EXHIBIT 10.6
 
MULTI-TENANT LEASE (NNN)
 
ARDENWOOD LIFE SCIENCE CENTER
Fremont, California
 
LANDLORD:
 
LBA REALTY FUND III-COMPANY VII, LLC,
a Delaware limited liability company
 
TENANT:
 
WAFERGEN, INC.,
a Delaware corporation

 
 

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TABLE OF CONTENTS
 
ARTICLE 1 -
LEASE SUMMARY AND PROPERTY SPECIFIC PROVISIONS
1
     
ARTICLE 2 -
LEASE
9
     
ARTICLE 3 -
PREMISES
9
     
ARTICLE 4 -
TERM AND POSSESSION
9
     
ARTICLE 5 -
RENT
10
     
ARTICLE 6 -
SECURITY DEPOSIT
10
     
ARTICLE 7 -
OPERATING EXPENSES/UTILITIES/SERVICES
11
     
ARTICLE 8 -
MAINTENANCE AND REPAIR
11
     
ARTICLE 9 -
USE
12
     
ARTICLE 10 -
HAZARDOUS MATERIALS
12
     
ARTICLE 11 -
PARKING
13
     
ARTICLE 12 -
TENANT SIGNS
13
     
ARTICLE 13 -
ALTERATIONS
13
     
ARTICLE 14 -
TENANT’S INSURANCE
14
     
ARTICLE 15 -
LANDLORD’S INSURANCE
15
     
ARTICLE 16 -
INDEMNIFICATION AND EXCULPATION
16
     
ARTICLE 17 -
CASUALTY DAMAGE/DESTRUCTION
17
     
ARTICLE 18 -
CONDEMNATION
18
     
ARTICLE 19 -
WAIVER OF CLAIMS; WAIVER OF SUBROGATION
18
     
ARTICLE 20 -
ASSIGNMENT AND SUBLETTING
19
     
ARTICLE 21 -
SURRENDER AND HOLDING OVER
20
     
ARTICLE 22 -
DEFAULTS
20
     
ARTICLE 23 -
REMEDIES OF LANDLORD
21
     
ARTICLE 24 -
ENTRY BY LANDLORD
22
     
ARTICLE 25 -
LIMITATION ON LANDLORD’S LIABILITY
22
     
ARTICLE 26 -
SUBORDINATION
22
     
ARTICLE 27 -
ESTOPPEL CERTIFICATE
23
     
ARTICLE 28 -
RELOCATION OF PREMISES
23
     
ARTICLE 29 -
MORTGAGEE PROTECTION
23
     
ARTICLE 30 -
QUIET ENJOYMENT
23
     
ARTICLE 31 -
MISCELLANEOUS PROVISIONS
23

 
EXHIBITS:

Exhibit A
Premises Floor Plan
Exhibit B
Site Plan
Exhibit C
Work Letter
Exhibit D
Notice of Lease Term Dates
Exhibit E
Rules and Regulations
Exhibit F
Estoppel Certificate
Exhibit G
Environmental Questionnaire and Disclosure Statement

 
RIDERS:

Rider No. 1
Extension Option
Rider No. 2
Fair Market Rental Rate

 
 
(i)

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THIS LEASE, entered into as of this [22nd] day of October, 2009 for reference
purposes, is by and between LBA REALTY FUND III-COMPANY VII, LLC, a Delaware
limited liability company, hereinafter referred to as "Landlord", and WAFERGEN,
INC., a Delaware corporation, hereinafter referred to as "Tenant".
 
ARTICLE 1 - LEASE SUMMARY AND PROPERTY SPECIFIC PROVISIONS
 
1.1
Landlord's Address:
LBA Realty Fund III-Company VII, LLC
   
2550 North First Street, Suite 180
   
San Jose, CA 95131
   
Attn:  Jessica Henderson
   
Telephone:  (408) 435-1221
   
Facsimile:  (408) 435-7836
       
With copies to:
LBA Realty
   
17901 Von Karman, Suite 950
   
Irvine, CA  92614
   
Attn: SVP - Operations
   
Telephone:  (949) 833-0400
   
Facsimile:  (949) 955-9350
       
For payment of Rent:
LBA Realty Fund III-Company VII, LLC
   
P.O. Box 515256
   
Los Angeles, CA 90051-6556

1.2
Tenant's Address (before the Commencement Date):
   
WaferGen, Inc.
   
46531 Fremont Blvd.
   
Fremont, CA  94538
   
Attn:  Lindsay Nishiki
   
Telephone:  (___) ________________
   
Facsimile:  (___) ________________

 

 
Tenant's Address (after the Commencement Date):
   
To the Premises
   
WaferGen, Inc.
   
Attn:  Lindsay Nishiki
   
Telephone:  (___) TBD
   
Facsimile:  (___) TBD

 
1.3        Building:  The Building commonly known as 34781 Campus Drive,
Fremont, California 94555.  The Building, together with all other buildings,
improvements and facilities, now or subsequently located upon the land (the
"Site") as shown on the Site Plan attached hereto as Exhibit B (as such area may
be expanded or reduced from time to time) is referred to herein as the
"Property".  The Property is commonly known as the Ardenwood Life Science
Center.  Landlord and Tenant stipulate and agree that the Property contains
92,250 rentable square feet in the aggregate and that the Building contains
48,240 rentable square feet rentable square feet, for all purposes of this
Lease.
 
1.4        Premises:  Suite 150 of the Building, as outlined on the Premises
Floor Plan attached hereto as Exhibit A.  Landlord and Tenant stipulate and
agree that the Premises contain 19,186 rentable square feet (exclusive of the
server room) for all purposes of this Lease.
 
1.5        City:  The City of Fremont, County of Alameda, State of California.
 
1.6        Commencement Date:  The date for commencement of the Term, to be
determined pursuant to the Work Letter attached as Exhibit C hereto.  Estimated
Commencement Date:  November 1, 2009.
 
1.7        Term:  Sixty-six (66) months, plus any partial month at the beginning
of the Term, commencing on the Commencement Date and ending on the last day of
the sixty-sixth (66th) full calendar month following the Commencement Date
("Expiration Date").
 
1.8        Monthly Base Rent:

 
Months or Period
 

Monthly Base Rent
   
Monthly Base
Rent / rsf
 
*1 – 12
  $ **30,697.60     $ 1.60  
13 – 24
  $ 32,616.20     $ 1.70  
25 – 36
  $ 36,453.40     $ 1.90  
37 – 48
  $ 38,372.00     $ 2.00  
49 – 60
  $ 40,290.60     $ 2.10  
61 – 66
  $ 42,209.20     $ 2.20  

*Including any partial month at the beginning of the Term.

 

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**Notwithstanding the foregoing, Tenant's obligation to pay Monthly Base Rent
and Tenant's Percentage of Operating Expenses shall be abated during months 1
through 6, inclusive, of the initial Term (such total amount of abated Monthly
Base Rent and Tenant's Percentage of Operating Expenses being hereinafter
referred to as the "Abated Amount").  During such abatement period, Tenant will
still be responsible for the payment of all other monetary obligations under the
Lease.

Accordingly, Tenant shall deliver the following amounts to Landlord upon
execution of this Lease (Sections 4.2 and 5.1 of the Standard Provisions):

(a)
Monthly Base Rent:
$30,697.60 for month 7 of the initial Term.
     
(b)
Estimated Operating Expenses:
$9,324.40 for month 7 of the initial Term.
     
(c)
Security Deposit:
$42,209.20 (See Section 1.9 below).
   
Total due upon execution of this Lease:
$82,231.20.

 
1.9        Security Deposit:  $42,209.20.
 
1.10      Permitted Use:  Office, biotechnology research and development,
manufacturing and warehousing, subject to the provisions set forth in this Lease
and as permitted by Law.
 
1.11      Parking:  Three (3) unreserved parking spaces for each 1,000 rentable
square feet leased (i.e., 58 unreserved parking spaces based upon the Premises
containing 19,186 rentable square feet), subject to the terms of Article 11 of
the Standard Lease Provisions.  In addition, Tenant shall be provided four (4)
parking spaces which shall be designated as visitor parking for Tenant and one
parking space which shall be designated for Tenant's shipping/receiving.
 
1.12      Brokers:  GVA Kidder Mathews, representing Landlord and Tenant.
 
1.13      Interest Rate:  The lesser of: (a) Ten percent (10%) or (b) the
maximum rate permitted by law in the State where the Property is located.
 
1.14      Insurance Amounts:
 
a.      Commercial General Liability Insurance: General aggregate liability of
not less than Two Million Dollars ($2,000,000.00).
 
b.      Commercial Automobile Liability Insurance: Limit of liability of not
less than One Million Dollars ($1,000,000.00) per accident.
 
c.      Worker’s Compensation and Employers Liability Insurance: With limits as
mandated pursuant to the laws in the State in which the Property is located, or
One Million Dollars ($1,000,000.00) per person, disease and accident, whichever
is greater.
 
d.      Umbrella Liability Insurance: Limits of not less than Three Million
Dollars ($3,000,000.00) per occurrence.
 
1.15      Tenant Improvements:  The improvements previously installed in the
Premises, if any, and the tenant improvements to be installed in the Premises by
Landlord or Tenant, if any, as described in the Work Letter attached hereto as
Exhibit C (the "Work Letter").  Landlord hereby grants to Tenant an allowance of
up to $10.00 per rentable square foot of the Premises (the "Allowance") (i.e.,
$191,860.00 based upon the Premises containing 19,186 rentable square feet), to
be applied as provided in the Work Letter.
 
1.16      Tenant's Percentage:  39.77%, which is the ratio that the rentable
square footage of the Premises bears to the rentable square footage of the
Building.  Building Percentage of Property:  52.29%, which is the ratio that the
rentable square footage of the Building bears to the rentable square footage of
all buildings within the Property (hereinafter, the "Building
Percentage").  Landlord represents and warrants that the “rentable square feet”
for the Property, the Building and the Premises were measured by the same
standard or method.  Accordingly, as more particularly provided in Section 1.18
hereof, Operating Expenses include the Building Percentage of all such items
which are common to the entire Property.
 
1.17      Common Areas; Definitions; Tenant's Rights. During the Term, Tenant
shall have the non-exclusive right to use, in common with other tenants in the
Property, and subject to the Rules and Regulations referred to in Article 9 of
the Standard Lease Provisions, those portions of the Property (the "Property
Common Areas") not leased or designated for lease to tenants that are provided
for use in common by Landlord, Tenant and any other tenants of the Property (or
by the sublessees, agents, employees, customers invitees, guests or licensees of
any such party), whether or not those areas are open to the general
public.  Without limiting the generality of the foregoing, Tenant shall have the
non-exclusive rights to use the common risers and runs in the Building in order
to install, maintain, replace, remove or use any communications or computer
wires and cables serving the Premises.  The Property Common Areas shall include,
without limitation, parking areas (subject to Article 11 of the Standard Lease
Provisions), loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas appurtenant to the Building,
fixtures, systems, decor, facilities and landscaping contained, maintained or
used in connection with those areas, and shall be deemed to include any city
sidewalks adjacent to the Property, any pedestrian walkway system, park or other
facilities located on the Site and open to the general public.  The common areas
of the Building shall be referred to herein as the "Building Common Areas" and
shall include, without limitation, the following areas of the Building:  the
common entrances, lobbies, common restrooms, accessways, loading docks, ramps,
drives and platforms and any passageways and serviceways thereto to the extent
not exclusively serving another tenant or contained within another tenant's
premises, and the common pipes, conduits, wires and appurtenant equipment
serving the Premises.  The Building Common Areas and the Property Common Areas
shall be referred to herein collectively as the "Common Areas."  If Tenant is
leasing the entire Building, then all elements of the Building and the Building
Common Areas shall constitute part of the Premises and all references to Common
Areas contained in this Lease shall mean and refer to those elements of the
Property outside of the Building.

 
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1.18      Operating Expenses.
 
a.      Triple Net Lease.  Except as otherwise provided herein, all Rent (as
that term is defined under Section 5.2 of the Standard Lease Provisions) shall
be absolutely net to Landlord so that this Lease shall yield net to Landlord the
Rent to be paid each month during the Term of this Lease.  Accordingly, and
except as otherwise provided in this Lease, all costs, expenses and obligations
relating to the Premises which become due during the Term of this Lease
including, without limitation, all costs and expenses of maintenance and
repairs, insurance and taxes, shall be paid by Tenant.  Nothing herein contained
shall be deemed to require Tenant to pay or discharge any liens or mortgages of
any character whatsoever which may exist or hereafter be placed upon the
Premises by or as a result of the conduct of anyone other than Tenant or any of
Tenant's employees, agents, contractors or subcontractors.
 
b.      Operating Expenses.  In addition to the Monthly Base Rent, Tenant shall
pay to Landlord Tenant's Percentage of Operating Expenses (which includes the
Building Percentage of all costs and expenses of operation and maintenance of
the Property Common Areas and the Site), in the manner and at the times set
forth in the following provisions of this Section 1.18.  "Operating Expenses"
shall consist of all costs and expenses of operation, maintenance and repair of
the Building and Building Common Areas as determined by standard accounting
practices and calculated assuming the Building is at least ninety-five percent
(95%) occupied, together with the Building Percentage of all costs and expenses
of operation and maintenance of the Property Common Areas and the Site as
determined by standard accounting practices and calculated assuming the Property
is at least ninety-five percent (95%) occupied.  Operating Expenses include the
following costs by way of illustration but not limitation: (i) any and all
assessments imposed with respect to the Building, Common Areas, and/or Site
pursuant to any covenants, conditions and restrictions affecting the Property;
(ii) costs, levies or assessments resulting from statutes or regulations
promulgated by any government authority in connection with the use or occupancy
of the Site, Building or the Premises (unless triggered by the specific use or
occupancy of another tenant or any alterations or improvements made by another
tenant); (iii) all costs of utilities serving the Common Areas and  all Premises
Utilities Costs and utilities costs for other premises in the Building which are
not separately metered which shall be billed on a pro rata basis based upon the
rentable square footage of all space leased which share in the such utilities)
(iv) all Taxes and Insurance Costs as defined in the Standard Lease Provisions,
(v) waste disposal; (vi) security, if any; (vii) costs incurred in the
management of the Site, Building and Common Areas, including, without
limitation: (1) supplies, materials, equipment and tools, (2) wages, salaries,
benefits, pension payments, fringe benefits, (and payroll taxes, insurance and
similar governmental charges related thereto) of employees used in the operation
and maintenance of the Site, Building and Common Areas, (3) the rental of
personal property used by Landlord's personnel in the maintenance, repair and
operation of the Property, (4) accounting fees and (5) a
management/administrative fee; (viii) repair and maintenance of other portions
of the Building other than such portions as are maintained by Tenant, including
the elevators (if any), restrooms (if any), structural and non-structural
portions of the Building, and the plumbing, heating, ventilating,
air-conditioning and electrical systems installed or furnished by Landlord and
not maintained by Tenant pursuant to Section 8.2 of the Standard Provisions;
(ix) maintenance, costs and upkeep of all parking and Common Areas; (x)
amortization on a straight-line basis over the useful life together with
interest at the Interest Rate (as defined in Section 1.13 of the Lease Summary)
on the unamortized balance of all costs of a capital nature (including, without
limitation, capital improvements, capital replacements, capital repairs, capital
equipment and capital tools) that are: (1) reasonably intended to produce a
reduction in operating charges or energy consumption; or (2) required after the
date of this Lease under any Law that was not applicable to the Building at the
time it was originally constructed; or (3) for repair or replacement of any
equipment or improvements needed to operate and/or maintain the Building, the
Common Areas and/or the Site at the same quality levels as prior to the repair
or replacement; (xi) costs and expenses of gardening and landscaping; (xii)
maintenance of signs (other than signs of tenants of the Site); (xiii) personal
property taxes levied on or attributable to personal property used in connection
with the Building, the Common Areas and/or the Site; and (xiv) costs and
expenses of repairs, resurfacing, repairing, maintenance, painting, lighting and
similar items, including appropriate reserves.  Landlord shall have the right,
from time to time, to equitably allocate some or all of the Operating Expenses
among different tenants and/or different buildings and/or difference premises of
the Property based upon differing levels of use, demand, risk or other
distinctions among such parties, premises or Buildings (the "Cost Pools").  Such
Cost Pools may include, for example, all office space tenants or industrial/R&D
space tenants in the Property and may be modified to take into account the
addition of any additional buildings within the Property.  Accordingly, in the
event of such allocations into Cost Pools, Tenant's Percentage shall be
appropriately adjusted to reflect such allocation.  In addition, if Landlord
does not furnish a particular service or work (the cost of which, if furnished
by Landlord would be included in Operating Expenses) to a tenant (other than
Tenant) that has undertaken to perform such service or work in lieu of receiving
it from Landlord, then such tenant's percentage share of the costs of such
service or work shall be excluded for purposes of calculating Tenant's
Percentage (and the percentage share of all other tenants) as to the costs of
such service or work which is included Operating Expenses and performed by
Landlord.

 
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c.      Exclusions from Operating Expenses.  Notwithstanding anything to the
contrary contained elsewhere in this Section 1.18, the following items shall be
excluded from Operating Expenses: (i) Costs of decorating, redecorating, or
special cleaning or other services provided to certain tenants and not provided
on a regular basis to all tenants of the Building; (ii) Any charge for
depreciation of the Building or equipment and any interest or other financing
charge; (iii) All costs relating to activities for the marketing, solicitation,
negotiation and execution of leases of space in the Building, including without
limitation, costs of tenant improvements; (iv) All costs for which Tenant or any
other tenant in the Building is being charged other than pursuant to the
operating expense clauses of leases for the Building; (v) The cost of correcting
defects in the construction of the Building or in the building equipment, except
that conditions (not occasioned by construction defects) resulting from ordinary
wear and tear will not be deemed defects for the purpose of this category; (vi)
To the extent Landlord is reimbursed by third parties, the cost of repair made
by Landlord because of the total or partial destruction of the Building or the
condemnation of a portion of the Building; (vii) The cost of any items for which
Landlord is reimbursed by insurance or otherwise compensated by parties other
than tenants of the Building pursuant to clauses similar to this paragraph;
(viii) Any operating expense representing an amount paid to a related
corporation, entity, or person which is in excess of the amount which would be
paid in the absence of such relationship; (ix) The cost of any work or service
performed for or facilities furnished to any tenant of the Building to a greater
extent or in a manner more favorable to such tenant than that performed for or
furnished to Tenant; (x) The cost of alterations of space in the Building leased
to other tenants; (xi) Ground rent or similar payments to a ground lessor; (xii)
Legal fees and related expenses incurred by Landlord (together with any damages
awarded against Landlord) due to the gross negligence or willful misconduct of
Landlord; (xiii) Costs arising from the presence of any Hazardous Materials
within, upon or beneath the Property that are not caused by Tenant or any Tenant
Parties; (xiv) Salaries and compensation of ownership and management personnel
to the extent that such persons provide services to properties other than the
Building; (xv) Costs of selling or financing or refinancing the Building; (xvi)
Leasing commissions, attorneys’ fees, costs, disbursements, and other expenses
incurred in connection with negotiations or disputes with tenants, or in
connection with leasing, renovating, or improving space for tenants or other
occupants or prospective tenants or other occupants of the Building; (xvii)
Costs of a capital nature, including but not limited to capital improvements and
alterations, capital repairs, capital equipment, and capital tools as determined
in accordance with generally accepted accounting principles, except as expressly
permitted by Section 1.18(b)(x) above; (xviii) Overhead profit increments paid
to Landlord’s subsidiaries or affiliates for management or other services on or
to the building or for supplies or other materials to the extent that the cost
of the services, supplies, or materials exceeds the cost that would have been
paid had the services, supplies, or materials been provided by unaffiliated
parties on a competitive basis; (xix) Costs of repairs and other work occasioned
by fire, windstorm, or other casualty of an insurable nature; (xx) Management
fees or costs to the extent they exceed management costs charged for similar
facilities in the area and in any event, to the extent they exceed 3% of gross
receipts; (xxi) insurance deductibles to the extent the same exceed twenty five
thousand dollars ($25,000.00).
 
d.      Estimate Statement and Payment of Tenant's Percentage of Operating
Expenses.  By the first day of April  of each calendar year during the Term,
Landlord shall endeavor to deliver to Tenant a statement ("Estimate Statement")
estimating the Tenant's Percentage of Operating Expenses for the current
calendar year.  If at any time during the Term, but not more often than
quarterly, Landlord reasonably determines that the estimated amount of Tenant's
Percentage of Operating Expenses payable by Tenant for the current calendar year
will be greater or less than the amount set forth in the then current Estimate
Statement, Landlord may issue a revised Estimate Statement and Tenant agrees to
pay Landlord, within ten (10) days after receipt of the revised Estimate
Statement, the difference between the amount owed by Tenant under such revised
Estimate Statement and the amount owed by Tenant under the original Estimate
Statement for the portion of the then current calendar year which has
expired.  Thereafter Tenant agrees to pay Tenant's Percentage of Operating
Expenses based on such revised Estimate Statement until Tenant receives the next
calendar year's Estimate Statement or a new revised Estimate Statement for the
current calendar year.  Tenant's Percentage of Operating Expenses shown on the
Estimate Statement (or revised Estimate Statement, as applicable) shall be
divided into twelve (12) equal monthly installments, and Tenant shall pay to
Landlord, concurrently with the regular monthly Rent payment next due following
the receipt of the Estimate Statement (or revised Estimate Statement, as
applicable), an amount equal to one (1) monthly installment of such Tenant's
Percentage of Operating Expenses multiplied by the number of months from January
in the calendar year in which such statement is submitted to the month of such
payment, both months inclusive (less any amounts previously paid by Tenant with
respect to any previously delivered Estimate Statement or revised Estimate
Statement for such calendar year).  Subsequent installments shall be paid
concurrently with the regular monthly Rent payments for the balance of the
calendar year and shall continue until the next calendar year's Estimate
Statement (or current calendar year's revised Estimate Statement) is received.
 
e.      Actual Statement.  By the first day of June  of each subsequent calendar
year during the Term, Landlord shall endeavor to deliver to Tenant a statement
("Actual Statement") which states the Tenant's Percentage of actual Operating
Expenses payable by Tenant for the immediately preceding calendar year.  If the
Actual Statement reveals that the Tenant's Percentage of actual Operating
Expenses was more than the Tenant's Percentage of estimated Operating Expenses
paid by Tenant with respect to the preceding calendar year, Tenant agrees to pay
Landlord the difference in a lump sum within thirty (30) days after receipt of
the Actual Statement.  Such obligation will be a continuing one which will
survive the expiration or earlier termination of this Lease.  If the Actual
Statement reveals that the Tenant's Percentage of actual Operating Expenses was
less than the Operating Expenses paid by Tenant with respect to the preceding
calendar year, Landlord will credit any overpayment toward the next monthly
installment(s) of Rent due from Tenant or returned to Tenant in a lump sum
payment within thirty days following the end of the Term.  Prior to the
expiration or sooner termination of the Term and Landlord's acceptance of
Tenant's surrender of the Premises, Landlord will have the right to estimate the
Tenant's Percentage of actual Operating Expenses for the then current calendar
year and to collect from Tenant prior to Tenant's surrender of the Premises, any
excess of such Tenant's Percentage of actual Operating Expenses over the
Tenant's Percentage of estimated Operating Expenses paid by Tenant in such
calendar year.

 
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f.      No Release.  Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Section 1.18 shall not constitute
a waiver of its right to receive Tenant's payment of Tenant's Percentage of
Operating Expenses, nor shall it relieve Tenant of its obligations to pay
Operating Expenses pursuant to this Section 1.18, except that Tenant shall not
be obligated to make any payments based on such Estimate or Actual Statement
until thirty (30) days after receipt of such statement.  Notwithstanding the
foregoing, Landlord shall have no right to bill Tenant for any Operating
Expenses attributable to a given year after the date which is eighteen (18)
months after the end of such year.
 
g.      Review.  Within one hundred eighty (180) days after receiving Landlord’s
Actual Statement, Tenant may, upon advance written notice to Landlord and during
reasonable business hours, cause a review of Landlord’s books and records with
respect to the preceding calendar year only to determine the accuracy of
Landlord’s Actual Statement.  Landlord shall make all pertinent records
available for inspection that are reasonably necessary for Tenant to conduct its
review.  If any records are maintained at a location other than the office of
the Building, Tenant may either inspect the records at such other location or
pay for the reasonable cost of copying and shipping the records.  If Tenant
retains an agent, at Tenant’s sole cost and expense, to review Landlord’s
records, the agent shall be an independent accountant of national or regional
standing which is reasonably acceptable to Landlord, is not compensated on a
contingency basis and is also subject to a confidentiality agreement.  Within
ninety (90) days after the records are made available to Tenant, Tenant shall
have the right to give Landlord written notice (an "Objection Notice") stating
in reasonable detail any objection to the Actual Statement of Operating Expenses
for that year.  If Tenant provides Landlord with a timely Objection Notice,
Landlord and Tenant shall work together in good faith to resolve any issues
raised in Tenant’s Objection Notice.  If Tenant fails to provide Landlord with a
timely Objection Notice, Landlord’s Actual Statement shall be deemed final and
binding, and Tenant shall have no further right to review or object to such
statement.  If Landlord and Tenant determine that Operating Expenses for the
calendar year are less than reported, Landlord shall provide Tenant with a
credit against the next installment of Rent in the amount of the overpayment by
Tenant or returned to Tenant in a lump sum payment within thirty days following
the end of the Term.  Likewise, if Landlord and Tenant determine that Operating
Expenses for the calendar year are greater than reported, Tenant shall pay
Landlord the amount of any underpayment within thirty (30) days after such
determination.  The records obtained by Tenant shall be treated as
confidential.  In no event shall Tenant be permitted to review Landlord’s
records or to dispute any statement of Operating Expenses unless Tenant has paid
and continues to pay all Rent when due.
 
1.19      Utilities and Services.
 
a.      Utilities and Services.  As used in this Lease, "Premises Utilities
Costs" shall mean all actual charges for utilities for the Premises of any kind,
including but not limited to water, sewer and electricity, telecommunications
and cable service, and the costs of heating, ventilating and air conditioning
and other utilities as well as related fees, assessments and surcharges.  Tenant
shall be charged Premises Utilities Costs as part of Operating Expenses on a
monthly basis based on Tenant's Percentage of utilities costs for the
Building.  Tenant shall reimburse Landlord within ten (10) days after billing
for fixture charges and/or water tariffs, if applicable, which are charged to
Landlord by local utility companies.  Landlord will notify Tenant of this charge
as soon as it becomes known.  This charge will increase or decrease with current
charges being levied against Landlord, the Premises or the Building by the local
utility company, and will be due as Additional Rent.  In no event shall
Landlord, except for its gross negligence, be liable for any interruption or
failure in the supply of any such utility or other services to Tenant.  In no
event shall any Rent owed Landlord under this Lease be abated by reason of the
failure to furnish, delay in furnishing, unavailability or diminution in quality
or quantity of any such utility or other services or interference with Tenant’s
business operations as a result of any such occurrence; nor shall any such
occurrence constitute an actual or constructive eviction of Tenant or a breach
of an implied warranty by Landlord.  Notwithstanding anything in this Lease to
the contrary, if (i) any interruption or cessation of utilities or services
results from Landlord’s breach of this Lease or the negligence or willful
misconduct of Landlord, or its employees, agents and contractors, or (ii) any
such interruption is covered by any rent loss insurance maintained by Landlord,
then if the Premises are not usable by Tenant for the conduct of Tenant’s
business as a result such interruption, Base Rent and applicable Operating
Expenses not actually incurred up to that point by Tenant shall be abated for
the period that commences three (3) business days after the date Tenant gives to
Landlord notice of such interruption until such utilities and services are
restored.
 
b.      Maintenance/Janitorial/Service Contracts.  To the extent Landlord does
not perform HVAC maintenance, then Tenant shall, at its sole cost and expense,
enter into a regularly scheduled preventive maintenance/service contract with a
maintenance contractor to service all hot water, heating and air conditioning
systems and equipment ("HVAC") within the Premises, or which serve the Premises
exclusively, including, without limitation, any rooftop package, HVAC units,
distribution lines and internal venting systems.  All cleaning and janitorial
services, including regular removal of trash and debris, for the Premises shall
be performed and obtained, at Tenant's sole cost and expense, exclusively by or
through Tenant or Tenant's janitorial contractors.  The maintenance contractor
and janitorial contractor and the contracts for same must be approved in writing
by Landlord in advance.  All maintenance/service contracts shall include all
services recommended by the equipment manufacturer within the
operation/maintenance manual and shall become effective (and a copy thereof
delivered to Landlord) within thirty (30) days following the date Tenant takes
possession of the Premises.  Landlord reserves the right, upon notice to Tenant,
to procure and maintain any or all of such service contracts, and if Landlord so
elects, Tenant shall reimburse Landlord, as Additional Rent, upon demand, for
the cost therefor.  Notwithstanding anything to the contrary contained in this
Lease, Tenant’s obligation to repair or maintain and HVAC shall not include the
making of any capital repairs, replacements, renewals or improvements to such
HVAC systems unless, and to the extent, required due to Tenant’s negligence or
willful misconduct, and any such capital items shall be performed by Landlord in
accordance with Paragraph 1.19(d) below.

 
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c.      Tenant's Obligations.  Tenant shall reasonably cooperate at all times
with Landlord, and abide by all reasonable regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the
Building's services and systems.  Subject to Article 13, Tenant shall not
connect any conduit, pipe, apparatus or other device to the Building's water,
waste or other supply lines or systems for any purpose.  Neither Tenant nor its
employees, agents, contractors, licensees or invitees shall at any time enter,
adjust, tamper with, touch or otherwise in any manner affect the mechanical
installations or facilities of the Building.
 
d.      Landlord's Obligations.  In addition to any repair obligations of
Landlord set forth elsewhere in this Lease, Landlord, at Landlord’s cost, shall
repair, maintain in good condition, including replacements as necessary, the
foundation and structural elements of the Building (including structural load
bearing walls and roof structure), the Common Areas, the roof membrane, exterior
walls, exterior of windows, window sashes, casements and frames, exterior plate
glass, and utility meters, electrical lines, pipes and conduits serving the
Building and the Premises; provided, however, to the extent such maintenance,
repairs or replacements are required as a result of any act, neglect, fault or
omission of Tenant or any of Tenant’s Parties, Tenant shall pay to Landlord, as
Additional Rent, the costs of such maintenance, repairs and replacements.
 
1.20     Additional Hazardous Materials Requirements.  In addition to Tenant's
obligations under Article 10 of the Standard Provisions, Tenant shall comply
with the following provisions with respect to Hazardous Materials (as that term
is defined in Article 10).
 
a.      Environmental Questionnaire; Disclosure.  Prior to the execution of this
Lease, Tenant shall complete, execute and deliver to Landlord an Environmental
Questionnaire and Disclosure Statement (the "Environmental Questionnaire") in
the form of Exhibit G, and Tenant shall certify to Landlord all information
contained in the Environmental Questionnaire as true and correct to the best of
Tenant's knowledge and belief.  The completed Environmental Questionnaire shall
be deemed incorporated into this Lease for all purposes, and Landlord shall be
entitled to rely fully on the information contained therein.  On each
anniversary of the Commencement Date (each such date is hereinafter referred to
as a "Disclosure Date"), until and including the first Disclosure Date occurring
after the expiration or sooner termination of this Lease, Tenant shall disclose
to Landlord in writing the names and amounts of all Hazardous Materials, or any
combination thereof, that were stored, generated, used or disposed of on, under
or about the Premises for the twelve (12) month period prior to each Disclosure
Date, and that Tenant intends to store, generate, use or dispose of on, under or
about the Premises through the next Disclosure Date.  At Landlord's request,
Tenant's disclosure obligations under this Section 1.20 shall include a
requirement that Tenant update, execute and deliver to Landlord the
Environmental Questionnaire, as the same may be reasonably modified by Landlord
from time to time; provided, however, Tenant shall not be required to update the
Environmental Questionnaire more than once per year unless an environmental
event of default has occurred or Tenant has materially changed its business.  In
addition to the foregoing, Tenant shall promptly notify Landlord of, and shall
promptly provide Landlord with true, correct, complete and legible copies of,
all of the following environmental items relating to the Premises:  reports
filed pursuant to any self reporting requirements; reports filed pursuant to any
Environmental Laws or this Lease; all permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices, and all
other reports, disclosures, plans or documents (even those that may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, underground storage tanks or Hazardous Materials;
all orders, reports, notices, listings and correspondence (even those that may
be considered confidential) of or concerning the release, investigation,
compliance, clean up, remedial and corrective actions, and abatement of
Hazardous Materials whether or not required by Environmental Laws; and all
complaints, pleadings and other legal documents filed against Tenant related to
Tenant's use, handling, storage or disposal of Hazardous Materials.
 
b.      Inspection; Compliance.  Following no less than 24 hours prior written
notice (or without notice in case of emergency) and subject to Tenant’s
reasonable security requirements, Landlord and Landlord Parties (as that term is
defined in Article 10) shall have the right, but not the obligation, to inspect,
investigate, sample and/or monitor the Premises, including any air, soil, water,
groundwater or other sampling, and any other testing, digging, drilling or
analyses, at any time to determine whether Tenant is complying with the terms of
this Section 1.20 and Article 10, and in connection therewith, Tenant shall
provide Landlord with access to all relevant facilities, records and
personnel.  If Tenant is not in compliance with any of the provisions of this
Section 1.20 and Article 10, or in the event of a release of any Hazardous
Material on, under, from or about the Premises, Landlord and Landlord Parties
shall have the right, but not the obligation, without limitation on any of
Landlord's other rights and remedies under this Lease, to immediately enter upon
the Premises and to discharge Tenant's obligations under this Section 1.20 and
Article 10 at Tenant's expense, including without limitation the taking of
emergency or long term remedial action.  Landlord and Landlord Parties shall
endeavor to minimize interference with Tenant's business but shall not be liable
for any such interference.  In addition, Landlord, at Tenant's sole cost and
expense, shall have the right, but not the obligation, to join and participate
in any legal proceedings or actions initiated in connection with any claims or
causes of action caused by the storage, generation, use or disposal by Tenant or
Tenant's Parties of Hazardous Materials on, under, from or about the
Premises.  All sums reasonably disbursed, deposited or incurred by Landlord in
connection therewith, including, but not limited to, all costs, expenses and
actual attorneys' fees, shall be due and payable by Tenant to Landlord, as an
item of Additional Rent, on demand by Landlord, together with interest thereon
at the Interest Rate from the date of such demand until paid by
Tenant.  Landlord agrees that unless any testing proves that the Tenant or
Tenant's Parties have responsibility for the presence of said Hazardous
Materials, Tenant shall not be liable for any costs or expenses in connection
with such inspection, testing and monitoring.

 
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c.      Tenant Obligations.  If the presence of any Hazardous Materials on,
under or about the Premises caused by Tenant or Tenant's Parties results in
(i) injury to any person, (ii) injury to or contamination of the Premises, or
(iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its sole cost and expense, shall promptly take all actions
necessary to return the Premises to a condition which complies with all
Environmental Laws and to remedy or repair any such injury or
contamination.  Without limiting any other rights or remedies of Landlord under
this Lease, Tenant shall pay the cost of any cleanup work performed on, under or
about the Premises as required by this Lease or any Environmental Laws in
connection with the removal, disposal, neutralization or other treatment of such
Hazardous Materials caused by Tenant or Tenant's Parties.  If Landlord has a
reasonable basis to believe that Tenant or Tenant's Parties have caused the
release of a Hazardous Material on, under, from or about the Premises, then
Landlord may require Tenant, at Tenant's sole cost and expense, to conduct
monitoring activities on or about the Premises reasonably satisfactory to
Landlord concerning such suspected release of Hazardous Materials on, under,
from or about the Premises.  Notwithstanding anything to the contrary contained
in the foregoing, Tenant shall not, without Landlord's prior written consent,
take any remedial action in response to the presence of any Hazardous Materials
on, under or about the Premises in violation of Environmental Laws, or enter
into any settlement agreement, consent decree or other compromise with any
governmental agency with respect to any Hazardous Materials claims; provided,
however, Landlord's prior written consent shall not be necessary in the event
that the presence of Hazardous Materials on, under or about the Premises
(i) poses an immediate threat to the health, safety or welfare of any
individual, or (ii) is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Landlord's consent before taking such
action.  Tenant's failure to timely comply with this Section 1.20 shall
constitute an event of default under this Lease.
 
d.      Tenant's Responsibility at Conclusion of Lease.  Promptly upon the
expiration or sooner termination of this Lease, Tenant shall represent to
Landlord in writing that Tenant has made a diligent effort to determine whether
any Hazardous Materials are on, under or about the Premises, as a result of any
acts or omissions of Tenant or Tenant's Parties.  If Landlord at any time
discovers that Tenant or Tenant's Parties caused the release of a Hazardous
Material on, under, from or about the Premises, Tenant shall, at Landlord's
request, immediately prepare and submit to Landlord within thirty (30) days
after such request a comprehensive plan, subject to Landlord's approval,
specifying the actions to be taken by Tenant to return the Premises to the
condition as required by applicable Environmental Laws.  Upon Landlord's
approval of such clean up plan, Tenant shall, at Tenant's sole cost and expense,
without limitation on any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to clean up such
Hazardous Materials in accordance with all Environmental Laws and as required by
such plan and this Lease.
 
1.21     Emergency Power Generator.  Tenant shall have the right to operate and
utilize as needed, on a non-exclusive basis together with other tenants of the
Building, at the sole cost and expense of Tenant and any such other tenants (on
a prorate basis) including costs of fuel replacement (except as provided
herein), the existing back-up generator and above-ground storage tank associated
with the generator (collectively including the tank and related equipment, the
"Generator") on the Site in the area shown on the Site Plan attached hereto as
Exhibit "B".  Notwithstanding the foregoing, in no event may the use and
operation of the Generator involve the installation or use of an underground
storage tank.  Landlord hereby represents and warrants that as of the date
Tenant takes possession of the Premises and assumes responsibility for the
Generator that the Generator is in good working order and in compliance with all
applicable Laws, including applicable Environmental Laws.  Subject to such
representation and warranty of Landlord, (i) Tenant shall be solely responsible
for complying with any and all applicable Laws, including all Environmental Laws
relating to the Generator and all Hazardous Materials associated with the
Generator, including, without limitation, all permitting and tank monitoring and
use obligations,  (ii) for purposes of all Environmental Laws, Tenant shall be
deemed the owner and operator of the Generator, (iii) Tenant shall be
responsible for periodically starting and testing the proper functioning of the
Generator as recommended by the manufacturer, (iv) Tenant shall be responsible
for all repair and maintenance of the Generator to keep it in good operating
condition and in compliance with all applicable laws and regulations including
applicable Environmental Laws, and (v) Landlord shall have no liability to
Tenant as to the operation, suitability or use of the Generator or for any
failure of the Generator to function properly should Tenant require use of the
Generator for any reason and Tenant hereby releases and agrees to hold Landlord
harmless from any and all such liability.  Notwithstanding the foregoing,
Tenant’s obligation to repair or maintain the Generator shall not include the
making of any capital repairs, replacements, renewals or improvements unless,
and to the extent, required due to Tenant’s negligence or willful misconduct.
 
1.22      Personal Property. During the Term, Tenant may, at no additional
charge, use the following furniture, fixtures and equipment now located in the
Premises (collectively, the "Personal Property"): laboratory benches, casework,
fume hoods, and laminar flow hoods and all office and cubicle furniture.  Tenant
shall maintain the Personal Property in good condition and repair (ordinary wear
and tear excepted), shall not alter and/or remove the Personal Property from the
Premises, and, if any item of the Personal Property is damaged, Tenant shall
repair or replace (with a comparable replacement) such item.  Landlord
represents and warrants that it holds legal title to the Personal Property, and
the Personal Property shall remain the property of Landlord and shall by
surrendered to Landlord upon the expiration or earlier termination of this Lease
in substantially the same condition as it was delivered to Tenant by Landlord,
ordinary wear and tear excepted.  Except as expressly set forth herein, Tenant
acknowledges that Landlord has made no representation or warranty (express or
implied) regarding the quantity, quality, suitability and/or condition of the
Personal Property or the suitability of the Personal Property for Tenant's use.

 
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1.23      Monument Sign.  Tenant shall also have the non-exclusive right, at
Tenant's sole cost and expense, to have the name "Wafergen" placed (1) on one
sign panel on the monument sign for the Project located on Paseo Padre
("Monument Sign").  The location of Tenant's panel on the Monument Sign will be
determined by Landlord.  Tenant shall be solely responsible for payment of all
costs and expenses related to Tenant's panel on the Monument Sign, including,
without limitation, all design, fabrication and permitting costs, license fees,
installation, maintenance, repair and removal costs.  Landlord shall maintain
and repair Tenant's sign panel at Tenant's expense.  Upon the expiration or
earlier termination of this Lease, Landlord shall, at Tenant's sole cost and
expense (except as otherwise set forth hereinabove), (i) cause Tenant's sign to
be removed from the Monument Sign, (ii) repair any damage caused by the removal
of Tenant's sign, and (iii) restore the underlying surfaces to the condition
existing prior to the installation of Tenant's sign.  The Monument Sign rights
granted herein are personal to the original Tenant executing this Lease and may
not be assigned, voluntarily or involuntarily, to any person or entity.  The
rights granted to the original Tenant hereunder are not assignable separate and
apart from the Lease, nor may any right granted herein be separated from the
Lease in any manner, either by reservation or otherwise.
 
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STANDARD LEASE PROVISIONS
 
ARTICLE 2 - LEASE
 
2.1        Lease Elements; Definitions; Exhibits.  The Lease is comprised of the
Lease Summary and Property Specific Provisions (the "Summary"), these Standard
Lease Provisions ("Standard Provisions") and all exhibits, and riders attached
hereto (collectively, "Exhibits"), all of which are incorporated together as
part of one and the same instrument.  All references in any such documents and
instruments to "Lease" means the Summary, these Standard Provisions and all
Exhibits attached hereto.  All terms used in this Lease shall have the meanings
ascribed to such terms in the Summary, these Standard Provisions and any
Exhibits.  To the extent of any inconsistency between the terms and conditions
of the Summary, these Standard Provisions, or any Exhibits attached hereto, the
Summary and any Exhibits attached hereto shall control over these Standard
Provisions.
 
ARTICLE 3 - PREMISES
 
3.1        Lease of Premises. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Premises, upon and subject to, the terms,
covenants and conditions of this Lease.  Each party covenants and agrees, as a
material part of the consideration for this Lease, to keep and perform their
respective obligations under this Lease.
 
3.2        Landlord's Reserved Rights.  Landlord reserves the right from time to
time to do any of the following: (a) expand the Building and construct or alter
other buildings or improvements on the Property as long as Tenant's parking
ratio is not substantially and adversely impacted; (b) make any changes,
additions, improvements, maintenance, repairs or replacements in or to the
Property, Common Areas and/or the Building (including the Premises if required
to do so by any applicable Laws or to the extent necessary in conjunction with
any improvements to the Property, Common Areas and/or the Building, provided
that Tenant's use of, or access to, the Premises is not materially and adversely
affected), and the fixtures and equipment thereof, including, without
limitation: (i) maintenance, replacement and relocation of pipes, ducts,
conduits, wires and meters and equipment above the ceiling surfaces, below the
floor surfaces and within the walls of the Building and the Premises; and
(ii) changes in the location, size, shape and number of driveways, entrances,
stairways, elevators, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways, easements, parking spaces and parking
areas as long as Tenant's parking ratio is not substantially and adversely
impacted; (c) close temporarily any of the Property while engaged in making
repairs, improvements or alterations to the Property; and (d) perform such other
acts and make such other changes with respect to the Property, as Landlord may,
in the exercise of good faith business judgment, deem to be
appropriate.  Landlord’s right pursuant to this Section 3.2 shall be subject to
the conditions that (i) the exercise of any of such rights shall not
unreasonably interfere with Tenant’s use of or acess to the Premises, or
decrease the number of Tenant’s parking spaces, (ii) Landlord shall provide
reasonable prior notice to Tenant before exercising any such rights which may
interfere with Tenant’s business, and (iii) Landlord shall use its best efforts
to minimize to the extent possible any interference with Tenant’s business,
including without limitation, scheduling such work after business hours or on
weekends to the extent reasonably feasible and economical.
 
ARTICLE 4 - TERM AND POSSESSION
 
4.1        Term; Notice of Lease Dates.  The Term shall be for the period
designated in the Summary commencing on the Commencement Date and ending on the
Expiration Date, unless the Term is sooner terminated or extended as provided in
this Lease.  If the Commencement Date falls on any day other than the first day
of a calendar month then the Term will be measured from the first day of the
month following the month in which the Commencement Date occurs.  Within ten
(10) days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and Expiration Date of the Term in the
form of the Notice of Lease Term Dates attached hereto as Exhibit D.  The Notice
of Lease Term Dates shall be binding upon Tenant unless Tenant reasonably
objects thereto in writing within such ten (10) day period.
 
4.2        Possession.  Landlord shall deliver possession of the Premises to
Tenant as provided in the Work Letter, or if no Work Letter is attached hereto,
Landlord shall deliver possession of the Premises to Tenant in its then as-is
condition, subject to the provisions of Section 4.3 below.  Tenant agrees that
if Landlord is unable to deliver possession of the Premises to Tenant on or
prior to the Commencement Date or the Estimated Commencement Date, the Lease
will not be void or voidable, nor will Landlord be liable to Tenant for any loss
or damage resulting therefrom.  Notwithstanding the foregoing, Landlord will not
be obligated to deliver possession of the Premises to Tenant until Landlord has
received from Tenant all of the following:  (i) a copy of this Lease fully
executed by Tenant; (ii) any Security Deposit, Guaranty and/or Letter of Credit
required hereunder and the installment of Monthly Base Rent and Additional Rent
(applicable to the seventh [7th] full month of the initial Term), due under this
Lease; and (iii) copies of Tenant's insurance certificates as required
hereunder.

 
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4.3        Condition of Premises.  Landlord shall deliver the Premises to Tenant
in broom-clean condition and free of debris, with the existing Building-standard
electrical, plumbing, and HVAC systems (collectively, the "Operating Systems")
in good operating condition as of the Turnover Date (as defined in the Work
Letter attached hereto as Exhibit C).  If one of such Operating Systems or
elements should malfunction or fail within the warranty period below, as
Tenant's sole remedy for Landlord's breach of this warranty, Landlord shall, as
Landlord's sole obligation, promptly after receipt of written notice from Tenant
setting forth with specificity the nature and extent of such non-compliance,
malfunction or failure, repair or replace the same, if necessary, at Landlord's
expense; provided, however, Landlord shall have no liability hereunder for
repairs or replacements necessitated by the acts or omissions of Tenant and/or
any of Tenant's Parties.  The warranty period shall be thirty (30) days after
Lease Commencement of the Premises .  If Tenant does not give Landlord the
required notice within said warranty period, repair of the Operating Systems
which exclusively service the Premises shall be the obligation of Tenant at
Tenant's sole cost and expense.  Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, (i) neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises,
the Building or the Property or their condition, or with respect to the
suitability thereof for the conduct of Tenant's business, and Tenant shall
accept the Premises in its then as-is condition on delivery by Landlord, and
(ii) the acceptance of possession of the Premises by Tenant shall establish that
the Premises, the Building and the Property were at such time complete and in
good, sanitary and satisfactory condition and repair with all work required to
be performed by Landlord, if any, completed and without any obligation on
Landlord's part to make any further alterations, upgrades or improvements
thereto
 
ARTICLE 5 - RENT
 
5.1        Monthly Base Rent.  Tenant agrees to pay Landlord, the Monthly Base
Rent as designated in the Summary.  Monthly Base Rent and recurring monthly
charges of Additional Rent (defined below) shall be paid by Tenant in advance on
the first day of each and every calendar month ("Due Date") during the Term,
except that the Monthly Base Rent and Additional Rent applicable to the seventh
[7th] full month of the initial Term shall be paid upon Tenant's execution and
delivery of this Lease to Landlord.  Monthly Base Rent for any partial month
shall be prorated in the proportion that the number of days this Lease is in
effect during such month bears to the actual number of days in such month.
 
5.2        Additional Rent.  All amounts and charges payable by Tenant under
this Lease in addition to Monthly Base Rent, if any, including, without
limitation, payments for Operating Expenses, Taxes, Insurance Costs and Premises
Utilities Costs to the extent payable by Tenant under this Lease shall be
considered "Additional Rent", and the word "Rent" in this Lease shall include
Monthly Base Rent all such Additional Rent unless the context specifically
states or clearly implies that only Monthly Base Rent is referenced.  Rent shall
be paid to Landlord, without any prior notice or demand therefor and without any
notice, deduction or offset, in lawful money of the United States of America.
 
5.3        Late Charges & Interest Rate: If Landlord does not receive Rent or
any other payment due from Tenant within five (5) days following the Due Date,
Tenant shall pay to Landlord a late charge equal to five percent (5%) of such
past due Rent or other payment; provided, however, that Tenant shall be entitled
to one notice of late payment and a five (5) day cure period in each calendar
year before any such late charge accrues.  Tenant agrees that this late charge
represents a fair and reasonable estimate of the cost Landlord will incur by
reason of Tenant’s late payment.  Accepting any late charge shall not constitute
a waiver by Landlord of Tenant’s default with respect to any overdue amount nor
prevent Landlord from exercising any other rights or remedies available to
Landlord.  If any installment of Monthly Base Rent or Additional Rent, or any
other amount payable by Tenant hereunder is not received by Landlord by the Due
Date, it shall bear interest at the Interest Rate set forth in the Summary from
the Due Date until paid.  All interest, and any late charges imposed pursuant to
this Section 5.3, shall be considered Additional Rent due from Tenant to
Landlord under the terms of this Lease.
 
5.4        Rental Tax.  In addition to Rent and other charges to be paid by
Tenant under this Lease, Tenant shall reimburse to Landlord, simultaneously
therewith, a sum equal to the aggregate of any municipal, county, state and/or
federal excise, rent, sales, use or transaction privilege taxes now or hereafter
legally levied or imposed against, or on account of, any or all amounts payable
under this Lease by Tenant or the receipt thereof by Landlord, and any taxes
assessed or imposed in lieu of or in substitution of any of the foregoing
taxes.  The taxes payable by Tenant hereunder are not included within and shall
not be duplicated in the Taxes described in Section 7.3 below (which Taxes are
included in Operating Expenses).  Notwithstanding the foregoing, in no event
shall Tenant have any liability for any inheritance or estate taxes imposed upon
or assessed against the interest of Landlord, gift taxes, excess profit taxes,
franchise taxes, or similar taxes on Landlord's business or any other taxes
computed upon the basis of the net income of Landlord.
 
ARTICLE 6 - SECURITY DEPOSIT
 
Concurrently with Tenant’s execution and delivery of this Lease to Landlord,
Tenant shall deposit with Landlord the Security Deposit, if any, designated in
the Summary.  The Security Deposit shall be held by Landlord as security for the
full and faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease to be performed by Tenant during the Term.  If Tenant
defaults with respect to any of its obligations under this Lease, Landlord may
(but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any Monthly Base Rent, Additional Rent or
any other sum in default, or for the payment of any other amount, loss or damage
which Landlord may spend, incur or suffer by reason of Tenant's default.  If any
portion of the Security Deposit is so used or applied, Tenant shall, within ten
(10) days after demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount.  Landlord
shall not be required to keep the Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on the Security
Deposit.  Provided Tenant is not then in default, the Security Deposit or any
balance thereof shall be returned to Tenant within thirty (30) days following
the expiration of the Term, provided that Landlord may retain the Security
Deposit until such time as any amount then due from Tenant in accordance with
this Lease has been determined and paid in full.  If Landlord sells its interest
in the Building during the Term and if Landlord deposits with or credits to the
purchaser the Security Deposit (or balance thereof), then, upon such sale,
Landlord shall be discharged from any further liability with respect to the
Security Deposit.  Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code and agrees that the provisions of this Article 6 shall
govern the treatment of Tenant's Security Deposit in all respects for this
Lease.

 
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ARTICLE 7 - OPERATING EXPENSES/UTILITIES/SERVICES
 
7.1        Operating Expenses.  Tenant shall pay for or contribute to the costs
of operation, maintenance, repair and replacement of the Premises, Building and
Property as provided in the Summary.
 
7.2        Utilities and Services.  Utilities and services to the Premises and
the Property are described in the Summary.
 
7.3        Taxes.  As used in this Lease, the term "Taxes" means: All real
property taxes and assessments, possessory interest taxes, sales taxes, personal
property taxes, business or license taxes or fees, gross receipts taxes, license
or use fees, excises, transit charges, and other impositions of any kind
(including fees "in-lieu" or in substitution of any such tax or assessment)
which are now or hereafter assessed, levied, charged or imposed by any public
authority upon the Building, Site, Property and/or Premises or any portion
thereof, its operations or the Rent derived therefrom (or any portion or
component thereof, or the ownership, operation, or transfer thereof), and any
and all costs and expenses (including, without limitation, reasonable attorneys'
fees) incurred in attempting to protest, reduce or minimize the same.  Taxes
shall not include inheritance or estate taxes imposed upon or assessed against
the interest of Landlord, gift taxes, excess profit taxes, franchise taxes, or
similar taxes on Landlord's business or any other taxes computed upon the basis
of the net income of Landlord.  If it shall not be lawful for Tenant to
reimburse Landlord for any such Taxes, the Monthly Base Rent payable to Landlord
under this Lease shall be revised to net Landlord the same net rent after
imposition of any such Taxes by Landlord as would have been payable to Landlord
prior to the payment of any such Taxes.  Tenant shall pay for or contribute to
Taxes as part of Operating Expenses as provided in the Summary.  Notwithstanding
anything herein to the contrary, Tenant shall be liable for all taxes levied or
assessed against personal property, furniture, fixtures, above-standard Tenant
Improvements and alterations, additions or improvements placed by or for Tenant
in the Premises.  Furthermore, Tenant shall pay prior to delinquency any (i)
rent tax or sales tax, service tax, transfer tax or value added tax, or any
other applicable tax on the rent or services provided herein or otherwise
respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Property; or (iii)
taxes assessed upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises.
 
7.4        Insurance Costs.  As used in this Lease, "Insurance Costs" means the
cost of insurance obtained by Landlord pursuant to Article 15 (including
commercially reasonable deductibles, if any).   Tenant shall pay for or
contribute to Insurance Costs as part of Operating Expenses subject to and in
accordance with the provisions in the Summary.
 
7.5        Interruption of Utilities.  Landlord shall have no liability to
Tenant for any interruption in utilities or services to be provided to the
Premises when such failure is caused by all or any of the following:
(a) accident, breakage or repairs; (b) strikes, lockouts or other labor
disturbances or labor disputes of any such character; (c) governmental
regulation, moratorium or other governmental action; (d) inability, despite the
exercise of reasonable diligence, to obtain electricity, water or fuel;
(e) service interruptions or any other unavailability of utilities resulting
from causes beyond Landlord's control including without limitation, any
electrical power "brown-out" or "black-out"; or (f) any other cause beyond
Landlord's reasonable control.  Except as expressly set forth in this Lease
(including as provided in Articles 17 and 18 if such failure is a result of any
casualty damage or taking described therein), in the event of any such
interruption in utilities or services, Tenant shall not be entitled to any
abatement or reduction of Rent, no eviction of Tenant shall result, and Tenant
shall not be relieved from the performance of any covenant or agreement in this
Lease.  In the event of any stoppage or interruption of services or utilities
which are not obtained directly by Tenant, Landlord shall diligently attempt to
resume such services or utilities as promptly as practicable.  Tenant hereby
waives the provisions of any applicable existing or future Law, ordinance or
governmental regulation permitting the termination of this Lease due to an
interruption, failure or inability to provide any services (including, without
limitation, to the extent the Premises are located in California, the provisions
of California Civil Code Section 1932(1)).
 
ARTICLE 8 - MAINTENANCE AND REPAIR
 
8.1        Landlord's Repair Obligations.  Except as otherwise expressly
provided in this Lease, Landlord shall have no obligation to alter, remodel,
improve, repair, renovate, redecorate or paint all or any part of the
Premises.  Except as otherwise stated in the Summary, Tenant waives the right to
make repairs at Landlord's expense under any applicable Laws (including, without
limitation, to the extent the Premises are located in California, the provisions
of California Civil Code Sections 1941 and 1942 and any successor statutes or
laws of a similar nature).  All other repair and maintenance of the Premises,
Building and Property to be performed by Landlord, if any, shall be as provided
in the Summary.
 
8.2        Tenant's Repair Obligations.  Except for Landlord's obligations
specifically set forth elsewhere in this Lease and in Section 8.1 and 1.19(d)
above and in the Summary, Tenant shall at all times and at Tenant's sole cost
and expense, keep, maintain, clean, repair, preserve and replace, as necessary,
the interior of the Premises and all parts thereof including, without
limitation, all Tenant Improvements, Alterations, and all furniture, fixtures
and equipment, including, without limitation, all computer, telephone and data
cabling and equipment, Tenant's signs, if any, door locks, closing devices,
security devices, interior of windows, window sashes, casements and frames,
floors and floor coverings, shelving, kitchen, restroom facilities and/or
appliances of any kind located within the Premises, if any, custom lighting, and
any additions and other property located within the Premises, so as to keep all
of the foregoing elements of the Premises in good condition and repair,
reasonable wear and tear and casualty damage excepted.  Tenant shall replace, at
its expense, any and all interior glass in and about the Premises which is
damaged or broken from any cause whatsoever except due to the negligence or
willful misconduct of Landlord, its agents or employees.  Such maintenance and
repairs shall be performed with due diligence, lien-free and in a first-class
and workmanlike manner, by licensed contractor(s) that are selected by Tenant
and approved by Landlord, which approval Landlord shall not unreasonably
withhold or delay.  All other repair and maintenance of the Premises, Building
and Property to be performed by Tenant, if any, shall be as provided in the
Summary.  If Tenant refuses or neglects to repair and maintain the Premises
properly as required hereunder to the reasonable satisfaction of Landlord, then
at any time following ten (10) days from the date on which Landlord makes a
written demand on Tenant to effect such repair and maintenance, Landlord may
enter upon the Premises and make such repairs and/or maintenance, and upon
completion thereof, Tenant agrees to pay to Landlord as Additional Rent,
Landlord's costs for making such repairs plus an amount not to exceed two
percent (2%) of such costs for overhead, within ten (10) days after receipt from
Landlord of a written itemized bill therefor.  Any amounts not reimbursed by
Tenant within such ten (10) day period will bear interest at the Interest Rate
until paid by Tenant.

 
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ARTICLE 9 - USE
 
Tenant shall procure, at its sole cost and expense, any and all permits required
by applicable Law for Tenant's use and occupancy of the Premises.  Tenant shall
use the Premises solely for the Permitted Use specified in the Summary, and
shall not use or permit the Premises to be used for any other use or purpose
whatsoever without Landlord’s prior written approval, which shall not be
unreasonably withheld.  Tenant shall observe and comply with the Rules and
Regulations attached hereto as Exhibit E, as the same may be modified by
Landlord from time to time, and all reasonable non-discriminatory modifications
thereof and additions thereto from time to time put into effect and furnished to
Tenant by Landlord.  Landlord shall endeavor to enforce the Rules and
Regulations, but shall have no liability to Tenant for the violation or
non-performance by any other tenant or occupant of any such Rules and
Regulations.  Tenant shall, at its sole cost and expense, observe and comply
with all Laws and all requirements of any board of fire underwriters or similar
body relating to Tenant’s specific use or occupancy of the Premises now or
hereafter in force or relating to any alteration or improvement of the Premises
by Tenant (whether, except as otherwise provided herein, structural or
nonstructural, including unforeseen and/or extraordinary alterations and/or
improvements to the Premises and regardless of the period of time remaining in
the Term).  Tenant shall not use or allow the Premises to be used for any
improper, unlawful or reasonably objectionable purpose.  Tenant shall not do or
permit to be done anything that will obstruct or interfere with the rights of
other tenants or occupants of the Building or the Property, if any, or injure or
annoy them.  Tenant shall not cause, maintain or permit any nuisance in, on or
about the Premises, the Building or the Property, nor commit or suffer to be
committed any waste in, on or about the Premises.
 
ARTICLE 10 - HAZARDOUS MATERIALS
 
As used in this Lease, the term "Environmental Law(s)" means any past, present
or future federal, state or local Law relating to (a) the environment, human
health or safety, including, without limitation, emissions, discharges, releases
or threatened releases of Hazardous Materials (as defined below) into the
environment (including, without limitation, air, surface water, groundwater or
land), or (b) the manufacture, generation, refining, processing, distribution,
use, sale, treatment, receipt, storage, disposal, transport, arranging for
transport, or handling of Hazardous Materials.  As used in this Lease, the term
"Hazardous Material(s)" means and includes any hazardous or toxic materials,
substances or wastes as now or hereafter designated or regulated under any
Environmental Laws including, without limitation, asbestos, petroleum, petroleum
hydrocarbons and petroleum based products, urea formaldehyde foam insulation,
polychlorinated biphenyls ("PCBs"), and freon and other
chlorofluorocarbons.  Except for ordinary and general office supplies, such as
copier toner, liquid paper, glue, ink and common household cleaning materials,
any Hazardous Material disclosed in the Environmental Questionnaire, and motor
vehicle fuel stored in fuel tanks of motor vehicles used on site in compliance
with all Environmental Laws (some or all of which may constitute Hazardous
Materials), Tenant agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Building, the Common Areas or any other portion
of the Property by Tenant, its agents, officers, directors, shareholders,
members, managers, partners, employees, subtenants, assignees, licensees, or
contractors or guests (collectively, "Tenant’s Parties"), without the prior
written consent of Landlord, which consent Landlord may withhold in its sole and
absolute discretion.  Upon the expiration or earlier termination of this Lease,
Tenant agrees to promptly remove from the Premises, the Building and the
Property, at its sole cost and expense, any and all Hazardous Materials,
including any equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in, under or
about the Premises, the Building and/or the Property or any portion thereof by
Tenant or any of Tenant's Parties.  To the fullest extent permitted by law,
Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord
and Landlord's members, managers, shareholders, partners, officers, directors,
managers, employees, agents, successors and assigns (collectively, "Landlord
Parties") from and against any and all claims, damages, judgments, suits, causes
of action, losses, liabilities, penalties, fines, expenses and costs (including,
without limitation, clean-up, removal, remediation and restoration costs, sums
paid in settlement of claims, attorneys' fees, consultant fees and expert fees
and court costs) which arise or result from the presence of Hazardous Materials
on, in, under or about the Premises, the Building or any other portion of the
Property and which are caused or permitted by Tenant or any of Tenant's
Parties.  The provisions of this Article 10 will survive the expiration or
earlier termination of this Lease.  Tenant shall give Landlord written notice of
any evidence of Mold, water leaks or water infiltration in the Premises promptly
upon discovery of same.  At its expense, Tenant shall investigate, clean up and
remediate any Mold in the Premises caused by Tenant.  Remediation required by
applicable Environmental Law may be performed only after Tenant has Landlord's
written approval of a plan for such remediation.  All clean up and remediation
shall be done in compliance with all applicable Laws and to the reasonable
satisfaction of Landlord.  As used in this Lease, "Mold" means mold, fungi,
spores, microbial matter, mycotoxins and microbiological organic compounds.

 
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Landlord represents and warrants to Tenant that Landlord has no knowledge or
reasonable cause to believe that any release of Hazardous Materials has come to
be located at the Premises or the Building (and for the purposes of this
paragraph, the Building shall be deemed to include the underlying soil and
ground water) which requires any removal or remedial action under applicable
environmental laws.  In the event of (i) any breach of the foregoing
representation and warranty, or (ii) the occurrence, release or threatened
release of any Hazardous Materials on or about the Premises during the term
hereof that is not caused by Tenant, Landlord at Landlord’s sole cost and
expense shall (a) promptly remove, eliminate, remediate or encapsulate said
Hazardous Materials and/or take such other action with respect thereto as is
required by any federal, state or local government agency having jurisdiction
thereof, and (b) protect, indemnify, defend and hold Tenant harmless from and
against any and all liability, loss, suits, claims, actions, costs and expense
(including without limitation attorneys’ fees) arising out of or in connection
with said Hazardous Materials.  The provisions of this paragraph shall survive
the termination of this Lease.
 
ARTICLE 11 - PARKING
 
During the Term, Tenant shall be entitled to utilize the number and type of
parking spaces specified in the Summary within the parking areas for the
Property as designated by Landlord from time to time.  Landlord shall at all
times have the right to establish and modify the nature and extent of the
parking areas for the Building and Property (including whether such areas shall
be surface, underground and/or other structures).  In addition, if Tenant is not
the sole occupant of the Property, Landlord may, in its discretion, designate
any unreserved parking spaces as reserved parking.  The terms and conditions for
parking at the Property shall be as specified in the Summary and in the Rules
and Regulations regarding parking as contained in Exhibit E attached hereto, as
the same may be reasonably modified by Landlord from time to time.  Tenant shall
not use more parking spaces than its allotment and shall not use any parking
spaces specifically assigned by Landlord to other tenants, if any, or for such
other uses such as visitor, handicapped or other special purpose
parking.  Tenant's visitors shall be entitled to access to the parking areas on
the Property designated for visitor use, subject to availability of spaces and
the terms of the Summary.
 
ARTICLE 12 - TENANT SIGNS
 
Tenant shall have the right to install and maintain, at Tenant’s sole cost and
expense, one (1) sign (restricted solely to Tenant's name) on the exterior of
the Building above the doorway to the Premises, subject to the provisions of
this Article 12.  Subsequent changes to Tenant's sign and/or any additional
signs, to the extent permitted by Landlord herein, shall be made or installed at
Tenant's sole cost and expense.  All aspects of any such signs shall be subject
to the prior written consent of Landlord (which shall not be unreasonably
withheld), and shall be per Landlord's standard specifications and materials, as
revised by Landlord from time to time.  Tenant shall have no right to install or
maintain any other signs, banners, advertising, notices, displays, stickers,
decals or any other logo or identification of any person, product or service
whatsoever, in any location on or in the Property except as (i) shall have been
expressly approved by Landlord in writing prior to the installation thereof
(which approval may be granted or withheld in Landlord's sole and absolute
discretion), (ii) shall not violate any signage restrictions or exclusive sign
rights contained in any then existing leases with other tenants of the Property,
if any, and (iii) are consistent and compatible with all applicable Laws, and
the design, signage and graphics program from time to time implemented by
Landlord with respect to the Property, if any.  Landlord shall have the right to
remove any signs or signage material installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as Additional Rent hereunder, payable within ten (10) days
after written demand by Landlord.  Any additional sign rights of Tenant, if any,
shall be as provided in the Summary.
 
ARTICLE 13 - ALTERATIONS
 
13.1      Alterations.  After installation of the initial Tenant Improvements
for the Premises, Tenant may, at its sole cost and expense, make alterations,
additions, improvements and decorations to the Premises ("Alteration(s)")
subject to and upon the following terms and conditions:
 
a.                 Tenant shall not make any Alterations which: (i) adversely
affect any area outside the Premises including the outside appearance, character
or use of any portions of the Building or other portions of the Property; (ii)
adversely affect the Building's roof, roof membrane, or any structural component
of the Building, or the proper functioning of any equipment, services or systems
(including fire and life/safety systems) or Landlord's access thereto; (iii) in
the reasonable opinion of Landlord, materially lessen the value of the Building
or the Property; (iv) will violate or require a change in any occupancy
certificate applicable to the Premises; or (v) would trigger a legal requirement
which would require Landlord to make any alteration or improvement to the
Premises, Building or other aspect of the Property unless Tenant agrees to be
responsible for the same.
 
b.                 Tenant shall not make any Alterations not prohibited by
Section 13.1(a), unless Tenant first obtains Landlord's prior written consent,
which consent Landlord shall not unreasonably withhold, provided Landlord's
prior approval shall not be required for any Alteration that is not prohibited
by Section 13.1(a) above and is of a cosmetic nature that satisfies all of the
following conditions (hereinafter a "Pre-Approved Alteration"):  (i) the costs
of such Alteration do not exceed Two Dollar ($2.00) per rentable square foot of
the Premises; (ii) to the extent reasonably required by Landlord or by law due
to the nature of the work being performed, Tenant delivers to Landlord final
plans, specifications, working drawings, permits and approvals for such
Alterations at least ten (10) days prior to commencement of the work thereof;
(iii) Tenant and such Alterations otherwise satisfy all other conditions set
forth in this Section 13.1; and (iv) the making of such Alterations will not
otherwise cause a default by Tenant under any provision of this Lease.  Tenant
shall provide Landlord with ten (10) days' prior written notice before
commencing any Alterations.  In addition, before proceeding with any Alteration,
Tenant's contractors shall obtain, on behalf of Tenant and at Tenant's sole cost
and expense:  (A) all necessary governmental permits and approvals for the
commencement and completion of such Alterations, and (B) if reasonably requested
by Landlord and if the cost of such Alterations exceeds $80,000.00, a completion
and lien indemnity bond, or other evidence of funds reasonably satisfactory to
Landlord for such Alterations.  Landlord's approval of any plans, contractor(s)
and subcontractor(s) of Tenant shall not release Tenant or any such
contractor(s) and/or subcontractor(s) from any liability with respect to such
Alterations and will create no liability or responsibility on Landlord's part
concerning the completeness of such Alterations or their design sufficiency or
compliance with Laws.

 
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c.                 All Alterations shall be performed: (i) in material
accordance with the approved plans, specifications and working drawings, if any;
(ii) lien-free and in a first-class workmanlike manner; (iii) in compliance with
all Laws; (iv) in such a manner so as not to unreasonably interfere with the
occupancy of any other tenant, nor impose any additional expense upon nor delay
Landlord in the maintenance and operation of the Building; (v) by licensed and
bondable general contractors selected by Tenant and reasonably approved by
Landlord, and (v) at such times, in such manner and subject to such rules and
regulations as Landlord may from time to time reasonably designate.  Tenant
shall pay to Landlord, within ten (10) days after written demand, the costs of
any increased insurance premiums incurred by Landlord to include such
Alterations in the causes of loss – special form property insurance obtained by
Landlord pursuant to this Lease, if Landlord elects in writing to insure such
Alterations; provided, however, Landlord shall not be required to include the
Alterations under such insurance.
 
d.                 Tenant shall pay to Landlord, as Additional Rent, the
reasonable third party costs of Landlord's engineers and other consultants for
review of all plans, specifications and working drawings for the Alterations,
within ten (10) business days after Tenant's receipt of invoices either from
Landlord or such consultants.  In addition to such costs, Tenant shall pay to
Landlord, within ten (10) business days after completion of any Alterations, a
construction supervision fee equal to two percent (2%) of the total cost of the
Alterations and the actual, reasonable costs incurred by Landlord for any
services rendered by Landlord's management personnel and engineers to coordinate
and/or supervise any of the Alterations to the extent such services are provided
in excess of or after the normal on-site hours of such engineers and management
personnel.
 
e.                 Throughout the performance of the Alterations, Tenant shall
obtain, or cause its contractors to obtain, workers compensation insurance and
commercial general liability insurance in compliance with the insurance
provisions of this Lease.
 
13.2      Removal of Alterations.  All Alterations and the initial Tenant
Improvements in the Premises (whether installed or paid for by Landlord or
Tenant), shall become the property of Landlord and shall remain upon and be
surrendered with the Premises at the end of the Term; provided, however,
Landlord may, by written notice delivered to Tenant within fifteen (15) days
after Landlord's receipt of plans for any Alterations identify those Alterations
which Landlord shall require Tenant to remove at the end of the Term.  If
Landlord requires Tenant to remove any such Alterations, Tenant shall, at its
sole cost, remove the identified items on or before the expiration or sooner
termination of this Lease and repair any damage to the Premises caused by such
removal to its original condition (or, at Landlord's option, Tenant shall pay to
Landlord all of Landlord's costs of such removal and repair).  Notwithstanding
anything to the contrary herein, Tenant shall be entitled to remove, at any
time, in addition to its furniture, trade fixtures, and other personal property,
any Alterations installed by or at the direction of Tenant, provided Tenant
repairs any damage caused by such removal.
 
13.3      Liens.  Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Property or the Premises, nor
against Tenant's leasehold interest in the Premises, by reason of or in
connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any of Tenant's Parties.  If any such liens are
filed, Tenant shall, at its sole cost, immediately cause such liens to be
released of record or bonded so that such lien(s) no longer affect(s) title to
the Property, the Building or the Premises.  If Tenant fails to cause any such
lien to be released or bonded within ten (10) days after notice thereof,
Landlord may cause such lien to be released by any means it shall deem proper,
including payment in satisfaction of the claim giving rise to such lien, and
Tenant shall reimburse Landlord within five (5) business days after receipt of
invoice from Landlord, any sum paid by Landlord to remove such liens, together
with interest at the Interest Rate from the date of such payment by Landlord.
 
ARTICLE 14 - TENANT’S INSURANCE
 
14.1      Tenant’s Insurance.  On or before the Commencement Date or the date
Tenant commences or causes to be commenced any work of any type in the Premises,
and continuing during the entire Term, Tenant shall obtain and keep in full
force and effect, the following insurance with limits of coverage as set forth
in Section 1.14 of the Summary:
 
a.                 Special Form (formerly known as "all risk") insurance,
including fire and extended coverage, sprinkler leakage (including earthquake
sprinkler leakage), vandalism, malicious mischief plus earthquake and flood
coverage upon property of every description and kind owned by Tenant and located
in the Premises or the Building, or for which Tenant is legally liable or
installed by or on behalf of Tenant including, without limitation, furniture,
equipment and any other personal property (but excluding the initial Tenant
Improvements previously existing or installed in the Premises), in an amount not
less then the full replacement cost thereof.

 
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b.                 Commercial general liability insurance coverage on an
occurrence basis, including personal injury, bodily injury (including wrongful
death), broad form property damage, operations hazard, owner’s protective
coverage, contractual liability (including Tenant’s indemnification obligations
under this Lease), liquor liability (if Tenant serves alcohol on the Premises),
products and completed operations liability.  The limits of liability of such
commercial general liability insurance may be increased every three (3) years
during the Term upon reasonable prior notice by Landlord to an amount reasonably
required by Landlord and appropriate for tenants of buildings comparable to the
Building.
 
c.                 Commercial Automobile Liability covering all owned, hired and
non-owned automobiles.
 
d.                 Worker’s compensation, in statutory amounts and employers
liability, covering all persons employed in connection with any work done in, on
or about the Premises for which claims for death, bodily injury or illness could
be asserted against Landlord, Tenant or the Premises.
 
e.                 Umbrella liability insurance on an occurrence basis, in
excess of and following the form of the underlying insurance described in
Section 14.1.b. and 14.1.c. and the employer’s liability coverage in Section
14.1.d. which is at least as broad as each and every area of the underlying
policies.  Such umbrella liability insurance shall include pay on behalf of
wording, concurrency of effective dates with primary policies, blanket
contractual liability, application of primary policy aggregates, and shall
provide that if the underlying aggregate is exhausted, the excess coverage will
drop down as primary insurance, subject to customary commercially reasonable
deductible amounts imposed on umbrella policies.
 
f.                 Any other form or forms of insurance as Tenant or Landlord or
the Mortgagees of Landlord may reasonably require from time to time, in form,
amounts and for insurance risks against which a prudent tenant of a building
similar to the Building would protect itself, but only to the extent such risks
and amounts are available in the insurance market at commercially reasonable
costs.
 
14.2      Requirements.  Each policy required to be obtained by Tenant hereunder
shall:  (a) be issued by insurers which are approved by Landlord and/or
Landlord’s Mortgagees and are authorized to do business in the state in which
the Building is located and rated not less than Financial Size VIII, and with a
Financial Strength rating of B+ in the most recent version of Best’s Key Rating
Guide; (b) name Tenant as named insured thereunder and shall name Landlord and,
at Landlord’s request, such other persons or entities of which Tenant has been
informed in writing, as additional insureds under any such liability policies,
all as their respective interests may appear; (c) not have a deductible amount
exceeding Ten Thousand Dollars ($10,000.00), which deductible amount shall be
deemed self-insured with full waiver of subrogation; (e) specifically provide
that the insurance afforded by any such liability policy for the benefit of
Landlord and any other additional insureds shall be primary, and any insurance
carried by Landlord or any other additional insureds shall be excess and
non-contributing; (f) contain an endorsement that the insurer waives its right
to subrogation; (g) require the insurer to notify Landlord and any other
additional insureds in writing not less than thirty (30) days prior to any
material change, reduction in coverage, cancellation or other termination
thereof; (h) contain a cross liability or severability of interest endorsement;
and (i) be in amounts sufficient at all times to satisfy any coinsurance
requirements thereof.  Tenant agrees to deliver to Landlord, as soon as
practicable after the placing of the required insurance, but in no event later
than the date Tenant is required to obtain such insurance as set forth in
Section 14.1 above, certificates from the insurance company evidencing the
existence of such insurance and Tenant’s compliance with the foregoing
provisions of this Article 14.  Tenant shall cause replacement certificates to
be delivered to Landlord not less than ten (10) days prior to the expiration of
any such policy or policies.  If any such initial or replacement certificates
are not furnished within the time(s) specified herein, , and if Tenant fails to
remedy such condition within five (5) business days after notice thereof,
Landlord shall have the right, but not the obligation, to procure such policies
and certificates at Tenant’s expense.
 
14.3      Effect on Insurance.  Tenant shall not do or permit to be done
anything which will (a) violate or invalidate any insurance policy or coverage
maintained by Landlord or Tenant hereunder, or (b) increase the costs of any
insurance policy maintained by Landlord.  If Tenant’s occupancy or conduct of
its business in or on the Premises results in any increase in premiums for any
insurance carried by Landlord with respect to the Building or the Property,
Tenant shall either discontinue the activities affecting the insurance or pay
such increase as Additional Rent within ten (10) days after being billed
therefor by Landlord.  If any insurance coverage carried by Landlord pursuant to
this Lease or otherwise with respect to the Building or the Property shall be
cancelled or reduced (or cancellation or reduction thereof shall be threatened)
by reason of the use or occupancy of the Premises other than as allowed by the
Permitted Use by Tenant or by anyone permitted by Tenant to be upon the
Premises, and if Tenant fails to remedy such condition within five (5) business
days after notice thereof, Tenant shall be deemed to be in default under this
Lease and Landlord shall have all remedies provided in this Lease, at law or in
equity, including, without limitation, the right (but not the obligation) to
enter upon the Premises and attempt to remedy such condition at Tenant’s cost.
 
ARTICLE 15 - LANDLORD’S INSURANCE
 
During the Term, Landlord shall maintain property insurance written on a Special
Form (formerly known as "all risk") basis covering the Property and the
Building, including the initial Tenant Improvements (excluding, however,
Tenant's furniture, equipment and other personal property and Alterations,
unless Landlord otherwise elects to insure the Alterations pursuant to Section
13.1 above) against damage by fire and standard extended coverage perils and
with vandalism and malicious mischief endorsements, rental loss coverage, at
Landlord's option, earthquake damage coverage, and such additional coverage as
Landlord deems appropriate.  Landlord shall also carry commercial general
liability in such reasonable amounts and with such reasonable deductibles as
would be carried by a prudent owner of a similar building in the state in which
the Building is located.  At Landlord's option, all such insurance may be
carried under any blanket or umbrella policies that Landlord has in force for
other buildings and projects.  In addition, at Landlord's option, Landlord may
elect to self-insure all or any part of such required insurance which shall be
deemed with full waiver of subrogation.  Landlord may, but shall not be
obligated to carry any other form or forms of insurance as Landlord or the
Mortgagees or ground lessors of Landlord may reasonably determine is
advisable.  Subject to Section 1.18, the cost of insurance obtained by Landlord
pursuant to this Article 15 (including commercially reasonable deductibles)
shall be included in Insurance Costs.

 
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ARTICLE 16 - INDEMNIFICATION AND EXCULPATION
 
16.1      Tenant's Assumption of Risk and Waiver.  Except to the extent such
matter is not covered by the insurance required to be maintained by Tenant
and/or Landlord under this Lease and/or except to the extent such matter is
attributable to the gross negligence or willful misconduct of Landlord or
Landlord's agents, contractors or employees, Landlord shall not be liable to
Tenant, or any of Tenant’s Parties for: (i) any damage to property of Tenant, or
of others, located in, on or about the Premises, (ii) the loss of or damage to
any property of Tenant or of others by theft or otherwise, (iii) any injury or
damage to persons or property resulting from fire, explosion, falling ceiling
tiles masonry, steam, gas, electricity, water, rain or leaks from any part of
the Premises or from the pipes, appliance of plumbing works or from the roof,
street or subsurface or from any other places or by dampness or by any other
cause of whatsoever nature, (iv) any such damage caused by other tenants or
persons in the Premises, occupants of any other portions of the Property, or the
public, or caused by operations in construction of any private, public or
quasi-public work, or (v) any interruption of utilities and services.  Landlord
shall in no event be liable to Tenant or any other person for any consequential
damages, special or punitive damages, or for loss of business, revenue, income
or profits and Tenant hereby waives any and all claims for any such
damages.  Notwithstanding anything to the contrary contained in this
Section 16.1, all property of Tenant and Tenant’s Parties kept or stored on the
Premises, whether leased or owned by any such parties, shall be so kept or
stored at the sole risk of Tenant.  Landlord or its agents shall not be liable
for interference with light or other intangible rights.
 
16.2      Tenant's Indemnification.  Tenant shall be liable for, and shall
indemnify, defend, protect and hold Landlord and the Landlord Parties harmless
from and against, any and all claims, damages, judgments, suits, causes of
action, losses, liabilities and expenses, including, without limitation,
attorneys' fees and court costs (collectively, "Indemnified Claims"), arising or
resulting from (a) any occurrence in the Premises following the date Landlord
delivers possession of all or any portion of the Premises to Tenant, except to
the extent caused by the negligence or willful misconduct of Landlord or
Landlord's agents, contractors or employees, (b) any act or omission of Tenant
or any of Tenant's Parties; (c) the use of the Premises, the Building and the
Property and conduct of Tenant's business by Tenant or any of Tenant's Parties,
or any other activity, work or thing done, permitted or suffered by Tenant or
any of Tenant's Parties, in or about the Premises, the Building or elsewhere on
the Property; and/or (d) any default by Tenant as to any obligations on Tenant's
part to be performed under the terms of this Lease or the terms of any contract
or agreement to which Tenant is a party or by which it is bound, affecting this
Lease or the Premises.  The foregoing indemnification shall include, but not be
limited to, any injury to, or death of, any person, or any loss of, or damage
to, any property on the Premises, or on adjoining sidewalks, streets or ways, or
connected with the use, condition or occupancy thereof, whether or not Landlord
or any Landlord Parties has or should have knowledge or notice of the defect or
conditions causing or contributing to such injury, death, loss or damage.  In
case any action or proceeding is brought against Landlord or any Landlord
Parties by reason of any such Indemnified Claims, Tenant, upon notice from
Landlord, shall defend the same at Tenant's expense by counsel approved in
writing by Landlord, which approval shall not be unreasonably
withheld.  Tenant’s indemnification obligations under this Section 16.2 and
elsewhere in this Lease shall survive the expiration or earlier termination of
this Lease.  Tenant's covenants, agreements and indemnification in Section 16.1
and this Section 16.2 are not intended to and shall not relieve any insurance
carrier of its obligations under policies required to be carried by Tenant
pursuant to the provisions of this Lease.
 
16.3      Landlord's Indemnification of Tenant.  Notwithstanding anything to the
contrary contained in Section 16.1 or 16.2, Tenant shall not be required to
protect, defend, save harmless or indemnify Landlord from any liability for
injury, loss, accident or damage to any person resulting from Landlord's grossly
negligent acts or omissions or willful misconduct or that of its agents,
contractors, servants, employees or licensees, in connection with Landlord's
activities on or about the Premises, and subject to the terms of Article 22,
Landlord hereby indemnifies and agrees to protect, defend and hold Tenant
harmless from and against Indemnified Claims arising out of (i) Landlord's
grossly negligent acts or omissions or willful misconduct or those of its
agents, contractors, servants, employees or licensees in connection with
Landlord's activities on or about the Premises, (ii) any default by Landlord as
to any obligations on Landlord's part to be performed under the terms of this
Lease or the terms of any contract or agreement to which Landlord is a party or
by which it is bound, affecting this Lease or the Premises, or (iii) any
occurrence in the Common Areas to the extent covered by the liability insurance
maintained by Landlord, the cost for which is included in Operating
Expenses.  Such exclusion from Tenant's indemnity and such agreement by Landlord
to so indemnify and hold Tenant harmless are not intended to and shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease to the extent that
such policies cover (or, if such policies would have been carried as required,
would have covered) the result of grossly negligent acts or omissions or willful
misconduct of Landlord or those of its agents, contractors, servants, employees
or licensees; provided, however, the provisions of this sentence shall in no way
be construed to imply the availability of any double or duplicate
coverage.  Landlord's and Tenant's indemnification obligations hereunder may or
may not be coverable by insurance, but the failure of either Landlord or Tenant
to carry insurance covering the indemnification obligation shall not limit their
indemnity obligations hereunder.  In case any action or proceeding is brought
against Tenant or any Tenant Parties by reason of any such Indemnified Claims,
Landlord, upon notice from Tenant, shall defend the same at Landlord's expense
by counsel approved in writing by Tenant, which approval shall not be
unreasonably withheld.  Landlord’s indemnification obligations under this
Section 16.3 and elsewhere in this Lease shall survive the expiration or earlier
termination of this Lease.  Landlord's covenants, agreements and indemnification
in this Section 16.3 is not intended to and shall not relieve any insurance
carrier of its obligations under policies required to be carried by Landlord
pursuant to the provisions of this Lease.  Tenant shall in no event be liable to
Landlord or any other person for any consequential damages, special or punitive
damages, or for loss of business, or except as provided in Section 21.2, for
loss of revenue, income or profits, and Landlord hereby waives any and all
claims for any such damages.

 
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ARTICLE 17 - CASUALTY DAMAGE/DESTRUCTION
 
17.1      Landlord's Rights and Obligations.  If the Premises or the Building is
damaged by fire or other casualty not caused by the gross negligence or willful
misconduct of Tenant ("Casualty") to an extent not exceeding thirty-three
percent (33%) of the full replacement cost thereof, and Landlord's contractor
estimates in writing delivered to the parties that the damage thereto is such
that the Building and/or Premises may be repaired, reconstructed or restored to
substantially its condition immediately prior to such damage within one hundred
twenty (120) days from the date of such Casualty, and Landlord will receive
insurance proceeds sufficient to cover the costs of such repairs, reconstruction
and restoration plus applicable deductibles or self insured retentions, then
Landlord shall commence and proceed diligently with the work of repair,
reconstruction and restoration and this Lease shall continue in full force and
effect.  If, however, the Premises or the Building is damaged to an extent
exceeding thirty-three percent (33%) of the full replacement cost thereof, or
Landlord's contractor estimates that such work of repair, reconstruction and
restoration will require longer than one hundred twenty (120) days to complete
from the date of Casualty, or Landlord will not receive insurance proceeds plus
applicable deductibles or self insured retentions sufficient to cover the costs
of such repairs, reconstruction and restoration, then Landlord may elect to
either: (a) repair, reconstruct and restore the portion of the Premises or
Building damaged by such Casualty (including the Tenant Improvements, the
Alterations that Landlord elects to insure pursuant to Section 13.1 and, to the
extent of insurance proceeds received from Tenant, the Alterations that Tenant
is required to insure pursuant to Section 13.1), in which case this Lease shall
continue in full force and effect; or (b) terminate this Lease effective as of
the date which is thirty (30) days after Tenant's receipt of Landlord's election
to so terminate.  Under any of the conditions of this Section 17.1, Landlord
shall give written notice to Tenant of its intention to repair or terminate
within the later of sixty (60) days after the occurrence of such Casualty, or
fifteen (15) days after Landlord's receipt of the estimate from Landlord's
contractor or, as applicable, thirty (30) days after Landlord receives approval
from Landlord's Mortgagee to rebuild.
 
17.2      Tenant's Costs and Insurance Proceeds.  In the event of any damage or
destruction of all or any part of the Premises, Tenant shall
immediately:  (a) notify Landlord thereof; and (b) deliver to Landlord all
insurance proceeds received by Tenant with respect to the Alterations (to the
extent such items are covered by Tenant’s casualty insurance) and with respect
to Alterations in the Premises that Tenant is required to insure pursuant to
Section 13.1, excluding proceeds for Tenant's furniture and other personal
property, whether or not this Lease is terminated as permitted in Section 17.1,
and Tenant hereby assigns to Landlord all rights to receive such insurance
proceeds.  .
 
17.3      Abatement of Rent.  If as a result of any such damage, repair,
reconstruction and/or restoration of the Premises or the Building, Tenant is
prevented from using, and does not use, the Premises or any portion thereof,
then Rent shall be abated or reduced, as the case may be, during the period that
Tenant continues to be so prevented from using and does not use the Premises or
portion thereof, in the proportion that the rentable square feet of the portion
of the Premises that Tenant is prevented from using, and does not use, bears to
the total rentable square feet of the Premises from the date of the damage until
the Premises is restored.  Notwithstanding the foregoing to the contrary, if the
damage is due to the gross negligence or willful misconduct of Tenant or any of
Tenant's Parties, Rent shall only be abated to the extent of the proceeds that
Landlord receives from the rental loss insurance maintained by Landlord.  Except
for abatement of Rent as provided hereinabove, Tenant shall not be entitled to
any compensation or damages for loss of, or interference with, Tenant's business
or use or access of all or any part of the Premises resulting from any such
damage, repair, reconstruction or restoration.
 
17.4      Inability to Complete.  Notwithstanding anything to the contrary
contained in this Article 17, if Landlord is obligated or elects to repair,
reconstruct and/or restore the damaged portion of the Building or Premises
pursuant to Section 17.1 above, but is delayed from completing such repair,
reconstruction and/or restoration beyond the date which is six (6) months after
the date estimated by Landlord's contractor for completion thereof pursuant to
Section 17.1, by reason of any causes beyond the reasonable control of Landlord
(including, without limitation, delays due to Force Majeure, and delays caused
by Tenant or any of Tenant's Parties), then Landlord may elect to terminate this
Lease upon thirty (30) days' prior written notice to Tenant.
 
17.5      Damage to the Property.  If there is a total destruction of the
improvements on the Property or partial destruction of such improvements, the
cost of restoration of which would exceed one-third (1/3) of the then
replacement value of all improvements on the Property, by any cause whatsoever,
whether or not insured against and whether or not the Premises are partially or
totally destroyed, Landlord may within a period of one hundred eighty (180) days
after the occurrence of such destruction, notify Tenant in writing that it
elects not to so reconstruct or restore such improvements, in which event this
Lease shall cease and terminate as of the date of such destruction.
 
17.6      Damage Near End of Term.  In addition to its termination rights in
Sections 17.1, 17.4 and 17.5 above, Landlord shall have the right to terminate
this Lease if any damage to the Building or Premises occurs during the last
twelve (12) months of the Term and Landlord's contractor estimates in writing
delivered to the parties that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Term, or (b) sixty (60) days after the date of such Casualty.

 
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17.7      Tenant's Termination Rights.  In the event of any damage or
destruction which affects Tenant's use and enjoyment of the Premises which is
not caused by the gross negligence or willful misconduct of Tenant or any of
Tenant's Parties, if (i) Tenant's possession and use of the Premises is not
restored by Landlord within two hundred seventy (270) days for reasons other
than delays caused by Tenant or any of Tenant's Parties, (ii) Landlord's
contractor estimates in writing delivered to the parties that the damage thereto
is such that the Building and/or Premises may not be repaired, reconstructed or
restored to substantially its condition immediately prior to such damage within
one hundred eighty (180) days from the date of such Casualty, or (iii) damage to
the Premises occurs during the last twelve (12) months of the Term, then in any
such event Tenant shall have the right to terminate this Lease upon written
notice to Landlord.
 
17.8      Waiver of Termination Right.  This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of any damage or
destruction.  Accordingly, except as expressly provided herein, Tenant hereby
waives any and all provisions of applicable Law that provide alternative rights
for the parties in the event of damage or destruction (including, without
limitation, to the extent the Premises are located in California, the provisions
of California Civil Code Section 1932, Subsection 2, and Section 1933,
Subsection 4 and any successor statute or laws of a similar nature).
 
ARTICLE 18 - CONDEMNATION
 
18.1      Substantial or Partial Taking.  Subject to the provisions of Section
18.3 below, either party may terminate this Lease if any material part of the
Premises is taken or condemned for any public or quasi-public use under law, by
eminent domain or private purchase in lieu thereof (a "Taking").  Landlord shall
also have the right to terminate this Lease if there is a Taking of any portion
of the Building or the Property which would have a material adverse effect on
Landlord’s ability to profitably operate the remainder of the Building and/or
the Property.  The terminating party shall provide written notice of termination
to the other party within thirty (30) days after it first receives notice of the
Taking.  The termination shall be effective as of the effective date of any
order granting possession to, or vesting legal title in, the condemning
authority.  If this Lease is not terminated, Base Rent and all other elements of
this Lease which are dependent upon the area of the Premises, the Building or
the Property shall be appropriately adjusted to account for any reduction in the
square footage of the Premises, Building or Property, as applicable.  All
compensation awarded for a Taking shall be the property of Landlord.  The right
to receive compensation or proceeds are expressly waived by Tenant, however,
Tenant may file a separate claim for Tenant's furniture, fixtures, equipment and
other personal property, loss of goodwill and Tenant's reasonable relocation
expenses, provided the filing of the claim does not diminish the amount of
Landlord’s award.
 
18.2      Condemnation Award.  Subject to the provisions of Section 18.3 below,
in connection with any Taking of the Premises or the Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation, without deduction or apportionment for any estate
or interest of Tenant, it being expressly understood and agreed by Tenant that
no portion of any such award shall be allowed or paid to Tenant for any
so-called bonus or excess value of this Lease, and such bonus or excess value
shall be the sole property of Landlord.  Tenant shall not assert any claim
against Landlord or the taking authority for any compensation because of such
taking (including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's furniture, fixtures, equipment and other personal property
within the Premises, for Tenant's relocation expenses, and for any loss of
goodwill or other damage to Tenant's business by reason of such taking.
 
18.3      Temporary Taking.  In the event of a Taking of the Premises or any
part thereof for temporary use, (a) this Lease shall be and remain unaffected
thereby and Rent shall not abate, and (b) Tenant shall be entitled to receive
for itself such portion or portions of any award made for such use with respect
to the period of the taking which is within the Term, provided that if such
taking shall remain in force at the expiration or earlier termination of this
Lease, Tenant shall perform its obligations with respect to surrender of the
Premises and shall pay to Landlord the portion of any award which is
attributable to any period of time beyond the Term expiration date.  For purpose
of this Section 18.3, a temporary taking shall be defined as a taking for a
period of two hundred seventy (270) days or less.
 
18.4      Waiver.  Tenant hereby waives any rights it may have pursuant to any
applicable Laws (including, without limitation, to the extent the Premises are
located in California, any rights Tenant might otherwise have pursuant to
Section 1265.130 of the California Code of Civil Procedure) and agrees that the
provisions hereof shall govern the parties' rights in the event of any Taking.
 
ARTICLE 19 - WAIVER OF CLAIMS; WAIVER OF SUBROGATION
 
Landlord and Tenant each hereby waive any and all claims against the other party
and its officers, directors, shareholders, partners, members, principals,
employees, agents, representatives, and other related entities and individuals,
and their respective successors and assigns, for any and all loss of or damage
to the Premises, Building or other tangible property, or any resulting loss of
income, or losses under worker's compensation laws and benefits, which loss or
damage arises out of any peril that is or would be covered by any physical
damage insurance policy actually carried or required to be carried pursuant to
this Lease.  The foregoing waiver shall apply regardless of whether the party
suffering the loss or damage actually carries such insurance, recovers under
such insurance, or self-insures the loss or damage.  Inasmuch as the foregoing
waiver will preclude the assignment of any such claim by subrogation (or
otherwise) to an insurance company (or any other person), Landlord and Tenant
each agree to give to each insurance company issuing to it any policy of
physical damage insurance written notice of the terms of this mutual waiver, and
to have each such insurance policy properly endorsed, if necessary, to prevent
the invalidation of such insurance coverage by reason of such waiver. The waiver
set forth herein shall apply to any deductible amount under any insurance
policy, is not limited by the amount of insurance carried or required to be
carried, and is in addition to any other waiver or release contained in this
Lease.  If Landlord has contracted with a third party for the management of the
Building, the waiver of claims and waiver of subrogation by Tenant herein shall
also run in favor of such third party.

 
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ARTICLE 20 - ASSIGNMENT AND SUBLETTING
 
20.1      Restriction on Transfer.  Except with respect to a Permitted Transfer
pursuant to Section 20.6 below, Tenant shall not, without the prior written
consent of Landlord, which consent Landlord will not unreasonably withhold or
delay, assign this Lease or any interest herein or sublet the Premises or any
part thereof, or permit the use or occupancy of the Premises by any party other
than Tenant (any such assignment, encumbrance, sublease, license or the like
being sometimes referred to as a "Transfer").  In no event may Tenant encumber
or hypothecate this Lease or the Premises.  This prohibition against Transfers
shall be construed to include a prohibition against any assignment or subletting
by operation of law.  Any Transfer without Landlord's consent (except for a
Permitted Transfer pursuant to Section 20.6 below) shall constitute a default by
Tenant under this Lease, and in addition to all of Landlord's other remedies at
law, in equity or under this Lease, such Transfer shall be voidable at
Landlord's election.
 
20.2      Landlord's Options.  If Tenant desires to effect a Transfer, then at
least thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "Transfer Date"), Tenant shall deliver to Landlord written notice
("Transfer Notice") setting forth the terms and conditions of the proposed
Transfer and the identity of the proposed assignee, sublessee or other
transferee (sometimes referred to hereinafter as a "Transferee").  Tenant shall
also deliver to Landlord with the Transfer Notice, a current financial statement
and such evidence of financial responsibility and standing as Landlord may
reasonably require of the Transferee, and such other information concerning the
business background and financial condition of the proposed Transferee as
Landlord may reasonably request.  Except with respect to a Permitted Transfer,
within fifteen (15) business days after Landlord's receipt of any Transfer
Notice, and any additional information requested by Landlord pursuant to this
Section 20.2, Landlord will notify Tenant of its election to do one of the
following:  (a) consent to the proposed Transfer subject to such reasonable
conditions as Landlord may impose in providing such consent; or (b) refuse such
consent, which refusal shall be on reasonable grounds.
 
20.3      Additional Conditions; Excess Rent.  A condition to Landlord's consent
to any Transfer will be the delivery to Landlord of a true copy of the fully
executed instrument of assignment, sublease, transfer or hypothecation, in form
and substance reasonably satisfactory to Landlord, an original of Landlord’s
commercially reasonable consent form executed by both Tenant and the proposed
Transferee, and an affirmation of guaranty in form satisfactory to Landlord
executed by each guarantor of this Lease, if any.  In addition, Tenant shall pay
to Landlord as Additional Rent within thirty (30) days after receipt thereof,
without affecting or reducing any other obligations of Tenant hereunder, fifty
percent (50%) of any rent or other economic consideration received by Tenant as
a result of any Transfer which exceeds, in the aggregate, (i) the total Rent
which Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to any portion of the Premises subleased) for the
applicable period, plus (ii) any reasonable brokerage commissions and attorneys'
fees actually paid by Tenant in connection with such Transfer, plus (iii) the
reasonable costs actually incurred by Tenant for tenant improvements necessary
for the Transferee.  If Tenant effects a Transfer or requests the consent of
Landlord to any Transfer (whether or not such Transfer is consummated), then,
upon demand, Tenant agrees to reimburse Landlord for its reasonable attorneys'
and paralegal fees and other costs reasonably incurred by Landlord in reviewing
such proposed assignment or sublease (whether attributable to Landlord's
in-house attorneys or paralegals or otherwise).  Reimbursement of Landlord's
attorneys' and/or paralegal fees shall in no event obligate Landlord to consent
to any proposed Transfer.
 
20.4      Reasonable Disapproval.  Without limiting in any way Landlord's right
to withhold its consent on any reasonable grounds, it is agreed that Landlord
will not be acting unreasonably in refusing to consent to a Transfer if, in
Landlord's reasonable opinion:  (a) the proposed assignee or subtenant does not
have the financial capability to fulfill the obligations imposed by the
Transfer; (b) intentionally omitted; (c) the proposed Transferee is negotiating
with Landlord (or has negotiated with Landlord in the last six (6) months) for
space in the Building or the Property; (d) the proposed Transferee is a
governmental entity; (e) the portion of the Premises to be sublet or assigned is
irregular in shape with inadequate means of ingress and egress; (f) the proposed
Transfer involves a change of use of the Premises or would violate any exclusive
use covenant to which Landlord is bound; (g) the Transfer would likely result in
significant increase in the use of the parking areas by the Transferee's
employees or visitors, and/or significantly increase the demand upon utilities
and services to be provided by Landlord to the Premises; or (h) the Transferee
is not in Landlord's reasonable opinion of reputable or good character or
consistent with Landlord's desired tenant mix for the Building.
 
20.5      No Release.  No Transfer, occupancy or collection of rent from any
proposed Transferee shall be deemed a waiver on the part of Landlord, or the
acceptance of the Transferee as Tenant and no Transfer shall release Tenant of
Tenant's obligations under this Lease or alter the primary liability of Tenant
to pay Rent and to perform all other obligations to be performed by Tenant
hereunder.  During any period in which Tenant is in default hereunder, Landlord
may require that any Transferee remit directly to Landlord on a monthly basis,
all monies due Tenant by said Transferee, and each sublease shall provide that
if Landlord gives said sublessee written notice that Tenant is in default under
this Lease, said sublessee will thereafter make all payments due under the
sublease directly to or as directed by Landlord, which payments will be credited
against any payments due under this Lease.  Tenant hereby irrevocably and
unconditionally assigns to Landlord all rents and other sums payable under any
sublease of the Premises; provided, however, that Landlord hereby grants Tenant
a license to collect all such rents and other sums so long as Tenant is not in
default under this Lease.  Consent by Landlord to one Transfer shall not be
deemed consent to any subsequent Transfer.  In the event of default by any
Transferee of Tenant or any successor of Tenant in the performance of any of the
terms hereof, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against such Transferee or successor.  Landlord may
consent to subsequent assignments of this Lease or sublettings or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.  To
the extent the Premises are located in California, Tenant hereby waives (for
itself and all persons claiming under Tenant) the provisions of Civil Code
Section 1995.310.

 
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20.6      Permitted Transfers.  Notwithstanding the provisions of Section 20.1
above to the contrary, Tenant may assign this Lease or sublet the Premises or
any portion thereof (herein, a "Permitted Transfer"), without Landlord's consent
to (i) any entity that controls, is controlled by or is under common control
with Tenant, (ii) any entity resulting from a merger, reorganization or
consolidation with Tenant, (iii)  to any joint venture entity between Tenant and
a third party; or (iv) to any entity which acquires substantially all of the
stock or assets of Tenant, as a going concern, with respect to the business that
is being conducted in the Premises (each, a "Permitted Transferee"), provided
that: (a) to the extent not restricted by applicable law, Tenant delivers to
Landlord a reasonably detailed description of the proposed Transfer and the
financial statements and other financial and background information of the
assignee or sublessee described in Section 20.2 above prior to such Permitted
Transfer; (b) in the case of an assignment, the assignee assumes, in full, the
obligations of Tenant under this Lease pursuant to an assignment and assumption
agreement reasonably acceptable to Landlord, a fully executed copy of which is
delivered to Landlord within thirty (30) days following the effective date of
such assignment; (c) each guarantor of this Lease executes a reaffirmation of
its guaranty in form satisfactory to Landlord; (d) Tenant remains fully liable
under this Lease; (f) the use of the Premises is pursuant to Section 1.10 of
this Lease; (e) such transaction is not entered into as a subterfuge to avoid
the restrictions and provisions of this Article 20 and will not violate any
exclusive use covenant to which Landlord is bound; and (f) with respect to a
subletting only, Tenant and such Permitted Transferee execute Landlord's
commercially reasonable consent to sublease form promptly following such
Permitted Transfer; and (i) Tenant is not in default under this Lease beyond
applicable notice and cure periods.
 
ARTICLE 21 - SURRENDER AND HOLDING OVER
 
21.1      Surrender of Premises.  Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises and exclusive
possession of the Premises to Landlord broom clean and in good condition and
repair, reasonable wear and tear excepted (and casualty damage excepted), with
all of Tenant's personal property, electronic, fiber, phone and data cabling and
related equipment that is installed by or for the exclusive benefit of Tenant
(to be removed in accordance with the National Electric Code and other
applicable Laws) and those items, if any, of Alterations identified by Landlord
pursuant to Section 13.2, removed therefrom and all damage caused by such
removal repaired.  If Tenant fails to remove by the expiration or sooner
termination of this Lease all of its personal property and Alterations
identified by Landlord for removal pursuant to Section 13.2, Landlord may,
(without liability to Tenant for loss thereof), at Tenant's sole cost and in
addition to Landlord's other rights and remedies under this Lease, at law or in
equity:  (a) remove and store such items in accordance with applicable Law;
and/or (b) upon ten (10) days' prior notice to Tenant, sell all or any such
items at private or public sale for such price as Landlord may obtain as
permitted under applicable Law.  Landlord shall apply the proceeds of any such
sale to any amounts due to Landlord under this Lease from Tenant (including
Landlord's attorneys' fees and other costs incurred in the removal, storage
and/or sale of such items), with any remainder to be paid to Tenant.
 
21.2      Holding Over.  Tenant will not be permitted to hold over possession of
the Premises after the expiration or earlier termination of the Term without the
express written consent of Landlord, which consent Landlord may withhold in its
sole and absolute discretion.  If Tenant holds over after the expiration or
earlier termination of the Term without the express written consent of Landlord,
then, in addition to all other remedies available to Landlord, Tenant shall
become a tenant at sufferance only, upon the terms and conditions set forth in
this Lease so far as applicable (including Tenant's obligation to pay all
Additional Rent under this Lease), but at a Monthly Base Rent equal to one
hundred fifty percent (150%) of the Monthly Base Rent applicable to the Premises
immediately prior to the date of such expiration or earlier termination.  Any
such holdover Rent shall be paid on a per diem basis.  Acceptance by Landlord of
Rent after such expiration or earlier termination shall not constitute consent
to a hold over hereunder or result in an extension of this Lease.  This Section
21.2 shall not be construed to create any express or implied right to holdover
beyond the expiration of the Term or any extension thereof.  If Tenant shall
hold over for more than thirty (30) days without the express written consent of
Landlord, Tenant shall be liable, and shall pay to Landlord within ten (10) days
after demand, for all losses incurred by Landlord as a result of such holdover,
and shall indemnify, defend and hold Landlord and the Landlord Parties harmless
from and against all liabilities, damages, losses, claims, suits, costs and
expenses (including reasonable attorneys’ fees and costs) arising from or
relating to any such holdover tenancy, including without limitation, any claim
for damages made by a succeeding tenant. Tenant’s indemnification obligation
hereunder shall survive the expiration or earlier termination of this
Lease.  The foregoing provisions of this Section 21.2 are in addition to, and do
not affect, Landlord's right of re-entry or any other rights of Landlord
hereunder or otherwise at law or in equity.
 
ARTICLE 22 - DEFAULTS
 
22.1      Tenant's Default.  The occurrence of any one or more of the following
events shall constitute a "Default" under this Lease by Tenant:
 
a.                    the abandonment of the Premises by Tenant.  "Abandonment"
is as defined in California Civil Code Section 1951.3;

 
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b.                    the failure by Tenant to make any payment of Rent,
Additional Rent or any other payment required to be made by Tenant hereunder,
where such failure continues for three (3) days after written notice thereof
from Landlord that such payment was not received when due; provided that if
Landlord provides two (2) or more notices of late payment within any twelve (12)
month period, then the third failure of Tenant to make any payment of Rent or
any other payment required to be made by Tenant hereunder when due in the twelve
(12) month period following the second (2nd) such notice shall be an automatic
Default without notice from Landlord;
 
c.                    the failure by Tenant to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Sections 22.1(a) or (b) above,
where such failure shall continue for a period of ten (10) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that it may be cured but more than ten (10) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said ten (10) day period and
thereafter diligently prosecute such cure to completion; or
 
d.                   A general assignment by Tenant or any guarantor or surety
of Tenant's obligations hereunder ("Guarantor") for the benefit of creditors;
 
e.                   The filing of a voluntary petition in bankruptcy by Tenant
or any Guarantor, the filing by Tenant or any Guarantor of a voluntary petition
for an arrangement, the filing by or against Tenant or any Guarantor of a
petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by the creditors of Tenant or any Guarantor, said
involuntary petition remaining undischarged for a period of one hundred twenty
(120) days;
 
f.                   Receivership, attachment, or other judicial seizure of
substantially all of Tenant's assets on the Premises, such attachment or other
seizure remaining undismissed or undischarged for a period of thirty (30) days
after the levy thereof;
 
g.                   Death or disability of Tenant or any Guarantor, if Tenant
or such Guarantor is a natural person, or the failure by Tenant or any Guarantor
to maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity.
 
Any notice sent by Landlord to Tenant pursuant to this Section 22.1 shall be in
lieu of, and not in addition to, any notice required under any applicable Law.
 
ARTICLE 23 - REMEDIES OF LANDLORD
 
23.1      Landlord's Remedies; Termination.  In the event of any such Default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity (including, without limitation, to the extent the
Premises are located in California, the remedies of Civil Code Section 1951.4
and any successor statute or similar Law, which provides that Landlord may
continue this Lease in effect following Tenant's breach and abandonment and
collect rent as it falls due, if Tenant has the right to sublet or assign,
subject to reasonable limitations), Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder and to re-enter the
Premises and remove all persons and property from the Premises; such property
may be removed, stored and/or disposed of as permitted by applicable Law.  If
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:  (a) the worth at the time of award of any unpaid Rent which had been
earned at the time of such termination; plus (b) the worth at the time of the
award of the amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (c) the worth at the time
of award of the amount by which the unpaid Rent for the balance of the term
after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus (d) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom; plus (e) all monetary damages
allowed under applicable Law.
 
As used in Sections 23.1(a) and 23.1(b) above, the "worth at the time of award"
is computed by allowing interest at the Interest Rate set forth in the
Summary.  As used in Section 23.1(c) above, the "worth at the time of award" is
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).  To the extent
the Premises are located in California, Tenant hereby waives for Tenant and all
those claiming under Tenant all right now or hereafter existing including,
without limitation, any rights under California Code of Civil Procedure
Sections 1174 and 1179 and Civil Code Section 1950.7 to redeem by order or
judgment of any court or by any legal process or writ, Tenant's right of
occupancy of the Premises after any termination of this Lease.
 
23.2      Landlord's Remedies; Continuation of Lease; Re-Entry Rights.  In the
event of any such Default by Tenant, in addition to any other remedies available
to Landlord under this Lease, at law or in equity, Landlord shall also have the
right to (a) continue this Lease in effect after Tenant's breach and abandonment
and recover Rent as it becomes due, and (b) with or without terminating this
Lease, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed, stored and/or disposed of as permitted
by applicable Law.  No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 23.2, and no acceptance of surrender of the Premises or
other action on Landlord's part, shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent
jurisdiction.  No notice from Landlord or notice given under a forcible entry
and detainer statute or similar Laws will constitute an election by Landlord to
terminate this Lease unless such notice specifically so states.  Notwithstanding
any reletting without termination by Landlord because of any Default, Landlord
may at any time after such reletting elect to terminate this Lease for any such
Default.

 
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23.3      Landlord's Right to Perform.  Except as specifically provided
otherwise in this Lease, all covenants and agreements by Tenant under this Lease
shall be performed by Tenant at Tenant's sole cost and expense and without any
abatement or offset of Rent.  In the event of any Default by Tenant, Landlord
may, without waiving or releasing Tenant from any of Tenant's obligations, make
such payment or perform such other act as required to cure such Default on
behalf of Tenant.  All sums so paid by Landlord and all necessary incidental
costs incurred by Landlord in performing such other acts shall be payable by
Tenant to Landlord within five (5) days after demand therefor as Additional
Rent.
 
23.4      Rights and Remedies Cumulative.  All rights, options and remedies of
Landlord contained in this Article 23 and elsewhere in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not stated in this Lease.  Nothing in this Article 23 shall
be deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.
 
ARTICLE 24 - ENTRY BY LANDLORD
 
Subject to Tenant’s reasonable security requirements, Landlord and its employees
and agents shall at all reasonable times following no less than 24 hour prior
notice (except in case of emergency in which no notice shall be required) have
the right to enter the Premises to inspect the same, to supply any service
required to be provided by Landlord to Tenant under this Lease, to exhibit the
Premises to prospective lenders or purchasers (or during the last year of the
Term or during any default by Tenant, to prospective tenants), to post notices
of non-responsibility, and/or to alter, improve or repair the Premises or any
other portion of the Building or Property, all without being deemed guilty of or
liable for any breach of Landlord's covenant of quiet enjoyment or any eviction
of Tenant, and without abatement of Rent.  In exercising such entry rights,
Landlord shall use its best efforts to minimize, to the extent practicable, the
interference with Tenant's business.  For each of the foregoing purposes,
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about the Premises, excluding Tenant's vaults, safes or
secured areas, and Landlord shall have the means which Landlord may deem proper
to open said doors in an emergency in order to obtain entry to the
Premises.  Any entry to the Premises obtained by Landlord by any of said means
or otherwise shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an eviction
of Tenant from the Premises or any portion thereof, or grounds for any abatement
or reduction of Rent and Landlord shall not have any liability to Tenant for any
damages or losses on account of any such entry by Landlord.
 
ARTICLE 25 - LIMITATION ON LANDLORD’S LIABILITY
 
Notwithstanding anything contained in this Lease to the contrary, the
obligations of Landlord under this Lease (including as to any actual or alleged
breach or default by Landlord) do not constitute personal obligations of the
individual members, managers, investors, partners, directors, officers, or
shareholders of Landlord or Landlord's members or partners, and Tenant shall not
seek recourse against the individual members, managers, investors, partners,
directors, officers, or shareholders of Landlord or Landlord's members or
partners or any other persons or entities having any interest in Landlord, or
any of their personal assets for satisfaction of any liability with respect to
this Lease.  In addition, in consideration of the benefits accruing hereunder to
Tenant and notwithstanding anything contained in this Lease to the contrary,
Tenant hereby covenants and agrees for itself and all of its successors and
assigns that the liability of Landlord for its obligations under this Lease
(including any liability as a result of any actual or alleged failure, breach or
default hereunder by Landlord), shall be limited solely to, and Tenant's and its
successors' and assigns' sole and exclusive remedy shall be against, Landlord's
interest in the Property, and no other assets of Landlord.  The term "Landlord"
as used in this Lease, so far as covenants or obligations on the part of the
Landlord are concerned, shall be limited to mean and include only the owner or
owners, at the time in question, of the fee title to, or a lessee's interest in
a ground lease of, the Property.  In the event of any transfer or conveyance of
any such title or interest (other than a transfer for security purposes only),
the transferor shall be automatically relieved of all covenants and obligations
thereafter to be performed on the part of Landlord contained in this
Lease.  Landlord and Landlord's transferees and assignees shall have the
absolute right to transfer all or any portion of their respective title and
interest in the Premises, the Building, the Property and/or this Lease without
the consent of Tenant, and such transfer or subsequent transfer shall not be
deemed a violation on Landlord's part of any of the terms and conditions of this
Lease.
 
ARTICLE 26 - SUBORDINATION
 
Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of
trust, ground lease(s) or other lien(s) now or subsequently arising upon the
Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a "Mortgage").
This clause shall be self-operative, but no later than ten (10) business days
after written request from Landlord or any holder of a Mortgage (the
"Mortgagee(s)"), Tenant shall execute a commercially reasonable form of
subordination non-disturbance and attornment agreement .  As an alternative, a
Mortgagee shall have the right at any time to subordinate its Mortgage to this
Lease.  No later than ten (10) business days after written request by Landlord
or any Mortgagee, Tenant shall, without charge, attorn to any successor to
Landlord’s interest in this Lease.  Tenant hereby waives its rights under any
current or future Law which gives or purports to give Tenant any right to
terminate or otherwise adversely affect this Lease and the obligations of Tenant
hereunder in the event of any such foreclosure proceeding or sale.  Tenant's
failure to deliver such documents following an additional two (2) business day
cure period after notice shall constitute a default hereunder.

 
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ARTICLE 27 - ESTOPPEL CERTIFICATE
 
Within ten (10) business days following Landlord's written request, Tenant shall
execute and deliver to Landlord an estoppel certificate, in a form substantially
similar to the form of Exhibit F attached hereto. Any such estoppel certificate
delivered pursuant to this Article 27 may be relied upon by any Mortgagee,
beneficiary, purchaser or prospective purchaser of any portion of the Property,
as well as their assignees.  Tenant's failure to deliver such estoppel
certificate following an additional two (2) business day cure period after
notice shall constitute a default hereunder.  Tenant's failure to deliver such
certificate within such time shall be conclusive upon Tenant that this Lease is
in full force and effect, without modification except as may be represented by
Landlord, that there are no uncured defaults in Landlord's performance, and that
not more than one (1) month's Rent has been paid in advance.
 
ARTICLE 28 - RELOCATION OF PREMISES
 
Intentionally Omitted.
 
ARTICLE 29 - MORTGAGEE PROTECTION
 
If, in connection with Landlord's obtaining or entering into any financing or
ground lease for any portion of the Building or Property, the lender or ground
lessor shall request modifications to this Lease, Tenant shall, within thirty
(30) days after request therefor, execute an amendment to this Lease including
such modifications, provided such modifications are reasonable, do not increase
the obligations of Tenant hereunder, or adversely affect the leasehold estate
created hereby or Tenant's rights hereunder. In the event of any default on the
part of Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or Mortgagee covering the Premises or ground
lessor of Landlord whose address shall have been furnished to Tenant, and shall
offer such beneficiary, Mortgagee or ground lessor a reasonable opportunity to
cure the default (including with respect to any such beneficiary or Mortgagee,
time to obtain possession of the Premises, subject to this Lease and Tenant's
rights hereunder, by power of sale or judicial foreclosure, if such should prove
necessary to effect a cure).
 
ARTICLE 30 - QUIET ENJOYMENT
 
Landlord covenants and agrees with Tenant that, upon Tenant performing all of
the covenants and provisions on Tenant's part to be observed and performed under
this Lease (including payment of Rent hereunder), Tenant shall have the right to
use and occupy the Premises in accordance with and subject to the terms and
conditions of this Lease as against all persons claiming by, through or under
Landlord. This covenant shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building.
 
ARTICLE 31 - MISCELLANEOUS PROVISIONS
 
31.1      Broker.  Landlord and Tenant each represents to the other that it has
not had any dealings with any real estate broker, finder or intermediary with
respect to this Lease, other than the Brokers specified in the Summary.  Tenant
shall indemnify, protect, defend (by counsel reasonably approved in writing by
Landlord) and hold Landlord harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs) resulting from any breach by Tenant
of the foregoing representation, including, without limitation, any claims that
may be asserted against Landlord by any broker, agent or finder undisclosed by
Tenant herein.  Landlord shall indemnify, protect, and hold Tenant harmless from
and against any and all claims, judgments, suits, causes of action, damages,
losses, liabilities and expenses (including attorneys' fees and court costs)
resulting from any other brokers claiming to have represented Landlord in
connection with this Lease.  The foregoing indemnities shall survive the
expiration or earlier termination of this Lease.  Landlord shall pay to the
Brokers the brokerage fee, if any, pursuant to a separate written agreement
between Landlord and Brokers.
 
31.2      Governing Law.  This Lease shall be governed by, and construed
pursuant to, the laws of the state in which the Building is located.  Venue for
any litigation between the parties hereto concerning this Lease or the occupancy
of the Premises shall be initiated in the county in which the Premises are
located.  Tenant shall comply with all governmental and quasi-governmental laws,
ordinances and regulations applicable to the Building, Property and/or the
Premises, and all rules and regulations adopted pursuant thereto and all
covenants, conditions and restrictions applicable to and/or of record against
the Building, Property and/or the Site (individually, a "Law" and collectively,
the "Laws").
 
31.3      Successors and Assigns.  Subject to the provisions of Article 25
above, and except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective heirs, personal
representatives and permitted successors and assigns; provided, however, no
rights shall inure to the benefit of any Transferee of Tenant unless the
Transfer to such Transferee is made in compliance with the provisions of Article
20, and no options or other rights which are expressly made personal to the
original Tenant hereunder or in any rider attached hereto shall be assignable to
or exercisable by anyone other than the original Tenant under this Lease.

 
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31.4      No Merger.  The voluntary or other surrender of this Lease by Tenant
or a mutual termination thereof shall not work as a merger and shall, at the
option of Landlord, either (a) terminate all or any existing subleases, or
(b) operate as an assignment to Landlord of Tenant's interest under any or all
such subleases.
 
31.5      Professional Fees.  If either Landlord or Tenant should bring suit (or
alternate dispute resolution proceedings) against the other with respect to this
Lease, including for unlawful detainer, forcible entry and detainer, or any
other relief against the other hereunder, then all costs and expenses incurred
by the prevailing party therein (including, without limitation, its actual
appraisers', accountants', attorneys' and other professional fees, expenses and
court costs), shall be paid by the other party, including any and all costs
incurred in enforcing, perfecting and executing such judgment and all reasonable
costs and attorneys’ fees associated with any appeal.  Further, if for any
reason Landlord consults legal counsel or otherwise incurs any costs or expenses
as a result of its proper attempt to enforce the provisions of this Lease
against Tenant due to Tenant’s default, even though no litigation is commenced,
or if commenced is not pursued to final judgment, Tenant shall be obligated to
pay to Landlord, in addition to all other amounts for which Tenant is obligated
hereunder, all of Landlord’s reasonable costs and expenses incurred in
connection with any such acts, including attorneys’ fees incurred associated
with any appeal.
 
31.6      Waiver.  The waiver by either party of any breach by the other party
of any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant and
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the performance by the other in strict accordance with said terms.  No waiver of
any default of either party hereunder shall be implied from any acceptance by
Landlord or delivery by Tenant (as the case may be) of any Rent or other
payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect defaults other than as specified in said waiver.
 
31.7      Terms and Headings.  The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular.  Words used in any gender
include other genders.  The Article and Section headings of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.  Any deletion of language from this Lease
prior to its execution by Landlord and Tenant shall not be construed to raise
any presumption, canon of construction or implication, including, without
limitation, any implication that the parties intended thereby to state the
converse of the deleted language.  The parties hereto acknowledge and agree that
each has participated in the negotiation and drafting of this Lease; therefore,
in the event of an ambiguity in, or dispute regarding the interpretation of,
this Lease, the interpretation of this Lease shall not be resolved by any rule
of interpretation providing for interpretation against the party who caused the
uncertainty to exist or against the draftsman.
 
31.8      Time.  Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor.
 
31.9      Business Day.  A "business day" is Monday through Friday, excluding
holidays observed by the United States Postal Service and reference to 5:00 p.m.
is to the time zone of the recipient.  Whenever action must be taken (including
the giving of notice or the delivery of documents) under this Lease during a
certain period of time (or by a particular date) that ends (or occurs) on a
non-business day, then such period (or date) shall be extended until the
immediately following business day.
 
31.10    Payments and Notices.  All Rent and other sums payable by Tenant to
Landlord hereunder shall be paid to Landlord at the address designated in the
Summary, or to such other persons and/or at such other places as Landlord may
hereafter designate in writing.  Any notice required or permitted to be given
hereunder must be in writing and may be given by personal delivery (including
delivery by nationally recognized overnight courier or express mailing service),
or by registered or certified mail, postage prepaid, return receipt requested,
addressed to Tenant at the address(es) designated in the Summary, or to Landlord
at the address(es) designated in the Summary.  Either party may, by written
notice to the other, specify a different address for notice purposes.  Notice
given in the foregoing manner shall be deemed given (i) upon confirmed
transmission if sent by facsimile transmission, provided such transmission is
prior to 5:00 p.m. on a business day (if such transmission is after 5:00 p.m. on
a business day or is on a non-business day, such notice will be deemed given on
the following business day), (ii) when actually received or refused by the party
to whom sent if delivered by a carrier or personally served or (iii) if mailed,
on the day of actual delivery or refusal as shown by the certified mail return
receipt or the expiration of three (3) business days after the day of mailing,
whichever first occurs.
 
31.11    Prior Agreements; Amendments.  This Lease, including the Summary and
all Exhibits attached hereto, contains all of the covenants, provisions,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied,
pertaining to the Premises or any such other matter shall be effective for any
purpose.  No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest.  The parties acknowledge that all prior agreements, representations
and negotiations are deemed superseded by the execution of this Lease to the
extent they are not expressly incorporated herein.
 
31.12    Separability.  The invalidity or unenforceability of any provision of
this Lease shall in no way affect, impair or invalidate any other provision
hereof, and such other provisions shall remain valid and in full force and
effect to the fullest extent permitted by law.

 
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31.13    Recording.  Neither Landlord nor Tenant shall record this Lease or a
short form memorandum of this Lease.
 
31.14    Accord and Satisfaction.  No payment by Tenant or receipt by Landlord
of a lesser amount than the Rent payment herein stipulated shall be deemed to be
other than on account of the Rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or pursue any
other remedy provided in this Lease.  Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.
 
31.15    Financial Statements.  Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term including in
connection with Tenant's exercise of any Option in this Lease, but no more often
that two (2) times in any calendar year, other than in the event of a default by
Tenant during such calendar year or the exercise of any Option in such calendar
year, when such limitation shall not apply), Tenant shall deliver to Landlord
(a) the most recent financial statement of Tenant and any guarantor of this
Lease, and (b) financial statements of Tenant and such guarantor for the two (2)
years prior to the current financial statement year.  Such statements shall be
prepared in accordance with generally acceptable accounting principles.
 
31.16    No Partnership.  Landlord does not, in any way or for any purpose,
become a partner of Tenant in the conduct of its business, or otherwise, or
joint venturer or a member of a joint enterprise with Tenant by reason of this
Lease.
 
31.17    Force Majeure.  If either party hereto shall be delayed or hindered in
or prevented from the performance of any act required hereunder by reason of
strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, governmental moratorium or other governmental action or inaction
(including, without limitation, failure, refusal or delay in issuing permits,
approvals and/or authorizations), injunction or court order, riots,
insurrection, war, terrorism, bioterrorism, fire, earthquake, inclement weather
including rain, flood or other natural disaster or other reason of a like nature
not the fault of the party delaying in performing work or doing acts required
under the terms of this Lease (but excluding delays due to financial inability)
(herein collectively, "Force Majeure Delay(s)"), then performance of such act
shall be excused for the period of the delay and the period for the performance
of any such act shall be extended for a period equivalent to the period of such
Force Majeure Delay.  The provisions of this Section 31.17 shall not apply to
nor operate to excuse either party from any monetary obligations hereunder.
 
31.18    Counterparts.  This Lease may be executed in one or more counterparts,
each of which shall constitute an original and all of which shall be one and the
same agreement.
 
31.19    Intentionally Omitted.
 
31.20    Tenant's Authority.  If Tenant executes this Lease as a partnership,
corporation or limited liability company, then Tenant represents and warrants
that: (a) Tenant is a duly organized and existing partnership, corporation or
limited liability company, as the case may be, and is qualified to do business
in the state in which the Building is located; (b) such persons and/or entities
executing this Lease are duly authorized to execute and deliver this Lease on
Tenant's behalf; and (c) this Lease is binding upon Tenant in accordance with
its terms.  Tenant shall provide to Landlord a copy of any documents reasonably
requested by Landlord evidencing such qualification, organization, existence and
authorization within ten (10) days after Landlord's request. Tenant represents
and warrants to Landlord that Tenant is not, and the entities or individuals
constituting Tenant or which may own or control Tenant or which may be owned or
controlled by Tenant are not, (i) in violation of any Laws relating to terrorism
or money laundering, or (ii) among the individuals or entities identified on any
list compiled pursuant to Executive Order 13224 for the purpose of identifying
suspected terrorists or on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tllsdn.pdf or any replacement website or other
replacement official publication of such list.
 
31.21    Joint and Several Liability.  If more than one person or entity
executes this Lease as Tenant: (a) each of them is and shall be jointly and
severally liable for the covenants, conditions, provisions and agreements of
this Lease to be kept, observed and performed by Tenant; and (b) the act or
signature of, or notice from or to, any one or more of them with respect to this
Lease shall be binding upon each and all of the persons and entities executing
this Lease as Tenant with the same force and effect as if each and all of them
had so acted or signed, or given or received such notice.
 
31.22    No Option.  The submission of this Lease for examination or execution
by Tenant does not constitute a reservation of or option for the Premises and
this Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.
 
31.23    Consents and Approvals.  Any time the consent of Landlord or Tenant is
required under this Lease, such consent shall not be unreasonably withheld,
conditioned or delayed, and whenever this Lease grants Landlord or Tenant the
right to take action, exercise discretion, establish rules and regulations or
make an allocation or their determination, Landlord and Tenant shall act
reasonably and in good faith.  Notwithstanding the foregoing, Landlord and
Tenant shall grant or withhold its consent or exercise its discretion with
respect to matters for which there is a standard of consent or discretion
specifically set forth in this Lease in accordance with such specific standards.

 
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31.24           Options and Rights in General.  Any option (each an "Option" and
collectively, the "Options"), including without limitation, any option to
extend, option to terminate, option to expand, right to lease, right of first
offer, and/or right of first refusal, granted to Tenant is personal to the
original Tenant executing this Lease or a Permitted Transferee and may be
exercised only by the original Tenant executing this Lease while occupying the
entire Premises and without the intent of thereafter assigning this Lease or
subletting the Premises or a Permitted Transferee and may not be exercised or be
assigned, voluntarily or involuntarily, by any person or entity other than the
original Tenant executing this Lease or a Permitted Transferee.  The Options, if
any, granted to Tenant under this Lease are not assignable separate and apart
from this Lease, nor may any Option be separated from this Lease in any manner,
either by reservation or otherwise.  Tenant will have no right to exercise any
Option, notwithstanding any provision of the grant of option to the contrary,
and Tenant's exercise of any Option may be nullified by Landlord and deemed of
no further force or effect, if (i) Tenant is in default under the terms of this
Lease (or if Tenant would be in such default under this Lease but for the
passage of time or the giving of notice, or both) as of Tenant's exercise of the
Option in question or at any time after the exercise of any such Option and
prior to the commencement of the Option event, or (ii) Landlord has given Tenant
two (2) or more notices of default, whether or not such defaults are
subsequently cured, during any twelve (12) consecutive month period of this
Lease.  Each Option granted to Tenant, if any, is hereby deemed an economic term
which Landlord, in its sole and absolute discretion, may or may not offer in
conjunction with any future extensions of the Term.
 
[NO FURTHER TEXT ON THIS PAGE; SIGNATURES ON FOLLOWING PAGE]

 
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the date first above written.

Landlord:
 
LBA REALTY FUND III-COMPANY VII, LLC,
a Delaware limited liability company
 
By:
LBA Realty Fund III, L.P.,
 
a Delaware limited partnership,
 
its sole Member and Manager
             
By:
LBA Management Company III, LLC,
   
a Delaware limited liability company,
   
its General Partner
               
By:
LBA Realty LLC,
     
a Delaware limited liability company,
     
its Manager
                 
By:
LBA Inc.,
       
a California corporation,
       
its Managing Member
                   
By:
         
Name:
         
Title:
 

Tenant:
 
WAFERGEN, INC.,
a Delaware corporation
   
By:
 
Name:
 
Title:
 

For LBA Office Use Only:  Prepared & Reviewed
by:  _______________________________

 
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EXHIBIT A
 
PREMISES FLOOR PLAN
 
[chart1.jpg]
 
EXHIBIT A 
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EXHIBIT B
 
SITE PLAN
 
[chart2.jpg]

  EXHIBIT B
-1-

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EXHIBIT C
 
WORK LETTER
(TENANT BUILD W/ALLOWANCE)

 
1.           TENANT IMPROVEMENTS.  As used in the Lease and this Work Letter,
the term "Tenant Improvements" or "Tenant Improvement Work" or "Tenant's Work"
means those items of general tenant improvement construction shown on the Final
Plans (described in Section 4 below), more particularly described in Section 5
below.  Tenant shall complete the Tenant Improvements on or before November 1,
2009.
 
2.           WORK SCHEDULE.  Prior to commencing construction, Tenant will
deliver to Landlord, for Landlord's review and approval, a schedule ("Work
Schedule"), which will set forth the timetable for the planning and completion
of the installation of the Tenant Improvements.
 
3.           CONSTRUCTION REPRESENTATIVES.  Landlord hereby appoints the
following person(s) as Landlord's representative ("Landlord's Representative")
to act for Landlord in all matters covered by this Work Letter:  Jessica
Henderson.
 
Tenant hereby appoints the following person(s) as Tenant's representative
("Tenant's Representative") to act for Tenant in all matters covered by this
Work Letter:  Lindsay Nishiki.
 
All communications with respect to the matters covered by this Work Letter are
to be made to Landlord's Representative or Tenant's Representative, as the case
may be, in writing in compliance with the notice provisions of the
Lease.  Either party may change its representative under this Work Letter at any
time by written notice to the other party in compliance with the notice
provisions of the Lease.
 
4.           TENANT IMPROVEMENT PLANS
 
(a)         Preparation of Space Plans.  In accordance with the Work Schedule,
Landlord agrees to meet with Tenant's architect and/or space planner for the
purpose of promptly reviewing preliminary space plans for the layout of the
Premises prepared by Tenant ("Space Plans").  The Space Plans are to be
sufficient to convey the architectural design of the Premises and layout of the
Tenant Improvements therein and are to be submitted to Landlord in accordance
with the Work Schedule for Landlord's approval.  If Landlord reasonably
disapproves any aspect of the Space Plans, Landlord will advise Tenant in
writing of such disapproval and the reasons therefor in accordance with the Work
Schedule.  Tenant will then submit to Landlord for Landlord's approval, in
accordance with the Work Schedule, a redesign of the Space Plans incorporating
the revisions reasonably required by Landlord.
 
(b)         Preparation of Final Plans.  Based on the approved Space Plans, and
in accordance with the Work Schedule, Tenant's architect will prepare complete
architectural plans, drawings and specifications and complete engineered
mechanical, structural and electrical working drawings for all of the Tenant
Improvements for the Premises (collectively, the "Final Plans").  The Final
Plans will show (a) the subdivision (including partitions and walls), layout,
lighting, finish and decoration work (including carpeting and other floor
coverings) for the Premises; (b) all internal and external communications and
utility facilities which will require conduiting or other improvements from the
base Building shell work and/or within common areas; and (c) all other
specifications for the Tenant Improvements.  The Final Plans will be submitted
to Landlord for signature to confirm that they are materially consistent with
the Space Plans.  If Landlord reasonably disapproves any aspect of the Final
Plans based on any material inconsistency with the Space Plans, Landlord agrees
to advise Tenant in writing of such disapproval and the reasons therefor within
the time frame set forth in the Work Schedule.  In accordance with the Work
Schedule, Tenant will then cause Tenant's architect to redesign the Final Plans
incorporating the revisions reasonably requested by Landlord so as to make the
Final Plans materially consistent with the Space Plans.
 
(c)         Requirements of Tenant's Final Plans.  Tenant's Final Plans will
include locations and complete dimensions, and the Tenant Improvements, as shown
on the Final Plans, will:  (i) be compatible with the Building shell and with
the design, construction and equipment of the Building; (ii) if not comprised of
the Building standards set forth in the written description thereof (the
"Standards"), then compatible with and of at least equal quality as the
Standards and reasonably approved by Landlord; (iii) comply with all applicable
laws, ordinances, rules and regulations of all governmental authorities having
jurisdiction, and all applicable insurance regulations; (iv) not require
Building service beyond the level normally provided to other tenants in the
Building and will not overload the Building floors; and (v) be of a nature and
quality consistent with the overall objectives of Landlord for the Building, as
determined by Landlord in its reasonable but subjective discretion.
 
(d)         Submittal of Final Plans.  Once approved by Landlord and Tenant,
Tenant's architect will submit the Final Plans to the appropriate governmental
agencies for plan checking and the issuance of a building permit.  Tenant's
architect, with Landlord's cooperation, will make any changes to the Final Plans
which are requested by the applicable governmental authorities to obtain the
building permit.  After approval of the Final Plans no further changes may be
made without the prior written approval of both Landlord and Tenant, and then
only after agreement by Tenant to pay any excess costs resulting from the design
and/or construction of such changes or charged against the "Allowance" described
in Section 5 below.
 
(e)         Changes to Shell of Building.  If the Final Plans or any amendment
thereof or supplement thereto shall require changes in the Building shell, the
increased cost of the Building shell work caused by such changes will be paid
for by Tenant or charged against the "Allowance" described in Section 5 below.

EXHIBIT C 
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(f)          Work Cost Estimate and Statement.  Prior to the commencement of
construction of any of the Tenant Improvements shown on the Final Plans, Tenant
will submit to Landlord a written estimate of the cost to complete the Tenant
Improvement Work, which written estimate will be based on the Final Plans taking
into account any modifications which may be required to reflect changes in the
Final Plans required by the City or County in which the Premises are located
(the "Work Cost Statement").  Tenant will have the right to purchase materials
and to commence the construction of the items included in the Work Cost
Statement pursuant to Section 6 hereof.  If the total costs reflected in the
Work Cost Statement exceed the Allowance described in Section 5 below, Tenant
agrees to pay such excess.
 
5.           PAYMENT FOR THE TENANT IMPROVEMENTS
 
(a)           Allowance.  Landlord hereby grants to Tenant an Allowance as
referenced in the Summary.  The Allowance is to be used for all hard and soft
costs incurred by Tenant in connection with the Tenant Improvements, including
without limitation the following:
 
(i)           Payment of the cost of preparing the Space Plans and the Final
Plans, including mechanical, electrical, plumbing and structural drawings and of
all other aspects necessary to complete the Final Plans.  The Allowance will not
be used for the payment of extraordinary design work not consistent with the
scope of the Standards (i.e., above-standard design work) or for payments to any
other consultants, designers or architects other than Landlord's architect
and/or Tenant's architect.
 
(ii)          The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements.
 
(iii)         Construction of the Tenant Improvements, including, without
limitation, the following:
 
(aa)           Installation within the Premises of all partitioning, doors,
floor coverings, ceilings, wall coverings and painting, millwork and similar
items;
 
(bb)           All electrical wiring, lighting fixtures, outlets and switches,
and other electrical work necessary for the Premises;
 
(cc)           The furnishing and installation of all duct work, terminal boxes,
diffusers and accessories necessary for the heating, ventilation and air
conditioning systems within the Premises, including the cost of meter and key
control for after-hour air conditioning;
 
(dd)           Any additional improvements to the Premises required for Tenant's
use of the Premises including, but not limited to, odor control, special
heating, ventilation and air conditioning, noise or vibration control or other
special systems or improvements;
 
(ee)           All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories,
necessary for the Premises;
 
(ff)           All plumbing, fixtures, pipes and accessories necessary for the
Premises;
 
(gg)           Testing and inspection costs, construction and project
management; and
 
(hh)           Fees and costs attributable to general conditions associated with
the construction of the Tenant Improvements plus a two percent (2%) construction
administration fee ("Construction Administration Fee") to cover the services of
Landlord's tenant improvement coordinator.
 
(b)         Excess Costs.  The cost of each item referenced in Section 5(a)
above shall be charged against the Allowance.  If the work cost exceeds the
Allowance, Tenant shall be solely responsible for payment of all excess costs,
including the Construction Administration Fee, which fee shall be paid to
Landlord within five (5) business days after invoice therefor.  In no event will
the Allowance be used to pay for Tenant's furniture, artifacts, equipment,
telephone systems or any other item of personal property which is not affixed to
the Premises.  Notwithstanding the foregoing, to the extent any portion of the
Allowance remains unused following the completion of the Tenant Improvements, so
long as Tenant is not in default under this Lease, Tenant shall be entitled to
apply any such unused portion of the Allowance towards the cost of Tenant's
fixtures, furniture and equipment, up to a maximum of $2.00 per rentable square
foot of the Premises.
 
(c)         Changes.  Any changes to the Final Plans will be approved by
Landlord and Tenant in the manner set forth in Section 4 above.  Tenant shall be
solely responsible for any additional costs associated with such changes
including the Construction Administration Fee, which fee shall be paid to
Landlord within five (5) business days after invoice therefor or charged against
the "Allowance".
 
(d)         Governmental Cost Increases.  If increases in the cost of the Tenant
Improvements as set forth in the Work Cost Statement are due to requirements of
any governmental agency, Tenant shall be solely responsible for such additional
costs including the Construction Administration Fee, which fee shall be paid to
Landlord within five (5) business days after invoice therefor; provided,
however, that Landlord will first apply toward any such increase any remaining
balance of the Allowance.

EXHIBIT C 
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(e)         Unused Allowance Amounts.  Subject to Section 5(b) above, any unused
portion of the Allowance upon completion of the Tenant Improvements will not be
refunded to Tenant or be available to Tenant as a credit against any obligations
of Tenant under the Lease.
 
(f)          Disbursement of the Allowance.  Provided Tenant is not in default
following the giving of notice and passage of any applicable cure period under
the Lease or this Work Letter, Landlord shall disburse the Allowance to Tenant
to reimburse Tenant for the actual construction costs which Tenant incurs in
connection with the construction of the Tenant Improvements in accordance with
the following:
 
(i)           Twenty-five percent (25%) of the Allowance shall be disbursed to
Tenant when Landlord shall have received "Evidence of Completion and Payment" as
to fifty percent (50%) of Tenant's Work having been completed and paid for by
Tenant as described hereinbelow;
 
(ii)           Fifty percent (50%) of the Allowance shall be disbursed to Tenant
when Landlord shall have received "Evidence of Completion and Payment" as to
seventy-five percent (75%) of Tenant's Work having been completed and paid for
by Tenant as described hereinbelow;
 
(iii)           Fifteen percent (15%) of the Allowance shall be disbursed to
Tenant when Landlord shall have received "Evidence of Completion and Payment" as
to ninety percent (90%) of Tenant's Work having been completed and paid for by
Tenant as described hereinbelow;
 
(iv)           The final ten percent (10%) of the Allowance shall be disbursed
to Tenant when Landlord shall have received "Evidence of Completion and Payment"
as to one hundred percent (100%) of Tenant's Work having been completed and paid
for by Tenant as described hereinbelow and satisfaction of the items described
in subparagraph (vi) below;
 
(v)           As to each phase of completion of Tenant's Work described in
subparagraphs (i) through (iv) above, the appropriate portion of the Allowance
shall be disbursed to Tenant only when Landlord has received the following
"Evidence of Completion and Payment":
 
(A)           Tenant has delivered to Landlord a draw request ("Draw Request")
in a form reasonably satisfactory to Landlord and Landlord's lender with respect
to the Improvements specifying that the requisite portion of Tenant's Work has
been completed, together with invoices, receipts and bills evidencing the costs
and expenses set forth in such Draw Request and evidence of payment by Tenant
for all costs which are payable in connection with such Tenant's Work covered by
the Draw Request.  The Draw Request shall constitute a representation by Tenant
that the Tenant's Work identified therein has been completed in a good and
workmanlike manner and in material accordance with the Final Plans and the Work
Schedule and has been paid for;
 
(B)           The architect for the Tenant Improvements has certified to
Landlord that the Tenant Improvements have been completed to the level indicated
in the Draw Request in material accordance with the Final Plans;
 
(C)           Tenant has delivered to Landlord such other evidence of Tenant's
payment of the general contractor and subcontractors for the portions of
Tenant's Work covered by the Draw Request and the absence of any liens generated
by such portions of the Tenant's Work as may be required by Landlord (i.e.,
either unconditional lien releases in accordance with California Civil Code
Section 3262 or release bond(s) in accordance with California Civil Code
Sections 3143 and 3171);
 
(D)           Landlord or Landlord's architect or construction representative
has inspected the Tenant Improvements and determined that the portion of
Tenant's Work covered by the Draw Request has been completed in a good and
workmanlike manner;
 
(iv)           The final disbursement of the balance of the Allowance shall be
disbursed to Tenant only when Landlord has received Evidence of Completion and
Payment as to all of Tenant's Work as provided hereinabove and the following
conditions have been satisfied:
 
(A)           Thirty-five (35) days shall have elapsed following the filing of a
valid notice of completion by Tenant for the Tenant Improvements;
 
(B)           A certificate of occupancy for the Tenant Improvements and the
Premises has been issued by the appropriate governmental body;
 
(C)           Tenant has delivered to Landlord:  (i) properly executed mechanics
lien releases from all of Tenant's contractors, agents and suppliers in
compliance with both California Civil Code Section 3262(d)(2) and either Section
3262(d)(3) or Section 3262(d)(4), which lien releases shall be conditional with
respect to the then-requested payment amounts and unconditional with respect to
payment amounts previously disbursed by Landlord; (ii) an application and
certificate for payment (AIA form G702-1992 or equivalent) signed by Tenant's
architect/space planner; (iii) original stamped building permit plans; (iv) copy
of the building permit; (v) original stamped building permit inspection card
with all final sign-offs; (vi) a reproducible copy (in a form reasonably
approved by Landlord) of the "as-built" drawings of the Tenant Improvements;
(vii) warranty letters from Tenant's contractors as provided in Section 8(o)
below; (viii) manufacturer's warranties and operating instructions; (ix) final
punchlist completed and signed off by Tenant's architect/space planner; and (x)
an acceptance of the Premises signed by Tenant;

EXHIBIT C 
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(D)           Tenant has delivered to Landlord evidence satisfactory to Landlord
that all construction costs in excess of the Allowance have been paid for by
Tenant.
 
Notwithstanding anything to the contrary contained hereinabove, all
disbursements of the Allowance shall be subject to the prior deduction of the
portion of the Construction Administration Fee allocable to the Tenant
Improvements described in the applicable Draw Request.
 
(g)         Books and Records.  At its option, Landlord, at any time within
three (3) years after final disbursement of the Allowance to Tenant, and upon at
least ten (10) days prior written notice to Tenant, may cause an audit to be
made of Tenant's books and records relating to Tenant's expenditures in
connection with the construction of the Tenant Improvements.  Tenant shall
maintain complete and accurate books and records in accordance with generally
accepted accounting principles of these expenditures for at least three (3)
years.  Tenant shall make available to Landlord's auditor at the Premises within
ten (10) business days following Landlord's notice requiring the audit, all
books and records maintained by Tenant pertaining to the construction and
completion of the Tenant Improvements.  In addition to all other remedies which
Landlord may have pursuant to the Lease, Landlord may recover from Tenant the
reasonable cost of its audit if the audit discloses that Tenant falsely reported
to Landlord expenditures which were not in fact made or falsely reported a
material amount of any expenditure or the aggregate expenditures.
 
6.           CONSTRUCTION OF TENANT IMPROVEMENTS.  Following Landlord's approval
of the Final Plans and the Work Cost Statement described in Section 4(f) above,
Tenant's contractor (selected as provided in Section 8(n)) will commence and
diligently proceed with the construction of the Tenant Improvements.  Tenant
shall use diligent efforts to cause its contractor to complete the Tenant
Improvements in a good and workmanlike manner in material accordance with the
Final Plans and the Work Schedule.  Tenant agrees to use diligent efforts to
cause construction of the Tenant Improvements to commence promptly following the
issuance of a building permit for the Tenant Improvements.  Landlord shall have
the right to enter upon the Premises to inspect Tenant's construction activities
following reasonable advance notice Tenant.
 
7.           DELIVERY OF POSSESSION; TERM AND COMMENCEMENT DATE
 
(a)         Delivery of Possession.  Landlord agrees to use its commercially
reasonable efforts to deliver possession of the Premises to Tenant on or before
November 1, 2009 (the "Scheduled Turnover Date").  Tenant agrees that if
Landlord is unable to deliver possession of the Premises to Tenant on or prior
to the Scheduled Turnover Date specified in the Basic Lease Information section
of the Lease, the Lease will not be void or voidable, nor will Landlord be
liable to Tenant for any loss or damage resulting therefrom.  The actual date
upon which Landlord turns over possession of the Premises to Tenant is the
"Turnover Date."  Notwithstanding anything to the contrary contained herein, if
the Turnover Date has not occurred on or before November 15, 2009, then Tenant
shall have the right thereafter to cancel this Lease, and upon such
cancellation, Landlord shall return all sums theretofore deposited by Tenant
with Landlord, and neither party shall have any further liability to the other.
 
(b)         Commencement Date.  The Term of the Lease and Tenant's obligation to
pay rent will commence upon the earlier of substantial completion of the Tenant
Improvements (as defined below in Section 7(c)) below or the Turnover Date (the
"Commencement Date").
 
(c)         Substantial Completion; Punch-List.  For purposes of Section 8(b)
above, the Tenant Improvements will be deemed to be "substantially completed"
when Tenant's contractor certifies in writing to Landlord and Tenant that
Tenant  has substantially performed all of the Tenant Improvement Work required
to be performed by Tenant under this Work Letter, other than decoration and
minor "punch-list" type items and adjustments which do not materially interfere
with Tenant's use of the Premises; and Tenant has obtained a temporary
certificate of occupancy or other required equivalent approval from the local
governmental authority permitting occupancy of the Premises.  Within ten (10)
days after receipt of such certificates, Tenant and Landlord will conduct a
walk-through inspection of the Premises and Landlord shall provide to Tenant a
written punch-list specifying those decoration and other punch-list items which
require completion, which items Tenant will thereafter diligently complete.
 
8.           MISCELLANEOUS CONSTRUCTION COVENANTS
 
(a)         No Liens.  Tenant shall not allow the Tenant Improvements or the
Building or any portion thereof to be subjected to any mechanic's, materialmen's
or other liens or encumbrances arising out of the construction of the Tenant
Improvements.
 
(b)         Diligent Construction.  Tenant will promptly, diligently and
continuously pursue construction of the Tenant Improvements to successful
completion in material compliance with the Final Plans, the Work Schedule and
this Work Letter.  Landlord and Tenant shall cooperate with one another during
the performance of Tenant's Work to effectuate such work in a timely and
compatible manner.
 
(c)         Compliance with Laws.  Tenant will construct the Tenant Improvements
in a safe and lawful manner.  Tenant shall, at its sole cost and expense, comply
with all applicable laws and all regulations and requirements of, and all
licenses and permits issued by, all municipal or other governmental bodies with
jurisdiction which pertain to the installation of the Tenant
Improvements.  Copies of all filed documents and all permits and licenses shall
be provided to Landlord.  Any portion of the Tenant Improvements which is not
acceptable to any applicable governmental body, agency or department, or not
reasonably satisfactory to Landlord, shall be promptly repaired or replaced by
Tenant at Tenant's expense.  Notwithstanding any failure by Landlord to object
to any such Tenant Improvements, Landlord shall have no responsibility therefor.

EXHIBIT C 
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(d)         Indemnification.  Subject to the terms of the Lease regarding
insurance and waiver of subrogation by the parties, Tenant hereby indemnifies
and agrees to defend and hold Landlord, the Premises and the Building harmless
from and against any and all suits, claims, actions, losses, costs or expenses
of any nature whatsoever, together with reasonable attorneys' fees for counsel
of Landlord's choice, arising out of or in connection with the Tenant
Improvements or the performance of Tenant's Work (including, but not limited to,
claims for breach of warranty, worker's compensation, personal injury or
property damage, and any materialmen's and mechanic's liens).
 
(e)         Insurance.  Construction of the Tenant Improvements shall not
proceed without Tenant or it’s general contractor first acquiring workers'
compensation and commercial general liability insurance and property damage
insurance as well as "All Risks" builders' risk insurance, with minimum coverage
of $2,000,000 or such other amount as may be approved by Landlord in writing and
issued by an insurance company reasonably satisfactory to Landlord.  Before
commencing the construction of the Tenant Improvements, certificates of such
insurance shall be furnished to Landlord or, if requested, the original policies
thereof shall be submitted for Landlord's approval.  All such policies shall
provide that thirty (30) days prior notice must be given to Landlord before
modification, termination or cancellation.  All insurance policies maintained by
Tenant pursuant to this Work Letter shall name Landlord and any lender with an
interest in the Premises as additional insureds and comply with all of the
applicable terms and provisions of the Lease relating to insurance.  Tenant's
contractor shall be required to maintain the same insurance policies as Tenant,
and such policies shall name Tenant, Landlord and any lender with an interest in
the Premises as additional insureds.
 
(f)          Construction Defects.  Landlord shall have no responsibility for
the Tenant Improvements or any defects in the Tenant Improvements that may
appear during or after the completion thereof whether the same shall affect the
Tenant Improvements in particular or any parts of the Premises in general.
 
(g)         Additional Services.  If the construction of the Tenant Improvements
shall require that additional services or facilities (including, but not limited
to, hoisting, cleanup or other cleaning services, trash removal, field
supervision, or ordering of materials) be provided by Landlord, then Tenant
shall pay Landlord for such items at Landlord's cost or at a reasonable charge
if the item involves time of Landlord's personnel only.  Electrical power and
heating, ventilation and air conditioning shall be available to Tenant during
normal business hours for construction purposes at no charge to Tenant.
 
(h)         Coordination of Labor.  All of Tenant's contractors, subcontractors,
employees, servants and agents must work in harmony with and shall not interfere
with any labor employed by Landlord, or Landlord's contractors or by any other
tenant or its contractors with respect to the any portion of the
Property.  Nothing in this Work Letter shall, however, require Tenant to use
union labor.
 
(i)           Work in Adjacent Areas.  Any work to be performed in areas
adjacent to the Premises shall be performed only after obtaining Landlord's
express written permission, which shall not be unreasonably withheld,
conditioned or delayed, and shall be done only if an agent or employee of
Landlord is present; Tenant will reimburse Landlord for the expense of any such
employee or agent.
 
(j)           HVAC Systems.  Tenant agrees to be entirely responsible for the
maintenance or the balancing of any heating, ventilating or air conditioning
system installed by Tenant and/or maintenance of the electrical or plumbing work
installed by Tenant and/or for maintenance of lighting fixtures, partitions,
doors, hardware or any other installations made by Tenant.
 
(k)         Coordination with Lease.  Nothing herein contained shall be
construed as (i) constituting Tenant as Landlord's agent for any purpose
whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or
provisions of the Lease.  Any default by Tenant following the giving of notice
and the passage of any applicable cure period with respect to any portion of
this Work Letter shall be deemed a breach of the Lease for which Landlord shall
have all the rights and remedies as in the case of a breach of said Lease.
 
(l)           Approval of Plans.  Landlord will not check Tenant drawings for
building code compliance.  Approval of the Final Plans by Landlord is not a
representation that the drawings are in compliance with the requirements of
governing authorities, and it shall be Tenant's responsibility to meet and
comply with all federal, state, and local code requirements.  Approval of the
Final Plans does not constitute assumption of responsibility by Landlord or its
architect for their accuracy, sufficiency or efficiency, and Tenant shall be
solely responsible for such matters.
 
(m)        Tenant's Deliveries.  Tenant shall deliver to Landlord, at least five
(5) days prior to the commencement of construction of Tenant's Work, the
following information:
 
(i)           The names, addresses, telephone numbers, and primary contacts for
the general, mechanical and electrical contractors Tenant intends to engage in
the performance of Tenant's Work; and
 
(ii)           The date on which Tenant's Work will commence, together with the
estimated dates of completion of Tenant's construction and fixturing work.
 
(n)         Qualification of Contractors.  Once the Final Plans have been
proposed and approved, Tenant shall select and retain a contractor and
subcontractors subject to prior written approval by Landlord (which approval
shall not be unreasonably withheld) for the construction of the Tenant
Improvement Work in accordance with the Final Plans.  All contractors engaged by
Tenant shall be bondable, licensed contractors, possessing good labor relations,
capable of performing quality workmanship and working in harmony with Landlord'
s general contractor and other contractors on the job, if any, all as determined
by Landlord. All work shall be coordinated with general construction work on the
Site, if any.

EXHIBIT C 
-5-

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(o)         Warranties.  Tenant shall cause its contractor to provide warranties
for not less than one (1) year (or such shorter time as may be customary and
available without additional expense to Tenant) against defects in workmanship,
materials and equipment, which warranties shall run to the benefit of Landlord
or shall be assignable to Landlord to the extent that Landlord is obligated to
maintain any of the improvements covered by such warranties.
 
(p)         Landlord's Performance of Work.  Within ten (10) working days after
receipt of Landlord's notice of Tenant's failure to perform its obligations
under this Work Letter, if Tenant shall fail to commence to cure such failure,
Landlord shall have the right, but not the obligation, to perform, on behalf of
and for the account of Tenant, subject to reimbursement of the cost thereof by
Tenant, any and all of Tenant's Work which Landlord determines, in its
reasonable discretion, should be performed immediately and on an emergency basis
for the best interest of the Premises including, without limitation, work which
pertains to structural components, mechanical, sprinkler and general utility
systems, roofing and removal of unduly accumulated construction material and
debris; provided, however, Landlord shall use reasonable efforts to give Tenant
at least ten (10) days prior notice to the performance of any of Tenant's Work.
 
(q)         As-Built Drawings.  Tenant shall cause "As-Built Drawings"
(excluding furniture, fixtures and equipment) to be delivered to Landlord and/or
Landlord's representative no later than sixty (60) days after the completion of
Tenant's Work.  In the event these drawings are not received by such date,
Landlord may, at its election, cause said drawings to be obtained and Tenant
shall pay to Landlord, as additional rent, the cost of producing these drawings.

EXHIBIT C 
-6-

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EXHIBIT D
 
NOTICE OF LEASE TERM DATES
Date:

To:

Re:
______________ dated _____________ ("Lease") by and between __________________,
a ______________________ ("Landlord"), and _________________________, a
_____________ ("Tenant") for the premises commonly known as,
______________________________("Premises").

 
Dear :
 
In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:
 
·
That Tenant has accepted and is in possession of the Premises and acknowledges
the following:

      ·         Term of the Lease:
 
      ·         Commencement Date:
 
      ·         Expiration Date:
 
      ·         Rentable Square Feet:
 
      ·         Tenant’s Percentage of Building:
%

 
·
That in accordance with the Lease, rental payments will/has commence(d) on
_______________ and rent is payable in accordance with the following schedule:

Months
 

Monthly Base Rent
 
00/00/0000 – 00/00/0000
  $ 00,000.00  
00/00/0000 – 00/00/0000
  $ 00,000.00  
00/00/0000 – 00/00/0000
  $ 00,000.00  

 
·
Rent is due and payable in advance on the first day of each and every month
during the Term of the Lease.

·
Your rent checks should be made payable to:
_________________________________
   
_________________________________ 
    _________________________________

 
ACCEPTED AND AGREED

TENANT:
 
__________________________________
a, ________________________________
 
By: __________________________________
Print Name: ____________________________
Its: __________________________________
LANDLORD:
 
__________________________________
a, ________________________________
 
By: __________________________________
 

 
EXHIBIT D 
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EXHIBIT E
 
RULES AND REGULATIONS
 
1.           Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises.  No awnings or other projection shall be attached to the
outside walls of the Building without the prior written consent of Landlord.  No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises, other than Building
standard materials, without the prior written consent of Landlord.
 
2.           Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, elevators, escalators or stairways of the Building.  The halls,
passages, exits, entrances, elevators, escalators and stairways are not for the
general public, and Landlord shall in all cases retain the right to control and
prevent access thereto of all persons whose presence in the reasonable judgment
of Landlord would be prejudicial to the safety, character, reputation and
interests of the Building; provided, that nothing herein contained shall be
construed to prevent such access to persons with whom any tenant normally deals
in the ordinary course of its business, unless such persons are engaged in
illegal activities.  Tenant and no employee, invitee, agent, licensee or
contractor of Tenant shall go upon or be entitled to use any portion of the roof
of the Building without the prior written consent of Landlord.
 
3.           Tenant shall not cause any unnecessary janitorial labor by
carelessness or indifference to the good order and cleanliness of the
Premises.  Landlord shall not in any way be responsible to Tenant for loss of
property on the Premises, however occurring, or for any damage to Tenant's
property by any janitors or any other employee or any other person.
 
4.           Landlord will furnish Tenant, free of charge, with two keys to each
door lock in the Premises.  Landlord may impose a reasonable charge for any
additional keys.  Tenant may not make or have made additional keys, and Tenant
shall not alter any lock or install a new additional lock or bolt on any door or
window of its Premises.  Tenant, upon termination of its tenancy, shall deliver
to Landlord the keys of all doors which have been furnished to, or otherwise
procured by Tenant, and, in the event of loss of any keys, shall pay Landlord
the cost of replacing the same or of changing the lock or locks opened by such
lost key if Landlord shall deem it necessary to make such change.
 
5.           Intentionally Omitted.
 
6.           Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by Law.  Heavy objects, if such objects are considered
necessary by Tenant, as determined by Landlord, shall stand on such platforms as
determined by Landlord to be necessary to properly distribute the
weight.  Business machines and mechanical equipment which cause noise or
vibration that may be transmitted to the structure of the Building or to any
space therein to such a degree as to be objectionable to Landlord, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration.  Landlord will not
be responsible for loss of, or damage to, any such equipment or other property
from any cause, and all damage done to the Building by maintaining or moving
such equipment or other property shall be repaired at the expense of Tenant.
 
7.           Tenant shall not use or keep in the Premises any kerosene, gasoline
or inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office
equipment.  Tenant shall not use or permit to be used in the Premises any foul
or noxious gas or substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord by reason of noise,
odors or vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.
 
8.           Intentionally Omitted.
 
9.           Landlord reserves the right from time to time, in Landlord's sole
and absolute discretion, exercisable without prior notice and without liability
to Tenant, to:  (a) name or change the name of the Building or Property;
(b) change the address of the Building, and/or (c) install, replace or change
any signs in, on or about the Property (except for Tenant's signs, if any, which
are expressly permitted by the Lease).
 
10.         Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 7:00 a.m., or such other hours as may be reasonably
established from time to time by Landlord, and on legal holidays, any person
unless that person is known to the person or employee in charge of the Building
and has a pass or is properly identified.  Landlord shall not be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person.  Tenant shall be responsible for all persons for whom it
requests passes and shall be liable to Landlord for all acts of such
persons.  Landlord reserves the right to prevent access to the Building in case
of invasion, mob, riot, public excitement or other commotion by closing the
doors or by other appropriate action.

EXHIBIT E 
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11.         The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, and no foreign substances of any kind whatsoever shall be thrown
therein.
 
12.         Tenant shall not install any radio or television antenna,
loudspeaker or other device on the roof or exterior walls of the Building
without the prior written consent of Landlord.  Tenant shall not interfere with
radio or television broadcasting or reception from or in the Building or
elsewhere.
 
13.         Except as expressly permitted in the Lease, Tenant shall not mark,
drive nails, screw or drill into the partitions, window mullions, woodwork or
drywall, or in any way deface the Premises or any part thereof, except to
install normal wall hangings.  Tenant shall repair any damage resulting from
noncompliance under this rule.
 
14.         Tenant shall store all its trash and garbage within the trash
receptacles for the Building or Property.  All garbage and refuse disposal shall
be made in accordance with directions reasonably issued from time to time by
Landlord.
 
15.         Other than as permitted elsewhere in the Lease, the Premises shall
not be used for the storage of merchandise held for sale to the general public,
or for lodging of any kind.  No cooking shall be done or permitted by Tenant on
the Premises, except that use by Tenant of Underwriters' Laboratory-approved
equipment for brewing coffee, tea, hot chocolate and similar beverages shall be
permitted and the use of a microwave shall be permitted, provided that such
equipment and use is in accordance with all applicable federal, state, county
and city laws, codes, ordinances, rules and regulations.
 
16.         Tenant shall not use in any space, elevators or stairwells of the
Building, any hand trucks except those equipped with rubber tires and side
guards, or such other material-handling equipment as Landlord may
approve.  Tenant shall not bring any other vehicles of any kind into the
Building.
 
17.         Tenant shall not use the name of the Building in connection with, or
in promoting or advertising, the business of Tenant, except for Tenant's
address.
 
18.         Tenant agrees that it shall comply with all fire and security
regulations that may be issued from time to time by Landlord, and Tenant also
shall provide Landlord with the name of a designated responsible employee to
represent Tenant in all matters pertaining to such fire or security
regulations.  Tenant shall reasonably cooperate with Landlord in all matters
concerning fire and other emergency procedures.
 
19.         Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage.  Such responsibility shall include
keeping doors locked and other means of entry to the Premises closed.
 
20.         Landlord reserves the right to make such other and reasonable
non-discriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety, security, care and cleanliness of the Building or
Property and for the preservation of good order therein.  Tenant agrees to abide
by all such Rules and Regulations hereinabove stated and any additional
reasonable rules and regulations which are adopted.
 
21.         Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's  Parties.
 
22.         Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except by a paste, or other material which may easily be removed with
water, the use of cement or other similar adhesive materials being expressly
prohibited.  The method of affixing any such linoleum, tile, carpet or other
similar floor covering shall be subject to the approval of Landlord.  The
expense of repairing any damage resulting from a violation of this rule shall be
borne by Tenant.
 
23.         Tenant shall not without Landlord's consent, which may be given or
withheld in Landlord's sole and absolute discretion, receive, store, discharge,
or transport firearms, ammunition, or weapons or explosives of any kind or
nature at, on or from the Premises.
 
PARKING RULES AND REGULATIONS
 
In addition to any parking provisions contained in the Lease, the following
rules and regulations shall apply with respect to the use of the Property's
parking facilities.
 
1.           Every parker is required to park and lock his/her own vehicle.  All
responsibility for damage to or loss of vehicles is assumed by the parker and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.
 
2.           Tenant shall not park or permit its employees to park in any
parking areas designated by Landlord as areas for parking by visitors to the
Property.  Tenant shall not leave vehicles in the parking areas longer than 48
hours nor park any vehicles in the parking areas other than automobiles,
motorcycles, motor driven or non-motor driven bicycles or four wheeled trucks.

EXHIBIT E 
-2-

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3.           Parking stickers or any other device or form of identification
supplied by Landlord as a condition of use of the parking facilities shall
remain the property of Landlord.  Such parking identification device must be
displayed as requested and may not be mutilated in any manner.  The serial
number of the parking identification device may not be obliterated.  Devices are
not transferable and any device in the possession of an unauthorized holder will
be void.
 
4.           No extended term storage of vehicles shall be permitted.
 
5.           Vehicles must be parked entirely within painted stall lines of a
single parking stall.
 
6.           All directional signs and arrows must be observed.
 
7.           The speed limit within all parking areas shall be five (5) miles
per hour.
 
8.           Parking is prohibited:  (a) in areas not striped for parking; (b)
in aisles; (c) where "no parking" signs are posted; (d) on ramps; (e) in
cross-hatched areas; and (f) in reserved spaces and in such other areas as may
be designated by Landlord or Landlord's parking operator.
 
9.           Loss or theft of parking identification devices, if any, must be
reported to Landlord's property manager immediately, and a lost or stolen report
must be filed by the Tenant or user of such parking identification device at the
time.  Landlord has the right to exclude any vehicle from the parking facilities
that does not have an identification device.
 
10.           Any parking identification devices reported lost or stolen found
on any unauthorized car will be confiscated and the illegal holder will be
subject to prosecution.
 
11.           Washing, waxing, cleaning or servicing of any vehicle in any area
not specifically reserved for such purpose is prohibited.
 
12.           The parking operators, managers or attendants, if any, are not
authorized to make or allow any exceptions to these rules and regulations.
 
13.           If the Lease terminates for any reason whatsoever, or if Tenant's
right to possession of the Premises is terminated after a Default, Tenant's
right to park in the parking facilities shall terminate concurrently therewith.
 
14.           Landlord reserves the right to modify and/or adopt such other
reasonable and non-discriminatory rules and regulations for the parking
facilities as it deems necessary for the operation of the parking
facilities.  Landlord may refuse to permit any person who violates these rules
to park in the parking facilities, and any violation of the rules shall subject
the vehicle to removal, at such vehicle owner's expense.
 
15.           Tenant shall not permit any parking by its employees, agents,
subtenants, customers, invitees, concessionaires or visitors on the streets
surrounding the Premises in violation of any ordinances or postings by any
public authorities having jurisdiction.
 
16.           Tenant's parking spaces shall be used only for parking by vehicles
no larger than normally sized passenger automobiles, vans and sport utility
vehicles.  Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities.  If Tenant permits or allows any of the
prohibited activities described herein, then Landlord shall have the right, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost thereof to Tenant, which cost
shall be payable by Tenant upon demand by Landlord.
 
Notwithstanding anything to the contrary contained in this section, if any rule
or regulation is in conflict with any term, covenant or condition of this Lease,
this Lease shall prevail.  Following a written request from Tenant, Landlord
shall use commercially reasonable efforts to enforce the rules and regulations
against other tenants of the Building.

EXHIBIT E 
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EXHIBIT F
 
ESTOPPEL CERTIFICATE
 
The undersigned ("Tenant") hereby certifies
to  ____________________________________________ ("Landlord"), and
______________________________________________,as follows:
 
1.           Attached hereto is a true, correct and complete copy of that
certain Lease dated ________________, between Landlord and Tenant (the "Lease"),
for the premises commonly known as ____________________________________ (the
"Premises").  The Lease is now in full force and effect and has not been
amended, modified or supplemented, except as set forth in Section 6 below.
 
2.           The term of the Lease commenced on ________________, __.
 
3.           The term of the Lease is currently scheduled to expire on
________________, __.
 
4.           Tenant has no option to renew or extend the Term of the Lease
except: ________________________________.
 
5.           Tenant has no preferential right to purchase the Premises or any
portion of the Building/Premises except:
________________________________________________________________.
 
6.           The Lease has: (Initial One)
(      )      not been amended, modified, supplemented, extended, renewed or
assigned.
(      )      been amended, modified, supplemented, extended, renewed or
assigned by the following described agreements, copies of which are attached
hereto: ___________________________________.
 
7.           Tenant has accepted and is now in possession of the Premises and
has not sublet, assigned or encumbered the Lease, the Premises or any portion
thereof except as follows: _______________________________.
 
8.           The current Base Rent is $______________; and current monthly
parking charges are $____________.
 
9.           The amount of security deposit (if any) is $_______________.  No
other security deposits have been made.
 
10.           All rental payments payable by Tenant have been paid in full as of
the date hereof.  No rent under the Lease has been paid for more than thirty
(30) days in advance of its due date.
 
11.           All work required to be performed by Landlord under the Lease has
been completed and has been accepted by Tenant, and all tenant improvement
allowances have been paid in full except __________________________.
 
12.           As of the date hereof, Tenant is not aware of any defaults on the
part of Landlord under the Lease except __________________________.
 
13.           As of the date hereof, there are no defaults on the part of Tenant
under the Lease.
 
14.           As of the date hereof, Tenant is not aware of any defense to its
obligations under the Lease and claims no set-off or counterclaim against
Landlord except __________________________.
 
15.           Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.
 
16.           All insurance required of Tenant under the Lease has been provided
by Tenant and all premiums have been paid.
 
17.           There has not been filed by or against Tenant a petition in
bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors,
any petition seeking reorganization or arrangement under the bankruptcy laws of
the United States or any state thereof, or any other action brought pursuant to
such bankruptcy laws with respect to Tenant.
 
18.           Tenant pays rent due Landlord under the Lease to Landlord and does
not have any knowledge of any other person who has any right to such rents by
collateral assignment or otherwise.
 
The foregoing certification is made with the knowledge that
____________________________________ is about to [fund a loan to Landlord or
purchase the Building from Landlord], and that ___________________________ is
relying upon the representations herein made in [funding such loan or purchasing
the Building].
 
Dated:  _________________, ___.

"TENANT"
  _____________________________________________          
By: _______________________________________
   
Print Name: __________________________________
   
Its: ________________________________________

 
EXHIBIT F 

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EXHIBIT G
 
ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT

 
The purpose of this form is to obtain information regarding the use or proposed
use of hazardous materials at the premises.  Prospective tenants should answer
the questions in light of their proposed operations at the premises.  Existing
tenants should answer the questions as they relate to ongoing operations at the
premises and should update any information previously submitted.  If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.
 
Your cooperation in this matter is appreciated.
 
1.
GENERAL INFORMATION

 
Name of Responding Company: ___________________________________________________
 
Check the Applicable Status:                  Prospective Tenant _____  Existing
Tenant _____
 
Mailing
Address:  _______________________________________________________________
 
Contact Person and
Title:___________________________________________________________
 
Telephone Number:  (_____) ________________________
 
Address of Leased
Premises: _______________________________________________________________
 
Length of Term:
_________________________________________________________________________
 
Describe the proposed operations to take place on the premises, including
principal products manufactured or services to be conducted.  Existing tenants
should describe any proposed changes to ongoing operations.
 
____________________________________________________________________________
____________________________________________________________________________
 
2.
STORAGE OF HAZARDOUS MATERIALS

 
 
2.1
Will any hazardous materials be used or stored on-site?

 
Wastes                                           Yes _____              No _____
 
Chemical Products                         Yes _____             No _____
 
 
2.2
Attach a list of any hazardous materials to be used or stored, the quantities
that will be on-site at any given time, and the location and method of storage
(e.g., 55-gallon drums on concrete pad).

 
3.
STORAGE TANKS AND SUMPS

 
 
3.1
Is any above or below ground storage of gasoline, diesel or other hazardous
substances in tanks or sumps proposed or currently conducted at the premises?

 
Yes ______          No _____
 
If yes, describe the materials to be stored, and the type, size and construction
of the sump or tank.  Attach copies of any permits obtained for the storage of
such substances.
 
____________________________________________________________________________
____________________________________________________________________________

 
 
3.2
Have any of the tanks or sumps been inspected or tested for leakage?

 
Yes ______         No _____
 
If so, attach the results.
 
 
3.3
Have any spills or leaks occurred from such tanks or sumps?

 
Yes ______         No _____
 
If so, describe.
 
____________________________________________________________________________
____________________________________________________________________________

 
EXHIBIT G 
 

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3.4
Were any regulatory agencies notified of the spill or leak?

 
Yes ______         No _____
 
If so, attach copies of any spill reports filed, any clearance letters or other
correspondence from regulatory agencies relating to the spill or leak.
 
 
3.5
Have any underground storage tanks or sumps been taken out of service or
removed?

 
Yes ______         No _____
 
If yes, attach copies of any closure permits and clearance obtained from
regulatory agencies relating to closure and removal of such tanks.
 
4.
SPILLS

 
 
4.1
During the past year, have any spills occurred at the premises?

 
Yes ______         No _____
 
If yes, please describe the location of the spill.
 
____________________________________________________________________________
____________________________________________________________________________
 
 
4.2
Were any agencies notified in connection with such spills?

 
Yes ______         No _____
 
If yes, attach copies of any spill reports or other correspondence with
regulatory agencies.
 
 
4.3
Were any clean-up actions undertaken in connection with the spills?

 
Yes ______         No _____
 
Attach copies of any clearance letters obtained from any regulatory agencies
involved and the results of any final soil or groundwater sampling done upon
completion of the clean-up work.
 
5.
WASTE MANAGEMENT

 
 
5.1
Has your company been issued an EPA Hazardous Waste Generator I.D. Number?

 
Yes ______         No _____
 
 
5.2
Has your company filed a biennial report as a hazardous waste generator?

 
Yes ______         No _____
 
If so, attach a copy of the most recent report filed.
 
 
5.3
Attach a list of the hazardous wastes, if any, generated or to be generated at
the premises, its hazard class and the quantity generated on a monthly basis.

 
 
5.4
Describe the method(s) of disposal for each waste.  Indicate where and how often
disposal will take place.

 

_____
On-site treatment or recovery
_________________________       _____
Discharged to sewer
_________________________       _____
Transported and disposed of off-site
_________________________      
_____
Incinerator
_________________________

 
 
5.5
Indicate the name of the person(s) responsible for maintaining copies of
hazardous waste manifests completed for off-site shipments of hazardous waste.

 
____________________________________________________________________________
 
 
5.6
Is any treatment of processing of hazardous wastes currently conducted or
proposed to be conducted at the premises:

 
Yes ______         No _____

EXHIBIT G 
2

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If yes, please describe any existing or proposed treatment methods.
________________________
 
____________________________________________________________________________
 
 
5.7
Attach copies of any hazardous waste permits or licenses issued to your company
with respect to its operations at the premises.

 
6.
WASTEWATER TREATMENT/DISCHARGE

 
 
6.1
Do you discharge wastewater to:

 
_____  storm drain?                       _____  sewer?
 
_____  surface water?                    _____  no industrial discharge
 
 
6.2
Is your wastewater treated before discharge?

 
Yes ______         No _____
 
If yes, describe the type of treatment conducted.
 
____________________________________________________________________________
____________________________________________________________________________

 
 
6.3
Attach copies of any wastewater discharge permits issued to your company with
respect to its operations at the premises.

 
7.
AIR DISCHARGES

 
 
7.1
Do you have any filtration systems or stacks that discharge into the air?

 
Yes ______         No _____
 
 
7.2
Do you operate any of the following types of equipment or any other equipment
requiring an air emissions permit?

      _____
Spray booth
        _____
Dip tank
        _____
Drying oven
        _____
Incinerator
        _____
Other (please describe)
__________________________________      
_____
No equipment requiring air permits
 

 
 
7.3
Are air emissions from your operations monitored?

 
Yes ______          No _____
 
If so, indicate the frequency of monitoring and a description of the monitoring
results.
 
____________________________________________________________________________
 
 
7.4
Attach copies of any air emissions permits pertaining to your operations at the
premises.

 
8.
HAZARDOUS MATERIALS DISCLOSURES

 
 
8.1
Does your company handle hazardous materials in a quantity equal to or exceeding
an aggregate of 500 pounds, 55 gallons, or 200 cubic feet per month?

 
Yes ______         No _____
 
 
8.2
Has your company prepared a hazardous materials management plan pursuant to any
applicable requirements of a local fire department or governmental agency?

 
Yes ______         No _____
 
If so, attach a copy of the business plan.
 
 
8.3
Has your company adopted any voluntary environmental, health or safety program?

 
Yes _____            No _____

EXHIBIT G 
3

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If so, attach a copy of the program.
 
9.
ENFORCEMENT ACTIONS, COMPLAINTS

 
 
9.1
Has your company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees?

 
Yes ______         No _____
 
If so, describe the actions and any continuing compliance obligations imposed as
a result of these actions.
 
____________________________________________________________________________
 
 
9.2
Has your company ever received requests for information, notice or demand
letters, or any other inquiries regarding its operations?

 
Yes ______         No _____
 
 
9.3
Have there ever been, or are there now pending, any lawsuits against the company
regarding any environmental or health and safety concerns?

 
Yes ______         No _____
 
 
9.4
Has an environmental audit ever been conducted at your company's current
facility?

 
Yes ______         No _____
 
If so, identify who conducted the audit and when it was conducted.
 
Tenant:
 
By:
 
Its:
 

 
EXHIBIT G 
4

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EXTENSION OPTION
 
RIDER NO. 1 TO LEASE
 
This Rider No. 1 is made and entered into by and between LBA REALTY FUND
III-COMPANY VII, LLC, a Delaware limited liability company ("Landlord"), and
WAFERGEN, INC., a Delaware corporation ("Tenant"), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached.  Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease.  All references in
the Lease and in this Rider to the "Lease" shall be construed to mean the Lease
(and all Exhibits and Riders attached thereto), as amended and supplemented by
this Rider.  All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.
 
1.           Landlord hereby grants to Tenant one (1) option (the "Extension
Option") to extend the Term of the Lease for an additional period of three (3)
years (the "Option Term"), on the same terms, covenants and conditions as
provided for in the Lease during the initial Term, except for the Monthly Base
Rent, which shall initially be equal to the "fair market rental rate" for the
Premises for the Option Term as defined and determined in accordance with the
provisions of the Fair Market Rental Rate Rider attached to the Lease as Rider
No. 2, subject to fair market annual rent adjustments during the Option Term.
 
2.           An Extension Option must be exercised, if at all, by written notice
("Extension Notice") delivered by Tenant to Landlord no sooner than that date
which is twelve (12) months and no later than that date which is nine (9) months
prior to the expiration of the then current Term of the Lease.  Provided Tenant
has properly and timely exercised the Extension Option, the then current Term of
the Lease shall be extended by the Option Term, and all terms, covenants and
conditions of the Lease shall remain unmodified and in full force and effect,
except that the Monthly Base Rent shall be as set forth above, and except that
the number of remaining Extension Options (if any) shall be reduced by one.

RIDER NO. 1 
-1-

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FAIR MARKET RENTAL RATE
 
RIDER NO. 2 TO LEASE
 
This Rider No. 2 is made and entered into by and between LBA REALTY FUND
III-COMPANY VII, LLC, a Delaware limited liability company ("Landlord"), and
WAFERGEN, INC., a Delaware corporation ("Tenant"), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached.  Landlord and
Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease.  All references in
the Lease and in this Rider to the "Lease" shall be construed to mean the Lease
(and all Exhibits and Riders attached thereto), as amended and supplemented by
this Rider.  All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.
 
1.           The term "fair market rental rate" as used in this Rider and any
Rider attached to the Lease means the annual amount per square foot, projected
for each year of the Option Term (including annual adjustments), that a willing,
non-equity tenant (excluding sublease and assignment transactions) would pay,
and a willing landlord of a comparable quality building located in the Fremont,
California area would accept, in an arm's length transaction (what Landlord is
accepting in then current transactions for the Building may be used for purposes
of projecting rent for the Option Term), for space of comparable size, quality
and floor height as the Premises, taking into account the age, quality and
layout of the existing improvements in the Premises, and taking into account
items that professional real estate brokers or professional real estate
appraisers customarily consider, including, but not limited to, rental rates,
space availability, tenant size, tenant improvement allowances, parking charges
and any other lease considerations, if any, then being charged or granted by
Landlord or the lessors of such similar buildings.  All economic terms other
than Monthly Base Rent, such as tenant improvement allowance amounts, if any,
operating expense allowances, parking charges, etc., will be established by
Landlord and will be factored into the determination of the fair market rental
rate for the Option Term.  Accordingly, the fair market rental rate will be an
effective rate, not specifically including, but accounting for, the appropriate
economic considerations described above.
 
2.           Landlord shall provide written notice of Landlord's determination
of the fair market rental rate not later than sixty (60) days after the last day
upon which Tenant may timely exercise the right giving rise to the necessity for
such fair market rental rate determination.  Tenant shall have thirty (30) days
("Tenant's Review Period") after receipt of Landlord's notice of the fair market
rental rate within which to accept such fair market rental rate or to reasonably
object thereto in writing.  Failure of Tenant to so object to the fair market
rental rate submitted by Landlord in writing within Tenant's Review Period shall
conclusively be deemed Tenant's approval and acceptance thereof.  If within
Tenant's Review Period Tenant reasonably objects to or is deemed to have
disapproved the fair market rental rate submitted by Landlord, Landlord and
Tenant will meet together with their respective legal counsel to present and
discuss their individual determinations of the fair market rental rate for the
Premises under the parameters set forth in Paragraph 1 above and shall
diligently and in good faith attempt to negotiate a rental rate on the basis of
such individual determinations.  Such meeting shall occur no later than ten (10)
days after the expiration of Tenant's Review Period.  The parties shall each
provide the other with such supporting information and documentation as they
deem appropriate.  At such meeting if Landlord and Tenant are unable to agree
upon the fair market rental rate, they shall each submit to the other their
respective best and final offer as to the fair market rental rate.  If Landlord
and Tenant fail to reach agreement on such fair market rental rate within five
(5) business days following such a meeting (the "Outside Agreement Date"),
Tenant's Extension Option will be deemed null and void unless Tenant demands
appraisal, in which event each party's determination shall be submitted to
appraisal in accordance with the provisions of Section 3 below.
 
3.           (a)  Landlord and Tenant shall each appoint one (1) independent
appraiser who shall by profession be an M.A.I. certified real estate appraiser
who shall have been active over the five (5) year period ending on the date of
such appointment in the leasing of commercial (including office) properties in
the Fremont, California area.  The determination of the appraisers shall be
limited solely to the issue of whether Landlord's or Tenant's last proposed (as
of the Outside Agreement Date) best and final fair market rental rate for the
Premises is the closest to the actual fair market rental rate for the Premises
as determined by the appraisers, taking into account the requirements specified
in Section 1 above.  Each such appraiser shall be appointed within ten (10)
business days after the Outside Agreement Date.
 
(b)        The two (2) appraisers so appointed shall within ten (10) business
days after the date of the appointment of the last appointed appraiser agree
upon and appoint a third appraiser who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two (2)
appraisers.
 
(c)         The three (3) appraisers shall within ten (10) business days after
the appointment of the third appraiser reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted best and final fair market
rental rate, and shall notify Landlord and Tenant thereof.  During such ten (10)
business day period, Landlord and Tenant may submit to the appraisers such
information and documentation to support their respective positions as they
shall deem reasonably relevant and Landlord and Tenant may each appear before
the appraisers jointly to question and respond to questions from the appraisers.

RIDER NO. 2 
-1-

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(d)        The decision of the majority of the three (3) appraisers shall be
binding upon Landlord and Tenant and neither party shall have the right to
reject the decision or to undo the exercise of the applicable Option.  If either
Landlord or Tenant fails to appoint an appraiser within the time period
specified in Section 3(a) hereinabove, the appraiser appointed by one of them
shall within ten (10) business days following the date on which the party
failing to appoint an appraiser could have last appointed such appraiser reach a
decision based upon the same procedures as set forth above (i.e., by selecting
either Landlord's or Tenant's submitted best and final fair market rental rate),
and shall notify Landlord and Tenant thereof, and such appraiser's decision
shall be binding upon Landlord and Tenant  and neither party shall have the
right to reject the decision or to undo the exercise of the applicable Option.
 
(e)         If the two (2) appraisers fail to agree upon and appoint a third
appraiser, either party, upon ten (10) days written notice to the other party,
can apply to the Presiding Judge of the Superior Court of Alameda County to
appoint a third appraiser meeting the qualifications set forth herein.  The
third appraiser, however, selected shall be a person who has not previously
acted in any capacity for ether party.
 
(f)          The cost of each party's appraiser shall be the responsibility of
the party selecting such appraiser, and the cost of the third appraiser (or
arbitration, if necessary) shall be shared equally by Landlord and Tenant.
 
(g)         If the process described hereinabove has not resulted in a selection
of either Landlord's or Tenant's submitted best and final fair market rental
rate by the commencement of the applicable Option Term, then the fair market
rental rate estimated by Landlord will be used until the appraiser(s) reach a
decision, with an appropriate rental credit and other adjustments for any
overpayments of Monthly Base Rent or other amounts if the appraisers select
Tenant's submitted best and final estimate of the fair market rental rate.  The
parties shall enter into an amendment to this Lease confirming the terms of the
decision.
 
RIDER NO. 2 
-2-

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