect during such period bears to thirty (30). In addition to
            the Annual Basic Rent, Tenant agrees to pay as additional rental its
            pro rata share of the amount of rental adjustments and other charges
            required by this Lease. All rental shall be paid to Landlord,
            without prior demand and without any deduction or offset, in lawful
            money of the United States of America, at the address of Landlord
            designated in the Basic Lease provisions of this Lease, or to such
            other person or at such other place as Landlord may from time to
            time designate in writing. No demand, notice or invoice shall be
            required.

      (b)   The rental payable by Tenant shall be increased as of the
            commencement of each year during the term as follows:

<TABLE>
<S>                    <C>
     Year 1            $0.00 psf/mo
(months 1 to 3)
     Year l            $2.15 psf/mo
(months 4 to 12)
      Year 2           $2.23 psf/mo
      Year 3           $2.30 psf/mo
      Year 4           $2.38 psf/mo
      Year 5           $2.47 psf/mo
</TABLE>

                                  PAGE 3 OF 23

<PAGE>

      (c)   Tenant hereby acknowledges that the late payment by Tenant to
            Landlord of rent and other sums due hereunder will cause Landlord to
            incur costs not contemplated by this Lease, the exact amount of
            which will be extremely difficult to ascertain. Such costs may
            include, but are not limited to, administrative, processing and
            accounting charges, and late charges which may be imposed on
            Landlord by the terms of any mortgage or trust deed covering the
            Premises. Accordingly, if any installment of rent or any other sum
            due from Tenant shall not be received by Landlord or Landlord's
            designee within five (5) days after the due date, then Tenant shall
            pay to Landlord, in addition to any interest required to be paid by
            this Lease, a late charge in the amount of ten percent (10%) of the
            delinquent installment of rent. The parties agree that such late
            charge represents a fair and reasonable estimate of the cost
            Landlord will incur by reason of late payment by Tenant. Acceptance
            of such late charge by Landlord shall in no event constitute a
            waiver of Tenant's default with respect to such overdue amount, nor
            prevent Landlord from exercising any of the other rights and
            remedies granted hereunder.

      (d)   In the event that at any time during the term of this Lease, any
            governmental law, rule or regulation prohibits or postpones in whole
            or in part any increase in the rent or in the payment of other sums
            payable by Tenant hereunder to be made pursuant to this Lease, then,
            and in either of such events, such increase or payment shall be made
            to the maximum extent permissible by law at the time provided in
            this Lease, and/or at any time or times thereafter such increase or
            payment, or any portion thereof, may lawfully be made and any such
            increase in rent, or any portion thereof, or other sums payable
            hereunder, or portions thereof, the payment of which has been so
            prohibited or postponed, shall thereafter become due and payable to
            the maximum extent and at the earliest time or times permitted by
            law.

      5. RENTAL ADJUSTMENT

      (a)   For the purpose of this Section 5, the following terms are defined
            as follows:

            (i)   Tenant's Percentage: That portion of the Building occupied by
                  Tenant divided by the total square footage of the Building
                  available for occupancy (the approximate amount of which is
                  shown as Item 7(a) of the Basic Lease Provisions).

            (ii)  Direct Expenses Base: The term "Direct Expenses Base" as used
                  in this Lease shall mean the total direct expenses paid or
                  incurred by Landlord during the calendar year shown as Item
                  7(b) of the Basic Lease Provisions, annualized and adjusted as
                  if the Building were 95 percent occupied and fully assessed.

            (iii) Direct Expense: The term "Direct Expense" shall include:

                  (1)   All real and personal property taxes and assessments
                        imposed by any governmental authority or agency on the
                        Building and the land on

                                  PAGE 4 OF 23

<PAGE>

                        which the Building is located (including a pro rata
                        portion of any taxes levied on any common areas); any
                        assessments levied in lieu of taxes; any non-progressive
                        tax on or measured by gross rentals received from the
                        rental of space in the Building; and any other costs
                        levied or assessed by, or at the direction of, any
                        federal, state or local government authority in
                        connection with the use or occupancy of the Premises or
                        the parking facilities serving the Premises; any tax on
                        this transaction or any document to which Tenant is a
                        party creating or transferring an interest in the
                        Premises, and any expenses, including costs of attorneys
                        or experts, reasonably incurred by Landlord in seeking
                        reduction by the taxing authority of the
                        above-referenced taxes, less tax refunds obtained as a
                        result of an application for review thereof; but shall
                        not include (i) any net income, franchise, capital
                        stock, estate or inheritance, succession, transfer,
                        gift, or estate taxes; (ii) any item to the extent
                        otherwise included in Direct Expenses and paid by
                        Tenant, such that payment of the same would result in a
                        duplicate payment; (iii) any environmental assessments,
                        charges or liens arising in connection with the
                        remediation of hazardous materials from the Premises,
                        the causation of which arose prior to the Commencement
                        Date of this Lease (provided that monitoring of existing
                        environmental conditions, including methane monitoring,
                        shall be included within Direct Expenses), or to the
                        extent caused by Landlord, its agents, employees or
                        contractors or any tenant of the Premises (other than
                        Tenant or its sublessees or assignees); (iv) costs or
                        fees payable to public authorities in connection with
                        any future construction, renovation and/or improvements
                        to the Premises other than the Tenant Improvements to
                        the Premises made by or for Tenant; (v) reserves for
                        future taxes; or (vi) any personal property taxes
                        attributable to sculptures, paintings or other objects
                        of art (except for objects of art installed in the
                        Common Areas pursuant to requirements of public
                        authority). If any taxes are payable in installments
                        over a period of time, Tenant shall be liable only for
                        the payment of those installments accruing during the
                        term hereof, with appropriate proration for fractional
                        years.

                  (2)   Operating costs, consisting of costs actually incurred
                        by Landlord in maintaining and operating the Building,
                        exclusive of costs required to be capitalized for
                        federal income tax purposes, and including (without
                        limiting the generality of the foregoing) the following:
                        costs of utilities, supplies, tools and materials,
                        insurance, services of independent contractors, managers
                        and other suppliers, any and all assessments or costs
                        incurred with respect to Covenants, Conditions and/or
                        Restrictions, Reciprocal Easement Agreements or similar
                        documents affecting the Building or the Property,
                        compensation (including employment taxes and fringe
                        benefits) of all persons who perform regular and
                        recurring duties connected with the management,
                        operation, maintenance and repair of the Building, its
                        equipment,

                                  PAGE 5 OF 23

<PAGE>

                        parking facilities and the common areas, including,
                        without limitation, engineers, janitors, foremen, floor
                        waxers, window washers, watchmen and gardeners (but
                        excluding persons performing services not uniformly
                        available to, or performed for, substantially all
                        Building tenants), legal, accounting and other
                        professional or consulting services.

                  (3)   Amortization of such capital improvement as Landlord may
                        have installed: (a) in a good faith effort to reduce
                        operating costs or (b) to comply with governmental rules
                        and regulations promulgated after completion of the
                        Building.

            Notwithstanding the foregoing, Direct Expenses shall not include any
            of the following:

                  (a)   legal fees, brokerage commissions, advertising costs or
                        related expenses in connection with the leasing of the
                        Building;

                  (b)   capital repairs, alterations, additions, improvements or
                        replacements connected with or arising from the
                        renovation of the Building or any repairs or
                        replacements made to rectify or correct any defect in
                        the design, materials or workmanship of any portion of
                        the Building or common areas;

                  (c)   costs incurred in connection with damage or repairs
                        which are covered under any insurance policy carried by
                        Landlord in connection with the Building or common
                        areas;

                  (d)   expenses for repair or replacement actually paid by
                        condemnation awards;

                  (e)   costs associated with damage or repairs to the Building
                        or the common areas necessitated by the negligence or
                        willful misconduct of Landlord or Landlord's employees,
                        agents, contractors or invitees;

                  (f)   increases in insurance premiums over those in effect on
                        the commencement date hereof to the extent any other
                        tenant causes Landlord's insurance premiums to increase
                        or obligates Landlord to purchase additional insurance;

                  (g)   reserves for Landlord's repair, replacement or
                        improvement of the Building or any portion thereof;

                  (h)   executive salaries or salaries of service personnel to
                        the extent that such salaries are payable in connection
                        with services other than in connection with the
                        management, operation, repair or maintenance of the
                        Building or common areas;

                                  PAGE 6 OF 23

<PAGE>

                  (i)   the cost of offsite service personnel to the extent that
                        such personnel are not engaged in the management,
                        operation, repair or maintenance of the Building or
                        common areas;

                  (j)   charitable or political contributions or fees paid to
                        trade associates;

                  (k)   Landlord's general overhead expenses not related to the
                        Building or common areas;

                  (l)   all principal, interest, loan fees, and other carrying
                        costs related to any mortgage or deed of trust
                        encumbering the Building and all rental and other
                        payable due under any ground or underlying lease, unless
                        such costs are directly attributable to Tenant's, its
                        agents' or employees' activities in, on or about the
                        Building, or as a result of a Tenant's breach or default
                        under this Lease;

                  (m)   legal fees, accountant fees and other expenses incurred
                        in disputes with other tenants or occupants of the
                        Building or associated with the enforcement of any other
                        leases or defense of Landlord's title to or interest in
                        the Project or any part thereof;

                  (n)   costs (including permit, license and inspection fees)
                        incurred in renovating or otherwise improving,
                        decorating, painting, expanding or altering space for
                        tenants or other occupants of vacant space in the
                        Building;

                  (o)   any costs, fines, or penalties incurred due to
                        violations by Landlord or any tenant of the Building
                        (other than Tenant) of any governmental rule or
                        authority, this Lease or any other lease in the
                        Building, or due to Landlord's negligence or willful
                        misconduct;

                  (p)   the cost of any service provided to Tenant or other
                        occupants of the Project for which Landlord is
                        reimbursed;

                  (q)   any management or supervision fee greater than the
                        lesser of (i) the management or supervision fee
                        generally paid by tenants of similar projects in the
                        geographic area of the Premises or (ii) two percent (2%)
                        of the Basic Rent, and

                  (r)   the costs of repairs and/or replacements of the roof,
                        foundation, and structural supports of the Premises
                        unless such costs are amortized over the useful life of
                        the item.

      (b)   If Tenant's Percentage of the Direct Expenses paid or incurred by
            Landlord for any calendar year exceeds that portion of the Direct
            Expenses Base included in Tenant's rent and as set forth as Item
            7(b) of the Basic Lease Provisions, then Tenant shall pay such
            excess as additional rent. Within ninety (90) days of the beginning
            of each calendar year, or as soon thereafter as may be practicable,
            Landlord shall give to

                                  PAGE 7 OF 23

<PAGE>

            Tenant a statement of any additional rent payable by Tenant
            hereunder for the previous year, which shall be due and payable
            within thirty (30) days following receipt. In addition, for each
            year after the first calendar year, or portion thereof, Tenant shall
            pay its percentage of Landlord's estimate of the amount by which
            Direct Expenses for that year shall exceed the Direct Expense Base.
            This estimated amount shall be divided into twelve equal monthly
            installment. Tenant shall pay to Landlord, concurrently with the
            regular monthly rent payment next due following the receipt of such
            statement, an amount equal to one monthly installment multiplied by
            the number of months from January in the calendar year in which said
            statement is submitted to the month of such payment, both months
            inclusive. Subsequent installments shall be payable concurrently
            with the regular monthly rent payments for the balance of that
            calendar year and shall continue until the next calendar year's
            statement is rendered. If, in any calendar year, Tenant's Percentage
            of actual Direct Expenses is less than the estimate for that year,
            then upon receipt of Landlord's statement, any overpayment made by
            Tenant on the monthly installment basis shall be credited towards
            the next monthly rent falling due and the estimated monthly
            installments of Tenant's Percentage of Direct Expenses shall be
            adjusted to reflect such lower Direct Expenses for the most recent
            year. For purposes of making the calculations described herein, the
            Direct Expense, in whole or in part, shall be extrapolated to the
            extent Landlord deems appropriate, to reflect at least ninety-five
            percent (95%) occupancy of the rentable area of the Building, a full
            year of operating and a full year of occupancy by Tenant.

      (c)   Landlord may from time to time during any calendar year re-estimate
            the Estimated Direct Expense Payment for said year to reflect
            changes in circumstances. In such event, Landlord shall notify
            Tenant of the change and of the effect of such change on the amount
            of the monthly installment to be paid by Tenant pursuant to this
            Section. Commencing on the date specified in such notice from
            Landlord, the monthly installment payable by Tenant shall be
            adjusted as specified in said notice.

      (d)   Even though the term has expired and Tenant has vacated the
            Premises, when the final determination is made of Tenant's
            Percentage of Direct Expenses for the year in which this Lease
            terminates, Tenant shall, within thirty (30) days following receipt,
            pay any increase due over the estimated expenses paid and,
            conversely, any overpayment made in the event said expenses decrease
            shall be rebated by Landlord to Tenant.

      (e)   At any time within twelve (12) months of Tenant's receipt of any
            statement from Landlord relating to Direct Expenses, Landlord shall
            furnish Tenant following Tenant's written request therefor, invoices
            and other source documents relating to Direct Expenses charged by
            Landlord. If it is determined from Tenant's audit of such Direct
            Expenses that Tenant was overcharged by more than five percent (5%),
            such overcharge shall entitle Tenant to credit against its next
            payment of Direct Expenses the amount of the overcharge and the
            costs associated with the audit (and, if such credit occurs
            following the expiration of the Term, Landlord shall promptly pay
            the amount of such credit to Tenant). If the audit determines that
            the Tenant was overcharged less than five percent (5%), such
            overcharge shall entitle Tenant to

                                  PAGE 8 OF 23

<PAGE>

            credit against its next payment of Direct Expenses the amount of the
            overcharge and Tenant shall pay for all costs associated with the
            audit. If the audit shall determine that Tenant was undercharged for
            the Direct Expenses, Tenant shall promptly pay the amount of such
            undercharge to Landlord and Tenant shall pay for all costs
            associated with the audit. Notwithstanding anything to the contrary
            herein, any Direct Expenses attributable to a period which falls
            only partially within the term of this Lease shall be prorated
            between Landlord and Tenant so that Tenant shall pay only that
            portion thereof which the part of such period within the Lease term
            bears to the entire period.

      6. SECURITY DEPOSIT Upon the execution hereof, Tenant shall deposit with
Landlord the sum as shown in Item 9 of the Basic Lease Provisions. The Security
Deposit shall be held by Landlord as security for the faithful performance by
Tenant of all of Tenant's obligations hereunder. If Tenant defaults (beyond all
applicable notice and cure periods) with respect to any provision of this Lease,
including but not limited to the provisions relating to the payment of rent,
Landlord may, but shall not be required to, use, apply or retain all or any part
of this security deposit for the payment of any rent or any other sum in
default, or for the payment of any other amount which Landlord may reasonably
spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage which Landlord actually incurs
by reason of Tenant's default, to the full extent permitted by law. If any
portion of the deposit is so used or applied, Tenant shall, within ten (10)
business days of demand, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount. Tenant's failure to do so
shall be a material breach of this Lease. Landlord shall not be required to keep
this security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform all of it obligations under this Lease, the security deposit or any
balance thereof shall be returned to Tenant within fourteen (14) days of the
expiration of the Lease term, provided that Landlord may retain from the
security deposit an amount equal to Landlord's good faith estimate of amounts
required in accordance with Section 5 hereof until such time as any amount due
from Tenant in accordance with Section 5 hereof has been determined and paid in
full. Should Landlord sell its interest in the Premises during the term hereof
and if Landlord deposits with the purchaser thereof the then unappropriated
funds deposited by Tenant as set forth above, Landlord shall then be fully and
finally discharged from any further liability with respect to such deposit,
provided that Landlord obtains a written acknowledgment of receipt of the
security deposit by such subsequent landlord.

      7. NOTICES Any notice, demand, consent, approval or other communication
required or permitted to be given hereunder ("Notice") must be in writing and
may be given by personal delivery or by mail, and if given by mail shall be
deemed sufficiently given if sent by registered or certified mail, postage
prepaid, or by overnight courier service such as Federal Express, Express Mail
or the like, addressed to Tenant at the Building, or to Landlord at its address
set forth in the Basic Lease Provisions. Either party may specify a different
address for notice purposes by written notice to the other except that the
Landlord, after the Commencement date, may in any event use the Premises as
Tenant's address for notice purposes.

      8.CONDITION OF PREMISES Tenant acknowledges that, except as expressly set
forth herein, neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Premises or the Building, or with
respect to the suitability of either for the conduct of

                                  PAGE 9 OF 23

<PAGE>

Tenant's business. The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises and the Building were in satisfactory
condition at such time. Tenant specifically waives the provisions of the
California Civil Code regarding rental offsets, including Sections 1932(2),
1933(4), 1941 and 1942. Notwithstanding any other provision of this Lease,
Landlord represents that it is unaware of any Hazardous Materials, including but
not limited to any solvents, metals, petroleum, lead-based paint, PCBs, or
asbestos in, on or about the Building or Premises. Notwithstanding this
representation, to the extent that Hazardous Materials should be discovered in,
on or about the Building or Premises which existed as of the date of this Lease,
Landlord shall (i) cause, at its sole cost and expense, such Hazardous Materials
to be removed and (ii) indemnify and hold Tenant harmless against and from all
liability and claims of any kind for loss or damage to Tenant, its employees or
agents, and for expenses and fees of Tenant (including but not limited to costs,
expenses and attorneys' fees), incurred, directly or indirectly, as a result of
(a) the existence of such Hazardous Materials in the Premises as of the
commencement of this Lease; or (b) any acts or omissions of with respect to
Landlord's use, generation, disposal, storage, or transportation of Hazardous
Materials on or about the Building.

      9. REPAIRS

      (a)   By entry hereunder, Tenant accepts the Premises as being in good and
            sanitary order, condition and repair, and constructed in accordance
            with the specifications contained in Exhibit "B" of this Lease.
            Tenant shall keep, maintain and preserve the Premises in first class
            condition and repair, and shall, when and if needed, at Tenant's
            sole cost and expense make all repairs to the Premises and every
            part thereof. Tenant shall, upon the expiration or sooner
            termination of the term hereof, surrender the Premises to Landlord
            in the same condition as when received, usual and ordinary wear and
            tear excepted. Landlord shall have no obligation to alter, remodel,
            improve, repair, decorate or paint the Premises or any part thereof.
            The parties hereto affirm that Landlord has made no representations
            to Tenant respecting the condition of the Premises or the Building
            except as specifically herein set forth.

      (b)   Anything contained in Section 9(a) above to the contrary
            notwithstanding Landlord shall repair and maintain the structural
            portions of the Building, including the basic plumbing, heating,
            ventilating, air conditioning and electrical systems installed or
            furnished by landlord, unless such maintenance and repairs are
            caused in part or in whole by the act, neglect, or omission of any
            duty by Tenant, its agents, servant, employees or invitees, in which
            case Tenant shall pay to Landlord, as additional rent, the
            reasonable cost of such maintenance and repairs. Landlord shall not
            be liable for any failure to make any such repair or to perform any
            maintenance unless such failure shall persist for fifteen business
            (15) days after written notice of the need of such repairs or
            maintenance is given to Landlord by Tenant unless the nature of such
            repair or maintenance is such that it cannot be repaired in such
            fifteen (15) business day period, in which case Landlord shall have
            a reasonable amount of time to conduct such repair or maintenance
            provided Landlord commences same within such fifteen (15) business
            day period and diligently pursues same to completion. There shall be
            no abatement of rent and no liability of Landlord by reason of any
            injury to or interference with Tenant's business arising from the
            making of any repairs, alteration or improvements in or to any
            portion of the Building or the Premises or in

                                  PAGE 10 OF 23

<PAGE>

            or to fixtures, appliances and equipment therein. Tenant waives the
            right to make repairs at Landlord's expense under any law, statute
            or ordinance now or hereafter in effect.

      10. LIENS Tenant shall not permit any mechanic's, materialmen's or other
lien to be filed against the Building nor against Tenant's leasehold interest in
the Premises. Landlord shall have the right at all reasonable times to post and
keep posted on the Premises any notices which it deems necessary for protection
from such liens. If any such liens are filed, Landlord may (but shall not be
obligated to), without waiving its rights and remedies based on such breach of
Tenant and without releasing Tenant from any of its obligations, cause such
liens to be released by any means it shall deem proper, including payment in
satisfaction of the claim giving rise to such lien. Tenant shall pay to Landlord
at once upon notice by Landlord, any sum paid by Landlord to remove such liens,
together with interest at the maximum rate per annum permitted by law from the
date of such payment by Landlord. Landlord acknowledges Tenant's right to
finance and to secure under the Uniform Commercial Code, inventory, furnishings,
furniture, equipment, machinery and other personal property located in or at the
Premises and Landlord agrees to execute waiver forms releasing liens in favor of
any purchase money seller, lessor or lender who has financed or may finance in
the future such items. Without limiting the effectiveness of the foregoing,
provided that no default shall have occurred and be continuing, Landlord shall,
upon the request of Tenant, and at the Tenant's sole cost and expense, execute
and deliver any instruments necessary or appropriate to confirm any such grant,
release, dedication, transfer, annexation or amendment to any person or entity
permitted under this paragraph including landlord waivers with respect to any of
the foregoing.

      11. ENTRY BY LANDLORD Landlord and its employees and agents shall at all
reasonable times have the right to enter the Premises to inspect the same, to
show the Premises to prospective purchasers or (during the last twelve [12]
months of the term only) tenants, to post notices of nonresponsibility, and/or
to repair or maintain the structural portions of the Premises as permitted by
this Lease. Landlord acknowledges that its or its agents entry will be
accompanied by Tenant's designated escort, a position that will be staffed
twenty-four (24) hours per day, seven (7) days a week. In exercising such entry
rights, Landlord shall minimize the interference with Tenant's business, and
shall provide Tenant with reasonable advance notice of any such entry (except in
emergency situations).

      12. UTILITIES AND SERVICES / COMMON AREAS

      (a)   Landlord shall furnish or cause to be furnished to the Premises
            janitorial service, water, electricity, heating, air conditioning
            and ventilation in accordance with designs and specifications
            ordinarily and customarily established for similar buildings.
            Janitorial service shall be furnished after Building Operating
            hours, as the same may be set forth from time to time in the Rules
            and Regulations, and all other services shall be furnished during
            Building Operating Hours. Services not normally furnished after
            Building Operating Hours may be furnished, upon prior written
            request to Landlord, and upon such other terms, including
            appropriate reimbursement for the cost thereof, without any markup
            by Landlord, as may be

                                  PAGE 11 OF 23

<PAGE>

            determined from time to time by the Rules and Regulations.
            Landlord's failure to furnish any of the foregoing items when such
            failure is caused by (i) Accident, breakage, or repairs; (ii)
            Strikes, lockouts or other labor disturbances or labor dispute of
            any character; (iii) Governmental regulation, moratorium or other
            governmental action; (iv) Inability despite the exercise of
            reasonable diligence to obtain electricity, water or fuel; or by (v)
            Any other cause beyond Landlord's reasonable control shall not
            result in any liability to Landlord. In addition, Tenant shall not
            be entitled to any abatement or reduction of rent by reason of such
            failure, no eviction of Tenant shall result from such failure and
            Tenant shall not be relieved from the performance of any covenant or
            agreement in this Lease because of such failure. In the event of any
            failure, stoppage or interruption thereof, Landlord shall diligently
            attempt to resume service promptly.

      (b)   Landlord shall operate and maintain, or cause to be maintained,
            during the term of this Lease all "Common Facilities" within the
            Building, and its associated parking areas. The term "Common
            Facilities" shall mean all areas within the Project which are not
            held, or designated by Landlord to be held, for exclusive use by
            persons entitled to occupy space in the Building. The Common
            Facilities with the Project shall include, without limiting the
            generality of the foregoing, parking areas, driveways, truck-ways,
            delivery passages, loading docks, sidewalks, ramps, landscaped and
            planted areas, exterior stairways, hallways and interior stairways
            not located within the premises of any tenant, common entrances and
            lobbies, elevators, bus stops, retaining walls, restrooms not
            located within the premises of any tenant, lighting fixtures,
            identification signs for the Building, irrigation systems and
            controllers, drains and sewers.

            The use and occupancy by Tenant of the Premises shall include the
            use of the Common Facilities in common with Landlord and with all
            others for whose convenience and use the Common Facilities have been
            or may hereafter be provided by Landlord; subject, however, to the
            rules and regulations attached hereto as Exhibit "C", together with
            such additional and/or supplementary reasonable rules and
            regulations for the use thereof as may be prescribed from time to
            time by Landlord and of which Tenant receives written notice from
            Landlord. Landlord shall at all times during the term of this Lease
            have the sole and exclusive control of all Common Facilities and
            may, at any time and from time to time during the term hereof,
            restrain any use or occupancy thereof, except as authorized by such
            rules and regulations, as the same may be changed by Landlord, in
            Landlord's reasonable discretion, from time to time. Tenant shall
            keep said Common Facilities free and clear of any obstructions
            relating to Tenant's operations. Landlord may temporarily close any
            Common Facility for repairs or alterations or to prevent a
            dedication thereof, or the accrual of prescriptive rights therein,
            or for any other reason deemed sufficient by Landlord.

      13. DEFAULTS AND REMEDIES

      (a)   The occurrence of any one or more of the following events shall
            constitute a default ("Default") hereunder by Tenant.

                                  PAGE 12 OF 23

<PAGE>

            (i)   The abandonment of the Premises by Tenant. Abandonment is
                  herein defined to include but is not limited to, any absence
                  by Tenant from the Premises for five (5) business days or
                  longer while in default (beyond all applicable notice and cure
                  periods) of any provision of this Lease.

            (ii)  The failure by Tenant to make any payment of rent or
                  additional rent or any other payment required to be made by
                  Tenant hereunder, within five (5) days of receipt of written
                  notice from Landlord that same is past due.

            (iii) The failure by Tenant, as may be determined by Landlord, to
                  observe or perform any of the express or implied non-monetary
                  covenants or provisions of this Lease to be observed or
                  performed by Tenant, other than as specified in Subsection
                  13(a)(i) or (ii) above, where such failure shall continue for
                  a period of fifteen (15) days after written notice thereof
                  from Landlord to Tenant. Any such notice shall be in lieu of,
                  and not in addition to, any notice required under California
                  Code of Civil Procedure Section 1161 regarding unlawful
                  detainer actions. If the nature of Tenant's default is such
                  that it can be cured, but more than fifteen (15) days are
                  reasonably required for its cure (for any reasonable cause
                  other than financial inability), then Tenant shall not be
                  deemed to be in default if Tenant shall commence such cure
                  within said fifteen (15) day period and thereafter diligently
                  prosecute such cure to completion, which completion shall
                  occur not later than sixty (60) days from the date of such
                  notice from Landlord.

            (iv)  (1) The making by Tenant of any general assignment for the
                  benefit of creditors; (2) the filing by or against Tenant of a
                  petition to have Tenant adjudged as bankrupt or a petition for
                  reorganization or arrangement under any law relating to
                  bankruptcy (unless, in the case of a petition filed against
                  Tenant, the same is dismissed within thirty (30) days); (3)
                  the appointment of a trustee or receiver to take possession of
                  substantially all of Tenant's assets located at the Premises
                  or of Tenant's interest in this Lease, where possession is not
                  restored to Tenant within (30) days; or (4) the attachment,
                  execution or other judicial seizure of substantially all of
                  Tenant's assets located at the Premises or of Tenant's
                  interest in this Lease where such seizure is not discharged
                  within thirty (30) days.

            (v)   The use of the Premises for any purpose other than as
                  specifically authorized by this Lease without the consent of
                  Landlord (which consent of Landlord shall not be unreasonably
                  withheld, conditioned or delayed) and Master Lessor.

      (b)   In the event of any such Default by Tenant, in addition to any other
            remedies available to Landlord at law or in equity, Landlord shall
            have the immediate option to terminate this Lease and all rights of
            Tenant hereunder. In the event that Landlord shall elect to so
            terminate this Lease then Landlord may recover from Tenant:

                                  PAGE 13 OF 23

<PAGE>

            (i)   the worth at the time of award of any unpaid rent which had
                  been earned at the time of such termination; plus

            (ii)  the worth at the time of award of the amount by which the
                  unpaid rent 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; plus

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

            (iv)  if Tenant shall fail to take possession of the Premises or
                  fail to commence the payment of monthly rental payments as
                  herein required, or if Landlord terminates the Lease or
                  terminates Tenant's right to possession of the Premises by any
                  lawful means, due to Tenant's default or breach of the Lease
                  or the covenants and obligations of Tenant, Landlord shall
                  have the right, without affecting any of its other rights
                  under this Lease to recover from Tenant all broker commissions
                  and fees, if any, paid by Landlord in connection with this
                  Lease; plus

            (v)   any other amount necessary to compensate Landlord for all the
                  detriment proximately caused by Tenant's failure to perform
                  Tenant's obligations under this Lease or which in the ordinary
                  course of things would be likely to result therefrom.

                  As used in Subsection 13(b)(i) and (ii) above, the "worth at
                  the time of award" is computed by allowing interest at a rate
                  equal to two (2%) percent in excess of the "prime rate" of the
                  Bank of America N.T.&S.A. as of the time of award, not to
                  exceed, however, the maximum rate permitted by law. As used in
                  Subsection 13(b)(iii) above, the "worth at the time of award"
                  is computed by discounting such amount at the discount rate of
                  the Federal Reserve Bank of San Francisco at the time of award
                  plus one percent (1%).

      (c)   In the event of any such Default by Tenant, Landlord shall also have
            the right, with or without terminating this Lease to re-enter the
            Premises and remove all persons and property from the Premises; such
            property may be removed and stored in a public warehouse or
            elsewhere at the cost of and for the account of Tenant. No re-entry
            or taking possession of the Premises by Landlord pursuant to this
            Section 13(c) shall be construed as an election to terminate this
            Lease unless a written notice of such intention is given to Tenant
            or unless the termination thereof is decreed by a court of competent
            jurisdiction; provided, however, that Landlord may, at any time
            thereafter, elect to terminate this Lease for such previous and
            uncured breach by notifying Tenant in writing that Tenant's right to
            possession of the Premises has been terminated.

                                  PAGE 14 OF 23
<PAGE>

      (d)   All rights, options and remedies of Landlord contained in this Lease
            shall be construed and held to be cumulative, and no one of them
            shall be exclusive of the other, and Landlord shall have the right
            to pursue any one or all of such remedies or any other remedy or
            relief which may be provided by law, whether or not stated in this
            Lease. No waiver of any default of Tenant hereunder shall be implied
            from any acceptance by Landlord of any rent or other payments due
            hereunder or any omission by Landlord to take any action on account
            of such default if such default persists or is repealed, and no
            express waiver shall affect defaults other than as specified in said
            waiver. The consent or approval of Landlord to or of any act by
            Tenant requiring Landlord's consent or approval shall not be deemed
            to waive or render unnecessary Landlord's consent or approval to or
            of any subsequent similar acts of Tenant.

      (e)   Nothing in this Section shall be deemed to affect Tenant's indemnity
            of Landlord for liability or liabilities based upon occurrences
            prior to the termination of this Lease for personal injuries or
            property damage under the indemnification clause or clauses
            contained in this Lease. Such covenants of indemnification shall
            survive the termination of this Lease.

      14. SUBORDINATION Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord, the Master Lessor, or any mortgagee with a lien on the
Building, or any ground Lessor with respect to the Building, this Lease shall be
subject and subordinate at all times to:

      (a)   All ground leases or underlying leases which may now exist or
            hereafter be executed affecting the Building or the land upon which
            the Building is situated, or both, and

      (b)   The lien of any mortgage or deed of trust which may now exist or
            hereafter be executed in any amount for which the Building, land,
            ground leases or underlying leases, or Landlord's interest or estate
            in any of said items, is specified as security.

      Notwithstanding the foregoing, Landlord or the Master Lessor shall have
the right to subordinate or cause to be subordinated any such ground leases or
underlying leases or any such liens to this Lease. In the event that any ground
lease or underlying lease terminates for any reason, or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, notwithstanding any sub-ordination, attorn and become the
Tenant of the successor in interest to Landlord, at the option of such successor
in interest. Tenant covenants and agrees to execute and deliver, within ten (10)
business days of demand by Landlord, and in the commercially reasonable form
requested by Landlord, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. If Tenant to execute,
deliver and record any such document, Tenant shall be deemed to have consented
to same.

Tenant agrees that this Lease shall be subordinate to any mortgage or other
financing now or hereafter encumbering the Premises ("Mortgage"), provided that,
so long as Tenant is not in default in the performance of any and all terms,
covenants and conditions to be performed on its part under the Lease, Tenant's
leasehold estate under the Lease shall not be terminated, barred, cut off, or

                                  PAGE 15 OF 23
<PAGE>

otherwise disturbed by reason of any default under the Mortgage or any
foreclosure proceeding instituted by Mortgagee.

      15. ESTOPPEL CERTIFICATE

      (a)   Within ten (10) business days following any written request which
            Landlord may make from time to time, Tenant shall execute and
            deliver to Landlord a current financial statement of Tenant, in a
            form acceptable to Landlord (including both a balance sheet and an
            income statement), together with a written statement certifying:

            (i)   The date of commencement of this Lease;

            (ii)  The fact that this Lease is unmodified and in full force and
                  effect (or, if there have been modifications hereto, that this
                  Lease is in full force and effect, and stating the date and
                  nature of such modifications);

            (iii) The date to which the rental and other sums payable under this
                  Lease have been paid;

            (iv)  That there are no current defaults under this Lease by either
                  Landlord or Tenant except as specified in Tenant's statement;

            (v)   That Tenant has no rights of offset against Landlord;

            (vi)  That Tenant has accepted possession of the Premises; and

            (vii) Such other matters requested by Landlord.

            Landlord and Tenant intend that any statement delivered pursuant to
            this Section 15 may be relied upon by any mortgagee, beneficiary,
            purchaser or prospective purchaser of the Building or any interest
            therein.

      (b)   Tenant's failure to deliver such statement within such time shall be
            conclusive upon Tenant:

            (i)   That this Lease is in full force and effect, without
                  modification except as may be represented by Landlord;

            (ii)  That there are no uncured defaults in Landlord's performance
                  and that Tenant has no rights of offset against Landlord;

            (iii) That not more than one (1) month's rental has been paid in
                  advance; and

            (iv)  That Tenant has accepted possession of the Premises.

      16. RULES AND REGULATIONS Tenant shall faithfully observe and comply with
the "Rules and Regulations", a copy of which is attached hereto and marked
Exhibit "C", and all

                                  PAGE 16 OF 23
<PAGE>

reasonable and nondiscriminatory modifications thereof and additions thereto
from time to time put into effect by Landlord. Landlord shall not be responsible
to Tenant for the violation or non-performance by any other tenant or occupant
of the Building of any of said Rules and Regulations.

      17. PERFORMANCE BY TENANT All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any abatement of rent. If Tenant
shall fail to perform any act on its part to be performed hereunder, and such
failure shall continue for fifteen 15) days after notice thereof by Landlord,
Landlord may, without waiving or releasing Tenant from obligations of Tenant,
but shall not be obligated to, make any such payment or perform any such other
act to be made or performed by Tenant (unless there is a reasonable likelihood
of imminent harm to person or property as a result of Tenant's failure, in which
event Landlord may act immediately). All sums so paid by Landlord and all
necessary incidental costs together with interest thereon at the maximum rate
permissible by law, from the date of such payment by Landlord, shall be payable
to Landlord on demand. Tenant covenants to pay any such sums, and Landlord shall
have (in addition to any other right or remedy of Landlord) all rights and
remedies in the event of the non-payment thereof by Tenant as are set forth in
Section 13 hereof.

      18. PERFORMANCE BY LANDLORD If Landlord fails to perform any of its repair
and maintenance obligations as required in this Lease, and such failure
materially affects Tenant's ability to use and occupy the Premises for the
purposes permitted herein for more than fifteen business (15) days, Tenant shall
have the right, but not the obligation, to perform such repairs and/or
maintenance if such failure continues for more than fifteen business (15) days
after written notice from Tenant; provided, however, that if the nature of the
repairs and/or maintenance to be completed by Landlord is such that more than
fifteen business (15) days are required to complete such repairs and/or
maintenance, Landlord shall have such additional time as is reasonably necessary
to complete such repairs and/or maintenance so long as Landlord takes
appropriate action to commence such repairs and/or maintenance within such
fifteen business (15) day period and thereafter diligently pursues such repairs
and/or maintenance to completion. In such event and if Tenant had previously
provided written notice of the repair or maintenance need and Tenant
subsequently provided written notice of Tenant's intent to repair after Landlord
failed to perform its repair or maintenance obligation, Landlord shall reimburse
Tenant for the reasonable costs incurred by Tenant to complete such repairs
and/or maintenance within thirty (30) days after receipt of Tenant's written
demand therefore, together with copies of the paid invoices evidencing the costs
incurred by Tenant. Any repairs and/or maintenance permitted herein shall be
performed in a good workmanlike manner by licensed contractors. If Landlord
objects to the repairs and/or maintenance performed or the expenses incurred by
Tenant in performing such work, Landlord shall deliver a written notice of
Landlord's objection to Tenant within thirty (30) days after Landlord's receipt
of Tenant's invoice evidencing the expenses incurred by Tenant. Landlord's
notice shall set forth in reasonable detail Landlord's reasons for its claim
that such repairs and/or maintenance were not required or were not Landlord's
obligation in the terms of this lease and/or the reasons for Landlord's dispute
of the expenses incurred by Tenant in performing such work.

      19. DEFINITION OF LANDLORD The term "Landlord" as used in this Lease, so
far as covenants or obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner or owners, at the time in question,
of the leasehold estate granted by the Master Lease of the Premises. In the
event of any transfer, assignment or other conveyance or transfers of

                                  PAGE 17 OF 23
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such title, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically free and relieved from and
after the date of such transfer, assignment or other conveyance of all liability
as respects the performance of any covenants or obligations on the part of
Landlord contained in this Lease thereafter to be performed. Without further
agreement, the transferee of such title shall be deemed to have assumed and
agreed to observe and perform any and all obligations of Landlord hereunder,
during its ownership of the Premises. Landlord may transfer its interest in the
Premises without the consent of Tenant and such transfer or subsequent transfer
shall not be deemed a violation on Landlord's part of any of the terms and
conditions of this Lease.

      20. PARKING The use by Tenant, its employees and invitees, of the parking
facilities of the Building shall be on the terms and conditions set forth in the
Rules and Regulations contained in Exhibit C attached hereto and by this
reference incorporated herein and shall be subject to such other agreement
between Landlord and Tenant as may hereinafter be established. In no event,
however, shall Tenant be entitled to occupy more than its pro rata share of
spaces within the parking facilities of the Building.

      Landlord shall at all times have the right and privilege of determining
(1) the nature and extent of the automobile parking areas, whether the same
shall be surface, underground or other structure, and of making such changes
therein and thereto from time to time which, in Landlord's opinion, are deemed
to be desirable and for the efficient development of the Building and/or the use
of the Common Facilities, (2) the direction and flow of traffic, (3) the
installation of restricted and/or temporary parking areas, traffic control
signs, landscaped areas, and/or the institution of valet parking systems for
specific occupants, (4) the designation of outside sales area, drive-thru
banking, restaurant or other drive-thru facilities and/or other areas to be used
for seasonable and/or outside sales activities and/or temporary promotional
events, and (5) all other facilities thereof.

      Nothing contained herein shall be deemed to create liability upon Landlord
for any damage to motor vehicles of customers or employees or from loss of
property from within such motor vehicles. Notwithstanding the foregoing,
Landlord shall, at all times, subject only to condemnation and/or other
governmental restriction, provide or cause to be provided sufficient parking
spaces for the Building to satisfy the parking requirements of the City of
Brisbane then applicable to the Building.

      21. EXAMINATION OF LEASE Submission of this instrument for examination of
signature by Tenant does not constitute a reservation of or option for lease and
it is not effective as a lease or otherwise until execution by and delivery to
both Landlord and Tenant.

      22. RECORDING Neither Landlord nor Tenant shall record this Lease or a
short form memorandum thereof without the consent of the other.

      23. LIMITATION ON LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord,
the sole and exclusive remedy shall be against the Landlord's interest in the
Building.

                                  PAGE 18 OF 23
<PAGE>

      24. LEASEHOLD IMPROVEMENTS Subject to Landlord's review and approval of
final construction documents, Landlord shall construct all Leasehold
Improvements described in Exhibit "B". The parties will reach agreement on the
plans and specifications for the Tenant Improvements as specified in Exhibit B
prior to execution of this Lease. Such Leasehold Improvements shall be
constructed in accordance with all applicable building and health codes for
general office use. Notwithstanding any recommendation by Tenant, the ultimate
selection of the contractor shall be within Landlord's sole discretion.

      Landlord believes in good faith that as of the date hereof that the base,
shell and core of the Premises and the floor of the Building on which the
Premises is located (i) are in good condition and working order and (ii) comply
with all federal, state and local laws, regulations, ordinances, statutes and
rules.

      Landlord shall construct the Leasehold Improvements as described in
Exhibit B at Landlord's sole cost and expense, excepting only (a) costs actually
incurred by Landlord in excess of the Tenant Improvement Allowance as a result
of a Change Orders (as defined below) and (b) costs arising from Tenant Change
Orders, each of which shall be borne solely by Tenant. In the event that the
cost of the Leasehold Improvements requested by Tenant should exceed the Tenant
Improvement Allowance set forth in the Basic Lease provisions as a result of the
Tenant Change Order, Tenant shall pay to Landlord the amount of such excess in
cash prior to the commencement of construction of the Leasehold Improvements.

      Once final working drawings for the Leasehold Improvements have been
prepared, no changes ("Change Orders") shall be made by Tenant except upon the
express written consent of Landlord, which consent shall in every instance be
conditioned upon satisfaction of each of the following conditions, unless
expressly waived by Landlord:

      (a)   Tenant shall pay all costs associated with the Change Order, which
            payment shall be due in full prior to Tenant's occupancy of the
            Premises or concurrently with the first installment of rent due,
            whichever shall occur first.

      (b)   No work on any change order shall commence until such time as Tenant
            has executed a work authorization describing the Change in
            appropriate detail and requesting Landlord to proceed with the
            Change Order. If the costs associated with the Change Order are
            known at the time the Work Authorization is executed by Tenant, such
            amount shall be inserted in the Work Authorization. If the costs
            associated with the Change Order are not known at the time the Work
            Authorization is executed by Tenant, Landlord shall provide Tenant
            with precise cost information as soon as such information is
            available. The lack of information relating to the cost of the
            Change Order as of the date of Tenant's execution of the Work
            Authorization shall not, however, relieve Tenant of the obligation
            to pay all costs associated with the Change Order, and Tenant hereby
            expressly assumes all risk that the actual cost of a Change Order
            may exceed the cost anticipated by Tenant upon Tenant's execution of
            the Work Authorization.

      (c)   The commencement date for the Lease shall not be delayed as a result
            of any Change Order. In the event that the originally scheduled
            completion date for the Leasehold

                                  PAGE 19 OF 23
<PAGE>

            Improvements is delayed as a result of a Change Order, substantial
            completion of the Leasehold Improvements and the Commencement Date,
            for purposes of rent (and rental concessions, if any), shall be
            deemed to have occurred as of the date on which completion of the
            Leasehold Improvements would have occurred but for the Change Order.

      25. ASSIGNMENT & SUBLETTING The terms of the Master Lease regarding
assignment and subletting have been incorporated herein pursuant to Section 1 of
this Lease. Notwithstanding such incorporation by reference, however, Landlord
agrees that Landlord shall not be entitled to recapture the Premises in the
event of an assignment or sublet by Tenant of less than 20,925 square feet of
space within the Premises. Tenant acknowledges, however, that the Master Lessor
may be entitled to exercise such recapture rights. In all other respects, the
assignment and subletting provisions of the Master Lease shall apply as
described in Section 1. In the event of any approved sublease, profits (i.e.,
all rentals received by Tenant with respect to the sublease after recovery of
documented marketing costs and commissions) shall be divided evenly between
Tenant and Landlord. Notwithstanding anything to the contrary in this Lease, as
between Landlord and Tenant only, Landlord's consent shall not be required for
any of the following transfers (each of which shall be a "Permitted Transfer"):
(a) to any person(s) or entity who controls, is controlled by or is under common
control with Tenant, (b) to any entity resulting from the merger, consolidation
or other reorganization with Tenant, whether or not Tenant is the surviving
entity or (c) to any person or legal entity which acquires all or substantially
all of the assets or stock of Tenant (each of the foregoing is hereinafter
referred to as a "Tenant Affiliate"); provided that before such assignment shall
be effective, (x) said Tenant Affiliate shall assume, in full, the obligations
of Tenant under this Lease, (y) Landlord shall be given written notice of such
assignment and assumption and (z) the use of the Premises by the Tenant
Affiliate shall be as set forth in this Section. For purposes of this paragraph,
a public or private offering of Tenant stock is a Permitted Transfer and the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management, affairs and policies of anyone,
whether through the ownership of voting securities, by contract or otherwise.
The bonus rental provisions of this Section 25 and Section 22(d) of the Master
Lease shall not apply to an assignment or sublease by Tenant to a Tenant
Affiliate. Tenant acknowledges that this provision does not limit Master
Lessor's right to consent to any such assignments or subletting, the obtaining
of such consent shall be Tenant's responsibility. Failure to obtain Master
Lessor's consent shall be a material breach under this lease agreement.

      26. SIGNS Landlord shall affix a sign (restricted solely to Tenant's name
as set forth in Item 1 of the Basic Lease Provisions or such other name as may
be consented to in advance in writing, by Landlord), the cost of which shall be
included within the Tenant Improvement Allowance, to the exterior surface of the
hallway suite-front of the Premises. Except with the prior written approval of
Landlord, which approval may be withheld in Landlord's sole discretion, or as
specified herein, Tenant shall not place or allow to be placed, erected or
maintained any sign, decal, placard name,

                                  PAGE 20 OF 23
<PAGE>

insignia, trade name, description, flashing, moving or hanging lettering, or any
other descriptive words or advertising matter of any kind or description (herein
collectively, "sign" or "signs") on any exterior door, wall, window or roof of
the Premises or of the Building, or on the glass of any window or door of the
Building, or on any sidewalk or other location outside the Building, or within
any entrance to the Premises. If Tenant places or causes to be placed or
maintained any of the foregoing, the same may be removed by Landlord at Tenant's
expense without notice and without such removal constituting a breach of this
lease or entitling Tenant to claim damages on account thereof.

      Upon Tenant's actual occupancy of the Premises, Tenant shall be entitled
to erect and maintain, at its sole cost and expense, one rooftop sign at the
location shown on Exhibit "D", subject to compliance with governmental
requirements and Landlord's approval, such approval not to be unreasonably
denied. Landlord will use commercially reasonable efforts to assist Tenant in
obtaining approval of the appropriate governmental entities for the installation
of the rooftop sign. Notwithstanding the foregoing, all costs associated with
obtaining such approval shall be borne by Tenant.

      27. WAIVER OF SUBROGATION. The parties hereto, including Master Lessor by
reason of its consent hereto, release each other and their respective agents,
employees, successors and assigns from all liability for damage to any property
that is caused by or results from a risk which is actually insured against or
which would normally be covered by the standard form of "all risk" property
insurance, without regard to the negligence or willful misconduct of the entity
so released. Each party shall use its best efforts to cause each insurance
policy it obtains to provide that the insurer thereunder waives all right of
recovery by way of subrogation as required herein in connection with any damage
covered by the policy.

      28. LANDLORD'S OBLIGATIONS. Landlord, with respect to the obligations of
Master Lessor under the Master Lease, shall use diligent, good faith efforts to
cause Master Lessor to perform such obligations for the benefit of Tenant. Such
diligent, good faith efforts shall include, without limitation: (a) upon
Tenant's written request, immediately notify Master Lessor of its nonperformance
under the Master Lease and request that Master Lessor perform its obligations
under the Master Lease and (b) permitting Tenant to commence a legal action in
Landlord's name to obtain the performance required from Master Lessor under the
Master Lease; provided, however, that Tenant shall pay all costs and expenses
incurred in connection therewith and Tenant shall indemnify and hold Landlord
harmless against all reasonable costs and expenses incurred by Landlord in
connection therewith.

      29. QUIET ENJOYMENT. Tenant shall peacefully have, hold and enjoy the
Premises subject to the terms and conditions of this Lease, provided that there
is not an event of default by Tenant. Landlord shall fully perform all of its
obligations under the Master Lease to the extent Tenant has not expressly agreed
to perform such obligations under this Lease. In the event, however, that
Landlord defaults in the performance or observance of any of Landlord's
remaining obligations under the Master Lease or fails to perform Landlord's
stated obligations under this Lease or to enforce, for Tenant's benefit, Master
Lessor's obligations under the Master Lease, then Tenant shall be entitled,
following the expiration of any applicable cure period, to cure such default and
promptly collect from Landlord, Tenant's reasonable expenses in so doing
(including, without limitation, reasonable attorneys' fees and court costs), or,
at Tenant's option, to offset such

                                  PAGE 21 OF 23
<PAGE>

reasonable expenses against future payments of rent due under this Lease. Tenant
shall not be required, however, to wait the entire applicable cure period if
earlier action is required to comply with the Master Lease or with any
applicable law, regulation or governmental order.

      SIGNATURES FOLLOW ON NEXT PAGE...

                                  PAGE 22 OF 23
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.

LANDLORD:                            TENANT:

WAL-MART.COM, INC.                   STENTOR, INC.
A DELAWARE CORPORATION

By: /s/ Signed by authorized agent   By: /s/ Signed by authorized agent
    ------------------------------   -----------------------------------
TITLE: Signed by authorized agent    TITLE: Signed by authorized agent

      PLEASE NOTE: IF TENANT IS A CORPORATION, THE AUTHORIZED OFFICERS MUST SIGN
ON BEHALF OF THE CORPORATION AND INDICATE THE CAPACITY IN WHICH THEY ARE
SIGNING. THE LEASE MUST BE EXECUTED BY THE PRESIDENT OR VICE-PRESIDENT AND THE
SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BYLAWS OR A RESOLUTION OF THE BOARD
OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT THE BYLAWS OR A CERTIFIED
COPY OF THE RESOLUTION, AS THE CASE MAY BE, MUST BE ATTACHED TO THIS LEASE.

                                  PAGE 23 OF 23
<PAGE>

                                  EXHIBIT "A-1"

                                    SITE PLAN

                                 TO BE ATTACHED

                              EXHIBIT "A-1" PAGE 1
<PAGE>

                                  EXHIBIT "A-2"

                  FLOOR PLAN OF THE BUILDING, SHOWING PREMISES

                                 TO BE ATTACHED

                              EXHIBIT "A-2" PAGE 1
<PAGE>

                                   EXHIBIT "B"

                            TENANT IMPROVEMENT PLANS

                                 TO BE ATTACHED

                               EXHIBIT "B" PAGE 1

<PAGE>

                                   EXHIBIT "C"

                              RULES AND REGULATIONS

                        A. GENERAL RULES AND REGULATIONS

      The following rules and regulations govern the use of the Building and the
Development Common Areas. Tenant will be bound by such rules and regulations and
agrees to cause Tenant's Authorized Users, its employees, subtenants, assignees,
contractors, suppliers, customers and invitees to observe the same.

      1. Tenant will not obstruct any sidewalks, halls, passages, exits,
entrances, escalators, or stairways of the Development. The halls, passages,
exits, entrances, and stairways are not open to the general public, but are
open, subject to reasonable regulations, to Tenant's business invitees. Landlord
will in all cases retain the right to control and prevent access thereto of all
persons whose presence in the reasonable judgment of Landlord would be
prejudicial to the safety, character, reputation and interest of the Development
and its Tenants, provided that nothing herein contained will be construed to
prevent such access to persons with whom any Tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal or
unlawful activities.

      2. Landlord expressly reserves the right to reasonably prohibit
solicitation, canvassing, distribution of handbills or any other written
material, peddling, sales and displays of products, goods and wares in all
portions of the Development except as may be expressly permitted under the
Lease. Landlord reserves the right to restrict and regulate the use of the
common areas of the Development and Building by invitees of Tenants providing
services to Tenants on a periodic or daily basis including food and beverage
vendors. Such restrictions may include limitations on time, place, manner and
duration of access to a Tenant's premises for such purposes. Without limiting
the foregoing, Landlord may require that such parties use halls, passageways and
stairways for such purposes to preserve access within the Building for Tenants
and the general public.

      3. Landlord reserves the right to exclude from the Building between the
hours of 6 p.m. and 8 a.m. the following business day, or such other hours as
may be established from time to time by Landlord, and on Sundays and legal
holidays, any person unless that person is known to the person or employee in
charge of the Building or has a pass or is properly identified. Tenant will be
responsible for all persons for whom it requests passes and will be liable to
Landlord for all acts of such persons. Landlord will not be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. Landlord reserves the right to prevent access to the Building in
case of invasion, mob, riot, public excitement or other commotion by closing the
doors or by other appropriate action.

      4. The directory of the Building or the Development will be provided
exclusively for the display of the name and location of Tenants only and
Landlord reserves the right to exclude any other names therefrom.

                               EXHIBIT "C" PAGE-1

<PAGE>

      5. All cleaning and janitorial services for the Development and the
Premises will be provided exclusively through Landlord, and except with the
written consent of Landlord, no person or persons other than those approved by
Landlord will be employed by Tenant or permitted to enter the Development for
the purpose of cleaning the same.

      6. Tenant, upon the termination of its tenancy, will deliver to Landlord
the keys to all doors which have been furnished to Tenant, and in the event of
loss of any keys so furnished, will pay Landlord therefore.

      7. Freight elevator(s) will be available for use by all Tenants in the
Building, subject to such reasonable scheduling as Landlord, in its discretion,
deems appropriate. No equipment, materials, furniture, packages, supplies,
merchandise or other property will be received in the Building or carried in the
elevators except between such hours and in such elevators as may be reasonably
designated by Landlord. Deliveries during normal office hours shall be limited
to normal office supplies and other small items. No deliveries will be made
which impede or interfere with other Tenants or the operation of the Building.

      8. Tenant will not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Landlord will have the right to reasonably prescribe
the weight, size and position of all safes, heavy equipment, files, materials,
furniture or other property brought into the Building. Heavy objects will, if
considered necessary by Landlord, stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight, which platforms will
be provided at Tenant's expense. Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Building or to any space therein to such a degree as to be
objectionable to any Tenants in the Building or Landlord, are to be placed and
maintained by Tenant, at Tenant's expense, on vibration eliminators or other
devises sufficient to eliminate noise or vibration. Tenant will be responsible
for all structural engineering required to determine structural load, as well as
the expense thereof. The persons employed to move such equipment in or out of
the Building must be reasonably acceptable to Landlord. Landlord will not be
responsible for loss of, or damage to, any such equipment or other property from
any cause, and all damage done to the Building by maintaining or moving such
equipment or other property will be repaired at the expense of Tenant.

      9. Tenant will not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Tenant will not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of noise,
odors or vibrations, nor will Tenant bring into or keep in or about the Premises
any birds or animals.

      10. Tenant will not use any method of heating or air conditioning other
than that supplied by Landlord without Landlord's prior written consent.

      11. Tenant will not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to assure the most effective operation
of the Building's heating and air conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has actual
notice, and will refrain from attempting to adjust controls.

                               EXHIBIT "C" PAGE - 2

<PAGE>

      12. Tenant will comply with any governmental energy-saving rules, laws or
regulations of which Tenant has actual notice.

      13. Landlord reserves the right, exercisable without notice and without
liability to Tenant to change the name and street address of the Building.
Without the written consent of Landlord, Tenant will not use the name of the
Building or the Development in connection with or in promoting or advertising
the business of Tenant except as Tenant's address.

      14. Tenant will close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus, and lighting or gas before
Tenant and its employees leave the Premises. Tenant will be responsible for any
damage or injuries sustained by other Tenants or occupants of the Building or by
Landlord for noncompliance with this rule.

      15. The toilet rooms, toilets, urinals, wash bowls and other apparatus
will not be used for any purpose other than that for which they were constructed
and no foreign substance of any kind whatsoever shall be thrown therein. The
expense of any breakage, stoppage or damage resulting from any violation of this
rule will be borne by the Tenant who, or whose employees or invitees, break this
rule.

      16. Tenant will not use the Premises for any business or activity other
than that specifically provided for in this Lease. Tenant will not conduct, nor
permit to be conducted, either voluntarily or involuntarily, any auction upon
the Premises without first having obtained Landlord's prior written consent,
which consent Landlord may withhold in its sole and absolute, discretion.

      17. Except for the ordinary hanging of pictures and wall decorations,
Tenant will not mark, drive nails, screw or drill into the partitions, woodwork
or plaster or in any way deface the Premises or any part thereof, except in
accordance with the provisions of the Lease pertaining to alterations. Landlord
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises. Tenant will not cut or
bore holes for wires. Tenant will not affix any floor covering to the floor of
the Premises in any manner except as approved by Landlord. Tenant shall repair
any damage resulting from noncompliance with this rule.

      18. Landlord reserves the right to exclude or expel from the Development
any person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Building.

      19. Tenant will store all its trash and garbage within its Premises or in
other facilities provided by Landlord. Tenant will not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal.

      20. The Premises will not be used for lodging or for the storage of
merchandise held for sale to the general public, or for lodging or for
manufacturing of any kind, nor shall the Premises be used for any improper,
immoral or objectionable purpose. No cooking will be done or permitted on the
Premises without Landlord's consent, except that (i) cooking shall be allowed in
existing kitchens, or (ii) the use by Tenant of Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages
shall be permitted, and the use of a microwave oven for employees use will be
permitted, provided that such equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.

                              EXHIBIT "C" PAGE - 3

<PAGE>

      21. Neither Tenant nor any of its employees, agents, customers and
invitees may use in any space or in the public halls of the Building or the
Development any hand truck except those equipped with rubber tires and side
guards or such other material-handling equipment as Landlord may approve. Tenant
will not bring any other vehicles of any kind into the Building.

      22. Tenant agrees to comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.

      23. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

      24. To the extent Landlord reasonably deems it necessary to exercise
exclusive control over any portions of the Common Areas for the mutual benefit
of the Tenants in the Building or the Development, Landlord may do so subject to
reasonable, non-discriminatory additional rules and regulations.

      25. Smoking is prohibited in the Building.

      26. Tenant's requirements will be attended to only upon appropriate
application to Landlord's asset management office for the Development by an
authorized individual of Tenant. Employees of Landlord will not perform any work
or do anything outside of their regular duties unless under special instructions
from Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.

      27. These Rules and Regulations are in addition to, and will not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease. Landlord may waive any one or
more of these Rules and Regulations for the benefit of Tenant or any other
Tenant, but no such waiver by Landlord will be construed as a waiver of such
Rules and Regulations in favor of Tenant or any other Tenant, nor prevent
Landlord from thereafter enforcing any such Rules and Regulations against any or
all of the Tenants of the Development.

      28. Landlord reserves the right to make such other and reasonable and
non-discriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the
Development and for the preservation of good order therein. Tenant agrees to
abide by all such Rules and Regulations herein above stated and any additional
reasonable and non- discriminatory rules and regulations which are adopted.
Tenant is responsible for the observance of all of the foregoing rules by
Tenant's employees, agents, clients, customers, invitees and guests.

                        B. PARKING RULES AND REGULATIONS.

      The following rules and regulations govern the use of the parking
facilities which serve the Building. Tenant will be bound by such rules and
regulations and agrees to cause its employees, subtenants, assignees,
contractors, suppliers, customers and invitees to observe the same:

      1. Tenant will not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, subtenants, customers or invitees to
be loaded, unloaded or parked in areas other than those designated by Landlord
for such activities. No vehicles are to be parked in the parking areas

                              EXHIBIT "C" PAGE - 4

<PAGE>

other than normally sized passenger automobiles, motorcycles and pick-up trucks
except those reasonably required in the operations of Tenant's business. No
extended term storage of vehicles is permitted.

      2. Vehicles must be parked entirely within painted stall lines of a single
parking stall.

      3. All directional signs and arrows must be observed.

      4. The speed limit within all parking areas shall be five (5) miles per
hour.

      5. Parking is prohibited: (a) in areas not striped for parking; (b) in
aisles or on ramps; (c) where "no parking" signs are posted; (d) in
cross-hatched areas; and (e) in such other areas as may be designated from time
to time by Landlord or Landlord's parking operator.

      6. Landlord reserves the right, without cost or liability to Landlord, to
tow any vehicle if such vehicle's audio theft alarm system remains engaged for
an unreasonable period of time.

      7. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.

      8. Landlord may refuse to permit any person to park in the parking
facilities who violates these rules with unreasonable frequency, and any
violation of these rules shall subject the violator's car to removal, at such
car owner's expense. Tenant agrees to use its best efforts to acquaint its
employees, subtenants, assignees, contractors, suppliers, customers and invitees
with these parking provisions, rules and regulations.

      9. All damage or loss claimed to be the responsibility of Landlord must be
reported, itemized in writing and delivered to the management office located
within the Development within ten (10) business days after any claimed damage or
loss occurs. Any claim not so made is waived. Landlord is not responsible for
damage by water or fire, or for the acts or omissions of others, or for articles
left in vehicles. In any event, the total liability of Landlord, if any, is
limited to Two Hundred Fifty Dollars ($250.00) for all damages or loss to any
car. Landlord is not responsible for loss of use.

      10. Landlord reserves the right, without cost or liability to Landlord, to
tow any vehicles which are used or parked in violation of these rules and
regulations.

      11. Landlord reserves the right from time to time to modify and/or adopt
such other reasonable and non-discriminatory rules and regulations for the
parking facilities as it deems reasonably necessary for the operation of the
parking facilities.

                              EXHIBIT "C" PAGE - 5

<PAGE>

                                   EXHIBIT "D"

                                 ROOFTOP SIGNAGE

                                 TO BE ATTACHED

                                   Exhibit "D"
                                 Rooftop Signage<PAGE>

                                                                    EXHIBIT 10.8

                         EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the "Agreement") is entered into by and
between Stentor, Inc. (the "Company") and Jeffrey Often (the "Executive"), and
is effective as of February 17, 2004.

      1.    POSITION, DUTIES AND RESPONSIBILITIES. Effective February 17, 2004,
the Executive has been employed as the Company's Chief Executive Officer. As
Chief Executive Officer, Executive will perform the duties customarily
associated with this position and such other duties assigned by the Company.
Executive will work at the Company's Brisbane, California headquarters. The
Company retains the discretion to modify Executive's position and duties from
time to time without a written modification of this Agreement.

      2.    COMPENSATION AND EMPLOYEE BENEFITS.

            (a) BASE SALARY. Executive's base salary will be Twenty-Five
Thousand Five Hundred Dollars ($25,500) per month which is Three Hundred and Six
Thousand Dollars ($306,000) annualized, less standard payroll deductions and
required withholdings, paid according to the Company's regular payroll schedule
and procedures. Executive will be considered for increases in base salary, as
determined in the sole discretion of the Company.

            (b) DUAL RESIDENCE COMPENSATION. Executive acknowledges and agrees
that his base salary includes Three Thousand Dollars ($3,000) per month intended
to help offset the cost to Executive of local housing in the San Francisco Bay
Area; and further agrees that, if Executive establishes a permanent residence in
the San Francisco Bay Area, Executive will no longer be entitled to receive the
$3,000 per month and that Executive's base salary will be reduced accordingly.
Further, in an effort to accommodate the fact that Executive will maintain
residences on the East Coast, by the most affordable direct flight the Company
will reimburse Executive for one round trip flight per month to the East Coast;
provided further that Executive agrees to help minimize the associated cost by
combining the East Coast trips with business travel when it is practical to do
so.

            (c) ANNUAL BONUS. Executive will have a bonus target of One Hundred
Twenty Five Thousand Dollars ($125,000) per year based on a combination of
Company and personal deliverables, payable after the fiscal close. Specifically,
for each year 70% of the payout will be based on the then applicable annual
executive bonus plan (to be determined by the Company in its sole discretion),
with the payout to be determined in a manner consistent with such determination
for the Company's other executives, and 30% will be based on mutually agreed
upon personal objectives for Executive for each year, with the determination of
whether such objectives have been achieved and the amount of such payout to be
reasonably determined by the Company. Any bonus payments will be subject to
payroll deductions and required

                                       1

<PAGE>

withholdings. If Executive is not employed at the time any bonus is to be paid
he will not have earned the bonus, and no partial or pro-rata bonus will be
earned or paid. For 2004 the annual bonus target payout to Executive will
reflect a pro-rata deduction based on his employment start date of February 17,
2004.

            (d) STOCK OPTION GRANTS. Pursuant to the Company's 2001 Incentive
Stock Plan 1996 (the "Plan"), on February 17, 2004 the Company granted Executive
(i) an incentive stock option to purchase 147,780 shares of the Company's common
stock and (ii) a nonstatutory stock option to purchase 352,220 shares of the
Company's common stock (collectively the "Options"), at an exercise price of
$2.03 per share. The Options are subject to the terms and conditions of the
Plan, any amendments thereto, and Executive's stock option agreements entered in
connection therewith.

            (e) EMPLOYEE BENEFITS. Executive shall remain eligible for the
following standard benefits: medical, dental and vision insurance, flexible
reimbursement accounts, short and long-term disability insurance, life
insurance, and the Company's 401(k) plan. Executive will be eligible for ten
paid Company holidays per year and for 15 PTO days a year in accordance with the
Company's PTO policy. Details about these benefits are set forth in the Company
handbook and summary plan descriptions available for Executive's review. The
Company may, in its discretion, modify Executive's compensation and benefits
from time to time, as it deems necessary, and the Company may, in its
discretion, change the level of benefits it provides to employees from time to
time, as it deems advisable for the workforce.

      3.    OTHER ACTIVITIES DURING EMPLOYMENT; NON-SOLICITATION.

            (a) Except as permitted by Section 3(c) below or with the prior
written consent of the Company, Executive will not during Executive's employment
undertake or engage in any other employment, occupation or business enterprise.
Executive may engage in civic and not-for-profit activities so long as such
activities do not materially interfere with the performance of Executive's job
duties. The Company hereby gives its consent for Executive to continue as
Chairman of Ardais Corporation, provided the time commitment is no more than one
day per quarter. To the extent inconsistent with this Section 3, the first
sentence of section 4 ("Additional Activities") of that certain Employee
Proprietary Information and Inventions Agreement ("Proprietary Information
Agreement") between Executive and the Company, signed by Executive on February
17, 2004, is hereby superseded.

            (b) Except as permitted by Section 3(c) below, during Executive's
employment, Executive agrees not to acquire, assume or participate in, directly
or indirectly, any position, investment or interest known by Executive to be
adverse or antagonistic to the Company, or its business or prospects, financial
or otherwise.

                                       2

<PAGE>

            (c) During the term of Executive's employment by the Company, except
on behalf of the Company, Executive will not directly or indirectly, whether as
an officer, director, employee, stockholder, partner, proprietor, associate,
representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, be employed by or have any business connection with
any other person, corporation, firm, partnership, or other entity which
develops, licenses, distributes and/or markets software and/or systems for the
management of digital medical images, which could be either stand-alone systems
or integrated into broader systems, including, but not limited to, Picture
Archiving and Communications Systems, image display systems, image distribution
systems and/or image archiving systems, anywhere in the world, provided,
however, that anything above to the contrary notwithstanding, Executive may own,
as a passive investor, securities of any entity, so long as Executive's direct
holdings in any one such corporation do not in the aggregate constitute more
than one percent (1%) of the voting stock of such corporation.

            (d) Executive acknowledges that, because of Executive's position in
the Company, Executive will have access to material intellectual property and
confidential information. During the term of Executive's employment by the
Company and for one (1) year thereafter, in addition to Executive's other
obligations hereunder or under the Proprietary Information Agreement (as defined
below), Executive shall not, for Executive's self or any third party, directly
or indirectly:

                  (i) divert or attempt to divert from the Company any business
of any kind, including without limitation the solicitation of or interference
with any of its customers, clients, members, business partners or suppliers, or

                  (ii) solicit or otherwise induce any person employed by the
Company to terminate his or her employment.

      4.    COMPANY POLICIES; PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
AS a Company employee, Executive will be expected to abide by Company rules and
policies. As a further condition of Executive's continued employment, Executive
agrees to continue to abide by Executive's obligations under his Proprietary
Information Agreement.

      5.    INDEMNIFICATION AGREEMENT. Executive's Indemnification Agreement
with the Company dated______, 2004 is unaffected by this Agreement.

      6.    AT-WILL EMPLOYMENT RELATIONSHIP; OTHER TERMINATIONS.

            (a) AT-WILL EMPLOYMENT. Executive's employment with the Company
shall be "at will" at all times. Either Executive or the Company may terminate
the employment relationship at any time, with or without Cause (as defined
below) or advance notice. Upon and after such termination, all obligations of
the Company under this Agreement shall cease, unless the Company terminates
Executive without Cause (as defined below) or the Executive resigns

                                       3

<PAGE>

with Good Reason (as defined below), in which case the Company will provide
Executive with the Severance Benefits as described in Section 7.

            (b) DEATH. Executive's employment shall terminate automatically upon
Executive's death. The Company shall pay to Executive's beneficiaries or estate,
as appropriate, any compensation then due and owing. Thereafter all obligations
of the Company under this Agreement shall cease. Nothing in this Section shall
affect any entitlement of Executive's heirs or devisees to the benefits of any
life insurance plan or other applicable benefits.

            (c) DISABILITY. If Executive becomes eligible for the Company's long
term disability benefits or if, in the sole opinion of the Company, Executive is
unable to carry out the responsibilities and functions of the position held by
Executive by reason of any physical or mental impairment for more than ninety
(90) consecutive days or more than one hundred and twenty days in any
twelve-month period, then, to the extent permitted by law, the Company may
terminate Executive's employment. The Company shall pay to Executive all
compensation to which Executive is entitled up through the date of termination,
and thereafter all obligations of the Company under this Agreement shall cease.
Nothing in this Section shall affect Executive's rights under any disability
plan in which Executive is a participant.

      7.    SEVERANCE BENEFITS FOR TERMINATION WITHOUT CAUSE OR RESIGNATION FOR
GOOD REASON. If the Company terminates Executive's employment without Cause (as
defined below), as determined in good faith by the Board, or Executive resigns
from his employment with Good Reason (as defined below), provided that Executive
executes and delivers the Release Agreement, attached hereto as Exhibit A (the
"Release Agreement") in accordance with Section 7(e) and such Release Agreement
is not revoked, Executive will receive the following as Executive's sole
severance benefits (collectively, the "Severance Benefits"):

            (a) SALARY CONTINUATION. Executive will continue to receive
Executive's base salary at the same rate in effect as of the
termination/resignation effective date, paid on the Company's standard payroll
dates for the Severance Period (as defined below), subject to standard payroll
deductions and required withholdings.

            (b)COBRA PREMIUMS. If Executive timely elects to continue
Executive's Company-provided group health insurance coverage pursuant to the
federal COBRA law, the Company will reimburse Executive for the cost of such
COBRA premiums so that Executive may continue health insurance coverage, at the
same level Executive maintains as of the employment termination/resignation
date, through the end of the Severance Period, or until such time as Executive
qualifies for health insurance benefits through a new employer, whichever occurs
first. The reimbursement shall be for 100% of Executive's COBRA premiums, as
well as for Executive's eligible dependents' COBRA premiums, and the coverage to
be provided on this basis shall be health and dental coverage.

                                       4

<PAGE>

            (c) ACCELERATION OF STOCK OPTIONS WITHOUT CHANGE IN CONTROL. As of
the termination/resignation date Executive will receive accelerated vesting of
the Options equal to the amount of shares that would have vested in the
Severance Period, defined below, had Executive remained employed during that
time.

            (d) ACCELERATION OF STOCK OPTIONS WITH CHANGE IN CONTROL.
Notwithstanding Section 7(c), if the termination/resignation occurs within six
(6) months after there has been a Change in Control, defined below, then fifty
percent (50%) of the then remaining unvested shares of the Options will
accelerate as of the termination or resignation date (beginning with the
earliest of such shares that would have vested with future service). If this
Section 7(d) applies, it will substitute for, and not be in addition to, the
acceleration described in Section 7(c).

            (e) RELEASE AGREEMENT. As a condition of and prior to the Company's
provision of any of the Severance Benefits set forth in Sections 7(a) through
(d), Executive must execute, deliver and make effective the Release Agreement
(attached as Exhibit A) on or after the employment termination/resignation date.
In the event Executive revokes any part of the Release Agreement, the Company
will not provide any of the Severance Benefits to Executive.

            (f) DEFINITION OF CAUSE. For purposes of this Agreement, "Cause"
means the occurrence of any one or more of the following: (i) Executive's
conviction of, or plea of guilty or no contest with respect to, any felony or
crime involving fraud, dishonesty or moral turpitude; (ii) Executive's
participation in a fraud or act of dishonesty against the Company that results
in material harm to the business of the Company; (iii) Executive's intentional,
material breach of any contract or agreement between Executive and the Company,
including but not limited to this Agreement and Executive's Proprietary
Information Agreement, or Executive's breach of any statutory duty that
Executive owes to the Company, but only if Executive does not correct such
breach (if curable) within thirty (30) days after written notice thereof has
been provided to Executive; (iv) Executive's commission of an act of unlawful
harassment or discrimination; (v) Executive's willful refusal to implement or
follow a lawful policy or directive of the Company or the Board, but only if
Executive does not correct such action within thirty (30) days after written
notice thereof has been provided to Executive, or (vi) a demonstrated and
continued pattern of Executive's substantial nonperformance of employment (other
than due to Executive's illness or because the requested conduct would subject
Executive to criminal penalties or would violate applicable federal, state or
local law, ordinance or regulation), as determined by the Board in good faith,
but only if Executive does not correct such nonperformance within thirty (30)
days after a written notice has been provided to Executive that identifies
Executive's acts of substantial nonperformance of Executive's duties.

            (g) DEFINITION OF GOOD REASON. "Good Reason" for Executive's
resignation shall mean resignation by Executive of his employment within 30 days
of any of the following actions being taken by the Company: (i) the Company
requiring that Executive relocate to a

                                       5

<PAGE>

worksite that is more than 50 miles from the Company's current office, unless
such relocation is in, or within 50 miles from, the city limits of Boston,
Massachusetts or Executive accepts such a relocation opportunity; (ii) the
Company significantly and materially reducing Executive's position, duties or
responsibilities without Executive's approval, provided that Executive must give
the Company reasonable notice in writing of such circumstances and an
opportunity to cure same and, provided further, that in the event of a Change in
Control it shall not be Good Reason if, following the effective date of the
Change in Control, either (a) the Company is retained as a separate legal entity
or business unit and Executive holds the same position, duties and
responsibilities in such legal entity or business unit as Executive held before
such effective date or (b) Executive holds a position with duties and
responsibilities comparable (though not necessarily identical, in view of the
relative sizes of the Company and the entity involved in the Change in Control)
to the position, duties and responsibilities of Executive prior to the effective
date of the Change in Control; or (iii) the Company materially reducing
Executive's compensation or benefits, measured against such compensation or
benefits as of the date Executive started his employment with the Company,
unless such reduction is made pursuant to an across the board reduction
applicable to senior executives of the Company.

            (h) DEFINITION OF CHANGE IN CONTROL. A sale, lease, exclusive
license or other disposition of all or substantially all of the assets of the
Company; or any consolidation or merger of the Company with or into any other
corporation or other entity or person, or any other corporate reorganization, in
which holders of the capital stock of the Company immediately prior to such
consolidation, merger or reorganization, hold securities representing less than
50% of the voting power of the surviving entity (or, if the surviving entity is
a wholly owned subsidiary, its parent) immediately after such consolidation,
merger or reorganization; or any transaction or series of related transactions
involving the transfer of the Company's voting securities (other than to an
underwriter of the Company's securities) pursuant to which a person or group of
affiliated persons would, immediately following the closing of such
transaction(s), hold 50% or more of the outstanding voting power of the Company
(any such transaction, a "Change in Control"), provided that a Change in Control
shall not include (i) any consolidation or merger effected exclusively to change
the domicile of the Company, or (ii) any transaction or series of transactions
principally for bona fide equity financing purposes in which cash is received by
the Company or any successor or indebtedness of the Company is cancelled or
converted or a combination thereof.

            (i) DEFINITION OF SEVERANCE PERIOD. For purposes of this Agreement,
the "Severance Period" is defined as a six (6) month period if Executive's
employment is terminated or he resigns prior to February 17, 2005; assuming
Executive's employment continues thereafter, the Severance Period shall increase
by one month on each annual anniversary of Executive's employment, provided that
the Severance Period shall not be greater than a total of twelve (12) months.

                                       6

<PAGE>

      8.    TERMINATION OF SEVERANCE BENEFITS. The Company's obligations, and
Executive's rights to continued Severance Benefits pursuant to Sections 7(a)
through (c) shall cease immediately in the event that during the Severance
Period Executive:

            (a) breaches Executive's obligations under Executive's Proprietary
Information Agreement or this Agreement, including without limitation the
obligations set forth in Section 3; or

            (b) directly or indirectly, whether as an officer, director,
employee, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engages in, becomes financially
interested in, is employed by or has any business connection with any
stand-alone business, or any business residing within a corporation or any other
entity, which develops, licenses, distributes and/or markets software and/or
systems for the management of digital medical images, which could be either
stand-alone systems or integrated into broader systems, including, but not
limited to, Picture Archiving and Communications Systems, image display systems,
image distribution systems and/or image archiving systems, anywhere in the
world; provided, however, that anything above to the contrary notwithstanding,
Executive may (x) own, as a passive investor, securities of any entity, so long
as Executive's direct holdings in any one such corporation do not in the
aggregate constitute more than one percent (1%) of the voting stock of such
corporation, and (y) work for an entity that engages in the prohibited activity
set forth above if: (1) Executive works in a separate and distinct business
department, division or unit that does not directly or indirectly engage in such
prohibited activity; (2) Executive does not provide services for the benefit of
or support the business department, division or unit that engages in such
prohibited activity; and (3) Executive does not directly or indirectly provide
information on the Company's business to the business department, division or
unit that engages in such prohibited activity.

      9.    TERMINATION OBLIGATIONS.

            (a) COOPERATION. Upon termination of Executive's employment,
Executive shall, effective immediately, automatically and without further action
be deemed to no longer hold any offices or directorships with the Company.
Following any termination or resignation of employment, Executive shall
cooperate with the Company in the winding up of pending work on behalf of the
Company and the orderly transfer of work to other employees. Executive shall
also cooperate with the Company in making himself available to the Company or
its counsel in connection with the defense of any action brought by any third
party against the Company that relates to Executive's employment by the Company.

            (b) CONTINUING OBLIGATIONS. Executive acknowledges, understands and
agrees that Executive's obligations under Section 3(d) (Non-Solicitation),
Section 8 (Termination of Severance Benefits), Section 9 (Termination
Obligations) and Section 10

                                       7

<PAGE>

(Arbitration) shall survive the termination of Executive's employment for any
reason and the termination of this Agreement.

      10.   ARBITRATION. Executive and the Company hereby agree that, to the
fullest extent permitted by law, any and all claims or controversies between
them (or between Executive and any present or former officer, director, agent,
or employee of the Company or any parent, subsidiary, or other entity affiliated
with the Company) relating in any manner to the employment or the termination of
employment of Executive shall be resolved by final and binding arbitration.
Except as specifically provided herein, any arbitration proceeding shall be
conducted in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (the "AAA Rules").

      Claims subject to arbitration shall include, without limitation: contract
claims, tort claims, claims relating to compensation and stock options, as well
as claims based on any federal, state, or local law, statute, or regulation,
including but not limited to any claims arising under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the California Fair Employment and Housing Act. However,
claims for unemployment benefits, workers' compensation claims, and claims under
the National Labor Relations Act shall not be subject to arbitration.

      A neutral and impartial arbitrator shall be chosen by mutual agreement of
the parties; however, if the parties are unable to agree upon an arbitrator
within a reasonable period of time, then a neutral and impartial arbitrator
shall be appointed in accordance with the arbitrator nomination and selection
procedure set forth in the AAA Rules. The arbitrator shall prepare a written
decision containing the essential findings and conclusions on which the award is
based so as to ensure meaningful judicial review of the decision. The arbitrator
shall apply the same substantive law, with the same statutes of limitations and
same remedies, that would apply if the claims were brought in a court of law.
The arbitrator shall have the authority to rule on a motion to dismiss and/or
summary judgment by either party, and the arbitrator shall apply the standards
governing such motions under the California Code of Civil Procedure.

      Either the Company or Executive may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit of claim in any way
related to any arbitrable claim, including without limitation any claim as to
the making, existence, validity, or enforceability of the agreement to
arbitrate. Nothing in this Agreement, however, precludes a party from filing an
administrative charge before an agency that has jurisdiction over an arbitrable
claim. Moreover, either party may seek provisional relief pursuant to Section
1281.8 of the California Code of Civil Procedure in a court of competent
jurisdiction for any claim or controversy arising out of or related to the
unauthorized use, disclosure, or misappropriation of the confidential and/or
proprietary information of either party.

                                       8

<PAGE>

      All arbitration hearings under this Agreement shall be conducted in San
Francisco, California, unless otherwise agreed by the parties. The arbitration
provisions of this Arbitration Agreement shall be governed by the Federal
Arbitration Act. In all other respects, this Arbitration Agreement shall be
construed in accordance with the laws of the State of California, without
reference to conflicts of law principles.

      Each party shall pay its own costs and attorney's fees, unless a party
prevails on a statutory claim, and the statute provides that the prevailing
party is entitled to payment of its attorneys' fees. In that case, the
arbitrator may award reasonable attorneys' fees and costs to the prevailing
party as provided by law. The costs and fees of the arbitrator shall be paid by
the Company.

      If any provision of this Agreement shall be held by a court or the
arbitrator to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. The parties' obligations under
this Agreement shall survive the termination of Executive's employment with the
Company and the expiration of this Agreement.

      The Company and Executive understand and agree that this Agreement
contains a full and complete statement of any agreements and understandings
regarding resolution of disputes between the parties, and the parties agree that
this Agreement supersedes all previous agreements, whether written or oral,
express or implied, relating to the subjects covered in this agreement. The
parties also agree that the terms of this Agreement cannot be revoked or
modified except in a written document signed by both Executive and an officer of
the Company.

      THE PARTIES ALSO UNDERSTAND AND AGREE THAT THIS AGREEMENT CONSTITUTES A
WAIVER OF THEIR RIGHT TO A TRIAL BY JURY OF ANY CLAIMS OR CONTROVERSIES COVERED
BY THIS AGREEMENT. THE PARTIES AGREE THAT NONE OF THOSE CLAIMS OR CONTROVERSIES
SHALL BE RESOLVED BY A JURY TRIAL.

      11.   ASSIGNMENT; BINDING EFFECT.

            (a) ASSIGNMENT. Executive's performance hereunder is personal, and
Executive agree that Executive shall have no right to assign and shall not
assign or purport to assign any rights or obligations under this Agreement. This
Agreement may be assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets.

            (b) BINDING EFFECT. Subject to the foregoing restriction on
assignment by Executive, this Agreement shall inure to the benefit of and be
binding upon each of the parties; the affiliates, officers, directors, agents,
successors and assigns of the Company; and Executive's heirs, devisees, spouse,
legal representatives and successors.

                                       9

<PAGE>

      12.   NOTICES. All notices or other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered: (a) by hand; (b) by a nationally recognized overnight courier
service; or (c) by United States first class registered or certified mail,
return receipt requested, to the principal address of the other party, as set
forth below. The date of notice shall be deemed to be the earlier of (i) actual
receipt of notice by any permitted means, or (ii) five business days following
dispatch by overnight delivery service or the United States Mail. Executive
shall be obligated to notify the Company in writing of any change in Executive's
address. Notice of change of address shall be effective only when done in
accordance with this paragraph.

      Company's notice address:

      Stentor, Inc.
      500 Marina Boulevard
      Brisbane, CA 94005

      Executive's notice address:

      Jeffrey Otten
      P.O. Box RR1-Box 4765
      Edgartown, Massachusetts 02539
      (for United States mail)

      18 Wood Duck Way
      Oakbluff, Massachusetts 02557
      (for overnight courier service)

      13.   COMPLETE AGREEMENT. This Agreement, including its exhibits and
Executive's Proprietary Information Agreement, constitute the complete, final
and exclusive embodiment of Executive's employment agreement with the Company.
In entering into this Agreement, neither party is relying upon any promise or
representation, written or oral, on any subject concerning the Company or
concerning Executive's employment with the Company other than those expressly
contained or referenced as applicable herein. This Agreement supersedes that
certain offer letter agreement between Executive and the Company dated January
8, 2004 and, except as stated herein, any other agreements or promises made to
Executive by anyone, whether oral or written. This Agreement may not be amended
or modified except by a written instrument signed by Executive and a duly
authorized officer of the Company. This Agreement will be construed and
interpreted in accordance with the laws of the State of California. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
Any invalid or unenforceable provision shall be modified so as to render valid
and enforceable in a manner consistent with the intent of the parties insofar as
possible. This Agreement may be delivered by telefacsimile and may be

                                       10

<PAGE>

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

      14.   ACKNOWLEDGEMENT. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS HAD THE
OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE
HAS READ AND UNDERSTANDS THIS AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS
LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE'S
OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE
CONTAINED IN THIS AGREEMENT.

STENTOR, INC.                        EXECUTIVE

By: /s/ Davidi Gilo                  /s/ Jeffrey Otten
   -----------------------------     ----------------------------------
   DAVIDI GILO                       JEFFREY OTTEN
   CHAIR, BOARD OF DIRECTORS

                                       11

<PAGE>

<PAGE>

                                    EXHIBIT A

                                RELEASE AGREEMENT

       (TO BE SIGNED ON OR AFTER EXECUTIVE'S EMPLOYMENT TERMINATION DATE)

I, Jeffrey Otten, understand that my employment with Stentor, Inc. (the
"Company") terminated effective ______________________________, 200___ (the
"Separation Date"). The Company has agreed that if I choose to sign, and do not
revoke any part of, this Release Agreement ("Release"), upon the Effective Date
of this Release, the Company will pay me certain severance benefits (the
"Severance Benefits") pursuant to Section 7 of the Executive Employment
Agreement, dated February 17, 2004, between myself and the Company (the
"Agreement") to which this Release is attached. I understand that I am not
entitled to such benefits unless I sign this Release and return it to the
Company and do not revoke this Release on or prior to the Effective Date (as
defined below). I understand that, regardless of whether I sign this Release,
the Company will pay me all of my accrued salary and paid time off through the
Separation Date, to which I am entitled by law.

In consideration for the Severance Benefits I am receiving under the Agreement,
as described therein, except for any rights I have under the Agreement to obtain
the Severance Benefits, I hereby generally and completely release the Company
and its parents, subsidiaries, successors, predecessors and affiliates, and its
and their directors, officers, employees, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns, from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date I sign this Release. This general release
includes, but is not limited to: (a) all claims arising out of or in any way
related to my employment with the Company or the termination of that employment;
(b) all claims related to my compensation or benefits, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (d) all tort claims,
including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (e) all federal, state, and local statutory
claims, including claims for discrimination, harassment, retaliation, attorneys'
fees, or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990 (as amended), the
California Family Rights Act, and the California Fair Employment and Housing Act
(as amended). Notwithstanding the release in the preceding sentence, I shall not
hereby surrender any right I may have to indemnification by the Company pursuant
to the bylaws of the Company or applicable law.

In releasing claims unknown to me at present, I am waiving all rights and
benefits under Section 1542 of the California Civil Code, and any law or legal
principle of similar effect in any jurisdiction:

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

                                       2

<PAGE>

If I am age forty (40) or older on the Separation Date, I further acknowledge
that I am knowingly and voluntarily waiving and releasing any rights I may have
under the federal Age Discrimination in Employment Act (as amended) ("ADEA") and
that the consideration given for the waiver and release in the preceding
paragraphs hereof is in addition to anything of value to which I was already
entitled. I further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (a) my waiver and release do not apply to any rights
or claims that may arise after the date I sign this Release; (b) I have been
advised hereby that I have the right to consult with an attorney prior to
signing this Release; (c) I have twenty-one (21) days to consider this Release
(although I may choose to voluntarily sign it before the end of the
consideration period); (d) I have seven (7) days after I sign this Release to
revoke it; and (e) this Release will not be effective until the date upon which
the revocation period has expired, which will be the eighth day after I sign
this Release, provided that I have returned this Release to the Company by that
time (the "Effective Date ").

If I am under the age of forty (40) on the Separation Date, I acknowledge that
this Release shall become effective on the date that the signed release is
received by the Company (the "Effective Date").

I accept and agree to the terms and conditions of this Release as stated above:

____________________________________  _________________________________________
Jeffrey Otten                         Date

Accepted by:

STENTOR, INC.

By: _______________________________
Name: _____________________________
Title: ____________________________

THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH THEIR LEGAL COUNSEL AND HAVE AVAILED THEMSELVES OF
THAT OPPORTUNITY TO THE EXTENT THEY WISH TO DO SO.

                                       3

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