Reporting to Steven T. Guillen, President and C.E.O. of the Company, you will serve as the Vice President and Chief Financial Officer, based at the Company Headquarters in Foster City, California. You shall faithfully discharge your duties to the Company, its subsidiaries and the Board of Directors on a full time basis and will not accept other employment or engage in other business activity without prior written consent of the Company.

You will receive a monthly salary of $12,500 (equivalent to $150,000 per year) payable in equal portions bi-monthly in arrears and subject to annual salary and performance reviews and potential salary increases at the discretion of the C.E.O. and Board of Directors.

You will also be eligible for a performance based bonus targeted at twenty percent (20%) based upon achievement of mutually agreed upon goals and at the discretion of the C.E.O & Board of Directors.

The Company's C.E.O. has recommended an stock option grant in the amount of 150,000 shares of the Common Stock of the Company, to be reviewed and approved at the next meeting of the Board of Directors. Twenty-five percent (25%) will vest on the later of the commencement date of employment (the "Commencement Date") or the date that the Board of Directors approves the stock option grant (the "Date of Grant"), twenty-five percent (25%) on the first anniversary of the Date of Grant, twenty-five percent (25%) on the second anniversary date and the final twenty-five percent (25%) on the third anniversary date. The options will have an exercise price per share equal to the last sale price of the Company's stock as of the Date of Grant and will expire on the 10^th anniversary of the Date of Grant. Additional option grants may be awarded by action of the Board of Directors and will be governed by the Company's Option Plan and the Compensation Committee of the Board.

Not withstanding anything to the contrary, the Executive's employment relationship with the Company is employment "at will". As a result, the Executive's employment may be terminated by the Company's Board of Directors or by the Executive at any time (subject to the notice provision below), in each case without any liability or obligation, except as set forth in this Letter Agreement. If the Executive terminates his employment, he shall give the Company written notice of such termination not less than sixty (60) days prior to the effective date of such termination.

Executive shall be reimbursed by the Company for out of pocket business expenses incurred by Executive in the performance of his duties, provided Executive furnishes the Company with vouchers, receipts, and other details of such expenses.

Subject to the provisions of subsection (d) below and the other terms and conditions of this Letter Agreement, in the event (i) the Company terminates the Executive's employment without "cause" (ii) within twelve months after a Change of Control (as defined in the Option Plan) the Executive terminates his employment with "good reason" or (iii) the Executive's employment terminates as a result of the Executive's death or disability (any of the foregoing being a "Severance Termination"), the Company will provide the Executive the following benefits, which shall be the only severance benefits or other payments with respect to the Executive's employment with the Company to which the Executive shall be entitled. Without limiting the generality of the foregoing, these benefits, together with those set forth in Section 11 below, are in lieu of all salary and bonuses for periods ending on the date of termination, accrued vacation and other rights the Executive may have against the Company or its affiliates.

In the event of the termination of Executive's employment for any reason, the Executive will be entitled to receive upon such termination payment of all accrued, unpaid salary to the date of termination and a "pro rata portion" of his/her "bonus for the year of termination" (as those terms are defined below). "Pro rata portion" means the number of days in the calendar year of termination up to and including the date of termination divided by the total number of days in that full calendar year. The "bonus for the year of termination" means the amount the Executive would have been likely to earn if he/she had been employed for the full year, as determined in good faith by the Board of Directors of the Company or a committee thereof.

The Company will withhold taxes and other legally required deductions from all payments to be made hereunder. The Company's obligations to make payments under this letter are unfunded and unsecured and will be paid out of the general assets of the Company.

The Executive represents and warrants to the Company that (a) he has full power and authority to enter into this Letter Agreement and to perform his duties hereunder, (b) the execution and delivery of this Letter Agreement and the performance of his duties hereunder shall not result in an actual (as opposed to merely asserted) breach of, or constitute an actual (as opposed to merely asserted) default under, any agreement or obligation to which he may be bound or subject, including without limitation any obligations of confidentiality, non-competition, non-solicitation or use of information, (c) this Letter Agreement represents a valid, legally binding obligation on him and is enforceable against him in accordance with its terms except as the enforceability of this Letter Agreement may be subject to or limited by general principles of equity and by bankruptcy or other similar laws relating to or affecting the rights of creditors, (d) to the Executive's knowledge, the services contemplated by this Letter Agreement do not (i) infringe any third party's copyright, patent, trademark, trade secret or other proprietary right, or (ii) violate any law, statute, ordinance or regulation, and (e) the Executive has resigned from all positions as an employee, officer, director or executive of prior employers. The Executive covenants to the Company that during his employment with the Company (a) he shall not (i) intentionally use, in connection with his employment with the Company, any confidential or proprietary information or materials belonging to any third person or entity, or (ii) knowingly violate any law, statute, ordinance or regulation and (b) he shall not breach (i) any agreement with any third party to keep in confidence any confidential or propriety information, knowledge or data acquired prior to his execution of this Letter Agreement or (ii) any obligations of confidentiality, non-competition, non-solicitation or use of information.

This Letter Agreement may not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the Company other than Executive. Failure to exercise any right under this Letter Agreement shall not constitute a waiver of such right. Any waiver of any breach of this Letter Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

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

If any provision of this Letter Agreement shall be held by a court to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Letter Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court of competent jurisdiction to exceed the maximum time period or scope that such court deems enforceable, then such court shall reduce the time period or scope to the maximum time period or scope permitted by law.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of California and the courts sitting in San Mateo County, California shall have exclusive jurisdiction over any claims arising hereunder.

This Letter Agreement is intended to be the final, complete, and exclusive statement of the terms of Executive's employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the NDA, the Company's 2003 Stock Incentive Plan and the waiver and release agreement attached as Exhibit A).

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

If this letter Agreement sets forth our agreement on the subject matter hereof, kindly sign and return to us the enclosed copy of this letter which will then constitute our legally binding agreement on this subject and supersedes any prior discussions or agreements on this subject.