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                                                                   EXHIBIT 10.24

                                      LEASE

                             ARTICLE I - DEFINITIONS

         1.1      PARTIES: THIS LEASE is made December 17, 2002, between
Landlord and Tenant.

         1.2      DEFINITIONS: For the purposes of this Lease, the following
capitalized terms shall have the meanings, respectively, set forth below:

         "LANDLORD" shall mean BAADER NORTH AMERICAN CORPORATION, a
         Massachusetts corporation.

         "TENANT" shall mean SMARTDISK CORPORATION, a Delaware corporation.

         "BUILDING" shall mean that certain warehouse and office building
         commonly known as 12780 Westlinks Drive, Fort Myers, Florida and
         described in Exhibit A attached as a part of this Lease.

         "PROJECT" shall mean the Building, the land owned by Landlord upon
         which the Building is located, and all other improvements located on
         that land.

         "PREMISES" shall mean the warehouse and office space located in the
         Building as described in Exhibit A.

         "COMMON AREAS" shall mean all areas and facilities outside the Building
         and within the exterior boundary lines of the Project that are provided
         and designated by the Landlord from time to time for the general
         non-exclusive use of Landlord, Tenant and of other tenants of the
         Project and their respective employees, suppliers, shippers, customers
         and invitees, including parking areas, loading and unloading areas,
         trash areas, roadways, sidewalks, driveways and landscaped areas.

         "INDUSTRIAL PARK" shall mean the industrial park in which the Project
         is located and which is commonly known as the "Westlinks Business
         Park."

         "TERM" shall mean a period of eight (8) years beginning on the
         Commencement Date.

         "COMMENCEMENT DATE" shall mean February 1, 2003.

         "ADDITIONAL PERIOD" shall mean five (5) years.

         "BASIC RENTAL" shall mean the Premises Area multiplied by the Annual
         Rate for each Lease Year.

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         "ANNUAL RATE" shall mean the annual rental rate per square foot of
         Premises Area for each Lease Year as shown below:

                  Lease Year 1, $7.78 per square foot per year
                  Lease Year 2, $8.01 per square foot per year
                  Lease Year 3, $8.25 per square foot per year
                  Lease Year 4, $8.50 per square foot per year
                  Lease Year 5, $8.75 per square foot per year
                  Lease Year 6, $9.01 per square foot per year
                  Lease Year 7, $9.28 per square foot per year
                  Lease Year 8, $9.56 per square foot per year

         "PREMISES AREA" shall mean the total square footage of rentable area in
         the Premises which shall be determined in accordance with paragraph
         5.2.

         "BUILDING AREA" shall mean the total square footage of rentable area in
         the Building which Landlord and Tenant agree is 51,665 square feet for
         all purposes under this Lease.

         "TENANT'S SHARE" shall mean the fraction the numerator of which shall
         be the Premises Area and the denominator of which shall be the Building
         Area.

         "SECURITY DEPOSIT" shall mean the sum of $66,015.00

         "PERMITTED USE" shall mean the office operations, light assembly and
         warehousing in connection with the distribution of computer products.

                 ARTICLE II - PREMISES, PARKING AND COMMON AREAS

         2.1      PREMISES: Landlord leases the Premises to Tenant, and Tenant
leases the Premises from Landlord, for the Term, at the rent and on the
provisions and conditions of this Lease. Landlord represents to Tenant that, to
Landlord's actual knowledge, there are no material defects in the electrical,
HVAC or mechanical equipment in use in the Premises as of the date of this
Lease. Except for this representation, Tenant accepts the Premises in their
condition existing as of the Commencement Date or the date that Tenant takes
possession of the Premises, whichever is earlier, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing
and regulating the use of the Premises, and any covenants or restrictions of
record, and accepts this Lease subject thereto and to all matters disclosed
thereby and by any exhibits attached to this Lease. Tenant acknowledges that
neither Landlord nor Landlord's agent has made any representation or warranty as
to the present or future suitability of the Premises for the conduct of Tenant's
business. Notwithstanding the provisions of paragraph 4.3, costs incurred for
repairs to the electrical, HVAC or mechanical equipment of the Project during
the first sixty (60) days of the Term shall not be included in Operating Costs
as defined in paragraph 4.3.

         2.2      VEHICLE PARKING: Tenant shall be entitled to forty-eight (48)
vehicle parking spaces, unreserved and unassigned, on those portions of the
Common Areas located north and east of the Building and designated by Landlord
for parking as shown on Exhibit A-1 attached as a part of this

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Lease. Tenant shall not use more parking spaces than this number. Tenant shall
not use any of the parking spaces located south or east of the Building and
reserved for the use of other tenants of the Building as shown on Exhibit A-1.
These parking spaces shall be used only for parking vehicles no larger than full
size passenger automobiles or pick-up trucks, "Permitted Size Vehicles."
Vehicles other than Permitted Size Vehicles are referred to as "Oversized
Vehicles."

         2.3      COMMON AREAS - TENANT'S RIGHTS. Landlord grants to Tenant, for
the benefit of Tenant and its employees, suppliers, shippers, customers and
invitees, the non-exclusive right to use the Common Areas as they exist from
time to time, during the Term, in common with others entitled to such use, and
subject to any rights, powers, and privileges reserved by Landlord under this
Lease or under any rules and regulations or restrictions governing the use of
the Project. Under no circumstances shall the right to use the Common Areas be
deemed to include the right to store any property, temporarily or permanently,
in the Common Areas. Any such storage shall be permitted only by the prior
written consent of Landlord, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Tenant, which cost shall be
immediately payable to Landlord on demand.

         2.4      COMMON AREAS - RULES AND REGULATIONS. Provided they do not
interfere with Tenant's access to the Premises or unreasonably interfere with
any other rights granted to Tenant under this Lease, Landlord or such other
person(s) as Landlord may appoint shall have the exclusive control and
management of the Common Areas and shall have the right from time to time to
establish, modify, amend and enforce reasonable rules and regulations with
respect to the Common Areas. Tenant shall abide by and conform to all such rules
and regulations. Tenant shall cause its employees, suppliers, shippers,
customers, and invitees to so abide and conform. Landlord shall not be
responsible to Tenant for the non-compliance with the rules and regulations by
other Tenants of the Project.

         2.5      COMMON AREAS - CHANGES. Landlord shall have the right, in
Landlord's sole discretion, from time to time:

         (a)      To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas and walkways;

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

         (c)      To designate other land outside the boundaries of the Project
to be a part of the Common Areas:

         (d)      To add additional buildings and improvements to the Common
Areas;

         (e)      To use the Common  Areas  while  engaged in making  additional
improvements, repairs or alterations to all or any portion of the Project;

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         (f)      To do and perform such other acts and make sure other changes
in, to or with respect to the Common Areas and Project as Landlord may, in the
exercise of sound business judgment, deem to be appropriate.

Landlord shall at all times provide the parking facilities required by
applicable law and in no event shall the number of parking spaces that Tenant is
entitled to under paragraph 2.2 be reduced. Landlord shall not change the Common
Areas in any way which would materially adversely affect Tenant's ability to use
the Premises for its business purposes.

                            ARTICLE III - LEASE TERM

         3.1      LEASE YEAR: "Lease Year" shall mean a period of twelve (12)
successive calendar months beginning on the Commencement Date or an annual
anniversary of the Commencement Date.

         3.2      COMMENCEMENT  OF TERM: Subject to the other  provisions of
this Lease, the Term shall commence on the Commencement Date.

         3.3      OPTION TO EXTEND TERM: Tenant shall have the option to extend
the Term for the Additional Period at the Basic Rental specified in paragraph
4.1 and otherwise on all of the provisions and conditions of this Lease except
that there shall be no further option to extend the Term. Tenant shall exercise
this option, if at all by written notice to Landlord given at least six (6)
months prior to the end of the initial Term.

                               ARTICLE IV - RENT

         4.1      BASIC RENTAL: Tenant shall pay Landlord the annual Basic
Rental in equal monthly installments in advance on the first day of each
calendar month of each Lease Year throughout the Term. If the Term is extended
pursuant to the provisions of paragraph 3.3, the Annual Rate for each of the
Lease Years during the extended Term shall be the then current market annual
rental rate for comparable premises in the metropolitan Fort Myers area as
determined by Landlord, but in no event less than the effective Annual Rate of
the Basic Rental last paid by Tenant during the initial Term.

         4.2      RENTAL TAX: Tenant shall pay any sales tax, gross receipts tax
or other tax imposed upon the privilege of renting space under this Lease, or
upon the rent called for in this Lease or the privilege of conducting business
activity by Tenant. If any such tax is imposed upon Landlord, then Tenant will
pay, as additional rent, a sum equal to such tax or charge, but nothing in this
paragraph 4.2 shall be construed to require Tenant to pay any part of any real
property ad valorem taxes imposed upon the Premises (except as a part of
Operating Costs) or any part of any income tax imposed upon Landlord.

         4.3      RENTAL ADJUSTMENT: In addition to the Basic Rental, Tenant
shall, for each Lease Year, pay to Landlord as additional rent Tenant's Share of
the Operating Costs of the Project. "Operating Costs" shall be divided into two
categories, "Uncontrollable Costs" and Controllable Costs," and means Landlord's
operating expenses that are reasonable, actual and necessary, out-of-

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pocket (except Landlord may use its normal accrual method of accounting),
obtained at competitive prices, and that are directly attributable to the
operation, maintenance, management, and repair of the Project, as determined
under generally accepted accounting principles consistently applied, including,
but not limited to, the following:

(A) "Uncontrollable Costs" means the following:

         (1)      Premiums and other charges incurred by Landlord for insurance
on the Project and for employees specified in paragraph B(1) below;

         (2)      All real estate taxes and assessments;

         (3)      Assessments made by private owners' associations or pursuant
to any covenants or restrictions applicable to the Project;

         (4)      Costs incurred for the telephone lines for the fire alarm
systems;

         (5)      Payroll taxes, federal taxes, state and local unemployment
taxes, and social security taxes paid for the employees specified in paragraph
B(1) below;

         (6)      Sales, use, and excise taxes on goods and services purchased
by Landlord; and

         (7)      License, permit, and inspection fees.

(B) "Controllable Costs" means the following:

         (1)      Salaries, and other compensation; including payroll taxes,
vacation, holiday, and other paid absences; and welfare, retirement, and other
fringe benefits; that is paid to employees, independent contractors, or agents
of Landlord engaged in the operation, repair, management, or maintenance of the
Property;

         (2)      Costs of repairs and maintenance of the Project and the cost
of necessary supplies, tools, materials, and equipment for repairs and
maintenance, that under generally accepted accounting principles would not be
capitalized;

         (3)      Costs incurred for inspection and servicing, including all
outside maintenance contracts necessary or proper for the maintenance of the
Project, such as janitorial and window cleaning, rubbish removal, exterminating,
water treatment, electrical, plumbing, and mechanical equipment, and the cost of
materials, tools, supplies, and equipment used for inspection and servicing;

         (4)      Costs incurred for monitoring the fire alarm systems and for
any utility services not covered in paragraph 8.1;

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         (5)      An amount equal to five percent (5%) of the total Basic Rental
for the Building for the Lease Year in question to compensate Landlord for
general overhead and administrative expense and to reimburse Landlord of
management fees to any person or entity other than Landlord;

         (6)      The annual amortization over its useful life (not less than
five (5) years) with a reasonable salvage value on a straight-line basis of a
cost that is not considered a current expense, but should be capitalized, under
generally accepted accounting principles consistently applied, and which is
incurred by Landlord for (a) any replacement of any aspect of the Project
existing on the Commencement Date including but not limited to the plumbing,
electrical and HVAC equipment, the roof, the lawn ground, shrubbery and
landscaping, and the pavement, or (b) for any new equipment or capital
improvement required by governmental authority or which results in a savings of
labor or other costs; and

         (7)      Other costs reasonably necessary to operate, repair, manage,
and maintain the Project in a first class manner and condition.

Operating Costs shall not include the following: costs for capital improvements
to the Project except as provided in (B)(6) above, costs of repairs or other
work occasioned by fire, windstorm or other insured casualty, expenses incurred
in leasing or procuring new leases (e.g. for lease commissions, advertising
expenses and expenses of renovating space for new tenants), legal expenses in
enforcing any lease, interest or principal amortization payments on any
mortgage, and depreciation. Landlord may estimate Tenant's Share of the
Operating Costs of the Project and require Tenant to pay the same in one or more
installments (but not more often than monthly) either during or after the Lease
Year for which it is payable. When the actual amount of Operating Costs for a
particular Lease Year is known to Landlord, it shall notify Tenant of the amount
of Tenant's Share of the actual Operating Costs. If the amount of Tenant's Share
of the actual Operating Costs for a Lease Year exceeds the aggregate of the
installments of Tenant's Share of estimated Operating Costs, Tenant shall
promptly pay Landlord the balance due. If, on the other hand, the installments
paid by Tenant for a particular Lease Year exceed Tenant's Share of the actual
Operating Costs for that Lease Year, Landlord shall apply the excess to sums
then and thereafter owing from Tenant to it. Notwithstanding the foregoing,
Tenant's Share of Controllable Costs for any Lease Year after the first Lease
Year shall not exceed the "Cap Percentage" (defined below) of the sum of the
total Controllable Costs for the first Lease Year plus costs incurred in
subsequent Lease Years for emergencies, items requested by Tenant and any
category of cost not incurred during the first Lease Year. The "Cap Percentage"
for each Lease Year after the first Lease Year shall be as follows:

                  Lease Year 2, 110.00%
                  Lease Year 3, 121.00%
                  Lease Year 4, 131.10%
                  Lease Year 5, 146.41%
                  Lease Year 6, 161.05%
                  Lease Year 7, 177.16%
                  Lease Year 8, 194.87%
                  Lease Year 9(first Lease Year of the Additional Period),
                  214.36%
                  Lease Year 10 (second Lease Year of the Additional Period),
                  235.79%
                  Lease Year 11(third Lease Year of the Additional Period),
                  259.37%

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                  Lease Year 12 (fourth Lease Year of the Additional Period),
                  285.31%
                  Lease Year 13 (fifth Lease Year of the Additional Period),
                  313.84%

         4.4      PAYMENT: All such rental installments shall be paid to
Landlord at its address or to such other party or other address as Landlord may
designate in writing from time to time, without demand and without deduction,
set off or counterclaim.

         4.5      DELINQUENT RENTALS: Notwithstanding anything herein to the
contrary, and without limitation or waiver of Landlord's other rights and
remedies contained in this Lease or otherwise available at law or in equity, if
any Basic Rental or additional rental payments or any other payment or other
charge due from Tenant (collectively "Delinquent Rentals") are not paid when
due, Tenant shall (a) pay Landlord a late charge of five percent (5%) of all
such Delinquent Rentals and (b) pay interest at the rate of one and one-half
percent (1.5%) per month, compounded quarterly, on all Delinquent Rentals.

                            ARTICLE V - CONSTRUCTION

         5.1      CONSTRUCTION: On or before March 1, 2003, Tenant shall
construct and complete the demising wall separating the Premises from the rest
of the Building and other improvements (the Tenant's Work") in accordance with
the parameters set forth in Exhibit B attached as a part of this Lease. Prior to
commencing the Tenant's Work, Tenant shall obtain Landlord's written approval of
the plans and specification for the Tenant's Work. The following provisions
shall apply to the construction of the Tenant's Work:

         (a) All work involved shall be carried out by contractors licensed in
             Florida and approved by Landlord.

         (b) All improvements shall be made in a workmanlike manner utilizing
             good quality materials.

         (c) The improvements shall be constructed in strict compliance with the
             approved plans and specifications. If there are any changes
             requested by, or on behalf of, Tenant from the work as reflected in
             the approved plans and specifications, each such change must
             receive the prior written approval of Landlord, and Tenant shall
             bear the cost of all changes.

         (d) Tenant shall, at its expense, prior to performing any construction
             work, promptly obtain the following: instruments in form and
             substance satisfactory to Landlord under which each contractor,
             subcontractor and materialman agrees (irrespective of any default
             or failure to pay by Tenant or any other party) not to file any
             mechanic's, materialman's or other liens against the Project or the
             Building and providing that they and each of them will look solely
             to the defaulting party for satisfaction in the event of such
             default. Tenant shall not permit any mechanic's liens to be filed
             against all or portion of the Project on account of any work.

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         (e) From time to time, during the course of construction, Tenant shall
             obtain partial and, where appropriate, full lien waivers from
             anyone performing work or providing materials and such other
             information as Landlord shall reasonably request in order to insure
             compliance with the provisions of this lease.

The improvements to the Premises shall become part of the Premises and the
property of Landlord, subject to the provisions of this Lease.

         5.2      DETERMINATION OF PREMISES AREA: After completion of the
Tenant's Work, Landlord shall hire a licensed architect to determine the
Premises Area using the definition of rentable area in the BOMA standards. After
that determination is made, Landlord shall notify Tenant of the Premises Area,
the amount of the Basic Rental and the Tenant's Share. Until that determination
is made, the Basic Rental and Tenant's Share shall be calculated using 27,000
square feet for the Premises Area. If any amount Tenant owes under this Lease
exceeds the amount Tenant paid using the 27,000 square foot estimate for the
Premises Area, Tenant shall promptly pay Landlord the balance due. If, on the
other hand, the amount paid by Tenant exceeds the amount calculated using the
actual Premises Area, Landlord shall apply the excess to sums then and
thereafter owing from Tenant to it.

                      ARTICLE VI - ENVIRONMENTAL COVENANTS

         6.1      ENVIRONMENTAL: Tenant shall, at its sole cost and expense,
comply with all federal, state, and local laws, regulations and other
requirements pertaining to all environmental matters, and specifically with all
such legal requirement pertaining to hazardous material. Tenant shall not,
without the prior written consent of Landlord in each instance, cause or allow
hazardous, toxic and regulated materials or substances ("hazardous materials")
to be stored, to be brought on or in, to, to be used about or to be released on
or from the Premises. If the presence of hazardous material, stored, brought
onto or used or released about the Premises by Tenant, or anyone acting by,
through or for Tenant, results in alleged contamination, or if any alleged
contamination by hazardous material otherwise occurs for which Tenant may be
legally liable to Landlord for damages resulting therefrom or remediation
thereof, then Tenant, and all persons using or occupying any portions of the
Premises by through or for Tenant, shall and hereby agrees to indemnify, defend,
and hold Landlord harmless from any and all claims, damages, penalties, costs,
losses and liabilities (including diminution of value of the Premises) resulting
therefrom.

         Notwithstanding the foregoing, Tenant shall be allowed to store and use
in the ordinary course of its business, and in such quantities, using such
containers, and utilizing such methods as is reasonable under the circumstances,
those materials listed in Exhibit C attached as a part of this Lease.

         If any hazardous materials are released by Tenant, or anyone acting by,
through or for Tenant:

         (a) Tenant shall immediately notify applicable governmental agencies
             having jurisdiction of the occurrence of such release of hazardous
             materials in accordance with applicable environmental law;

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         (b) Tenant shall immediately notify Landlord of the occurrence of such
             release of hazardous materials.

         (c) Tenant shall immediately commence appropriate action required by
             environmental law and approved in writing by Landlord to conduct
             all cleanup action in accordance with applicable environmental law,
             all at Tenant's sole cost and expense.

         (d) Landlord will protect and defend Tenant against any attempt to
             impose remediation duties against Tenant for environmental law
             violations arising solely from environmental conditions which
             existed at the Premises prior to the Term, provided Tenant gives
             Landlord prompt written notice of any inquiry, demand or similar
             communication it receives from any governmental authority or any
             other entity in respect thereof, and provided Tenant (a) allows
             Landlord to assume and conduct Tenant's defense, and (b) fully
             cooperates in good faith with such defense.

                         ARTICLE VII - SECURITY DEPOSIT

         7.1      SECURITY DEPOSIT: Concurrent with the delivery of this Lease
to Landlord, and as a condition precedent to Landlord's obligations hereunder,
Tenant has deposited the Security Deposit with Landlord, which shall be held as
security for the payment and performance by Tenant of all of its obligations and
agreements under this Lease and may not be utilized in the payment of any
installment of rental without Landlord's written consent. The Security Deposit
shall not bear interest and nothing herein shall be deemed to require Landlord
to segregate such funds, or to not commingle the same with other funds it may
have.

         If Tenant is in default at any time in any of the provisions of this
Lease, and all cure and grace periods with respect to such default shall have
expired, Landlord may (but shall not be obligated to) use such Security Deposit
or any portion thereof to cure Tenant's default or to compensate Landlord for
all damage sustained by Landlord resulting from Tenant's default. Tenant shall
immediately upon demand pay to Landlord a sum equal to the portion of the
Security Deposit expended or applied by Landlord as herein provided so as to
maintain the security deposit in the amount initially deposited with Landlord.

         7.2      REPAYMENT: After expiration of the Term, Landlord shall
(provided that Tenant is not then in default of the provisions hereof) return
and pay back such Security Deposit to Tenant, less any portion thereof that
Landlord shall have used to make good any default by Tenant with respect to any
of Tenant's obligations and agreements contained in this Lease. Landlord may,
however, deduct and withhold a sum equal to Tenant's prorated share of Operating
Costs for the operating period in which the Term expires, as reasonably
estimated by Landlord, to secure payment of Tenant's prorated share of such
Operating Costs for such operating period.

                      ARTICLE VIII - SERVICES AND UTILITIES

         8.1      UTILITIES: Landlord shall furnish electric, water and sewer
service for the reasonable use and occupancy of the Premises and the Common
Areas. Tenant shall reimburse Landlord for the costs of these utilities in the
same proportion that the Premises Area bears to the total area in the

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Building leased to and occupied by Tenant and other tenants from time to time.
If Tenant or any other tenant of the Building uses more than its prorata share
of any utility, Landlord shall adjust the calculation of Tenant's share of the
cost of that utility to reflect the disproportionate usage as estimated by
Landlord. Landlord shall use the costs of utilities incurred while Tenant is the
sole user of the Building as a guide in making these adjustments if Tenant's
usage during that period is comparable to its usage during later periods.
Landlord shall notify Tenant periodically (but not more frequently than monthly)
of the amount of Tenant's share of the costs. Tenant shall pay its share, as
additional rent, within ten (10) days after each notice. Tenant may, at its
expense, provide a submeter for any of the utility services for the Premises, in
which case Tenant's share of the cost of the submetered utility service shall be
determined based on the submeter readings. Tenant may, at its expense, provide a
separate meter for any of the utility services to the Premises, in which case
Tenant shall obtain the separately metered service in its own name and account
and pay for the service (including any deposits and/or connection charges).

         8.2      TELEPHONE AND ALARM SERVICE: Tenant may use Landlord's
existing telephone system and fire alarm system installed in the Building.
Tenant shall obtain telephone and alarm services in its own name and account and
pay for these services (including any deposits and/or connection charges).
Tenant accepts the telephone system and alarm system in existing condition, "as
is". Tenant shall maintain the telephone system and alarm system in good
condition and return them to Landlord upon termination of the Term in good
condition subject to normal wear and tear.

         8.3      SECURITY: Landlord shall have no obligation whatsoever to
provide guard service or other security measures for the benefit of the Premises
or the Project. Tenant assumes all responsibility for the protection of Tenant,
its agents and invitees and the property of Tenant and of Tenant's agents and
invitees from acts of third parties.

         8.4      INTERRUPTION: No diminution or abatement of rent or other
compensation shall or will be claimed by Tenant as a result of, nor shall this
Lease or any of the obligations of Tenant be affected or reduced by reason of,
any interruption, curtailment, or suspension of utilities or services.

               ARTICLE IX - REPAIRS, ALTERATIONS, RECONSTRUCTIONS

         9.1      LANDLORD'S REPAIRS: Landlord shall maintain the following in
good condition and repair throughout the Term: the Common Areas and the
foundation, roof, exterior walls and HVAC system of the Building, the portion of
the plumbing and electrical system of the Building which is outside of the
Premises. Nothing in this Lease shall be construed as requiring Landlord to
repair any damage arising from the negligence of the Tenant or misuse of the
Premises by Tenant, or to repair any property or improvements installed by the
Tenant or glass in windows or doors. Landlord shall be under no obligation and
shall not be liable for any failure to make any repairs until and unless Tenant
notifies Landlord, in writing, of the necessity therefor, in which event
Landlord shall have a reasonable time thereafter to make such repairs. Landlord
represents that Tenant may contact Landlord with respect to needed repairs
twenty-four hours a day and seven days a week using the contact that Landlord
shall identify to Tenant from time to time. In case of emergency, Tenant's
initial notice of a needed repair may be oral (confirmed in writing as soon as
reasonably possible) and Landlord shall use its best efforts to perform
emergency repairs. In all other cases, Landlord shall respond to Tenant's repair
notification promptly and undertake and complete the needed repair

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work cost effectively, diligently and expeditiously. Landlord's costs incurred
pursuant to this paragraph 9.1 shall be reasonable, actual and necessary, and
obtained at competitive prices. If Landlord fails to perform its obligations
under this paragraph 9.1, Tenant may elect to perform the needed repairs. If
Tenant so elects, Tenant shall notify Landlord of Tenant's election and
undertake and complete the needed repair work cost effectively, diligently and
expeditiously. Landlord shall reimburse Tenant for the balance of the reasonable
cost of repairs performed by Tenant pursuant to this paragraph 9.1 after
deducting Tenant's Share of the cost.

         9.2      TENANT'S MAINTENANCE AND REPAIRS: Tenant will keep the
following in good repair and in clean, safe and sanitary condition throughout
the Term: the portion of the plumbing and electrical system of the Building
which is inside the Premises, the interior and loading platforms of the Premises
and the windows and doors of the Premises. At the expiration or other
termination of the Term, Tenant shall surrender the same broom-clean and in the
same order and condition in which they were on the commencement of the Term,
ordinary wear and tear excepted. Tenant shall remove all trash, garbage and
debris from the Premises and from other areas utilized by it or by those with
whom Tenant transacts business, and shall deposit the same not less than twice
daily in a receptacle for such purpose at such location and of a type as may be
approved by Landlord.

         9.3      TENANT'S ALTERATIONS: Tenant will not make or permit to be
made any alterations, additions or improvements in or to the Premises without
the prior written consent of Landlord. Tenant shall give Landlord assurances
satisfactory to it that any such work will not result in mechanics' or
materialmen's lien being filed against the Premises, Building, or Project, and
will fully indemnify, defend and save Landlord harmless from and against any and
all loss, cost, damage, liability or expense arising from the filing of any such
lien. If Tenant is not in default in the performance of any of its obligations
hereunder, it shall have the right to remove, prior to the expiration or
termination hereof, all furniture, furnishings or equipment installed at its
expense, which are moveable, provided that if the same are not removed by Tenant
prior to the expiration of the Term, the same shall become the property of
Landlord and shall be surrendered with the Premises as a part thereof.

         9.4      DESTRUCTION OF PREMISES: If, at any time during the Term, all
or any portion of the Building is damaged or destroyed, then Landlord shall have
the right to terminate this Lease by written notice to Tenant, in which event,
the proceeds of insurance applicable to the Building shall be and become the
sole and absolute property of Landlord.. If Landlord does not elect to terminate
this Lease, then Landlord shall repair, rebuild or restore the Building at least
to the condition existing immediately prior to the damage or destruction. The
work of restoration shall be in full compliance with all applicable laws and
regulations and governmental requirements. Notwithstanding anything herein to
the contrary, if the amount of insurance proceeds collected by Landlord are not
sufficient to complete any such restoration or rebuilding, Landlord shall have
the option, by notice in writing to Tenant, to terminate this Lease.

         9.5      RENTAL ABATEMENT: During any such period that such damage or
destruction is such as to render the use of the Premises untenantable, the rents
herein provided shall abate. In the event that the Building can be used
reasonably for the operation of Tenant's business, during the time required for
such restoration or repair, Tenant shall be entitled to a reasonable diminution
of the

                                       11
<PAGE>
Basic Rental according to the portion of the Premises rendered unusable taking
into consideration the time and extent of interference with the usual conduct of
Tenant's business.

                                 ARTICLE X - USE

         10.1     USE: Tenant's use of the Premises and the Common Areas and
other facilities of the Project shall be for the Permitted Use and only such
other uses as may be approved in writing by Landlord. Tenant will not allow the
occupancy and/or use of the Premises, nor the Common Areas nor other facilities
of the Project, for any purpose other than the Permitted Use without the prior
written consent of Landlord. Subject to the rules and regulations described
below, all Common Areas shall be available for the nonexclusive use by Tenant
and its employees, guests and invitees in common with those of other tenants in
the Project, and the Project's maintenance and management personnel. Throughout
the Term, Tenant shall have at least some full time employees at the Premises
during business hours.

         10.2     TENANT'S COMPLIANCE WITH LAW: Tenant shall, at its expense,
comply with any and all laws, ordinances, rules, regulations and requirements of
all governmental authorities having jurisdiction over the Premises or the
business operations of Tenant and any recorded covenants and restrictions
applicable to the Project, regardless of when they become effective, including,
without limitation, all applicable federal, state and local laws, regulations
and requirements pertaining to air and water quality, hazardous and/or toxic
materials, waste disposal, air emissions and other environmental matters, all
zoning and other land use matters, and with any direction of any public
official, pursuant to law, which shall impose any duty upon Tenant or Landlord
with respect to the use or occupation of the Premises. The recorded covenants
and restrictions applicable to the Project include, but are not limited to, that
certain April 29, 1994 Amended and Restated Declaration of Covenants and
Restrictions for Westlinks Business Park. Landlord has furnished Tenant a copy
of this Declaration. Tenant acknowledges receipt of it.

         10.3     RULES AND REGULATIONS: Provided that they do not in any way
materially adversely affect Tenant's ability to use the Premises for its
business purposes, interfere with Tenant's access to the Premises or
unreasonably interfere with any other rights granted to Tenant under this Lease,
Landlord may establish, modify, supplement or amend rules and regulations from
time to time governing the Project and the tenants in the Project, which may
include, without limitation, provisions for the use of Common Areas, the control
and regulation of vehicular and pedestrian traffic, the control and regulation
of customer, employee, visitor and other parking, the maintenance of clear areas
in front of and by any loading platform of the Premises for the convenience of
all persons as a passageway, and for the use of any common loading/unloading
dock. Tenant shall abide by these rules and regulations. All such rules and
regulations, as well as modifications, amendments or supplements thereto, shall
be applicable to all tenants of the Building. Tenant covenants that each and all
of such rules and regulations shall be faithfully observed by Tenant, its
employees, agents, contractors, guests and invitees.

                ARTICLE XI - CONDEMNATION OR RESTRICTION ON USE

         11.1     DEFINITION OF CONDEMNATION: "Condemnation" means the taking
of property under the power of eminent domain or a voluntary sale by Landlord to
any public body or agency having

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<PAGE>
the power of eminent domain, either under a threat of condemnation or while
condemnation proceedings are pending.

         11.2     TERMINATION: If all or any portion of the Project is taken
through Condemnation, then Landlord, at its option, may terminate this Lease as
of the date of taking upon giving Tenant notice of such election within thirty
(30) days after the taking. In the event of such termination, both parties shall
be released from any liability thereafter accruing hereunder and the rent shall
be prorated as of the date of taking of the part taken and as of the date of
termination as to the remaining portion.

         11.3     RESTORATION: If Landlord does not elect to terminate this
Lease, then Landlord shall at its own cost and expense restore the Premises and
the Building to a complete unit of like character and quality as existed prior
to the Condemnation, and thereafter all charges and items calculated based on
the Premises Area and Building Area shall be adjusted to reflect the rentable
area of the Premises and the Building lost due to the Condemnation. Landlord
shall be entitled to receive the total award or compensation in the Condemnation
proceedings. During the period of reconstruction, rent payable hereunder shall
be adjusted to such amount as shall be just and equitable in view of Tenant's
use of the Premises.

         11.4     NOTICE OF CONDEMNATION: Promptly after it receives notice of
the intention of any such authority to appropriate or take all or any portion of
the Project, Landlord shall give Tenant notice thereof in writing.

         11.5     ALLOCATION OF AWARD: All compensation and damage awarded for
the taking of all or portion of the Project shall belong to and be the sole
property of Landlord, and Tenant shall not have any claim or be entitled to any
award for diminution in value of its leasehold or for the value of any unexpired
portion of the Term.

                     ARTICLE XII - INDEMNITY AND INSURANCE

         12.1     INDEMNIFICATION: Landlord shall indemnify, defend and save
Tenant harmless from and against any and all loss, liability, cost and expense
whatsoever by reason of damage or injury to person or property caused by
Landlord or by its employees, agents, contractors, invitees or anyone acting by
or for it or at its direction, except from damage or injury arising out of any
act Landlord is required to perform or otherwise undertakes to cure a default by
Tenant. Tenant shall indemnify, defend and save Landlord harmless from and
against any and all loss, liability, cost and expense whatsoever by reason of
damage or injury to person or property caused by Tenant or by its employees,
agents, contractors, invitees or anyone acting by or for it or at its direction,
or arising out of Tenant's use of the Premises.

         12.2     RELEASE FROM LIABILITY AND WAIVER OF INSUROR'S SUBROGATION
RIGHTS: Landlord and Tenant waive any rights each may have against the other on
account of any loss or damage occasioned to Landlord or Tenant, as the case may
be, their respective properties, or the Building, arising from any risk,
including the negligent conduct of the other, which either is covered by any
insurance carried by Landlord or Tenant or would be covered under special broad
form coverage insurance (formerly known as "all risk insurance"). Landlord and
Tenant shall each have their

                                       13
<PAGE>
respective insurance companies consent to this mutual release and waive any
right of subrogation that the insurers may have against Landlord or Tenant, as
the case may be.

         12.3     TENANT'S INSURANCE: Tenant shall carry and maintain during
the entire Term, at its sole expense, insurance on the equipment, fixtures,
properties and inventory of Tenant kept or maintained in the Premises, the
Building or elsewhere in the Project, all in form and content satisfactory to
Landlord. Because Tenant is so obligated to fully insure all of its property and
inventory, Landlord shall not be liable to Tenant for damage, destruction, loss,
disappearance or theft of any part of Tenant's property located within the
Premises or elsewhere in the Project from any cause whatsoever, and Tenant fully
and completely assumes and agrees to bear the risks thereof. Without in any way
limiting the foregoing, Tenant shall bear the risk of damage to or loss or
destruction of any of Tenant's property or inventory in any way arising or
resulting from the failure or malfunction of any systems of the Building,
improvements, trade fixtures or equipment in, on or about the Building, whether
originally constructed, installed or placed in the Project by Landlord or
Tenant. Further, Tenant shall carry and maintain, during the entire Term, at its
sole cost and expense comprehensive general liability insurance policies in form
and content satisfactory to Landlord covering Tenant's indemnity, naming
Landlord as an additional insured, in the amount of at least $2,000,000.00
single limit coverage for personal injury (including death) and/or damage to
property per any one occurrence, with cross liability endorsements. Tenant shall
keep Landlord constantly furnished with certificates of such insurance, showing
Landlord's coverage and showing such policy(ies) to be non-cancelable without
thirty days' prior written notice to Landlord.

         12.4     LANDLORD'S INSURANCE: All insurance carried by Landlord with
respect to liability, casualty and property damage shall be in such amounts and
with such coverages as Landlord's lender may require or otherwise as may be
commercially reasonable at the time. The premiums for Landlord's insurance shall
be included in the Operating Costs.

                          ARTICLE XIII - SUBORDINATION

         13.1     SUBORDINATION: This Lease is and shall be subject to and
subordinate in law and in equity to any existing or future mortgage placed by
Landlord on all or any portion of the Project. The term "mortgage" as used
herein means any mortgage, deed of trust, pledge, assignment, sale/leaseback,
ground lease or other transfer of all or any portion of the Project made as
security for the performance of an obligation of Landlord or an overlord of
Landlord, and all amendments, renewals, modifications, consolidations,
assignments and extensions thereof. Tenant shall, at the election of the holder
of any such mortgage, attorn to such holder. Tenant shall upon demand execute,
acknowledge and deliver such instruments confirming such subordination, such
instruments affirming the status and good standing of this Lease, and such
instruments of attornment as shall be reasonably requested by any such holder or
prospective lender. Neither foreclosure of any such mortgage, nor the
institution of any suit, action or other proceedings against Landlord, or any
foreclosure or dispossession proceedings brought by the holder of any such
mortgage to recover possession of the Premises, Building or Land, shall by
operation of law or otherwise, except at the express election of the holder,
result in the cancellation or termination of this Lease or the obligations of
Tenant hereunder, and upon the request of the holder of any such mortgage,
Tenant shall execute, acknowledge and deliver an instrument in writing
satisfactory to such party or parties or to the purchaser of the mortgaged
premises in foreclosure or otherwise whereby Tenant fully

                                       14
<PAGE>
attorns to such successor in interest. Notwithstanding the foregoing, Tenant may
condition its subordination upon the receipt from the holder of the mortgage of
the lender's agreement not to disturb Tenant in its possession of the Premises
pursuant to this Lease so long as Tenant pays and performs its obligations under
this Lease. This agreement shall be in the form that is generally utilized by
the lender in the ordinary course of its business.

         The failure or refusal of Tenant to execute such instruments confirming
subordination, such instruments affirming the status and good standing of this
Lease, and/or such instruments of attornment as may be reasonably requested by
Landlord for or on behalf of a holder of a mortgage, a prospective lender, a
prospective purchaser, or other party with a bona fide interest therein, shall
constitute a default under the provisions of this Lease enabling Landlord to
exercise one or more of its remedies in respect of such default.

                     ARTICLE XIV - ASSIGNMENT AND SUBLETTING

         14.1     ASSIGNMENT AND SUBLETTING: Tenant shall not assign its
interest in this Lease, sublet and/or grant any license and concession in all or
any portion of the Premises without first obtaining the prior written consent of
Landlord. No consent by Landlord shall be deemed to release Tenant from its
primary obligations hereunder, unless specifically set forth in Landlord's
written consent. Landlord shall be entitled to, and Tenant shall promptly remit
to Landlord, any profit which may inure to the benefit of Tenant as a result of
any subletting of all or any portion of the Premises or any assignment or other
transfer of this Lease. For the purposes of this Article XIV, if Tenant is a
corporation, partnership or association, a transfer of the shares of stock,
partnership interest or other evidence of ownership in Tenant so as to change
the effective control of Tenant from that existing as of the date of this Lease
shall be deemed to be an assignment or other transfer of this Lease.

                        ARTICLE XV - DEFAULT AND REMEDIES

         15.1     TERMINATION FOR TENANT'S INSOLVENCY OR DISSOLUTION: This
Lease shall be deemed repudiated and breached by Tenant if, during the Term:

         (a) A petition to have Tenant adjudicated a bankrupt or a petition for
             reorganization or arrangement under any of the laws of the United
             States relating to bankruptcy is filed by Tenant, or against
             Tenant, and, if so filed against Tenant, not dismissed within 120
             days from the date of filing;

         (b) The assets of Tenant or the business conducted by Tenant on the
             Premises is assumed by any trustee or other person pursuant to any
             judicial proceedings;

         (c) Tenant becomes insolvent or makes an assignment for the benefit of
             creditors;

         (d) Tenant commits any act of bankruptcy; or

                                       15
<PAGE>
         (e) Any corporate Tenant or assignee or successor in interest of Tenant
             commences proceedings for winding up its business affairs.

Tenant expressly agrees that Landlord may at its election terminate this Lease
in the event of the occurrence of any of the events herein above described by
giving written notice to Tenant, and when so terminated, Landlord may reenter
the Premises, and the leasehold interest created by this Lease shall not be
treated as an asset of Tenant's estate. It is further expressly understood and
agreed that Landlord shall be entitled upon such reentry, notwithstanding any
other provisions of this Lease, to exercise such rights and remedies and to
recover from Tenant as damages for loss of the bargain resulting from such
breach, and not as a penalty, such amounts as are specified in paragraphs 15.3
and 15.4, unless any statute or rule or law governing the proceeding in which
such damages are to be proved shall lawfully limit the amount of such claims
capable of being so proved, in which case Landlord shall be entitled to recover
as and for liquidated damages the maximum amount which may be held under any
such statute or rule or law.

         15.2     DEFAULT: Landlord may, at its option and without limiting
Landlord in the exercise of any other right or remedy it may have on account of
a default or breach by Tenant, exercise the rights and remedies specified in
Section 15.03 if:

         (a) Tenant defaults in the payment of any money agreed to be paid by
             Tenant to Landlord for rent or Operating Costs, or to be paid for
             taxes, utilities, or insurance, or for any other purpose under this
             Lease, and if such default continues for five (5) days after
             written notice to Tenant by Landlord. The payment of any sum to
             cure any default and the payment of any money agreed to be paid by
             Tenant for rent, shall be accompanied by interest at the Default
             Rate from the date the payment was due until the date paid.

         (b) Tenant abandons the Premises.

         (c) Tenant defaults in the performance of any other of its agreements,
             conditions, or covenants under this Lease and such default
             continues for thirty (30) days or more after written notice to
             Tenant by Landlord.

         15.3     REMEDIES: On any breach or default, Landlord may exercise any
of the following rights at any time thereafter, with or without notice or
demand, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default:

         (a) Immediately re-enter and remove all persons and property from the
             Premises, storing the personal property in a public warehouse or
             elsewhere at the cost of, for the account of, and at the risk of,
             Tenant. In the event of any such re-entry by Landlord, Landlord may
             make any repairs, additions, or improvements in, to or upon the
             Premises which may be necessary or convenient. In such instance,
             the Lease will be terminated, and Landlord will be entitled
             otherwise to recover all damages, attorneys' fees and costs
             allowable under law or this Lease.

         (b) Collect by suit or otherwise each installment of rent or other sum
             as it becomes due under this Lease, or to enforce, by suit or
             otherwise, any other term or provision of this

                                       16
<PAGE>
             Lease on the part of Tenant required to be kept or performed. All
             unpaid installments of rent or other sums shall bear interest at
             the Default Rate from the due date until paid.

         (c) Terminate this Lease, in which Tenant shall immediately surrender
             possession of the Premises, and to pay Landlord, in addition to any
             other remedy Landlord may have, all damages Landlord may incur by
             reason of its defaults, including cost of recovering the Premises,
             with interest at the Default Rate.

         (d) Enter upon and repossess the Premises and, as agent of Tenant,
             relet the Premises for the balance of the Term, or for a shorter or
             longer term, and may receive the rents therefor, applying the same,
             first to the payment of the expense of such reletting and second to
             the payment of rent due and to become due under this Lease, with
             Tenant remaining liable for any deficiency.

         15.4     MEASURE OF DAMAGES: The damages Landlord may recover include
the following:

         (a) The worth, at the time of the award, of the unpaid rent and other
             charges that had been earned and accrued at the time of such
             default by Tenant;

         (b) The worth, at the time of the award, of the amount by which the
             unpaid rent and other charges that would have been earned after the
             date of such default by Tenant until the time of award exceeds the
             amount of the loss of rent and other charges that Tenant proves
             could have been reasonably avoided;

         (c) The worth, at the time of the award, of the amount by which the
             unpaid rent and other charges for the balance of the Term after the
             time of the award exceeds the amount of the loss of rent and other
             charges that Tenant proves could have been reasonably avoided; and

         (d) Any other amount, and attorneys' fees and court costs reasonably
             necessary or appropriate to compensate or reimburse Landlord for
             all detriment proximately caused by Tenant's default (including, by
             way of illustration and not limitation, the cost of recovering
             possession of the Premises, expenses of reletting, including
             necessary renovation and alteration of the Premises, reasonable
             attorney's fees, and any real estate commission actually paid, and
             that portion of the leasing commission paid by Landlord applicable
             to the unexpired Term).

"The worth, at the time of the award", as used in (a) and (b) of this paragraph
15.4 is to be computed by allowing interest at the Default Rate, and, as used in
(c) of this paragraph 15.4, is to be computed by discounting the amount at the
prevailing Bank Prime Interest Rate as published in the Wall Street Journal at
the time of the award.

         15.5     NO WAIVER OF DEFAULT: Landlord's failure to take action with
respect to any default(s) or breach(s) of any covenant or obligation on the part
of Tenant shall not be or be construed as a waiver thereof, nor shall any custom
or practice which may grow up between the parties in the course of administering
this instrument be construed to waive or lessen the right of

                                       17
<PAGE>
Landlord to insist upon the strict performance by Tenant of any term, covenant
or condition hereof, or to exercise any rights given it on account of any such
default. A waiver of a particular breach or default shall not be deemed to be a
waiver of the same or of any other subsequent breach or default. The acceptance
of rent hereunder shall not be, or be construed to be, a waiver of any term,
covenant, or condition of this Lease.

         15.6     REMEDIES CUMULATIVE: The rights, powers, elections, and
remedies of Landlord contained in this Lease shall be construed as cumulative
and no one of them is or shall be considered exclusive of the other or exclusive
of any rights or remedies allowed by law, and the exercise of one or more
rights, powers, elections, or remedies shall not impair Landlord's right to
exercise any other. Tenant expressly agrees that the acceptance of partial
payments by Landlord without waiver or prejudice will benefit Tenant in avoiding
the accrual of interest at the Default Rate on such partial payment.

         15.7     LANDLORD'S RIGHT TO CURE DEFAULT: If Tenant shall be in
default in the performance of any obligation on its part to be performed under
this Lease, then, after notice and the expiration of any applicable cure or
grace periods, and without waiving or releasing Tenant from the performance
thereof, Landlord may, but shall not be obligated to, perform any such
obligation and to pay necessary and incidental costs and expenses in connection
therewith. All sums so paid by Landlord, together with interest thereon at the
Default Rate, shall be deemed additional rent and shall be payable to Landlord
on the next rent paying day.

                               ARTICLE XVI - SIGNS

         16.1     SIGNS: Each of Tenant's signs, advertisements or notices
displayed on any portion of the exterior of the Building or on the Project,
shall be subject to, and comply with, all applicable requirements and approvals
of governmental authorities, recorded covenants and the owners' association of
the Industrial Park and otherwise shall require the prior written approval of
Landlord with respect to providing opportunity for equivalent and adequate
signage for other tenants.

                        ARTICLE XVII - GENERAL PROVISIONS

         17.1     APPROVALS AND CONSENTS: Whenever pursuant to the provisions
of this Lease the approval, consent or other affirmative action of either party
hereto is required, necessary or desirable, the same will not be unreasonably or
arbitrarily withheld or delayed.

         17.2     QUIET POSSESSION: So long as Tenant fulfills the conditions
and covenants of this Lease required by it to be performed, Tenant shall have
peaceful and quiet possession of the Premises.

         17.3     ESTOPPEL CERTIFICATES: Tenant shall, on request from Landlord
at any time and from time to time, execute, acknowledge and deliver to Landlord
a statement in writing (a) certifying that this Lease is unmodified and in full
force and effect (or if there have been modifications, that this Lease is in
full force and effect as modified and stating the modifications), (b) stating
the dates to which the rent and other charges have been paid by Tenant, (c)
stating, to the best knowledge of

                                       18
<PAGE>
Tenant, whether or not Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease, and, if so, specifying
such default of which Tenant may have knowledge, (d) stating the address to
which notices to Tenant should be sent pursuant to the provisions of this Lease,
and (e) stating any other fact or certifying any other condition reasonably
requested by Landlord or requested by any existing or prospective mortgagee,
overlord or purchaser of the Premises, Building, or Project, or any interest
therein. Any such statement delivered pursuant hereto may be relied upon by any
owner of the Premises, Project or Building, any prospective purchasers thereof,
any mortgagee or prospective assignee of such mortgagee, or any purchaser or
lessor, actual or prospective, of the Premises, Building, and/or Project, or any
interest therein.

         17.4     HOLDING OVER: If Tenant, with or without Landlord's consent,
remains in possession of the Premises after expiration or termination of the
Term of this Lease, or after the date in any notice given by Landlord to Tenant
terminating Tenant's right to possession of the Premises, such possession by
Tenant shall be deemed to be a month-to-month tenancy terminable upon thirty
days' notice given at any time by either party. During any such month-to-month
tenancy, Tenant shall pay all rent and other charges and perform all obligations
required by this Lease, except that Basic Rent during such month-to-month
tenancy shall be at a rate equal to one hundred fifty percent (150%) of the
Basic Rental which would otherwise be in effect, payable in monthly installments
as otherwise provided in this Lease. All provisions of this Lease, except those
pertaining to the Term, the Basic Rental, and additional rental shall apply to
such month-to-month tenancy. In addition to, and without limitation of the
foregoing, Tenant shall hold Landlord harmless from all damages, costs and
expenses, including attorneys' fees, resulting from Tenant's failure to
surrender the Premises, including, without limitation, claims made by a
succeeding tenant resulting from Tenant's failure to surrender the Premises.

         17.5     PERSONAL PROPERTY TAXES: Tenant shall pay prior to
delinquency all taxes, assessments, license fees and other charges that are
levied and assessed against Tenant's personal property installed or located in
or about the Premises that become payable during the Term, and shall indemnify
and hold Landlord harmless therefrom. Upon demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of these payments.

         17.6     BROKERS, FINDERS, COMMISSIONS: Tenant hereby represents and
warrants to Landlord that it has not had dealings with any real estate broker,
finder or other person with respect to this Lease in any manner, other than
Robert L. Johnson of CB Richard Ellis. Tenant shall indemnify, defend and hold
Landlord harmless from any claims that may be asserted against Landlord as a
result of any inaccuracy in Tenant's foregoing representation and warranty.

         17.7     HAZARDOUS MATERIALS: Without limitation to the provisions of
Article VI hereof, if Tenant's transportation, storage, use or disposal of
hazardous or toxic materials or substances in, on or about the Premises results
in contamination of the Building, the soil or surface or ground water, or loss
or damage to persons or property, then Tenant shall, after consultation with and
approval by Landlord, clean up the contamination in full compliance with
applicable statutes, regulations, requirements and standards, and protect,
indemnify, defend and hold Landlord harmless from and against any claims,
demands, suits, causes of action, liabilities, cost and fees, including
attorneys' fees, arising from or in any way related to any such contamination,
claim of contamination, loss or damage.

                                       19
<PAGE>
         17.8     DEFAULT RATE: The Default Rate as used in this Lease shall be
the prevailing Bank Prime Interest Rate as published in the Wall Street Journal,
plus five (5) percentage points, in effect at the time the Default Rate
commences and adjusted on the first day of each calendar month thereafter.

         17.9     ATTORNEYS' FEES: The prevailing party in any litigation with
respect to this Lease shall be entitled to have its reasonable attorneys fees
and expenses included in the judgment awarded to such party.

         17.10    CONDITIONS AND COVENANTS: All of the provisions of this Lease
shall be deemed as running with the Land, and construed to be "conditions" as
well as "covenants" as though the words specifically expressing or imparting
covenants and conditions were used in each separate provision.

         17.11    NO WAIVER OF BREACH: No failure by either Landlord or Tenant
to insist upon the strict performance by the other of the covenant, agreement,
term, or condition of this Lease, or to exercise any right or remedy upon a
breach thereof, shall constitute a waiver of any breach or of such covenant,
agreement, term, or condition. No waiver of any breach shall affect or alter
this Lease, but each and every covenant, condition, agreement, and the Term
shall continue in full force and effect with respect to any other then existing
or subsequent breach.

         17.12    TIME OF ESSENCE:  Time is of the essence of this Lease and of
each provision of this Lease.

         17.13    UNAVOIDABLE DELAY - FORCE MAJEURE: If either party shall be
delayed or prevented from the performance of any act required by this Lease by
reason of acts of God, strikes, lockouts, labor troubles, inability to procure
materials, restrictive governmental laws, or regulations, or other cause,
without fault and beyond the reasonable control of the party obligated
(financial inability excepted), performance of such act shall be extended for a
period of such delay, provided, however, nothing in this section shall excuse
Tenant from the prompt payment of any rental or other charge required by Tenant
except as may be expressly provided elsewhere in this Lease and provided nothing
herein shall be deemed to extend the completion date set forth in paragraph 5.1.

         17.14    SUCCESSORS IN INTEREST: Each and all of the covenants,
conditions, and restrictions in this Lease shall inure to the benefit of and
shall be binding upon the successors in interest of Landlord, and subject to the
restrictions of Article 14, the authorized encumbrancers, assignees,
transferees, subtenants, licensees, and other successors in interest of Tenant.
If Landlord sells or transfers the Project, voluntarily or involuntarily,
Landlord's liabilities and obligations arising under this Lease after the sale
or transfer shall be the sole responsibility of the new owner, whose liabilities
and obligations to Tenant under this Lease after the sale or transfer shall be
the same as Landlord's obligations and liabilities under this Lease before the
sale or transfer. If Landlord is ordered to pay Tenant a money judgment because
of Landlord's default, then Tenant's sole remedy to satisfy the judgment shall
be against Landlord's interest in the Project.

         17.15    ENTIRE AGREEMENT: This Lease contains the entire agreement of
the parties with respect to the matters covered by this Lease, and no other
agreement, statement, or promise made by

                                       20
<PAGE>
any party, to any employee, officer, or agent of any other party, which is not
contained in this Lease shall be binding or valid.

         17.16    PARTIAL INVALIDITY: If any term, covenant, condition or
provision of this Lease is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of the provisions shall remain in
full force and effect and shall in no way be affected, impaired, or invalidated.

         17.17    CAPTIONS: Captions of the articles, sections and paragraphs
of this Lease are for convenience and reference only, and the words contained
therein shall in no way be held to explain, modify, amplify, or aid in the
interpretation, construction, or meaning of the provisions of this Lease.

         17.18    MODIFICATION: This Lease is not subject to surrender,
cancellation or modification except in writing and signed by Landlord.

         17.19    DELIVERY OF RENT AND NOTICES - METHOD AND TIMES: All rents or
other sums, notices, demands, or requests from one party to another may be
personally delivered or sent by mail, certified or registered, postage prepaid,
to the addresses stated in this section, and shall be deemed to have been given
at the time of personal delivery or at the time of mailing.

         All rents and other sums payable by Tenant to Landlord shall be in
lawful money, delivered in person or mailed to Landlord, at 2955 Fairfax
Trafficway, Kansas City, KS 66115.

         All notices, demands, or requests from Tenant to Landlord shall be
given to Landlord at the same address.

         All notices, demands, or requests from Landlord to Tenant shall be
given to Tenant at the address of the Premises or at such other address as it
may designate.

         Each party shall have the right, from time to time, to designate a
different address by notice given in conformity with this section.

         17.20    OPTIONS.

         (a)      DEFINITION. As used in this paragraph the word "Option" means
the right or option to extend the term of this Lease or to renew this Lease.

         (b)      OPTIONS PERSONAL. Each Option granted to Tenant in this Lease
is personal to the original Tenant and may be exercised only by the original
Tenant while occupying the Premises, doing so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than the original Tenant.

         (c)      MULTIPLE OPTIONS. In the event that Tenant has any multiple
options to extend or renew this Lease, a later option cannot be exercised unless
the prior option to extend or renew this Lease has been so exercised.

                                       21
<PAGE>
         (d)      EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to
exercise an Option, notwithstanding any provision in the grant of Option to the
contrary, (i) during the time commencing from the date Landlord gives to Tenant
a notice of default and continuing until the noncompliance alleged in the notice
of default is cured, or (ii) during the period of time commencing on the date
after a monetary obligation to Landlord is due from Lessee and unpaid (without
any necessity for notice thereof to Tenant) and continuing until the obligation
is paid, or (iii) in the event that Landlord has given to Tenant three or more
notices of default, whether or not the defaults are cured, during the 12 month
period of time immediately prior to the time that Tenant attempts to exercise
the Option. The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Tenant's inability to exercise an Option
because of the provisions of this paragraph. All rights of Tenant under the
provisions of an Option shall terminate and be of no further force or effect,
notwithstanding Tenant's due and timely exercise of the Option, if, after such
exercise and during the term of this Lease, (i) Tenant fails to pay to Landlord
a monetary obligation of Tenant when such obligation becomes due (without any
necessity of Landlord to give notice thereof to Tenant), or (ii) Tenant fails to
commence to cure a default within the applicable grace period after the date
that Landlord gives notice to Tenant of such default and/or Tenant fails
thereafter to diligently prosecute said cure to completion, or (iii) Landlord
gives to Tenant three or more notices or default, whether or not the defaults
are cured.

         17.21    SURRENDER AT END OF TERM: Tenant shall peacefully give up and
surrender to Landlord the Premises and every part thereof at the termination of
the Term in as good condition and repair as reasonable use and wear thereof
shall permit.

         17.22    SURVIVAL: All covenants, obligations and indemnities of
Tenant herein which would normally or could be performed or arise after the end
of the Term shall survive termination of this lease.

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed as of the date first above set forth.

                                               (Landlord)
                                               BAADER NORTH AMERICAN CORPORATION
                                               (a Massachusetts corporation)
Witnesses

/s/ (Illegible)                                By:    /s/ Elizabeth Alpert
/s/  R.C.Ewing                                 Name:  Elizabeth Alpert
                                               Title: Executive Vice President

                                               (Tenant)
                                               SMARTDISK CORPORATION
                                               (a Delaware corporation)
Witnesses

/s/  Ruth Ayers                                By:    /s/ Peter J.Quinn
/s/  Robert Bemer                              Name:  Peter J. Quinn
                                               Title: Chief Financial Officer

                                       22Stock Purchase Agreement with SF Capital Partners

 EXHIBIT 4.2 
  
 RITA Medical Systems, Inc.  
  
 Ladies &
Gentlemen: 
  
 The undersigned, SF Capital Partners Ltd. (the “Investor”), hereby confirms its agreement
with you as follows: 
  
 1.    This Stock Purchase Agreement is made as of January 23, 2003 between RITA Medical
Systems, Inc., a Delaware corporation (the “Company”), and the Investor. 
  
 2.    The Company has authorized
the sale and issuance of up to 2,045,453 shares (the “Shares”) of common stock of the Company, $0.001 par value per share (the “Common Stock”), to certain investors in a private placement (the “Offering”). 

 
 3.    The Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to
the Investor 1,136,363 Shares, for a purchase price of $4.40 per share, or an aggregate purchase price of $4,999,997.20, pursuant to the Terms and Conditions for Purchase of Shares attached hereto as Annex I and incorporated herein by reference as
if fully set forth herein (the “Terms and Conditions”). This Stock Purchase Agreement, together with the Terms of Conditions which are incorporated herein by reference as if fully set forth herein, may hereinafter be referred to as the
“Agreement”. Unless otherwise requested by the Investor, certificates representing the Shares purchased by the Investor will be registered in the Investor’s name and address as set forth below. 
  
 4.    The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the
past three years with the Company or persons known to Investor to be affiliates of the Company, (b) neither it, nor any group of which it is a member or to which it is related or with which it is affiliated, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or indirect affiliation or association with any NASD member as of the date hereof. Exceptions: 
                                      
                                        
                                        
                                        
                                        
                                        
                     
                                      
                                        
                                        
                                        
                                        
                                        
                     
  
 (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”) 
  
 Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose. By executing this Agreement, the Investor acknowledges that the Company may use the information
in paragraph 4 above and the name and address information below in preparation of the Registration Statement (as defined in Annex 1). 
  
 
	 AGREED AND ACCEPTED:
 	 	 Investor:    SF CAPITAL PARTNERS LTD. 
 
	 RITA Medical Systems, Inc.
 	 	  
	 
	 /s/ Barry Cheskin
 	 	 By:    /s/ Brian Davidson
 
	 By:    Barry Cheskin
 	 	 Print Name:    Brian Davidson
 
	 Title:    President and Chief Executive Officer
 	 	 Title:    Authorized Signatory
 
	 
	  	 	 Address:
 	  	 c/o Staro Asset Management, L.L.C.
 3600 South Lake Drive, St. Francis, WI
53235
 
	 
	  	 	 Tax ID No.:    98-0363554
 
	 
	  	 	 Contact name:    Brian Davidson
 
	 
	  	 	 Telephone:    414-294-7000
 
	 
	  	 	 Name in which shares should be registered (if different):
 SF Capital
Partners Ltd.
 

 

  
 ANNEX I 
  
 TERMS AND CONDITIONS FOR PURCHASE OF SHARES 
  
 1.    Authorization and Sale of the Shares.    Subject to these Terms and Conditions, the Company has authorized the sale of up to 2,045,453 Shares. The Company reserves the right to
increase or decrease this number. 
  
 2.    Agreement to Sell and Purchase the Shares;
Subscription Date. 
  
 2.1    At the Closing (as defined in Section 3), the Company will sell
to the Investor, and the Investor will purchase from the Company, upon the terms and conditions hereinafter set forth, the number of Shares set forth in Section 3 of the Stock Purchase Agreement to which these Terms and Conditions are attached at
the purchase price set forth thereon. 
  
 2.2    The Company may enter into the same form of
Stock Purchase Agreement, including these Terms and Conditions, with certain other investors (the “Other Investors”) and expects to complete sales of Shares to them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the “Investors,” and the Stock Purchase Agreement to which these Terms and Conditions are attached and the Stock Purchase Agreements (including attached Terms and Conditions) executed by the Other Investors are
hereinafter sometimes collectively referred to as the “Agreements.”) The Company may accept executed Agreements from Investors for the purchase of Shares commencing upon the date on which the Company provides the Investors with the
proposed purchase price per Share and concluding upon the date (the “Subscription Date”) on which the Company has (i) executed Agreements with Investors for the purchase of at least 2,045,453 Shares, and (ii) notified Wells Fargo
Securities, LLC, in its capacity as placement agent for this transaction, in writing that it is no longer accepting additional Agreements from Investors for the purchase of Shares. The Company may not enter into any Agreements after the Subscription
Date. 
  
 2.3    The obligations of each Investor under any Agreement are several and not joint
with the obligations of any Other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Agreement. Nothing contained herein, and no action taken by any Investor hereto, shall
be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated hereby, provided that such obligations or the transactions contemplated hereby may be modified, amended or waived in accordance with Section 9 below. Each Investor shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement (provided, that such rights may be modified, amended or waived in accordance with Section 9 below), and it shall not be necessary for any Other Investor to be joined as an
additional party in any proceeding for such purpose. 
  
 3.    Delivery of the Shares at
Closing.    The completion of the purchase and sale of the Shares (the “Closing”) shall occur (the “Closing Date”) on January 24, 2003, at the offices of the Company’s counsel. At the Closing, the
Company shall deliver to the Investor one or more stock certificates representing the number of Shares set forth in Section 3 of the Stock Purchase Agreement, each such certificate to be registered in the name of the Investor or, if so indicated on
the signature page of the Stock Purchase Agreement, in the name of a nominee designated by the Investor. 
  
 The
Company’s obligation to issue the Shares to the Investor shall be subject to the following conditions, any one or more of which may be waived by the Company: (a) receipt by the Company of a certified or official bank check or wire transfer of
funds in the full amount of the purchase price for the Shares being purchased hereunder as set forth in Section 3 of the Stock Purchase Agreement; (b) completion of the purchases and sales under the Agreements with the Other Investors; (c) the
accuracy of the representations and warranties made by the Investors and the fulfillment of those undertakings of the Investors to be fulfilled prior to the Closing; and (d) the Closing Date shall have occurred by January 27, 2003. 

 
 The Investor’s obligation to purchase the Shares shall be subject to the following conditions, any one or more of which
may be waived by the Investor: (a) Investors shall have executed Agreements for the purchase of at least 2,045,453 Shares, (b) the representations and warranties of the Company set forth herein shall be true and correct as of the Closing Date in all
material respects (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true and correct as of such date) and (c) the Investor shall have received such documents as such Investor
shall reasonably have requested, including, a standard opinion of the Company’s counsel as to the matters set forth in Section 4.2 and as to exemption from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), of the sale of the Shares. 
  
 4.    Representations, Warranties
and Covenants of the Company.    The Company hereby represents and warrants to, and covenants with, the Investor, as follows: 

 
 -2- 

  
 4.1    Organization.    The
Company is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each of the Company and its Subsidiaries (as defined in Rule 405 under the Securities Act) has full power and authority to own,
operate and occupy its properties and to conduct its business as presently conducted and as described in the documents filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), since December 31, 2001
through the date hereof, including, without limitation, its most recent report on Form 10-Q for the quarter ended September 30, 2002 (the “Exchange Act Documents”) and is registered or qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the location of the properties owned or leased by it requires such qualification and where the failure to be so qualified would have a material adverse effect upon the condition
(financial or otherwise), earnings, business or business prospects (such business prospects being as described in the Exchange Act Documents and in any press release issued by the Company since September 30, 2002 (collectively, the “Press
Releases”)), properties or operations of the Company and its Subsidiaries, considered as one enterprise (a “Material Adverse Effect”), and no proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, such power and authority or qualification. 
  
 4.2    Due Authorization and Valid Issuance.    Assuming the correctness of the representations and warranties of the Investors set forth in the Agreements, (a) the Company has all
requisite power and authority to execute, deliver and perform its obligations under the Agreements, and the Agreements have been duly authorized and validly executed and delivered by the Company and constitute legal, valid and binding agreements of
the Company enforceable against the Company in accordance with their terms, except as rights to indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law), and (b) the Shares being purchased by the Investor hereunder will, upon issuance and payment therefor pursuant to the terms hereof, be duly authorized, validly
issued, fully-paid and nonassessable. 
  
 4.3    Non-Contravention.    The execution and delivery of the Agreements, the issuance and sale of the Shares under the Agreements, the fulfillment of the terms of the Agreements and
the consummation of the transactions contemplated thereby will not (A) conflict with or constitute a violation of, or default (with the passage of time or otherwise) under, (i) any contract, agreement or other instrument filed or incorporated by
reference as an exhibit to any of the Exchange Act Documents (any such contract, agreement or instrument, an “Exchange Act Exhibit”), (ii) the charter, by-laws or other organizational documents of the Company or any Subsidiary, or (iii)
assuming the correctness of the representations and warranties of the Investors set forth in the Agreements, any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the
Company or any Subsidiary or their respective properties, except in the case of clauses (i) and (iii) for any such conflicts, violations or defaults which are not reasonably likely to have a Material Adverse Effect or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or
condition contained in any Exchange Act Exhibit. Assuming the correctness of the representations and warranties of the Investors set forth in the Agreements, no consent, approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental body in the United States or any other person is required for the execution and delivery of the Agreements and the valid issuance and sale of the Shares to be sold
pursuant to the Agreements, other than such as have been made or obtained, and except for any post-closing securities filings or notifications required to be made under federal or state securities laws. 
  
 4.4    Capitalization.    The capitalization of the Company as of September 30, 2002 is as
set forth in the most recent applicable Exchange Act Documents, increased as set forth in the next sentence. The Company has not issued any capital stock since that date other than pursuant to (i) employee benefit plans disclosed in the Exchange Act
Documents, or (ii) outstanding warrants, options or other securities disclosed in the Exchange Act Documents. The Shares to be sold pursuant to the Agreements have been duly authorized, and when issued and paid for in accordance with the terms of
the Agreements will be duly and validly issued, fully paid and nonassessable. The outstanding shares of capital stock of the Company have been duly and validly issued and are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth in or contemplated by the Exchange Act Documents, there are no outstanding
rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company or any Subsidiary, or any
contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party and relating to the issuance or sale of any capital stock of the Company or any Subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options. Without limiting the foregoing, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares or the issuance and sale thereof,

 
 -3- 

 except for certain “piggy-back” registration rights granted by the Company on or before June 20, 2000, which registration rights
(including all rights to notice related thereto) have been waived by all of the holders thereof in connection with the filing of, and the proposal to file, the Registration Statement (defined below). No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. The Company owns the entire equity interest in each of its Subsidiaries, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, other than as described in the Exchange Act Documents. Except as disclosed in the Exchange Act Documents, there are no stockholders agreements, voting agreements or other similar agreements with respect to
the voting of the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
  
 4.5    Legal Proceedings.    There is no material legal or governmental proceeding pending or, to the knowledge of the Company, threatened to which the
Company or any Subsidiary is or may be a party or of which the business or property of the Company or any Subsidiary is subject that is not disclosed in the Exchange Act Documents or in any of the Press Releases. 
  
 4.6    No Violations.    Neither the Company nor any Subsidiary is in violation of its
charter, bylaws, or other organizational document, or in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary, which
violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, or is in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) in any material
respect in the performance of Exchange Act Exhibit, which would be reasonably likely to have a Material Adverse Effect. 
  
 4.7    Governmental Permits, Etc.    With the exception of the matters which are dealt with separately in Sections 4.1, 4.12, 4.13, and 4.14, each of the Company and its Subsidiaries has
all necessary franchises, licenses, certificates and other authorizations from any foreign, federal, state or local government or governmental agency, department, or body that are currently necessary for the operation of the business of the Company
and its Subsidiaries as currently conducted and as described in the Exchange Act Documents except where the failure to currently possess could not reasonably be expected to have a Material Adverse Effect. 
  
 4.8    Intellectual Property.    Except as specifically disclosed in the Exchange Act
Documents, (i) each of the Company and its Subsidiaries owns or possesses sufficient rights to use all material patents, patent rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names and know-how (collectively,
“Intellectual Property”) described or referred to in the Exchange Act Documents as owned or possessed by it or that are necessary for the conduct of its business as described in the Exchange Act Documents except where the failure to
currently own or possess would not have a Material Adverse Effect, (ii) to the knowledge of the Company, neither the Company nor any of its Subsidiaries is infringing any rights of a third party with respect to any Intellectual Property that,
individually or in the aggregate, would have a Material Adverse Effect, (iii) neither the Company nor any of its Subsidiaries has received any notice of, or has any knowledge of, any asserted infringement by the Company or any of its Subsidiaries
of, any rights of a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect if determined adversely to the Company and (iv) neither the Company nor any of its Subsidiaries
has received any notice of, or has any knowledge of, infringement by a third party with respect to any Intellectual Property rights of the Company or of any Subsidiary that, individually or in the aggregate, would have a Material Adverse Effect.

  
 4.9    Financial Statements.    The financial statements of the
Company and the related notes contained in the Exchange Act Documents present fairly, in accordance with generally accepted accounting principles, the financial position of the Company and its Subsidiaries as of the dates indicated, and the results
of its operations and cash flows for the periods therein specified consistent with the books and records of the Company and its Subsidiaries except that the unaudited interim financial statements were or are subject to normal and recurring year-end
adjustments which are not expected to be material in amount. Such financial statements (including the related notes) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods
therein specified, except as may be disclosed in the notes to such financial statements, or in the case of unaudited statements, as may be permitted by the Securities and Exchange Commission (the “SEC”) on Form 10-Q under the Exchange Act
and except as disclosed in the Exchange Act Documents. The other financial information contained in the Exchange Act Documents has been prepared on a basis consistent with the financial statements of the Company. 
  
 4.10    No Material Adverse Change.    Except as disclosed in the Exchange Act Documents
and the Press Releases, since September 30, 2002, there has not been (i) any material adverse change in the financial condition or earnings of the Company and its Subsidiaries considered as one enterprise, (ii) any material adverse event affecting
the Company or its Subsidiaries, (iii) any obligation, direct or contingent, that is material to the Company and its Subsidiaries considered as one enterprise, incurred by the Company, except obligations incurred in the ordinary course of business,
(iv) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any of its Subsidiaries, or (v) any loss or 

 
 -4- 

 damage (whether or not insured) to the physical property of the Company or any of its Subsidiaries which has been sustained which has a Material
Adverse Effect; provided, however, that changes in the ordinary course of business, including but not limited to the use of cash and increases in liabilities in the ordinary course of business, shall not be deemed to be a material adverse
change or to have a Material Adverse Effect. 
  
 4.11    Disclosure.    The representations and warranties of the Company contained in this Section 4 as of the date hereof and as of the Closing Date, do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Except with respect to the material terms and
conditions of the transaction contemplated by the Agreements, which shall be publicly disclosed by the Company pursuant to Section 16 hereof, the Company confirms that neither it nor any person acting on its behalf has provided Investor with any
information that the Company believes constitutes material, non-public information. The Company understands and confirms that Investor will rely on the foregoing representations in effecting transactions in securities of the Company. 

 
 4.12    NASDAQ Compliance.    The Company’s Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock Market, Inc. National Market (the “Nasdaq National Market”), and the Company has taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common Stock from the Nasdaq National Market, nor has the Company received any notification that the SEC or the National Association of Securities Dealers, Inc.
(“NASD”) is contemplating terminating such registration or listing. 
  
 4.13    Reporting Status.    The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the 12 months preceding the date
of this Agreement. The following documents complied in all material respects with the SEC’s requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading: 
  

(a)  Annual Report on Form 10-K for the year ended December 31, 2001, Quarterly Reports on Form 10-Q for the quarters ended September 30, 2002, June 30,
2002 and March 31, 2002, and Proxy Statement on Schedule 14A filed on April 26, 2002; and 
  
 (b)  all
other documents, if any, filed by the Company with the SEC during the one-year period preceding the date of this Agreement pursuant to the reporting requirements of the Exchange Act. 
  
 4.14    Listing.    Assuming the correctness of the representations and warranties of the Investors set forth in the
Agreements, the Company shall comply with all requirements of the National Association of Securities Dealers, Inc. with respect to the issuance of the Shares and the listing thereof on the Nasdaq National Market. 
  
 4.15    No Manipulation of Stock.    The Company has not taken and will not, in violation
of applicable law, take, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. 
  
 4.16    Company not an “Investment Company”.    The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and immediately after receipt of payment for the Shares will not be, an “investment company” or
an entity “controlled” by an “investment company” within the meaning of the Investment Company Act and shall conduct its business in a manner so that it will not become subject to the Investment Company Act. 

 
 4.17    Foreign Corrupt Practices.    Neither the Company, nor to the knowledge
of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company
(or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
  
 4.18    Accountants.    To the Company’s knowledge, PricewaterhouseCoopers LLC, who
the Company expects will express their opinion with respect to the financial statements to be incorporated by reference from the Company’s Annual 

 
 -5- 

 Report on Form 10-K for the year ended December 31, 2002 into the Registration Statement and the prospectus which forms a part thereof, are
independent accountants as required by the Securities Act and the rules and regulations promulgated thereunder. 
  
 4.19    Contracts.    The contracts described in the Exchange Act Documents that are material to the Company are in full force and effect on the date hereof, and neither the Company nor,
to the Company’s knowledge, any other party to such contracts is in breach of or default under any of such contracts which would have a Material Adverse Effect. 
  
 4.20    Taxes.    The Company has filed all necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been or might be asserted or threatened against it which would have a Material Adverse Effect. 
  
 4.21    Transfer Taxes.    On the Closing Date, all stock transfer or other taxes (other
than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold to the Investor hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will
be or will have been fully complied with. 
  
 4.22    Private
Offering.    Assuming the correctness of the representations and warranties of the Investors set forth in Section 5 hereof, the offer and sale of Shares hereunder is exempt from registration under the Securities Act. The
Company has not distributed and will not distribute prior to the Closing Date any offering material in connection with this Offering and sale of the Shares other than the documents of which this Agreement is a part, the Exchange Act Documents and
the Press Releases. The Company has not in the past nor will it hereafter take any action independent of the placement agent to sell, offer for sale or solicit offers to buy any securities of the Company which would bring the offer, issuance or sale
of the Shares as contemplated by this Agreement, within the provisions of Section 5 of the Securities Act, unless such offer, issuance or sale was or shall be within the exemptions of Section 4 of the Securities Act.  
  
 4.23    Disclosure Controls and Procedures; Internal Controls.    The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Form 10-K or Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s disclosure controls and procedures as of a date within ninety (90) days prior to the filing date of the Form 10-Q for the quarter ended September 30, 2002 (such date, the “Evaluation Date”). The
Company presented in the Form 10-Q for the quarter ended September 30, 2002 the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is used in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls. 
  
 4.24    Transactions With
Affiliates.    Except as disclosed in the Exchange Act Documents, none of the officers or directors of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from
any officer or director or, to the knowledge of the Company, any entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner. 
  
 4.25    Solvency.    Based on the financial condition of the Company as of the Closing Date, (i) the Company’s fair
saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do
not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking
into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. 
  
 5.    Representations, Warranties and Covenants of the Investor. 
  
 5.1    The Investor represents and warrants to, and covenants with, the Company that: (i) the Investor is an “accredited investor” as defined in Regulation D under the
Securities Act and the Investor is also knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to investments in shares presenting an investment decision 

 
 -6- 

 like that involved in the purchase of the Shares, including investments in securities issued by the Company and investments in comparable
companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (ii) the Investor is acquiring the number of Shares set forth in Section 3 of the Stock
Purchase Agreement in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the
distribution of such Shares; (iii) the Investor will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares except in
compliance with the Securities Act, applicable state securities laws and the respective rules and regulations promulgated thereunder; (iv) the Investor has answered all questions on the Investor Questionnaire for use in preparation of the
Registration Statement and the answers thereto are true, correct and complete as of the date hereof and will be true, correct and complete as of the Closing Date; (v) the Investor will notify the Company immediately of any change in any of such
information until such time as the Investor has sold all of its Shares or until the Company is no longer required to keep the Registration Statement effective; and (vi) the Investor has, in connection with its decision to purchase the number of
Shares set forth in Section 3 of the Stock Purchase Agreement, relied only upon the Exchange Act Documents, the Press Releases and the representations and warranties of the Company contained herein. The Investor understands that its acquisition of
the Shares has not been registered under the Securities Act or registered or qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of the
Investor’s investment intent as expressed herein. Subject to compliance with the Securities Act, applicable securities laws and the respective rules and regulations promulgated thereunder, nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Shares for any period of time. 
  
 5.2    The Investor acknowledges, represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company that would permit an offering of the Shares, or
possession or distribution of offering materials in connection with the issue of the Shares, in any jurisdiction outside the United States where legal action by the Company for that purpose is required. Each Investor outside the United States will
comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or distributes any offering material, in all cases at its own expense. 

 
 5.3    The Investor hereby covenants with the Company not to make any sale of the Shares without complying
with the provisions of this Agreement and without causing the prospectus delivery requirement under the Securities Act to be satisfied (whether by delivery of the Prospectus or pursuant to and in compliance with an exemption from such requirement),
and the Investor acknowledges that the certificates evidencing the Shares will be imprinted with a legend that prohibits their transfer except in accordance therewith. The Investor acknowledges that there may occasionally be times when the Company
determines that it must suspend the use of the Prospectus forming a part of the Registration Statement, as set forth in Section 7.2(c). 
  
 5.4    The Investor further represents and warrants to, and covenants with, the Company that (i) the Investor has full right, power, authority and capacity to enter into this Agreement and to consummate
the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and (ii) this Agreement constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except
as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as the indemnification agreements of the Investors herein may be legally
unenforceable. 
  
 5.5    Investor will not use any of the Shares acquired pursuant to this
Agreement to cover any short position in the Common Stock of the Company if doing so would be in violation of applicable securities laws. 
  
 5.6    The Investor understands that nothing in the Exchange Act Documents, the Press Releases, this Agreement or any other materials presented to the Investor in connection with the purchase and sale of
the Shares constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares. 

 
 5.7    The Company acknowledges and agrees that Investor does not make or has not made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Sections 5 and 16(a), in the Stock Purchase Agreement or in the Investor Questionnaire. 
  
 6.    Survival of Representations, Warranties and Agreements.    Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investor herein shall survive the execution of this Agreement, the delivery to the Investor of the Shares being
purchased and the payment therefor. 

 
 -7- 

  
 7.    Registration of the Shares; Compliance with the
Securities Act. 
  
 7.1    Registration Procedures and Other
Matters.    The Company shall: 
  
 (a)  subject to receipt of necessary
information from the Investor after prompt request from the Company to the Investors to provide such information, prepare and file with the SEC, within 10 days after the Closing Date (or, if such tenth day is a Saturday, Sunday or holiday, then by
the next succeeding business day), a registration statement on Form S-3 (the “Registration Statement”) to enable the resale of the Shares by the Investors from time to time through the automated quotation system of the Nasdaq National
Market or in privately-negotiated transactions; 
  
 (b)  subject to receipt of necessary
information from the Investor after prompt request from the Company to the Investors to provide such information, use its best efforts to cause the Registration Statement to become effective within 45 days after the Registration Statement is filed
by the Company, such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC in such 45-day period any financial statements that are required to be filed prior to the effectiveness of such Registration
Statement; 
  
 (c)  use its best efforts to prepare and file with the SEC such amendments and supplements
to the Registration Statement and the prospectus used in connection therewith (the “Prospectus”) as may be necessary to keep the Registration Statement current, effective and free from any material misstatement or omission to state a
material fact for a period not exceeding, with respect to each Investor’s Shares purchased hereunder, the earlier of (i) the second anniversary of the Closing Date, (ii) the date on which the Investor may sell all Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of the Securities Act, or (iii) such time as all Shares purchased by such Investor in this Offering have been sold pursuant to a registration statement; 
  
 (d)  furnish to the Investor with respect to the Shares registered under the Registration Statement such number of copies of
the Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the Securities Act and such other documents as the Investor may reasonably request in writing, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Investor; provided, however, that the obligation of the Company to deliver copies of Prospectuses or Preliminary Prospectuses to the Investor shall be subject to the receipt by the Company
of reasonable assurances from the Investor that the Investor will comply with the applicable provisions of the Securities Act and of such other securities or blue sky laws as may be applicable in connection with any use of such Prospectuses or
Preliminary Prospectuses; 
  
 (e)  file documents required of the Company for normal blue sky clearance in
states specified in writing by the Investor and use its best efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the Registration Statement pursuant to Section 7.1(c);
provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; 
  
 (f)  bear all expenses in connection with the procedures in paragraph (a) through (e) of this Section 7.1 (other than any
underwriting discounts or commissions, brokers’ fees and similar selling expenses, and any other fees or expenses incurred by the Investor, including attorneys’ fees) and the registration of the Shares pursuant to the Registration
Statement; and 
  
 (g)  advise the Investor, promptly after it shall receive notice or obtain knowledge of
the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceeding for that purpose; and it will promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued. 
  
 Notwithstanding anything to the contrary herein, the Registration Statement shall cover only the Shares. In no event at any time before the Registration Statement becomes effective with respect to the Shares shall the Company
publicly announce or file any other registration statement, other than registrations on Form S-8 or for transactions covered by Rule 145 of the Securities Act, without the prior written consent of a majority in interest of the Investors. The
Investor acknowledges and agrees that the Company shall not be regarded to have breached its “best efforts” obligation under Section 7.1(b) if, owing to a review of the Registration Statement by the SEC staff, the Registration Statement
does not become effective within 45 days after the Registration Statement is filed with the SEC, provided that following receipt of notice of such review, the Company shall have used its best efforts to cause the Registration Statement to
become effective at the earliest practicable date. 

 
 -8- 

  
 The Company understands that the Investor disclaims being an underwriter, but the
Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has hereunder; provided, however, that if the Company receives notification from the SEC that the Investor is deemed an underwriter, then the
period by which the Company is obligated to submit an acceleration request to the SEC shall be extended to the earlier of (i) the 90th day after such SEC notification, or (ii) 120 days after the initial filing of the Registration Statement with the
SEC. 
  
 7.2    Transfer of Shares After Registration; Suspension. 

 
 (a)  The Investor agrees that it will not effect any disposition of the Shares or its right to purchase the Shares
that would constitute a sale within the meaning of the Securities Act except as contemplated in the Registration Statement referred to in Section 7.1 and as described below or as otherwise permitted by law, and that it will promptly notify the
Company of any changes in the information set forth in the Registration Statement regarding the Investor or its plan of distribution. 
  
 (b)  Except in the event that paragraph (c) below applies, the Company shall (i) if deemed necessary by the Company, prepare and file from time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide the
Investor copies of any documents filed pursuant to Section 7.2(b)(i) as the Investor may reasonably request; and (iii) inform each Investor that the Company has complied with its obligations in Section 7.2(b)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been declared effective, the Company will notify the Investor to that effect, will use its best efforts to secure the effectiveness of such post-effective amendment as promptly
as possible and will promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the amendment has become effective). 
  
 (c)  Subject to paragraph (d) below, in the event (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) of any event or circumstance which, upon the advice of its counsel, necessitates the making of any changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company shall deliver a certificate in writing to the Investor (the “Suspension Notice”) to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Investor will refrain from selling any Shares pursuant to the Registration Statement (a “Suspension”) until the Investor’s receipt of copies of a supplemented or amended
Prospectus prepared and filed by the Company, or until it is advised in writing by the Company that the current Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by
reference in any such Prospectus. In the event of any Suspension, the Company will use its best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable within 20 business days after the delivery of a
Suspension Notice to the Investor. 
  
 (d)  Notwithstanding the foregoing paragraphs of this Section 7.2,
the Investor shall not be prohibited from selling Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than 30 days each in any twelve month period, unless, in the good faith judgment of the
Company’s Board of Directors, upon the written opinion of counsel of counsel, the sale of Shares under the Registration Statement in reliance on this paragraph 7.2(d) would be reasonably likely to cause a violation of the Securities Act or the
Exchange Act and result in liability to the Company. 
  
 (e)  Provided that a Suspension is not then in
effect, the Investor may sell Shares under the Registration Statement, provided that it arranges for delivery of a current Prospectus to the transferee of such Shares. The Company shall provide such number of current Prospectuses to the Investor as
the Investor may reasonably request, and shall supply copies to any other parties reasonably requiring such Prospectuses. 

 
 -9- 

  
 (f)  In the event of a sale of Shares by the Investor pursuant to the
Registration Statement, the Investor must also deliver to the Company’s transfer agent, with a copy to the Company, a Certificate of Subsequent Sale substantially in the form attached hereto as Exhibit A, so that the Shares may be
properly transferred. 
  
 7.3    Indemnification.    For the purpose
of this Section 7.3: 
  
 (i)  the term “Selling Stockholder” means the Investor and any affiliate
of such Investor; and 
  
 (ii)  the term “Registration Statement” shall include the Prospectus in
the form first filed with the SEC pursuant to Rule 424(b) of the Securities Act or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required, and any exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section 7.1; and 
  
 (iii)  the term “Untrue
Statement” means any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement, as amended or supplemented from time to time, a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
  
 (a)  The Company agrees to indemnify and hold harmless each Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any breach of the representations or warranties of the Company contained herein or failure to comply
with the covenants and agreements of the Company contained herein, (ii) any Untrue Statement, or (iii) any failure by the Company to fulfill any undertaking included in the Registration Statement, as amended or supplemented from time to time, and
the Company will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, or preparing to defend any such action,
proceeding or claim, provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an Untrue Statement made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement, as amended or supplemented from time to time (including, without limitation, information set
forth in the Investor Questionnaire), or the failure of such Selling Stockholder to comply with its covenants and agreements contained in Section 7.2 hereof respecting sale of the Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. The Company shall reimburse each Selling Stockholder for the indemnifiable amounts provided for
herein on demand as such expenses are incurred. 
  
 (b)  The Investor agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, (i) any failure to comply with the covenants and agreements contained in Section 7.2 hereof respecting sale of the Shares, or (ii) any Untrue Statement if such Untrue Statement was
made in reliance upon and in conformity with written information furnished by or on behalf of the Investor specifically for use in preparation of the Registration Statement, as amended or supplemented from time to time (including, without
limitation, information set forth in the Investor Questionnaire), and the Investor will reimburse the Company or such officer, director or controlling person, as the case may be, for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim. The Investor shall reimburse the Company or such officer, director or controlling person, as the case may be, for the indemnifiable amounts provided for herein on demand as such
expenses are incurred. Notwithstanding the foregoing, the Investor’s aggregate obligation to indemnify the Company and such officers, directors and controlling persons shall be limited to the net amount received by the Investor from the sale of
the Shares. 
  
 (c)  Promptly after receipt by any indemnified person of a notice of a claim or the
beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 7.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such
action, but the omission to so notify the indemnifying person will not relieve it from any liability which it may have to any indemnified person under this Section 7.3 (except to the extent that such omission materially and adversely affects the
indemnifying person’s ability to defend such action) or from any liability otherwise than under this Section 7.3. Subject to the provisions hereinafter stated, in case any 

 
 -10- 

 such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent
that it shall elect by written notice delivered to the indemnified person promptly after receiving the aforesaid notice from such indemnified person, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld or delayed. No indemnifying
person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnification could have been
sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. 
  
 (d)  If the indemnification provided for in this Section 7.3 is unavailable to or insufficient to hold harmless an indemnified
person under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying person shall contribute to the amount paid or payable by
such indemnified person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Investor, as well as any
other Selling Shareholders under such Registration Statement on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an Untrue Statement, whether the Untrue Statement relates to information supplied by the Company on the one hand or
an Investor or other Selling Shareholder on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such Untrue Statement. The Company and the Investor agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Investor and other Selling Shareholders were treated as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified person as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in excess of the amount by which the net amount received by the Investor from the sale of the Shares to which such loss relates exceeds the amount of any damages which such
Investor has otherwise been required to pay by reason of such Untrue Statement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Investor’s obligations in this subsection to contribute shall be in proportion to its Investor sale of Shares to which such loss relates and shall not be joint with any other Selling
Shareholders. 
  
 (e)  The parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 7.3, and are fully informed regarding said provisions. They further acknowledge
that the provisions of this Section 7.3 fairly allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the
Securities Act and the Exchange Act. The parties are advised that federal or state public policy as interpreted by the courts in certain jurisdictions may be contrary to certain of the provisions of this Section 7.3, and the parties hereto hereby
expressly waive and relinquish any right or ability to assert such public policy as a defense to a claim under this Section 7.3 and further agree not to attempt to assert any such defense. 
  
 7.4    Termination of Conditions and Obligations.    The conditions precedent imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any particular number of the Shares when such Shares shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended
method of disposition set forth in the Registration Statement covering such Shares or at such time as an opinion of counsel reasonably satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order
to comply with the Securities Act. 

 
 -11- 

  
 7.5    Information
Available.    So long as the Registration Statement is effective covering the resale of Shares owned by the Investor, the Company will furnish to the Investor: 
  
 (a)  as soon as practicable after it is available, one copy of (i) its Annual Report to Stockholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a national firm of certified public accountants), (ii) its Annual Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each case, excluding
exhibits); 
  
 (b)  upon the request of the Investor, all exhibits excluded by the parenthetical to
subparagraph (a) of this Section 7.5 as filed with the SEC and all other information that is made available to shareholders; and 
  
 (c)  upon the reasonable request of the Investor, an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and upon the reasonable request of the Investor, the President or
the Chief Financial Officer of the Company (or an appropriate designee thereof) will meet with the Investor or a representative thereof at the Company’s headquarters to discuss all information relevant for disclosure in the Registration
Statement covering the Shares and will otherwise cooperate with any Investor conducting an investigation for the purpose of reducing or eliminating such Investor’s exposure to liability under the Securities Act, including the reasonable
production of information at the Company’s headquarters; provided that the Company shall not be required to disclose any confidential information to or meet at its headquarters with any Investor until and unless the Investor shall have
entered into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto. 
  
 7.6    Legend; Restrictions on Transfer.    The certificate or certificates for the Shares (and any securities issued in respect of or exchange for the
Shares) shall be subject to a legend or legends restricting transfer under the Securities Act and referring to restrictions on transfer herein, such legend to be substantially as follows: 
  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. 

 
 The Company and the Investor acknowledge and agree that the Investor may, as permitted by law, from time to time pledge pursuant to a bona fide margin
agreement or grant a security interest in some or all of the Shares and, if required under the terms of such arrangement, Investor may, as permitted by law, transfer pledged or secured Shares to the pledgees or secured parties. So long as Investor
is not an affiliate of the Company, such a pledge or transfer would not be subject to approval or consent of the Company and would not require the legal opinion of legal counsel to the pledgee, secured party or pledgor. At the Investor’s
expense, so long as the Shares are subject to the legend required by this Section 7.6, the Company will use its best efforts to execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in
connection with a pledge or transfer of the Shares including such amendments or supplements to the Registration Statement and Prospectus as may be reasonably required. The foregoing does not affect Investor’s obligations pursuant to Section
7.2(a). 
  
 7.7    Liquidated Damages.    The Company and Investor
agree that Investor will suffer damages if the Company fails to fulfill its obligations pursuant to Section 7.1 and 7.2 hereof and that it would not be possible to ascertain the extent of such damages with precision. Accordingly, the Company hereby
agrees to pay liquidated damages (“Liquidated Damages”) to Investor under the following circumstances: (a) if the Registration Statement is not filed by the Company on or prior to 30 days after the Closing Date (such an event, a
“Filing Default”); (b) if the Registration Statement is not declared effective by the SEC on or prior to 90 days after the Closing Date (such an event, an “Effectiveness Default”); or (c) if the Registration Statement (after its
effectiveness date) ceases to be effective and available to Investor for any continuous period that exceeds 30 days or for one or more period that exceeds in the aggregate 60 days in any 12-month period (such an event, a “Suspension
Default” and together with a Filing Default and an Effectiveness Default, a “Registration Default”). In the event of a Registration Default, the Company shall as Liquidated Damages pay to Investor, for each 30-day period of a
Registration Default, an amount in cash equal to 1% of the aggregate purchase price paid by Investor pursuant to this Agreement; provided that in no event shall the aggregate amount of cash to be paid as Liquidated Damages pursuant to this Section
7.7 exceed 9% of the aggregate purchase price paid by Investor. The Company shall pay the Liquidated Damages as follows: (i) in connection with a Filing Default, on the 31st day after the Closing Date, and each 30th day thereafter until the
Registration Statement is filed with the SEC; (ii) in connection with an Effectiveness Default, on the 91st day after the Closing Date, and each 30th day thereafter until the Registration Statement is declared effective by the SEC; or (iii) in
connection with a Suspension Default, on either (x) the 31st consecutive day of any Suspension or (y) the 61st 

 
 -12- 

 day (in the aggregate) of any Suspensions in any 12-month period, and each 30th day thereafter until the Suspension is terminated in accordance with Section 7.2. Notwithstanding the foregoing, all periods shall be tolled during
delays directly caused by the action or inaction of any Investor, and the Company shall have no liability to any Investor in respect of any such delay. The Liquidated Damages payable herein shall apply on a pro rata basis for any portion of a 30-day
period of a Registration Default. 
  
 8.    Notices.    All notices,
requests, consents and other communications hereunder shall be in writing, shall be mailed (A) if within the United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International Federal Express (or other recognized international express courier)or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail,
three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express (or other recognized international express courier), two
business days after so mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt and shall be delivered as addressed as follows: 
  

	 	(a)
	 
	if to the Company, to 
 

  
 RITA Medical Systems, Inc. 
 967 N. Shoreline Blvd. 
 Mountain View, CA 94043 
 Attn: Chief
Financial Officer 
 Fax: (650) 967-1961 
  

	 	(b)
	 
	with a copy to: 
 

  
 Venture Law Group 
 2775 Sand Hill Road 
 Menlo Park, CA 94025 
 Attn: Mark B. Weeks,
Esq. 
 Fax: (650) 233-8386 
  

	 	(c)
	 
	if to the Investor, at its address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in writing.

 

  
 9.    Changes.    This Agreement may be
modified, amended or waived only pursuant to a written instrument signed by the Company and (a) Investors holding a majority of the Shares issued and sold in the Offering, provided that such modification, amendment or waiver is made with
respect to all Agreements and does not adversely affect the Investor without adversely affecting all Investors in a similar manner; or (b) the Investor. 
  
 10.    Headings.    The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement. 
  
 11.    Severability.    In case any
provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

  
 12.    Governing Law.    This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware, without giving effect to the principles of conflicts of law. 
  
 13.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 
  
 14.    Entire Agreement.    This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior understandings or
agreements concerning the purchase and sale of the Shares and the resale registration thereof. 
  
 15.    Rule 144.    The Company covenants that it will timely file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not 

 
 -13- 

 required to file such reports, it will, upon the request of any Investor holding Shares purchased hereunder made after the first anniversary of
the Closing Date, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will take such further action as any such Investor may reasonably request, all to the extent required from
time to time to enable such Investor to sell Shares purchased hereunder without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Investor, the Company will deliver to such holder a written statement as to whether it has complied with such information and requirements.

  
 16.    Confidential Information. 
  

(a)  The Investor represents to the Company that, at all times during the Company’s offering of the Shares, the Investor has maintained in confidence
all non-public information regarding the Company received by the Investor from the Company or its agents. 
  
 (b)  The Company shall on the Closing Date issue a press release disclosing the material terms of the transactions contemplated hereby (including at least the number of Shares sold and proceeds therefrom). The Company shall
not publicly disclose the name of Investor, or include the name of Investor in any filing with the SEC or any regulatory agency or the Nasdaq (other than the filing of the Agreements with the SEC pursuant to the Exchange Act), without the prior
written consent of Investor, except to the extent such disclosure is required by law or Nasdaq regulations. 
  
 17.    No Third-Party Beneficiaries.    This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person. 

 
 -14- 

 RITA Medical Systems, Inc. 
  
 INVESTOR QUESTIONNAIRE 
  
 (ALL INFORMATION WILL BE TREATED
CONFIDENTIALLY) 
  

	To:
	 
	RITA Medical Systems, Inc. 
 

 967 N. Shoreline Blvd. 
 Mountain View, CA 94043 
  
 This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of the shares of common stock,
par value $0.001 per share, of RITA Medical Systems, Inc. (the “Securities”). The Securities are being offered and sold by RITA Medical Systems, Inc. (the “Corporation”) without registration under the Securities Act of 1933, as
amended (the “Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(2) of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state
laws. The Corporation must determine that a potential investor meets certain suitability requirements before offering or selling Securities to such investor. The purpose of this Questionnaire is to assure the Corporation that each investor meets the
applicable suitability requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemption from registration is based in part on the information herein supplied.

  
 This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. Your
answers will be kept strictly confidential. However, by signing this Questionnaire you will be authorizing the Corporation to provide a completed copy of this Questionnaire to such parties as the Corporation deems appropriate in order to ensure that
the offer and sale of the Securities will not result in a violation of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Securities. All potential investors must
answer all applicable questions and complete, date and sign this Questionnaire. Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item. 
  
 
	 A.    BACKGROUND INFORMATION
  
 Name:
                                        
                                        
                                        
                                        
                                        
                                        
   
  
 Business Address:
                                        
                                        
                                        
                                        
                                        
                     
 (Number and Street)

 
                                      
                                        
                                        
                                        
                                        
                                        
                    
 (City)                                     
                                        
           (State)                            
                                (Zip
Code)            
  
 Telephone Number: (            )                   
                                        
                                        
                                        
                                        
                     
  
 Residence Address:
                                        
                                        
                                        
                                        
                                        
                  
 (Number and Street)
  
                                      
                                        
                                        
                                        
                                        
                                        
                    
 (City)                                     
                                        
           (State)                            
                                (Zip Code)
  
 Telephone Number: (            )                   
                                        
                                        
                                        
                                        
                     
  
 If an
individual:
 Age:                     
    Citizenship:                          Where registered to vote:
                                       
                                        
                         
  
 If a corporation, partnership, limited liability company, trust or other entity:
  
         Type of entity:
                                        
                                        
                                        
                                        
                                        
                  
  
         State of formation:
                                        
                         Date of formation:
                                        
                                     
  
 Social Security or Taxpayer Identification No.:
                                        
                                        
                                        
                 
  
 Send all correspondence to
(check one):          Residence Address            Business Address
 

 

 
 -15- 

  
 Current ownership of securities of the Corporation:

  
                    shares of common stock, par value $0.001 per share (the “Common Stock”) 
  
 options to purchase
                    shares of Common Stock 
  
 B.    STATUS AS ACCREDITED INVESTOR 
  
 The undersigned is an “accredited investor” as such term is defined in Regulation D under the Act, as at the time of the sale of the Securities the undersigned falls within one or more of the following categories
(Please initial one or more, as applicable):1

  
          (1) a bank as defined in Section 3(a)(2) of the
Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Act; an investment company registered under the Investment Corporation Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if
the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets
in excess of $5,000,000 or, if a self-directed plan, with the investment decisions made solely by persons that are accredited investors; 
  
          (2)    a private business development company as defined in Section 202(a)(22) of the Investment Adviser Act of 1940; 
  
          (3)    an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities offered, with total assets in excess of $5,000,000; 

 
          (4)    a natural person whose individual net worth,
or joint net worth with that person’s spouse, at the time of such person’s purchase of the Securities exceeds $1,000,000; 
  
          (5)    a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that
person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; 
  
          (6)    a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities
offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; and 
  
          (7)    an entity in which all of the equity owners are accredited investors (as defined above). 
  
 C.    REPRESENTATIONS 
  
 The undersigned hereby represents and warrants to the Corporation as follows: 
  

	1.
	 
	Any purchase of the Securities would be solely for the account of the undersigned and not for the account of any other person or with a view to any resale,
fractionalization, division, or distribution thereof. 
 

 
1 As used in this Questionnaire, the term “net worth” means the excess of total assets over total liabilities. In computing net worth for the purpose of subsection (4), the principal residence of the investor
must be valued at cost, including cost of improvements, or at recently appraised value by an institutional lender making a secured loan, net of encumbrances. In determining income, the investor should add to the investor’s adjusted gross income
any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depiction, contributions to an IRA or KEOGH retirement plan, alimony payments, and any amount by which
income from long-term capital gains has been reduced in arriving at adjusted gross income. 

 
 16 

  

	2.
	 
	The information contained herein is complete and accurate and may be relied upon by the Corporation, and the undersigned will notify the Corporation immediately
of any material change in any of such information occurring prior to the closing, if any, with respect to the purchase of Securities by the undersigned or any co-purchaser. 
 

  

	3.
	 
	There are no suits, pending litigation, or claims against the undersigned that could materially affect the net worth of the undersigned as reported in this
Questionnaire. 
 

  

	4.
	 
	The undersigned acknowledges that there may occasionally be times when the Corporation determines that it must suspend the use of the Prospectus forming a part
of the Registration Statement (as such terms are defined in the Stock Purchase Agreement to which this Questionnaire is attached), as set forth in Section 7.2(c) of the Stock Purchase Agreement. The undersigned is aware that, in such event, the
Securities will not be subject to ready liquidation, and that any Securities purchased by the undersigned would have to be held during such suspension. The overall commitment of the undersigned to investments which are not readily marketable is not
excessive in view of the undersigned’s net worth and financial circumstances, and any purchase of the Securities will not cause such commitment to become excessive. The undersigned is able to bear the economic risk of an investment in the
Securities. 
 

  

	5.
	 
	The undersigned has carefully considered the potential risks relating to the Corporation and a purchase of the Securities, and fully understands that the
Securities are speculative investments which involve a high degree of risk of loss of the undersigned’s entire investment. Among others, the undersigned has carefully considered each of the risks identified in the Exchange Act Documents.

 

  
 IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this
             day of January, 2003, and declares under oath that it is truthful and correct. 
  
 
	 SF CAPITAL PARTNERS
LTD.                                    
                                     
 
 Print Name
 
	 
	 By:
 	 	                                      
                                        
                                        
                
 
	  	 	 Signature
  
 Name/Title:                                  
                                        
                                    
 (required for any purchaser that is a corporation, partnership, trust or other entity)
 

 
  
  

 
 -17- 

  
 [Company Letterhead] 
  
                      , 200_ 
  

	 	Re:
	 
	RITA Medical Systems, Inc.; Registration Statement on Form S-3 
 

  
 Dear Selling Shareholder: 
  
 Enclosed please find five (5) copies of a prospectus dated                         ,
         (the “Prospectus”) for your use in reselling your shares of common stock, $0.001 par value (the “Shares”), of RITA Medical Systems, Inc. (the
“Company”), under the Company’s Registration Statement on Form S-3 (Registration No. 333-______) (the “Registration Statement”), which has been declared effective by the Securities and Exchange Commission.
As a selling shareholder under the Registration Statement, you have an obligation to deliver a copy of the Prospectus to each purchaser of your Shares, either directly or through the broker-dealer who executes the sale of your Shares.

  
 The Company is obligated to notify you in the event that it suspends trading under the Registration Statement in
accordance with the terms of the Stock Purchase Agreement between the Company and you. During the period that the Registration Statement remains effective and trading thereunder has not been suspended, you will be permitted to sell your Shares which
are included in the Prospectus under the Registration Statement. Upon a sale of any Shares under the Registration Statement, you or your broker will be required to deliver to the Transfer Agent, U.S. Stock Transfer Corporation (1) your restricted
stock certificate(s) representing the Shares, (2) instructions for transfer of the Shares sold, and (3) a representation letter from your broker, or from you if you are selling in a privately negotiated transaction, or from such other appropriate
party, in the form of Exhibit A attached hereto (the “Representation Letter”). The Representation Letter confirms that the Shares have been sold pursuant to the Registration Statement and in a manner described under the caption
“Plan of Distribution” in the Prospectus and that such sale was made in accordance with all applicable securities laws, including the prospectus delivery requirements. 
  
 Please note that you are under no obligation to sell your Shares during the registration period. However, if you do decide to sell, you must comply with the requirements
described in this letter or otherwise applicable to such sale. Your failure to do so may result in liability under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Please remember that all sales of your
Shares must be carried out in the manner set forth under the caption “Plan of Distribution” in the Prospectus if you sell under the Registration Statement. The Company may require an opinion of counsel reasonably satisfactory to the
Company if you choose another method of sale. You should consult with your own legal advisor(s) on an ongoing basis to ensure your compliance with the relevant securities laws and regulations. 
  
 In order to maintain the accuracy of the Prospectus, you must notify the undersigned upon the sale, gift, or other transfer of any
Shares by you, including the number of Shares being transferred, and in the event of any other change in the information regarding you which is contained in the Prospectus. For example, you must notify the undersigned if you enter into any
arrangement with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker-dealer. Depending on the circumstances, such transactions may require the
filing of a supplement to the Prospectus in order to update the information set forth under the caption “Plan of Distribution” in the Prospectus. 
  
 Should you need any additional copies of the Prospectus, or if you have any questions concerning the foregoing, please write to me at RITA Medical Systems, Inc., 967 N. Shoreline Blvd., Mountain View,
CA 94043. Thank you. 
  
 Sincerely, 
  

 
  
 Chief Financial Officer 
  

 
 -18- 

 Exhibit A 
  
 CERTIFICATE OF SUBSEQUENT SALE 
  
 U.S. Stock Transfer Corporation

 1745 Gardena Ave. 
 Glendale, CA 91204-2991 
  

	 	RE:
	 
	Sale of Shares of Common Stock of RITA Medical Systems, Inc. (the “Company”) pursuant to the Company’s Prospectus dated
                     ,              (the “Prospectus”)

 

  
 Dear Sir/Madam: 
  
 The undersigned hereby certifies, in connection with the sale of shares of Common Stock of the Company included in the table of Selling Shareholders in the Prospectus, that the undersigned has sold the
shares pursuant to the Prospectus and in a manner described under the caption “Plan of Distribution” in the Prospectus and that such sale complies with all securities laws applicable to the undersigned, including, without limitation, the
Prospectus delivery requirements of the Securities Act of 1933, as amended. 
  
 Selling Shareholder (the beneficial owner):
                                        
                                        
                                        
             
  
 Record Holder (e.g., if held in name of nominee):
                                        
                                        
                                         

  
 Restricted Stock Certificate No.(s):
                                        
                                        
                                        
                         
  
 Number of Shares Sold:
                                        
                                        
                                        
                                        
   
  
 Date of Sale:
                                        
                                        
                                        
                                        
                     
  
 In the event that you receive a stock certificate(s) representing more shares of Common Stock than have been sold by the undersigned, then you should return to the undersigned a newly issued certificate for such excess shares in the
name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you should place a stop transfer on your records with regard to such certificate. 
  
  Very truly yours, 
  
 
	 Dated:
                                        
                                        
    
 	 	 By:
                                        
                                       
 
 
	 
	  	 	 Print Name:
                                        
                         
 
	 
	  	 	 Title:
                                        
                                     
 

 
  

	cc:
	 
	RITA Medical Systems, Inc. 
 

	 	967
	 
	N. Shoreline Blvd. 
 

 Mountain
View, CA 94043 

	 	Attn:
	 
	Chief Financial Officer 
 

 
 -19-

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